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Sebi levies 90 lakh fine on 8 entities for fraudulent trading in RTS Power

Sebi said it received complaints that a set of clients had bought shares of RTS Power Corporation Limited on February 11, 2009, and failed to fulfill their respective pay-in obligations. (MINT_PRINT)Premium
Sebi said it received complaints that a set of clients had bought shares of RTS Power Corporation Limited on February 11, 2009, and failed to fulfill their respective pay-in obligations. (MINT_PRINT)

  • Sebi imposed a fine of 90 lakh on eight entities in a matter of non-genuine transactions in RTS Power Corporation's scrips
  • They were able to fulfill their obligations towards the initial margin money only after receiving funds from Om Associates and Bhawani Trading, Sebi said

Market regulator Sebi on Friday imposed a fine of 90 lakh on eight entities in a matter of non-genuine transactions in RTS Power Corporation's scrips.

Sebi said it received complaints that a set of clients--Mukesh G Konde, Ashok Narayan Waje, and Nitesh Ashok Jadhav had bought shares of RTS Power Corporation Limited on February 11, 2009, and failed to fulfill their respective pay-in obligations.

In June 2009, Sebi had restrained Chetan Shah, Konde, Waje, Jadhav, Hetal Patel, Rajesh Patel, Om Associates, and Bhawani Trading Company from accessing the securities market and further prohibited from buying, selling, or dealing in the securities market, directly or indirectly till further orders. BSE was also directed to withhold the payout of February 11, 2009, of Hetal Patel and Chetan Shahin a separate escrow account ( 4,31,19,130), till further orders.

An investigation was thereafter initiated by SEBI in respect of buying, selling, and dealing in the shares of RTS.

SEBI investigated in respect of buying, selling, and dealing in the shares of RTS during the period from September 1, 2008, to February 11, 2009, and possible violation of the provisions of the SEBI Act and various rules and regulations made there under.

Further, it was observed that the cheques which were given to the stockbrokers by Konde, Jadhav, and Waje as initial margin money was dishonored due to insufficiency of funds in their respective accounts.

These entities had entered into transactions with related persons/entities with mala fide intentions of not fulfilling the pay-in obligations concerning their trades on February 11, 2009, and had put the entire stock exchange mechanism at risk, the regulator said.

They were able to fulfill their obligations towards the initial margin money only after receiving funds from Om Associates and Bhawani Trading.

The act of financing undertaken by Om Associates and Bhawani Trading company was in the manner of aiding and abetting the other six entities in the latter's fraudulent activities, Sebi said.

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