Mumbai: In the case of non-compliance with SEBI’s investigation into suspected stock market manipulation in 1998, the special SEBI court has convicted Dinesh Doshi and Anil Doshi, along with their firms – Rijuta Finvest Pvt Ltd and Damayanti Finvest Pvt Ltd – for failing to furnish information sought by the market regulator.
Given that both Dinesh and Anil are cancer patients, the court took a lenient view and sentenced them to one year of imprisonment in each case. They have also been directed to pay a fine of Rs2 lakh each in both cases.
According to SEBI’s complaint filed in July 2014, the probe was initiated after abnormal price movements and unusually high trading volumes were observed in shares of BPL Ltd, Videocon International Ltd, and Sterlite Industries Ltd between April and June 1998. A petition in the Bombay High Court had also directed SEBI to investigate the matter thoroughly.
During the probe, several brokers and exchange members were identified, whose records showed they had executed trades in the said shares for a common set of clients. Among those clients were the two firms led by the Doshi brothers.
SEBI stated that after initially evading summons on medical grounds, the accused appeared before the regulator between July and August 1998 and gave statements. They were then directed to submit transaction-related records but failed to comply. Despite a show-cause notice and several reminders, the firms did not produce the documents.
Subsequently, SEBI filed complaints against all directors of the two firms, including Vinod Shah and Dilip Shah. The cases against them abated due to their deaths during the trial.
In their defence, the Doshi brothers denied holding directorial roles at the time and argued the prosecution had not proved their guilt. The court rejected these claims, confirming that the two were indeed directors and had deliberately withheld documents.
The court concluded that their non-cooperation impeded a regulatory investigation into serious allegations of market manipulation, warranting conviction under applicable provisions.
