SEBI Penalty Default: 6 Months Jail for Directors

Mumbai, Jul 24 (PTI) A special court here has sentenced two directors of M'Belle International Pvt Ltd, a firm associated with jewellery fashion accessories sector, to six months of imprisonment for failing to deposit a penalty of Rs 1 crore imposed by the Securities and Exchange Board of India (SEBI).
Special judge R M Jadhav, in an order passed on July 19, convicted Gopu Belani and Anupama Motwani and sentenced them.
It also directed them to pay Rs 1 crore each for defaulting the penalty originally imposed by the regulator.
A case had been filed by the SEBI in 2014 against the company and its directors for an offence punishable under the SEBI Act, 1992.

The regulator, while probing the transaction of share prices of Roofit Industries Limited, had called upon M'Belle International Pvt Ltd to furnish certain information pertaining to the probe under section 11C (3) of the Act.
As per the said provision, the SEBI can compel individuals or entities associated with the securities market to furnish information before them for examination during an investigation.
The penalty of Rs 1 crore was imposed on M'Belle International, through an adjudication order dated June 30, 2004, as it failed to furnish information during an investigation into the share prices of Roofit Industries.
The prosecution had argued that the convicted directors were vicariously liable for the company's failure to pay the penalty.
Finding merits in the prosecution's argument, the court convicted Belani and Motwani, saying they "were responsible for non-compliance".
The court, however, acquitted another accused Rita Motwani of all the charges.