Three individuals, multiple sham identities and purchase of shares in 27 initial public offers (IPOs) during 2004-2011.
Now, after repeated defaults on their obligations, the three individuals have been fined Rs 9.23 lakh by markets regulator Sebi.
Penalty has been imposed on the noticees -- Babulal Dugar, Manoj Dugar and Vinod Dugar.
The watchdog conducted an investigation between 2002 to 2012, following allegations that the three persons used multiple identities or sham identities to corner shares in IPOs.
Shares were allotted in the name of these sham identities in various IPOs and those were subsequently transferred to these persons and their relatives.
In a 22-page order, the watchdog said the noticees by creating sham identities and cornering shares in IPOs at the cost of genuine investors have indulged in fraudulent and unfair trade practices.
The noticees made unlawful gains of Rs 3,07,607.30 and the act of creating sham identities to corner shares in the IPOs at the cost of genuine investors is detrimental to the securities market, Sebi noted.
"Further, default on the part of the Noticees were repetitive in nature as during 2004 to 2011, there were a total of 27 IPOs where sham identities (used by the noticees) were allotted shares," it said.
The watchdog noted that a penalty of Rs 9.23 lakh is commensurate with the violation committed by the noticees and is equivalent to three times of the amount of profit made as a result of the violations committed by them.
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