SEBI has sent a notice to eight entities and asked them to pay over ₹98 lakh in a case pertaining to misutilisation of the IPO proceeds in the matter of Midvalley Entertainment Ltd (MVEL).

The notice came after Midvalley Entertainment and its directors failed to pay the penalty imposed on them by the Securities and Exchange Board of India (SEBI).

SEBI has directed the entities to pay ₹98.88 lakh, which includes interest and recovery cost within 15 days.

In the event of non-payment, it will recover the amount by attaching and selling their movable and immovable properties. They will also face attachment of their bank accounts and face arrest of its directors, SEBI said in an attachment notice on Friday.

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The regulator, through an order passed on May 31, levied fines totalling to ₹2.3 crore on 32 entities, including MVEL and its directors—R Chandrasegaran, Sudhir Kumar Jena, Datuk K Ketheeswaran, K Murugavel, Vasan Chidambaram, K Ramdasan and M Pandiyan.

The order came after SEBI conducted a probe in the matter of Initial Public Offering (IPO) of MVEL for the period January-February 2011.

It was found that MVEL had deviated from the objects of the issue and has not utilised the IPO proceeds as stated in the draft prospectus.

Apart from the company, the directors also recklessly omitted to perform their part, which resulted in diversion of IPO proceeds, and did not exercise any due diligence to prevent the offence, thereby violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

MVEL stock was listed on the BSE in January 2011.

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