sebi:8199

SEBI · SEBI · 2002-07-04 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Restrained the Noticees viz. MOH Ltd, Sunil M. Shah, Shri. Chagan Bhai A Manani, Shri. S. Sankaran, Shri. B. Palinicker and Shri. Manubhai Oghadlal Shah from buying, selling and dealing or accessing the securities market in any manner for a period of two years with immediate effect.

Provisions invoked

Regulations

Parties

Holding

The Whole Time Member held MOH Ltd and its five promoters/directors liable for fraud and market manipulation and restrained them from buying, selling, dealing in or accessing the securities market in any manner for two years.

Full text

APPEARANCES: FOR THE COMPANY/ITS PROMOTERS: Shri Sunil Shah, Managing Director, M/s MOH Ltd Shri Anish B Shah, Practising Company Secretary FOR SEBI: Mrs Barnali Mukherjee, DGM, SEBI Shri. K. V. Krishna Sastry, Manager, SEBI Shri. Mohamed Rahaz P. M., Legal Officer, SEBI

1.3 On perusing the Balance Sheet of MOH as on 31.03.2002, it was observed that MOH had no free reserves, share premium account and the proceeds of any shares to make it eligible for the buy-back of its shares in terms of Section 77A of the Companies Act. 1.4 In view of the above, investigation was conducted by Securities and Exchange Board of India (hereinafter referred to as “SEBI”) into the buying, selling and dealing in the scrip of MOH, for the period May 2002 to July 2002 under the provisions of the SEBI Act, 1992 read with SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 1995 (hereinafter referred to in short as “PFUTP Regulations”) and other relevant SEBI Regulations. Investigations revealed that the company M/s MOH Ltd had acquired 100% shareholding in M/s Saturn Technologies Ltd, (hereinafter referred to as “Saturn”) thereby making it 100% owned subsidiary. MOH had made a preferential allotment of 15 crore equity shares of Rs 1 paid up capital to the shareholders of Saturn as a consideration for an acquisition other than cash. Equity capital of MOH Ltd was Rs 10 crores (prior to acquisition of Saturn) which increased to Rs 25 crores after acquisition. The total turnover of Saturn was mere Rs 16 lakhs. 1.5 As per the details submitted by the company M/s MOH Ltd., it was observed that Saturn and MOH had common subscribers to the Memorandum of Understanding including Shri. Sunil Shah, CMD, M/s MOH Ltd indicating th

of preferential allotment to related entities, the buyback of shares through buyback advertisement, reasons for the proposal of buy back being rejected and its impact on the volume of the shares suggested a clear involvement on the part of promoters / directors to create an artificial demand for the shares of the company and deceive the innocent investors. The company MOH and its Directors, Shri. Sunil M. Shah, Shri. Chagan Bhai A Manani, Shri. S. Sankaran, Shri. B. Palinicker and Shri. Manubhai Oghadlal Shah (hereinafter referred to as “Noticees”), therefore, had violated Regulation 4, 5(1) (a) & (b) and 6(a) of PFUTP Regulations by issuing misleading statements / advertisements, by employing schemes, devise, act or practice intended to defraud and to influence the investment decisions of the investors. 2.0 SHOW CAUSE NOTICES 2.1 A show cause notice dated May 26, 2006 was issued to the Noticee advising them to show cause as to why directions under Section 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of PFUTP Regulations 2003 including debarring them from accessing the capital market and trading in securities should not be issued against them for the violations mentioned at paragraph no. 1.4 above. A supplementary show cause notice dated June 22, 2006 was also issued to the promoters of the company viz. Shri. Sunil M. Shah and Shri. Manubhai Oghadlal Shah for the violations of Regulation 6(a) read with Regulation 3 of PFUTP Regulations,

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Source: SecMarx — sebi:8199. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.