sebi:BS/AO-12/2007
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Penalty imposed on CDSL for violations of Section 26(2)(p) of the Depositories Act, 1996 and Regulations 16(2) and 34 of SEBI (Depositories and Participants) Regulations, 1996.
Provisions invoked
- s. 15
- s. 11
- s. 15H
- s. 16
- s. 15J
- s. 19H
- s. 19G
- s. 26(2)
- s. 4(1)
- s. 26(3)
- s. 26(4)
Regulations
- Reg. 8
- Reg. 4
- Reg. 16(2)
- Reg. 34
- Reg. 19
Parties
- Central Depository Services (India) Ltd. (CDSL)
Holding
CDSL violated Section 26(2)(p) of the Depositories Act, 1996 and Regulations 16(2) and 34 of the SEBI (Depositories and Participants) Regulations, 1996, and a penalty of Rs. 3,00,00,000 was imposed on it. CDSL's failures and omissions facilitated key operators in opening large numbers of fictitious/benami (afferent) accounts with its Depository Participants.
Full text
- 2 - 9. Infrastructure Development Finance Co. Ltd. 10. Jet Airways (India) Ltd. 11. Nandam Exim Ltd. 12. National Thermal Power Corporation Ltd. 13. Nectar Lifesciences Ltd.
- 3 - 2.4 It was noted that many entities (key operators) who opened various fictitious / benami accounts (hereinafter referred to as afferent accounts) had opened large number of such accounts with the Depository Participants affiliated to CDSL. Investigation revealed that many such accounts opened in fictitious names had common address. It was noted that as many as 21,698 afferent accounts were opened with various Depository Participants affiliated to CDSL.
- 4 - 2.8 On account of the failures and irregularities of CDSL as stated above, it is alleged that CDSL has violated / failed to comply with the following provisions ? Section4(1),4(2) & 26(2)(p) of the Depositories Act, 1996 ? The provisions of Regulation 16(2) & 34 of SEBI (Depositories and Participants) Regulations, 1996 (hereinafter referred as ‘Depositories Regulations’)
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Source: SecMarx — sebi:BS/AO-12/2007. 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.