sebi:8303

SEBI · SEBI · 2002-04-03 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Proceedings dropped against the noticee.

Provisions invoked

• s. 11B
• s. 19
• s. 73
• s. 621

Parties

• Shri Yeshwant M. Desai

Holding

SEBI dropped the proceedings against Shri Yeshwant M. Desai, finding he was not subject to the interim direction issued in October 2002 and the subsequent order dated October 10, 2003.

Full text

DATE OF HEARING: 28.06.2007 APPEARANCES: FOR THE NOTICEE: Shri Shyam Mehta, Advocate representing Shri Yeshwant M. Desai Shri Mohit Arora, Advocate representing Shri Yeshwant M. Desai FOR SEBI: Shri Jeevan Sonparote, DGM, SEBI Shri Mohamed Rahaz P.M., Legal Officer, SEBI 1.0

which SEBI would be constrained to pass a restraining order on the company and its directors. An opportunity of personal hearing was granted on May 31, 2003 which was not availed and thus culminating into an order dated October 10, 2003 directing the company and its directors namely Shri Goel B. Tulsidas, Shri Goyal B. Murlimanohar, Shri Goyal B Atulkrishna, Shri Yeshwant M. Desai, Shri Jaiveer Singh Bhaker, Shri Sunil Shankar Rao, Shri Suresh Bhagwat Prasad Gupta, Shri Kamal Kishore Kabra and Shri Ajay Santoshrao to dissociate themselves from the securities market for a period of 5 years. 1.2 Subsequent to the Order, Shri Yeshwant M. Desai (hereinafter referred to as ‘noticee’) filed Appeal No. 158 of 2003 before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as “SAT”) against the said order on the ground that he had resigned from the company w.e.f. July 14, 1998. He also contended before the Hon’ble SAT that he is an advocate and solicitor by profession and has been practicing full time since the year 1953. He was a partner in a law firm, M/s Ambubhai & Diwanji from 1959 to 1991 and thereafter in the law firm, M/s Desai and Diwaji. He also argued that he was a professional, non executive director of the company and was not responsible for the day to day affairs of the company. The Hon’ble SAT vide order dated July 07, 2004 set aside the above order and remanded the matter back to SEBI for a fresh consideration in accordance with law. 2.0 HEARING 2.1 In p

3.1 The only issue to be decided in this matter is whether the noticee was responsible for the failure of the company to redress the investor grievances which were pending in the year 2002. 3.2 The noticee stated that he had not received any show cause notice or any other communication from SEBI or the company except the final order dated October 10, 2003. The noticee has claimed to have resigned from the company w.e.f. July 14, 1998. The noticee has produced the copy of the resignation letter acknowledged by the company. Further, the noticee has also produced copy of the Form 32 filed by the company. 3.3 I note that SEBI had called upon the company to address the issue of pending investor grievances in April 3, 2002. Subsequently show cause notice was issued to the company in May 2002 and the first interim directions to address the pending grievances within one month was issued to the company in October 2002 and the final order was passed on October 10, 2003. 3.4 I observe from the documents produced by the noticee establish the fact he had resigned from the company as a director and also that the effective date of the resignation is the date of filing of the Form 32 with the ROC, i.e. July 15, 1998. 3.5 In view of the fresh facts brought to my notice in the instant proceeding by the noticee in his submissions, I conclude that the noticee was not subject to the

Source: SecMarx — sebi:8303. 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.