sebi:BM/AO-25/2011
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Facts / Headnote
Penalty imposed on the Noticee for violations of SEBI Act, PFUTP and PIT Regulations
Provisions invoked
- s. 15A
- s. 15
- s. 12A
- s. 15H
- s. 15J
- s. 391
Regulations
- Reg. 3
- Reg. 13
- Reg. 13(4)
- Reg. 2
- Reg. 3(a)
Parties
- Suresh Mavani
Holding
The Noticee, Suresh Mavani, was held guilty of violating section 12A(a), (b) and (c) of the SEBI Act and regulations 3(c) and 4(1) of PFUTP for being part of the fraudulent activity of making premature and misleading announcements, and of violating regulation 13(4) read with 13(5) of PIT for failing to disclose change in shareholding. A total penalty of Rs. 6,50,000 was imposed (Rs. 5,00,000 under section 15HA and Rs. 1,50,000 under section 15A(b)).
Full text
Page 2 of 18 These announcements prima facie appeared to be misleading. It was further observed that the promoters and directors of the company transferred their shares in the off market in physical form to certain entities before the above announcements were made by BEPL. These entities in turn after dematerializing the shares transferred to other entities or sold in the market. It was alleged that such announcements were made by BEPL to induce the investors into buying the shares of the company thereby enabling promoters/directors of the company to offload their stake.
Page 3 of 18 SHOW CAUSE NOTICE, HEARING AND REPLY 5. Show Cause Notice No. EAD-6/BM/JR/8113/2010 dated June 10, 2010 (hereinafter referred to as “SCN”) was issued to the Noticee under rule 4(1) of the Rules to show cause as to why an inquiry should not be held against the Noticee and penalty be not imposed on the Noticee under sections 15HA and 15A(b) of SEBI Act for the alleged violation specified in the said SCN.
Page 4 of 18 CONSIDERATION OF ISSUES AND FINDINGS 8. I have carefully examined the SCN and the documents available on record. The
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Source: SecMarx — sebi:BM/AO-25/2011. 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.