DSQ probe: Sebi official slaps Rs 1 cr fine on Parekh firm

The Securities and Exchange Board of India (Sebi) appointed adjudicating officer (AO) has imposed a fine of Rs 10000000 on Luminant Investment Private Limited (LIL), a firm owned by Ketan Parekh, for not providing relevant information to the regulator in November 2004. This is one of the biggest penalties imposed by Sebi under the adjudication process following the enhancement of regulators’ power to impose stringent penalties in 2002. Sebi was investigating the price manipulation of DSQ Biotech occurred during 2000-01. LIL has traded in the DSQ Biotech stock and in that connection Sebi had sought some information from LIL, which it could not produce. Amit Pradhan, the Sebi-appointed AO, in his order said, “I am fully satisfied that this case deserves a severe penalty since it’s a matter of multi0000000 fraud amounting to Rs 2200000000. Specifically, LIL held 10.6000000 shares of DSQ, whose ‘value at fraud’ works out to Rs 290000000; these shares were sold in the market at a value of Rs 160000000.” “LIL did not disclose the source of availability of these 10.600000 shares when this information was sought from LIL by issuing summons. In other words, it can be said that there is an undue enrichment equivalent to the said amount to LIL,” he said. He said 348 days have elapsed since the violation occurred and the violation continues till date. Sebi is empowered to impose penalty of Rs 100000 per day of the violation or Rs 10000000, whichever is the less, in such cases.