April 03: Security Exchange Board of India SEBI, fined an amount of Rs 25 lacs collectively on Rahul Kumar Agarwal, Ramod Kumar Agrawal and Sumitra Devi Agarwal for indulging in artificial stock trading in a stock broking firm Rajat Share and Stock Brokers Pvt Ltd, at Magadh Stock Exchange on August, 2005. The adjudicating officer of SEBI, Amit Pradhan, ordered them to make the payment within 45 days.
The SEBI official noticed the defaulters’ involvement in bungling involving Rs 89.28 crore. SEBI observed that there was a kinship between the broker, clients and promoter of Bhoruka Financial Service Ltd BFSL.
BFSL, a Non Banking Financial Company (NBFC), set a deal of 15 acres land at Whitefield road, Bangalore in Rs. 4.21 crore from Bhoruka Steel Ltd, the sister concern of BFSL in December 2002. This land was registered in the name of BFSL in June 2004. The promoters of BFSL wanted to sell it and they convinced DLF Commercial Developers Ltd (DCDL) to purchase it.
The promoters of BFSL held 98.73 percent equity share and they sold the entire holding share to DCDL at 4,490 per share. BSFL was listed in the Bangalore Stock Exchange only, even though it was traded in Magadh Stock Exchange Association (MSEA) under the ‘permitted category’ for short term period. Referring to the illegal act, to trade BSFL scrip in MESA, the SEBI official told that the exchange did not have the authorization from SEBI.
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