sebi:BM/AO-136/2011
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Facts / Headnote
Violation of PFUTP Regulations 3(a),(b),(c),(d), 4(1) and 4(2)(a),(d) and SEBI Notification G.S.R. 219(E) dated March 2, 2000 read with Sections 16 and 18 of SCRA held established; violation of Regulation 4(2)(f),(k) not established; Noticee held liable for penalty under Section 15HA of SEBI Act and Section 23H of SCRA
Provisions invoked
- s. 15
- s. 15H
- s. 13
- s. 16
- s. 15I
- s. 15J
- s. 23I
- s. 23J
- s. 18
- s. 41
- s. 23H
- s. 17
- s. 10
- s. 152A
- s. 11
- s. 29A
- s. 2(7)
- s. 2(4)
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(1)
- Reg. 4(2)(f)
- Reg. 3(a)
- Reg. 3(c)
- Reg. 3(b)
- Reg. 4(2)(a)
- Reg. 4(2)(d)
- Reg. 3(d)
- Reg. 4(2)(k)
Parties
- Eaugu Udyog Limited
Holding
The Noticee, promoter seller of Hit Kit Global Solutions Ltd, violated PFUTP Regulations 3(a)-(d), 4(1) and 4(2)(a) & (d) through synchronized trades with connected entities and violated SCRA Sections 16 and 18 r/w Notification G.S.R. 219(E) through off-market non-spot-delivery transfers, and is liable for penalty under Section 15HA of SEBI Act and Section 23H of SCRA. The charge under Regulation 4(2)(f) & (k) was not established.
Full text
______________________________________________________________________________________ Eaugu Udyog Limited in the matter of Hit Kit Global Solutions Limited Page 2 of 50 million by January 31, 2005, ` 19.3 million by April 2005 and ` 20.19 million by July 2005 which came down to ` 4.66 million in the quarter ended October 31, 2005 and ended up with a loss of ` 34.31 million by January 31, 2006. Noticee reduced its holding in the company from 2,05,68,600 shares (58.5%) as on September 2004 to 54,36,667 shares (15.53%) as on March 31, 2005. This was further reduced to 10,96,267 shares (3.13 %) as on June 30, 2005 and to 6,86,000 shares (1.85%) as on September 30, 2005. Noticee was not shown as promoter in the subsequent quarters and its holding reduced to 25000 shares by December 1, 2005. The last of such trades happened in November 2005. It was observed that in the quarter ended April 30, 2005 i.e. the quarter after Noticee offloaded substantial shares in the company, the company reported losses which taken together had neutralized the accumulated profits and the year’s financial results became ordinary.
______________________________________________________________________________________ Eaugu Udyog Limited in the matter of Hit Kit Global Solutions Limited Page 3 of 50 volume created by the connected entities the shares sold by the Noticee were absorbed by the market at much higher rates than the closing price of ` 0.93 just at the beginning of the investigation period.
______________________________________________________________________________________ Eaugu Udyog Limited in the matter of Hit Kit Global Solutions Limited Page 4 of 50 Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 2005 to inquire into and adjudge under Section 15HA of the SEBI Act and 23H of SCRA.
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Source: SecMarx — sebi:BM/AO-136/2011. 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.