SEBI fines Veerkrupa Jewellers MD, IPO banker and officials ₹16 lakh over public issue proceeds

The Securities and Exchange Board of India (SEBI) has imposed penalties totalling ₹16 lakh on Veerkrupa Jewellers Managing Director Chirag Arvindbhai Shah, the company's IPO merchant banker First Overseas Capital Ltd (FOCL) and three of the merchant banker's officials.

The action relates to violations concerning the handling of proceeds from Veerkrupa Jewellers' ₹8.10-crore public issue.

SEBI imposed a penalty of ₹5 lakh each on Shah and First Overseas Capital. FOCL officials Mala Soneji, Rushabh Pradeep Shroff and Satyen Bhupendra Dalal were fined ₹1 lakh, ₹2 lakh and ₹3 lakh, respectively.

Why did SEBI investigate?

SEBI investigated Veerkrupa Jewellers to determine whether securities-market rules had been violated in connection with the company and its public issue.

The investigation examined possible violations of provisions under the SEBI Act, the Securities Contracts (Regulation) Act, the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations and the Listing Obligations and Disclosure Requirements (LODR) Regulations.

The regulator's order records violations by the five parties and said the penalties imposed were commensurate with those violations.

Of the total ₹16-lakh penalty, Shah and First Overseas Capital together account for ₹10 lakh, while the three FOCL officials have been fined a combined ₹6 lakh.

What happens next?

All five have been directed to pay their respective penalties within 45 days of receiving SEBI's order.

If they fail to do so, the regulator can initiate recovery proceedings under the SEBI Act.

Those powers include recovering the penalty along with interest and, if required, attaching and selling movable or immovable property.

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