The special SEBI court has held Panther Fincap and Management Services Ltd and its directors Ketan Parekh and Kartik Parekh guilty of violation of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 while acquiring shares of Shonkh Technologies International Ltd, sentencing the Parekhs to three years in jail. The firm and the directors have been asked to pay a fine of Rs10 lakh.
While convicting Ketan and his cousin, the court observed that, the two were in charge and responsible for the day-to-day functioning of the company. The court later granted bail to Kartik, as he was out on bail.
SEBI imposed a fine of Rs6.50 lakh on the company. The company challenged the order imposing the penalty before the Securities Appellate Tribunal (SAT). SAT rejected their appeal on January 9, 2007.
As the company and its directors failed to pay the penalty, SEBI filed a criminal case against the company and its directors — Kartik Parekh, Navinchandra Parekh, Kirtikumar Parekh and Ketan Parekh. It was contended that the Parekhs approached SEBI to pay the fine, but asked for withdrawal of the case. However, it was not agreed and SEBI opened the case against the accused.
The counsel for SEBI examined the assessment officer who had lodged complaint as a witness and showed the company had defaulted in payment of penalty.
The court found company and two of the directors guilty in the case. The other members have been acquitted.