SEBI Fines Capital Finance & Investments Rs1 Lakh for Ignoring Summons

Moneylife Digital Team 29 August 2025

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs1 lakh on Capital Finance and Investments LLP for failing to cooperate with an investigation into suspicious trading activities in the shares of Sigma Solve Ltd. The regulator found that the firm ignored repeated summonses and failed to appear before the investigating authority (IA), thereby violating provisions of the SEBI Act.

In an order, Jai Sebastian, adjudicating officer (AO) of SEBI, stated that it is established that Capital Finance and Investments failed to appear before IA despite receipt of multiple summonses and reasonable cause, thereby violating the provisions of the SEBI Act. Capital Finance and Investments was under a statutory obligation to abide by the provisions of the SEBI Act, which it failed to comply with.

SEBI had launched an investigation into trading in the shares of Sigma Solve to determine possible violations of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. During the probe, Capital Finance and Investments was issued multiple summonses under Section 11C(5) of the SEBI Act, which empowers the regulator to examine individuals on oath in relation to securities market activities.

Despite receiving three separate summonses between October and December 2024, the firm failed to present itself before the IA. While Capital Finance and Investments argued that it had already furnished the required information in response to SEBI’s earlier communications, the regulator stressed that providing written replies was not a substitute for appearing in person for examination on oath.

In its defence, the firm cited the illness of one of its partners, Sumit Kumar, who was diagnosed with typhoid and jaundice and advised rest for a month. However, SEBI noted that sufficient time had been granted, including a final date of 23 December 2024, which was scheduled after the advised rest period. The firm’s other partner, Ms Lovely, did not appear either, citing a lack of knowledge about the transactions under investigation.

The regulator highlighted that Capital Finance and Investments had not only ignored summonses but also failed to respond to follow-up emails and letters from the IA. SEBI emphasised that the firm’s repeated requests for questionnaires in place of personal appearance were unacceptable, as the law required examination on oath to ensure credibility and accountability in the investigation process.

SEBI also pointed out that the firm’s presence was crucial, given its suspected links with the top contributor to price manipulation in Sigma Solve shares and other entities involved in suspicious fund transfers. The firm’s refusal to cooperate was found to have hindered the regulator’s ability to establish key connections in the case.

After considering the evidence, SEBI concluded that Capital Finance and Investments LLP had deliberately avoided appearing before the IA without reasonable cause, thereby violating Section 11C(5) of the SEBI Act.

As a result, the AO, Mr Sebastian imposed a monetary penalty of Rs1 lakh under Section 15HB of the SEBI Act.

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