Sebi had received copies of share certificates dated April 2011 of RFL International Ltd from certain entities which were issued to them by RFL. However, it was observed that there was no change in shareholding structure of RFL for the quarter ended March 2011 to June 2011.
Thereafter, Sebi conducted an investigation in the matter of RFL International for the period January 2011 to June 2011.
Pursuant to probe, the regulator found that RFL International received funds from certain entities and in exchange, it had issued shares certificate to them which it did not have listing and trading permission.
Further, RFL International neither informed BSE nor listed the said shares on BSE. It did not increase its paid up share capital.
Thus, RFL International and its managing director Anish Shah, were involved in fraudulent issuance of share certificates dated April, 2011 to certain entities without any regulatory compliance and thus deceived them, according to the order.
Further, RFL did not reply to the summons issued by the watchdog and failed to furnish the documents/ information as required by the investigating authority which hampered the investigation process.
The aforesaid fraudulent scheme was hatched by RFL and Shah, which duped investors into subscribing to shares for which the Noticee 1 and 2 never intended to obtain listing and trading permission, effectively rendering such shares untradeable on the exchange platform, the order stated.
Also, the regulator levied a fine of Rs 3 lakh on RFL International, however, this penalty would be subject to the outcome of Sebi’s appeal pending before the Supreme Court. Section 23E in the SCRA pertains to listing conditions.
Meanwhile, in a separate order, the market watchdog slapped a fine of Rs 5 lakh on an entity for contravening the regulatory norms in the matter of Indreshwar Sugar Mills Ltd.
The order came after Sebi conducted an probe in the matter of Indreshwar Sugar Mills Ltd (ISML) for the period April 2010 to March 2014.