SEBI slaps Birla wrist

Only in India can you do massive IT fraud in millions of dollars and be fined a piddling fine of US$ 1,200. Its sick man.

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SEBI fines Birla MF for non compliance
Sebi has slapped a Rs 75,000 penalty on Birla Mutual Fund for non-compliance with the take-over code regulations.

Sebi has slapped a Rs 75,000 penalty on Birla Mutual Fund, MF, for non-compliance with the take-over code regulations, reports The Economic Times.

The action has been taken for non-disclosure by the AMC when the holding of its various schemes in Bangalore-based IT company Subex System crossed the 5% limit in 1999.

The fund house was required to disclose under Regulation 7(1) and (2) of the Sebi take-over code, their aggregate shareholding in the company, within 4 working days of October 18, 1999 ie the date on which it crossed the threshold limit of 5% of the voting rights, Sebi order said.

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Sebi had issued a showcause notice on March 7, 2005 to the fund house. Sebi order also said that it has conducted an investigation into the phenomenal rise in share price of Subex since its listing in September 1999 at Rs 80 which rose to Rs 1,908 in December 1999.

The board’s order said that in an analysis of the trading patterns of the various entities including the brokers/clients who had traded in the said scrip, it was found that Birla MF was the single-largest buyer of the shares of Subex System at Bangalore and Hyderabad stock exchanges.

The fund house was also found to have made the maximum purchase in the said scrip (around 78%) in September 1999, the first month of its IPO listing, when the price was between Rs 80-300. Apart from the market purchases, the MF also got shares through preferential allotment.