Cornering of IPO shares: SEBI levies Rs 7.62-cr penalty on financier

Our Bureau Mumbai | Updated on August 12, 2013 Published on August 12, 2013


The equity market regulator, SEBI, has asked financier Jayesh P. Khandwala and his HUF to repay the unlawful gains of Rs 7.62 crore and undergo a three-month ban from the markets.

The amount consists of Rs 3.88 crore penalty and Rs 3.74 crore interest (totalling Rs 7.62 crore) within 45 days.

The SEBI direction against the two is for illegally cornering the retail investor portion of IDFC, Sasken Communications and Suzlon energy IPOs.

Passing the order under Supreme Court directions, SEBI said failure to pay up would lead to the ban being extended by seven years.

SEBI said it found that Jayesh had acted as financier to Roopalben Panchal, Sugandh Estates and Investment Pvt Ltd (SEIPL) and Biren Kantilal Shah who cornered 9.49 lakh shares of IDFC, 14,275 shares of Sasken and 28,800 shares of Suzlon and transferred the shares off market to Jayesh.

Another 11 lakh shares of IDFC were transferred to Bhanu Prasad Trivedi who acted as a front entity of Jayesh, said SEBI.

Jayesh was found to have sold the said shares and unlawfully gained over Rs 4 crore. The funds provided by Jayesh corresponded with the application money and the refunds exactly matched with the money and shares that were due from Roopal to Jayesh. This made it clear that Jayesh had extended finance for the IPO subscription, the regulator said. SEBI said it was clear that Jayesh was the mastermind in the manipulation of the retail segment of the IDFC, Sasken and Suzlon IPOs.

Published on August 12, 2013
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