1. These appeals are directed against the order passed by SEBI on 29-11-2002. The Respondent held the Appellants guilty of violating certain provisions of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 (the FUTP Regulations) and debarred them from "accessing and being associated with the capital market for a period of five years" with effect from the date of the impugned order.

2. SEBI has stated the background leading to the adjudication and issuance of the impugned order as follows :

"Investigations were conducted by SEBI into the affairs relating to buying, selling and dealing in the shares of M/s. Manu Finlease Ltd. (MFL) which entered the capital market with a public issue of 21,00,000 shares of Rs.10 each for cash at par. The issue remained open from 14-10-1995 to 18-10-1995. As per the prospectus dated 5-9-1995 the directors of MFL were Shri A.K. Jindal, Shri P.K. Kapoor, Shri R.K. Aggarwal, Shri J.K. Garg & Smt. Ritu Garg. The Lead Manager to Public Issue was M/s. Doogar & Associates and the Registrar to the Issue was M/s. SPS Data Products Ltd.

As per 3 day report filed on 21-10-1995, the number/s of shares subscribed to were 51.959 lacs i.e. the issue was oversubscribed by 2.81 times. However, as per 78 days report filed on 5.1.1996, the number of shares subscribed were 595.059 lakhs i.e., the issue was oversubscribed by 50.43 times. It was observed from the basis of allotment that the issue was subscribed mainly by way of stock invests accompanying big applications. The shares were listed at Delhi, Ahmedabad & Jaipur Stock Exchanges. As per the prospectus of MFL, Earning Per Share had reduced from Rs. 1.36 for the financial year 31-3-1994 to Rs. 1.07 for 31-3-1995. Thus, MFL did not appear to have any sound track record or profitability, which could justify oversubscription by 50.43 times. Further, scrip opened at Rs. 48 in January 96 at DSE and showed unusually high fluctuations touching Rs. 72 in March 96.

In view of the above, an investigation was ordered into the affairs relating to buying, selling or dealing in the shares of MFL in terms of order dated 2-8-1996. Investigations inter alia showed various irregularities which are detailed below :—

(A)Public Issue manipulation

1. Forgery in amount of stockinvests

There were 12 applications accompanied by stockinvests issued by Sangli Bank, Karol Bagh, New Delhi at Rs. 1 lac each. These stockinvests were fraudulently increased to Rs. 1 crore each. This implies that stockinvests of Rs. 12 lacs were used for making applications of Rs. 12 crores. All these stockinvests were issued to Shri Prem Gupta, a director of Glory Securities Ltd. (an associate concern of MFL).

Similarly, there were 23 applications accompanied by stockinvests also issued by Sangli Bank, wherein the amounts of stockinvests were increased by a multiple of 10. This implies that stockinvests worth Rs. 27.6 lacs were utilized for making applications worth Rs. 276 lacs. These include stockinvests issued to Shri Ashok Chawla, who had admitted by obtained these stockinvests on the asking of Shri S.K. Gupta. Shri S.K. Gupta arranged finance on behalf of Shri J.K. Garg and Shri A.K. Jindal, both Directors of MFL at the request of D.B. (India) Securities Ltd., member DSE (hereinafter referred to as DBISL). As admitted by Shri S.K. Gupta during the investigations, these stockinvests with blank applications forms were delivered at the office of DBISL. Subsequently these blank application forms were filled up, matching the altered value of stock invests as application money.

2. Back dating of stockinvests and acceptance of late applications.

As mentioned earlier, 12 stockinvests were issued by Sangli Bank for Rs. 1 lac each to Shri Prem Gupta, which were increased to Rs. 1 crore. All these stockinvests were issued on 19-11-1995 i.e. much after the close of the issue on 18-10-1995. These applications were accepted by De