Sebi today imposed a penalty of Rs 1 crore on SGI Research & Analysis and its seven directors for failing to comply with its earlier directions to refund over Rs 1,500 crore investors' money collected through the 'StockGuru' scam.
The fine has been levied on mastermind Lokeshwar Dev and his accomplice Priyanka Dev, both of whom used several aliases, for fraudulently raising money through sale of preference shares.
Names used by them included Ulhas Prabhakar Khaire and Raksha J Urs, Siddharth Jay and Maya Siddharth Marathe, Dr Raj and Priya Zaveri, Dr Rakesh Kumar and Prachi Maheshwari.
The other accomplices against whom fine has been levied are Ramesh Sharma, Pradeep Sharma, Baldev Raj Sharma, Sanjeev Sharma and Sonia Sharma.
The 'StockGuru' scam that came into light in 2012-13 is being probed by several agencies including Sebi and ED. Lokeshwar Dev in July last year had created a flutter inside a court room, where a money laundering case was being heard against him, after he showed the judge how to commit forgery easily.
Immediately after he demonstrated in the courtroom how a fraud can be attributed to a judge or an advocate, the court directed Delhi Police to register another case against him.
The entities were asked by Securities and Exchange Board of India (Sebi) through an order in January 2013 to return over Rs 1,500 crore, along with interest, to investors.
In an order passed today, Sebi said "refunds have not been made by the noticees (the firm and its directors). Therefore, all the investors' money is in the possession of the noticees and used by them only. Accordingly, noticees have made disproportionate gains by not complying with Sebi".
"Further, investors were to get their money back alongwith interest from the noticees as directed in the Sebi order dated January 11, 2013. The said amount has not been refunded to the investors, therefore, this is the loss caused to the investors which are at least 162 in number," it added.
Accordingly, Sebi has imposed a fine totalling Rs 1 crore on SGI and its seven directors.
A Sebi probe into the case had found that the fraudsters had tricked the investors into putting in their money with a promise of 18 per cent dividend, although the real assured dividend was a minuscule 0.12 per cent.
Besides, the money might have mostly been collected in cash to avoid any regulatory glare, as SGI's bank account had entries for a total amount of just about Rs 44 lakh towards subscription of its shares by 162 persons.
SGI had invited investors to subscribe to its convertible preference shares through its office in Delhi, its agents and representatives, associate concern 'stockguru.india' and its website.
According to Sebi, these securities were of face value Rs 10 each and were offered and subscribed at a premium of Rs 1,500 per share. However, the promised dividend of 18 per cent was found to be on face value of Rs 10 and not on exact per share price of Rs 1,510.
Further, it did not issue any share certificate to subscribers even on payment of money and made various "misrepresentations and false statements containing misleading and distorted information that the said convertible preference shares shall soon get listed after Sebi's approval and the listing price would be around Rs 2,000 per share".
SGI was incorporated on June 10, 2010, while the issue of its convertible preference shares opened for subscription in October, 2010 and continued till January 2011.
The firm, which had issued convertible preference shares, to investors was required to apply for listing those shares to a recognised stock exchanges. Under the rules, an offer to 50 or more persons becomes public issue by virtue and thereby attracts compulsory listing.
Earlier in 2013, Sebi had barred them from the capital market for ten years for allegedly duping investors.
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