Sebi today barred one Dipti Kirit Parekh from accessing the capital market for two years for cornering shares issued in the initial public offer (IPO) of Spice Communications back in 2007.
The market regulator has found that Parekh had cornered shares issued in the RII (Retail Institutional Investors) category of Spice's IPO by assisting in creating false applicants as well as managing and funding such applications
By indulging in such manipulative activities Parekh had made unlawful gains of Rs 1.28 lakh.
"...hereby restrain the noticee (Parekh) from buying, selling or otherwise dealing in securities, directly or indirectly, for a period of two years," Securities and Exchange Board of India said in an order today.
In May last year, Sebi had banned Parekh from the capital markets for two years in the same matter.
The ruling was challenged by Parekh before the Securities Appellate Tribunal which on January 31 this year set aside Sebi's order. It had directed the regulator to pass a fresh order in the case.
SAT said the ban imposed on Parekh will meanwhile continue for two months - the time given to Sebi to pass the new order.
In the latest order, Sebi while restraining Parekh for two years from the stock markets said that "the period of prohibition already undergone by the noticee pursuant to the Sebi order dated May 15, 2013, shall be taken into account for the purpose of computing the period of prohibition imposed vide this order.
"I find that the noticee assisted in creating fictitious applicants, engineered applications in the RII category of the IPO of SCL (Spice Communications) Ltd and subsequently, ensured transfer of shares allotted in such category to her own demat account, thereby cornering shares meant for RIIs," Sebi whole time member S Raman said in the latest order.
"I find that the noticee then sold the aforesaid shares in the open market thereby making a profit on the price difference between the IPO price and the listing price of such shares," Raman added.
Further, Parekh was found to have facilitated and managed the responses/replies provided to Sebi by certain allottees in the RII category of Spice's IPO with an intention to mislead the investigation.
Spice had come out with an IPO of 11.31 equity shares. The issue which was subscribed 37 times (3.83 times in the RII category), opened on June 25, 2007 and closed on June 27, 2007.