The founders of engineering and construction firm Jaiprakash Associates said they would challenge an order by the Securities and Exchange Board of India (Sebi), India's capital market regulator, penalising them on insider trading charges.

Sebi had imposed a penalty of 1 million rupees each on Manoj Gaur, chairman of the conglomerate, his wife Urvashi, and brother Sameer Gaur, as well as some company executives, for insider trading in the company's stock in 2008.

"The findings in the order are completely erroneous and contrary to factual position," Manoj Gaur said in a statement issued late on Friday.

"Aggrieved by the order, we are in the process of challenging the same before the Securities Appellate Tribunal."