The Securities Appellate Tribunal (SAT) has upheld the SEBI order against chartered accountant couple Dushyant and Puloma Dalal in the IPO allotment scam and dismissed the appeal filed by the couple. The stock market regulator, SEBI, had found them guilty of cornering IPO shares meant for retail investors in 10 IPOs — ILFS, IDFC, Sasken Communication, FCS Software, Gateway Distripark, Provogue, MSP steel, Nectar Life Sciences, Shoppers Stop and Suzlon Energy. In an order passed on July 21, 2009, SEBI ruled that the Dalal couple, in collusion with two other operators, Mr Purushottam Budhwani and M/s Sugandh Estates, had manipulated and cornered shares meant for retail investors using fictitious accounts. SEBI had disgorged the ill-gotten profits (Rs 4.05 crore) and asked the couple to pay interest at 12 per cent per annum. Disgorgement is the act of giving up illegally or unethically obtained profits on demand or by legal compulsion.
Couple appeals
Following this, the couple appealed against the SEBI order to SAT. The tribunal, reacting to the appellant’s argument that they had only lent money to the operators, said that both were chartered accountants by profession and not money lenders. The tribunal also endorsed SEBI’s order that the couple had acted in concert with the operators. SAT confirmed that SEBI has the right to disgorge the amount of ill-gotten profits. The tribunal also said that the couple had used the money made by cornering shares and that the 12 per cent penal interest was by no means excessive.
