SEBI bans entities and individuals on fake buyback

Market regulator Securities and Exchange Board of India (SEBI) on Monday banned eight people and six companies, including SMR Universal Infotech, from trading for two years in a case involving false advertisement regarding buy-back of shares in 2002.

These entities have been primarily accused of committing a "fraud on shareholders (of SMR) by first issuing misleading advertisement when they were not eligible or required to make commitment of buy-back as also their failure to take any conclusive action thereon," SEBI said in its order.

The entities banned by SEBI from trading for two years include SMR Universal Softech, Net Axis Software, Laxmi Agro, Mega Channel Computers, Golden Palms India and Fore C Software, besides Pradeep Kumar Jain, I Srinivasan, Mubeen-ur Rehman, A X N Prabhu, K R Kumaresan, S Moorthy, R Palaniappan and K Prakash.

Pointing out that the motive behind the advertisement was to deceive the investors by way of disseminating false information, SEBI said: "The process of announcing buy-back of shares and its subsequent withdrawal must have resulted in pecuniary loss to the investors who were influenced to purchase shares on the basis of advertisement."