Market regulator Sebi Monday imposed a fine of Rs 5 lakh on NCL Industries for violating disclosure norms with regard to selling of preferential shares by its promoter group in the lock-in period.
During the lock-in period, promoters or promoter group cannot sell preferential shares allotted to them till the period is over (six months).
The Securities and Exchange Board of India (Sebi) observed that two of the company's promoter groups sold a total 3,25,106 shares between August to December, 2015 while the lock-in period was still active, according to a Sebi order.
"Failure of NCL to lock-in shares of promoter entities had affected the confidence of the investors as such failure had facilitated promoter to gain substantially. Therefore, it is essential to impose the penalty which shall act as deterrent to the Noticee (NCL)," the watchdog said.
Accordingly, Sebi imposed a fine of Rs 5 lakh on the firm.
In a separate order, Sebi imposed a penalty of Rs 5 lakh on Pilot Consultants, a Kolkata-based firm for executing reversal trades in stock options at BSE with same entities on the same day, thereby creating artificial volume of trading.
By indulging in such activities, the firm violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices), Sebi said.
Options as financial instruments, ordinarily provide hedging avenues to investors.
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