sebi:BM/AO-87/2011

SEBI · SEBI · 2010-03-08 · Barnali Mukherjee, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Noticee absolved of PFUTP and SAST charges; held guilty of violating Regulation 13(1), 13(3) read with 13(5) of PIT and penalty of Rs.2,00,000 imposed under Section 15A(b)

Provisions invoked

• s. 15
• s. 12
• s. 81
• s. 10
• s. 15J

Regulations

• Reg. 3
• Reg. 7
• Reg. 13
• Reg. 13(3)
• Reg. 7(1)

Holding

The Noticee was absolved of manipulation/PFUTP charges for lack of evidence, but was held to have violated Regulation 13(1) and 13(3) read with 13(5) of PIT for failure to disclose acquisition and transfer of 12,50,000 shares, and a monetary penalty of Rs.2,00,000 under Section 15A(b) was imposed.

Full text

2 March 23, 2007 the Noticee acquired 12,50,000 shares through the preferential allotment from RPIL. It was alleged that the above allotment was not made within prescribed 15 days and were further made without due approval from shareholders and also at manipulated and lower prices.

3 inquire into and adjudge under Section 15 A (b) and 15 HA of the SEBI Act for the alleged violation of the provision of SEBI Act, SAST, PIT and PFUTP Regulations as committed by the Noticee.

4 ¾ Information sought by BSE was duly approved by RPIL on January 02, 2007 to which BSE replied vide letter dated January 05, 2007 that the notice served on the shareholder- rs on November 25, 2006 was not proper. Since RPIL had not complied with the formalities, RPIL was directed not to proceed with the allotment of shares. ¾ RPIL vide letter dated January 25, 2007 intimated BSE about another EGM scheduled to be held on February 28, 2007 incorporating the required disclosures for ratification by the shareholders of the resolution passed in the EGM of December 26, 2006. ¾ RPIL received another letter from BSE dated February 06, 2007, wherein BSE granted it in principle approval only for issue and allotment of shares to the Company, however sought shareholders resolution ratifying the disclosures for the purpose of listing of the shares.BSE vide letter dated March 13, 2007 granted the request of RPIL for extension and directed it to slot the shares by March 28, 2007. ¾ In the meantime the shareholders of RPIL in the EGM of February 28, 2007 ratified the resolutions passed in the EGM of December 23, 2006 and thereafter made allotment of the shares to the company and applied for listing of shares which were duly granted by BSE vide its letter dated June 01, 2007. ¾ It is humbly submitted that Mr. Fatehpuria is neither a shareholder nor a director of the Company. Therefore it cannot be construed that RPIL is connected to the company. Mr. Fatehpuria, being expert in the field of

Source: SecMarx — sebi:BM/AO-87/2011. 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.