sebi:ADJ/SKS/97863/2007

SEBI · SEBI · 2007-07-03 · Santosh Shukla, Adjudicating Officer

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Facts / Headnote

Penalty imposed

Provisions invoked

• s. 15A
• s. 15
• s. 15I
• s. 15J
• s. 11C
• s. 11C(3)

Parties

• Managing Director, M/s. DSQ Holdings Ltd.

Holding

The Adjudicating Officer imposed a penalty of one lakh rupees on the Managing Director of M/s. DSQ Holdings Ltd. for failure to furnish information, documents and records sought by the Investigating Authority under summons dated March 08, 2004, contrary to section 11C(3) of the SEBI Act, attracting penalty under section 15A(a) of the SEBI Act.

Full text

2 2.0 Inquiry and Show Cause Notice 2.1 In terms of Rule 4 of the Adjudication Rules, the undersigned had issued a show cause notice vide letter no. ADJ/SKS/97863/2007 dated July 03, 2007 advising the noticee to show cause within 14 days of the receipt of the show cause notice as to why an inquiry should not be held against it. The said show cause notice was sent by way of Registered Post, Acknowledgement Due at the address of the noticee as available on record. However, the show cause notice was returned undelivered by Postal Department with remarks “Left”. The said show cause notice was also hosted on the SEBI website under the head “Unserved Summons/Notices” so as to enable the noticee to avail the opportunity of hearing. However, the noticee failed to avail this opportunity of submitting reply. 2.2 Another notice communicating the date of hearing in the matter was issued to the noticee vide letter no. ADJ/SKS/99880/2007 dated July 27, 2007 fixing the date of appearance on August 13, 2007. A copy of the show cause notice dated July 03, 2007 alongwith its enclosures was enclosed with this notice of hearing. The noticee was also advised that if it wished to avail the consent process, it may apply in the prescribed format as per SEBI Circular no. EFD/ED/Cir-1/2007 dated April 20, 2007 (available at www.sebi.gov.in). The noticee was further advised that if the opportunity of personal hearing is not availed, it would be presumed that the noticee does not have any explanation to

3 Summons/Notices” so as to enable the noticee to avail the opportunity of hearing. However, the noticee failed to avail this opportunity of hearing. 2.4 Vide letter no. ADJ/SKS/PS/108396/2007 dated November 13, 2007 another date for appearance in the matter on November 29, 2007 was intimated to the noticee. The said letter was also sent to the noticee by way of Registered Post, Acknowledgement Due. However, the same was returned undelivered by the Postal Department with remarks “Left”. Since the letter was returned another date was fixed on December 06, 2007 in the matter and the same was communicated to the noticee vide letter No. ADJ/SKS/PS/109401/2007 dated 27.11.07. Since this letter was also returned undelivered by the Postal Department the said notice was served upon the noticee through substituted service on 04.12.07 by pasting the same on its premises, the address of which was made available to the Southern Regional Office of SEBI. However, the noticee failed to avail all opportunities of submitting reply and personal hearing despite services of the notices as stated above. 3.0 CONSIDERATION OF EVIDENCE AND FINDINGS 3.1 Since, the noticee has failed to avail the opportunities of hearing granted vide letters dated July 03, 2007 and July 27, 2007 and thereafter vide letters dated November 13, 2007 and November 27, 2007, in terms of rule 4 (7) of the Adjudication Rules the matter is being proceeded with in the absence of any representation or submission by the noticee a

4 as required by the covering letter of the summons, was extended to April 16, 2004 and April 27, 2007 respectively. The said letters were also served upon the noticee on 15.04.04 and 23.04.04, respectively. 3.4 I find that despite service of the summons and the covering letter dated March 08, 2004 and subsequent letters dated April 08, 2004 and April 21, 2004 upon the noticee, it failed to furnish the information, documents and records as sought by the Investigating Authority within the time specified by the said summons and letters. It is also noted that the Investigating Authority had also advised the noticee that if it omits to produce the books of accounts and/or documents as required by the Investigating Authority, SEBI shall initiate adjudication proceedings against the noticee and it could be levied the monetary penalty as provided in section 15A of the SEBI Act. 3.5 By the said summons and covering letter dated 08.03.04, the Investigating Authority had inter alia sought from the noticee – (a) the details of its dealings in securities of M/s DSQ Biotech Ltd(now known as M/s Origin Agrostar Ltd.). (b) the details of buy/sell transactions, name of the broker/sub- broker , quantity of shares rate at which bought/sold, DP Id, etc. (c) details regarding demat beneficiary accounts such as account number, name and addsress of DP, date of operation of the account, demat transaction statement (d) in case of physical settlement the extract of ledger of the brokers; (e) details

Source: SecMarx — sebi:ADJ/SKS/97863/2007. 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.