The Hindu Business Line : SEBI disgorges Rs 80.34 lakh from 33 entities

The Securities Exchange Board of India has disgorged Rs 80.34 lakh from 33 entities, who were allegedly involved in “customised front running” in Ballarpur Industries stock. A regulator’s panel consisting of Mr C.B. Bhave, SEBI, Chairman and Dr T.C. Nair, whole-time member, has passed the consent order on Friday on the applications of the 33 entities.

SEBI enquiry into the trading irregularities had found that these entities in collusion had indulged in customised front running in Ballarpur stock. The applicants were asked by the regulator to deposit the ill-gotten gains in an order issued on October 1, 2007.

Legal Tussle

The consent terms proposed by the applicants were then considered by the SEBI’s high powered advisory committee, which recommended the case for settlement on payment of the sums proposed by the applicants individually.

Applicants deposited the disgorged amount with the National Stock Exchange “for the sole purpose of settling the matter, and without admission or denial of guilt on the part of the applicants.”

After the long-drawn legal tussle over the first disgorgement order by the regulator in 2005 IPO scam, SEBI has devised the consent procedure in certain cases of irregularities.

A consent order is an agreement between a regulator and the accused, in which a case is settled with a fine or a penalty. As a SEBI order can be challenged or appealed against in SAT and then in the Supreme Court, a consent order forestalls such appeals.

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