Mumbai, May 7 (PTI) A special SEBI court on Thursday convicted two directors and their five firms, linked to late stockbroker Harshad Mehta, for failing to provide information during a 1998 investigation into the manipulation of shares belonging to BPL and Videocon.

The court directed Dinesh Doshi and Anil Doshi, along with their five firms, to pay a fine of Rs 10 lakh each in five separate cases.

Special judge RM Jadhav, in his ruling, said, "It is evident, established and proved beyond all reasonable doubt that accused company and its directors have failed to comply the summons issued by the investigating authority. The accused directors have failed to prove that the offence of non-compliance was committed without their knowledge or that they had exercised all due diligence to prevent the commission of the offence." According to the complaint filed by Securities and Exchange Board of India (SEBI) in July 2014, the market regulator had conducted a probe in 1998 into alleged price manipulation of shares of BPL Ltd, Videocon International Ltd and Sterlite Industries Ltd.

SEBI had observed abnormal price movements and large trading volumes between April and June 1998. The investigation revealed that several stock exchange brokers had dealt in these shares primarily on behalf of a common set of clients, identified as five Damayanti Group companies.

SEBI alleged that the directors initially evaded summons citing medical grounds. While they later recorded statements between July and August 1998, they failed to furnish specific transaction records despite a show-cause notice and three subsequent reminders.

The companies claimed they were victims of Harshad Mehta's misconduct. They argued that Mehta, who was married to a sister of the accused directors, operated through these "fictional" companies without the directors' actual consent or knowledge.

However, the court noted that while Mehta may have been the "key person or front" for the market manipulation, the current prosecution was strictly limited to the accused's failure to comply with legal summons. PTI AVI BNM