SEBI court imposes ₹9 lakh penalty for stock rigging in Prudential Pharmaceuticals case | Representative Image
Mumbai: A special SEBI court has found Arshad Afzal Khan, director of Clip Securities & Finance Pvt Ltd, guilty of failing to pay a penalty related to rigging in a stock script. While he was sentenced to custody until the rising of the court, the court imposed a fine of Rs 9 lakh, of which Rs 7 lakh is to be paid to SEBI.
As per the case filed by SEBI, a probe was initiated in the trading in the script of Prudential Pharmaceuticals Ltd (PPL) from March 5, 2001 to July 6, 2001 on the basis of a complaint received from an investor alleging price rigging in the script.
During the investigation, it was found that Khan acquired 3,00,000 shares of PPL—5.82% of its paid-up capital—without making the mandatory disclosures under SEBI’s Substantial Acquisition of Shares and Takeovers Regulations, 1997.
The SEBI-appointed adjudication officer imposed a Rs 7 lakh penalty on Arshad Afzal Khan on October 27, 2009, which he failed to pay within 45 days. Later, on January 25, 2011, an additional Rs2 lakh penalty was imposed for non-compliance with summons seeking information.
“I found that the custodial incarceration will not be the appropriate punishment to be inflicted upon the accused,” the court observed, ordering his custody only till the rising of the court and imposed a heavy penalty of Rs 9 lakh.
