sebi:BM/AO-88/2011

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/SEBI Act manipulation charges and SAST and PIT Regulation 13(1) charges; held liable for violation of Regulation 13(3) read with 13(5) of PIT and penalized Rs.1,00,000 under Section 15A(b)

Provisions invoked

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

Regulations

• Reg. 3
• Reg. 7
• Reg. 13
• Reg. 13(1)
• Reg. 13(3)
• Reg. 7(1)
• Reg. 2(c)
• Reg. 13(5)

Holding

The Noticee did not violate PFUTP Regulations and Section 12A of SEBI Act or Regulation 7(1), 7(2) of SAST and Regulation 13(1) of PIT, but violated Regulation 13(3) read with 13(5) of PIT by failing to disclose transfer of 3,00,000 shares to Mr. Sanjeev Arora, and is liable to penalty of Rs.1,00,000 under Section 15A(b).

Full text

2 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 the shareholders and also at manipulated lower prices.

3 APPOINTMENT OF ADJUDICATING OFFICER 6. I was appointed as the Adjudicating Officer, vide order dated March 08, 2010, under Section 15 I of the SEBI Act read with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing

4 ¾ After, the allotment was approved in the EGM dated December 23, 2006, RPIL approached BSE for its in principle approval for listing of shares. BSE vide its letter dated December 27, 2006 sought certified copy of the resolution passed in the EGM held on December 23, 2006 from RPIL and also observed that RPIL has not given the disclosures required under clause 13.1A of the SEBI (DIP) Guidelines in the notice dated November 25, 2006. The BSE further advised that the RPIL should not proceed with the allotment of the shares to the Company. ¾ The information as sought by BSE was duly provided by RPIL on January 2, 2007 to which BSE vide letter dated January 5, 2007 replied that that the notice served on the shareholders on November 25, 2006 was not proper. The BSE stated that in principle approval in terms of Clause 24(a) of listing Agreement for issue and allotment of the shares would be given only when the Company has complied with the formalities. The Company was also directed not to proceed with the allotment of shares to the Company without seeking approval of the Exchange. ¾ The Company vide letter dated January 12, 2007 intimated the BSE that it would be convening another EGM of the RPIL and later vide letter dated January 25, 2007 intimated BSE about the 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 23, 2006. ¾ On February 5, 2007, in compliance wi

Source: SecMarx — sebi:BM/AO-88/2011. 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.