Sebi bans former Tata Finance MD for 2 years

MUMBAI: Market regulator Sebi on Monday imposed a two-year ban on former Tata Finance managing director Dilip Pendse in a case related to executing illegal carry forward trades in the stocks of HFCL, Tata Motors (then TELCO), Infosys and SSI Ltd.
The case related to Pende's involvement in these transactions while he was a director of Inshaallah Investments and Niskalp Investment & Trading Co, both.
Prashant Saran, wholetime member, Sebi, in his order restrained Pendse from accessing the capital market and prohibited him from "buying, selling or otherwise dealing in the securities market, directly or indirectly, for a period of two years", from the date of the order.
In October 2002, Sebi had received a compliant from Tata Finance about alleged wrongdoing by Pendse, including his complicity with two brokers, Jhunjhunwala Stockbrokers of BSE and Pratik Stock Vision of NSE, through which those transactions were carried out.
It was alleged that Pendse executed illegally carry forwarded transactions in the said scrips on behalf of Inshaallah to transfer possible losses from the account of Anjudi Property, a company related to him, to Inshaallah's books through off-market transactions when the prices of these scrips were falling.
It was also alleged that these transactions did not result in delivery of shares or in the payment of consideration, and were just book entries to transfer the losses. Sebi found that Pendse had violated its Prohibition of Fraudulent and Unfair Trade Practices Regulations and hence the penalty was imposed. The regulator has now allowed Pendse to square off his existing open positions, if any, in the derivatives segment at the earliest.