Securities & Exchange Board of India imposed Penalty on IPO Scam Financers

Market regulator SEBI imposed a penalty of Rs 14 crore on Dushyant Natwarlal Dalal and Puloma Dushyant Dalal who were the two financiers for unlawful gains made during the infamous IPO scam of 2003-05. The two financers were accused of making unlawful gains of over 4.94 crore by cornering shares of various companies meant for retail individual investors and the penalty is three times of the amount.

SEBI directed the two companies to pay up the penalty within 45 days either jointly or individually.
The Dalals had been charged with being financiers to two key operators -- Sugandh Estates and Investments Pvt Ltd and Purshottam Budhwani. The key operators were accused of opening large number of demat accounts in the name of non-existent persons or name lenders and acquired shares of various companies by making applications in fictitious names. The key operators had subsequently transferred these shares through off-market deals to ultimate beneficiaries who had acted as financiers.

The Dalals were charged with being parties to such unlawful act of cornering shares and acting in connivance with others to make unlawful gains at the cost of other individual investors.