In its first action against penny stocks, the Securities and Exchange Board of India on Wednesday barred the promoters and directors of IFSL Ltd and Minal Engineering from dealing in the capital market.

The order, which comes into effect immediately, has also banned the clients and the broker-shareholders of IFSL from dealing in the company's stock, according to a Sebi statement issued on Wednesday.

The order followed the regulator's preliminary investigation into the movements of these penny stocks. The promoters of IFSL Ltd against whom the orders were passed by Sebi are Sonal Fincap Pvt Ltd and its directors PK Singh, Ramdas Kshisagar, Mukesh Vora, Dilip Kulkarni, Rishi Vashist, N Narendra and Rakesh Singhvi.

The broking firms that have been prohibited from dealing in IFSL Ltd on behalf of the promoters, directors and clients directly or indirectly, include Indiabulls [Get Quote] Securities Ltd, Insight Share Brokers Pvt Ltd, Fortis Securities Ltd, Joindre Capital Services Ltd [Get Quote], India Infoline [Get Quote] Securities Pvt Ltd, Ruchiraj Share Stock Broker, Peninsular Capital Market Ltd, Archi Shares & Stock Brokers Pvt Ltd.

Some of these broking firms were shareholders of the company.

The clients prohibited from trading in IFSL stock are New Leader Trading Co (P) Ltd, Sharpline Trading Co Pvt Ltd Right Star Trading Co (P) Ltd, Stockholm Mercantile Co Pvt Ltd, White Moon Mercantile Co (P) Ltd, Amar Adhav, Deepak Narvekar, Umesh Choukekar, Ganesh Raut, Deepak Todkar, Rajkishore Singh and, Prakash Yadav, Jay Shah, Vishalkumar Textiles Pvt Ltd, and Jayesh Waghela.