Mumbai, Dec. 11: The Securities and Exchange Board of India (Sebi) has suspended the certificate of registration of Reliance Share and Stockbroking, a Reliance Anil Dhirubhai Ambani group company, for four months from the bourses.

However, in an order issued by the market regulator, wholetime member T.C. Nair said as there were a few violations that were technical in nature and some of them rectified, the penalty had been reduced from nine months. The order will come into force within 20 days.

The company has contended that imposing a major penalty six years after the irregularities are alleged to have taken place and several years after the procedural lapses have been corrected is meaningless and not in the interest of the securities market.

A company spokesperson said, “We shall make an appeal to the Securities Appellate Tribunal and the matter is a procedural issue, which had taken place in 1999-2000.”

According to an order dated October 20, 2000, Sebi appointed auditors to conduct inspection of books of accounts, documents and other records of the company for the period from April 3, 1999 to November 26, 2000 with reference to its transactions on the BSE.

The auditors, in their report dated March 15, 2001, pointed out various violations with regard to non-maintenance of requisite books of accounts, documents and other records, non-issuance of contract notes, undertaking of improper trades and transactions with other members of BSE, non-segregation of own funds from clients’ funds and utilisation of clients’ funds, non-maintenance of client database and dealing with unregistered sub-brokers.

Based on the inspection report and reply submitted by the broker, an enquiry officer was appointed and a show cause notice was sent to the company with detailed charges.

Reliance Shares and Stockbroking then replied to the charges and appeared for a personal hearing on July 31, 2003 and August 4, 2003. Another personal hearing was granted to the company on March 25, 2004. This was attended by Amitabh Jhunjhunwala, director, Reliance Capital, D.H. Shah, director, Reliance Share & Stock Brokers and other officials.