Sebi slaps Rs 5 lakh fine on MKM Finsec director

Market regulator Sebi today imposed a penalty of Rs five00000 on director of MKM Finsec for issuing fictitious contract notes and bills to some iron and steel companies.Securities and Exchange Board of India (Sebi) said it is imposing "a penalty of Rs five00000 "on MKM Finsec director Prem Chand Batra for violating norms on prohibition of fraudulent trade practices.In its order, the regulator noted that Batra has admitted that he had issued fictitious contract notes and bills to some of the companies engaged in the business of manufacturing iron and steel products to enable them to file fictitious entries or profit or loss in their books."The noticee (Batra) has falsified records, contract notes, difference bills and vouchers etc and dealt in securities in collusion with some entities in a fraudulent manner," Sebi said.A probe by Sebi had revealed that during the financial years 2001-02 to 2004-05 some of the stock brokers of the Delhi Stock Exchange issued fictitious contract notes and difference bills to some iron and steel firms so that they had shown huge profits from share trading in their accounting books to avoid running losses from their manufacturing activities."...these share transactions were farce and of fraudulent nature, that the clients to the fictitious share transactions were his employees and therefore, that the whole fraudulent scheme was orchestrated by him," Sebi said.