MFL paid a settlement amount of Rs 2.01 crore while I Unnikrishnan, who was the Executive Director and Deputy CEO of the company, paid little over Rs 1.39 crore. One Sachin Agarwal paid around Rs 1.38 crore. Besides, V P Nandakumar, B N Raveendra and Rajesh Kumar settled the case. Each of them paid Rs 15.48 lakh, according to the orders.
They had proposed to settle the proceedings, without admitting or denying the findings of fact and conclusions of law, and their applications were recommended for settlement by Sebi's High Powered Advisory Committee. The total settlement charges amounted to around Rs 5.25 crore.
The watchdog had probed the matter of selective disclosure of UPSI related to the company. It was found that on March 19, 2013, the share price declined by 20 per cent coupled with a rise in volume. This came after the MFL informed the BSE that it expects an under recovery on certain loans due to correction in the gold prices as a result of which the profit for the corresponding quarter will be reduced.
It was alleged that MFL had selectively given guidance pertaining to quarterly results to certain analysts of Ambit Capital.
During the MFL's board meeting on March 13, 2013, it was mentioned that there was a possibility of making a negative profit for the corresponding quarter, which is deemed to be UPSI as under Sebi regulations, as per the orders.
On March 18, 2013, analysts from Ambit Capital had a meeting with MFL, wherein allegedly the UPSI was discussed, according to Sebi.
"After the aforesaid meeting, Ambit Capital changed its rating of MFL stock from 'buy' to 'under review' and published a research report based on its meeting with MFL which was distributed to its clients on March 19, 2013 before market opening hours," as per one of the orders.
Some portions were similarly worded in the six orders.
Certain clients of Ambit Capital who had received the research report sold shares of MFL on the basis of the report.
MFL, Unnikrishnan, who was the executive director and deputy CEO, of the company, and Agarwal had communicated UPSI to market participants before the same was disclosed to the exchange, as per the Sebi orders.
According to the orders, V P Nandakumar, who was MD and CEO of MFL, and B N Raveendra, who was a board member, failed to supervise implementation of the code of conduct in violation of Sebi norms.
In the case of Rajesh Kumar, who was the compliance officer, Sebi said he had failed to implement the code of conduct.