sebi:CO/115/ISD/09/2003
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Facts / Headnote
Directions issued under Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 directing M/s Galav Finance Limited and its directors Shri Navinbhai and Shri Jayesh Thakkar to dissociate themselves from the capital market for a period of 5 years and not to deal in securities in any manner whatsoever for a period of 5 years, effective immediately.
Provisions invoked
- s. 4(3)
- s. 11
Regulations
- Reg. 11
- Reg. 3
- Reg. 6
- Reg. 4
- Reg. 13
- Reg. 5(1)
Parties
- Galav Finance and Investments Pvt. Ltd. (GFIL)
- Shri Navinbhai
- Shri Jayesh Thakkar
Holding
GFIL was found to have acted in violation of Regulations 4, 5(1) and 6 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, by conniving with NEAL to create a false appearance of minimum subscription and by aiding manipulation of the scrip's price, and was directed to dissociate from the capital market for 5 years.
Full text
b. In order to circumvent the requirement of minimum subscription, NEAL had entered into an arrangement through Galav Finance and Investments Pvt. Ltd. (hereinafter referred to as “GFIL”) whereby they financed applications for the issue in order to ensure minimum subscription and NEAL purchased back the shares allotted. It was seen that NEAL transferred funds to GFIL which in turn transferred the funds to the applicants who later issued cheques to NEAL. Thus, NEAL did not receive any real consideration and also utilized the proceeds of the public issue for arranging subscription and for circumventing the requirement of minimum subscription.
3.1 Whether GFIL had aided and abetted the promoters of NEAL in fraudulently creating a façade of the public issue having received minimum subscription.
was the Vice President of DCW. 3.1.2 The said Toophanmal Bhandari in his statement before the investigating officer on 24.3.98 stated that DCW was in the business of financing public issues and that Piyush Avlani and Ketan Doshi the applicants as above along with their family members were regular clients of DCW. Shri Toophanmal Bhandari also stated that Shri. Avlani and Shri Doshi approached DCW for finance to the extent of Rs.300 lakhs to make 6 applications of Rs.50 lakhs each in the public issue of NEAL. Joint accounts were opened by DCW with the 6 applicants with Global Trust Bank (GTB) and 6 cheques for Rs.50 lakhs each were issued in favour of the said persons. Against these six cheques, GTB issued 6 stock invests for Rs.50 lakhs each and 6 applications for 1 lakh shares each were made by the said persons with Shri Toophanmal Bhandari as the second applicant.
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Source: SecMarx — sebi:CO/115/ISD/09/2003. 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.