New Delhi, Jan 29 (PTI) Markets regulator Sebi today slapped a fine of Rs 25 lakh on Fineotex Chemical Ltd’s promoter Sanjay Tibrewala for not adhering to disclosures made in the IPO prospectus and going ahead with a pre-arrangement for subscription of shares through two HNIs. Also Read - Govt Allows Operation of Electricity Futures in India

Sebi had conducted conducted an investigation in the initial public offer (IPO) of Fineotex Chemical to ascertain any possible violation of norms. The company came out with its public issue in 2011. Also Read - CBDT Signs MoU With SEBI For Data Exchange

The probe found that “noticee being the promoter and director of FCL had failed to adhere to the disclosure made in RHP/Prospectus and had gone ahead with a pre-arrangement for subscription of shares through two HNIs. Also Read - SEBI Allows Promoters to Increase Stake by up to 10%

However, such an arrangement was not in public domain during the relevant period and therefore mislead investors in subscribing to IPO.

“Noticee had engaged manipulative and deceptive scheme by indirectly engaging two HNI clients to apply in IPO when the issues were not fully subscribed and thereafter funded their application money and also received funds back from them after sale of shares on first day of listing,” it noted.

By indulging in such activities, Tibrewala has violated the provision of PFUTP (Prohibition of Fraudulent and Unfair Trade Practises) as well as ICDR (Issue of Capital and Disclosure Requirements) regulations, the regulator said.

Accordingly, the Securities and Exchange Board of India (Sebi) has levied a fine of Rs 25 lakh on him.

This is published unedited from the PTI feed.