sebi:CO/16/ISD/09/2004

SEBI · SEBI · 2001-08-07 · G.N. Bajpai, Chairman

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Facts / Headnote

Directors Mohammed Ghulam Ghouse, B.K. Pal, K.M. Venkateswaran and Brig (Retd) V.M. Sundaram prohibited from buying, selling or dealing in securities for 5 years and from holding any office of responsibility in a company/entity associated with the securities market for 5 years; J. Narayanamurthy and Pawan Kumar given benefit of doubt / no liability fastened.

Provisions invoked

• s. 4(3)
• s. 11
• s. 11(4)
• s. 30A
• s. 30A(2)

Regulations

• Reg. 11
• Reg. 3

Parties

• Mohammed Ghulam Ghouse
• B.K. Pal
• K.M. Venkateswaran
• Brig (Retd) V.M. Sundaram
• J. Narayanamurthy
• Pawan Kumar

Holding

The Chairman directed that four directors of DSQ Software Limited (Mohammed Ghulam Ghouse, B.K. Pal, K.M. Venkateswaran, Brig (Retd) V.M. Sundaram) be prohibited from dealing in securities and from holding any office of responsibility in securities-market-associated entities for 5 years each. No liability was fastened on J. Narayanamurthy (IDBI nominee director) or Pawan Kumar (President & CEO, not a Board member during the material period).

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER Order under Section 11(4)(b) and 11B read with Section 4(3) of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 against the directors of DSQ Software Limited CO/16/ISD/09/2004  1.0             Background 1.1             DSQ Software Ltd., formerly known as Square D Software Ltd., (hereinafter ‘the company’) is a company engaged in Software business. The company was originally incor on March 6, 1992 under the name and style of M/s. Square D Software Limited with its registered office at Calcutta. The company later on changed its registered office e from August 16, 1994 from Calcutta to Chennai and its registered office is at G R Complex, 407-408, Mount Road, Nandanam, Chennai 600 035. Effective from 01/04/1 company, changed its name from M/s. Square D Software Limited to M/s. DSQ Software Limited. The shares of the company are listed on the stock exchanges of M Kolkata, Madras, Delhi, Ahmedabad and the National Stock Exchanges. As per the Prospectus filed with SEBI for its public issue during 1993, the promoters of the compa Shri Dinesh Dalmia and his group concerns viz., a.      Ganapati Commerce Ltd., b.      Ganapati Combines Ltd., c.      Lexus Exports (P) Ltd., and d.      Square D Exports

1.0 Background 1.1 DSQ Software Ltd., formerly known as Square D Software Ltd., (hereinafter ‘the company’) is a company engaged in Software business. The company was originally incorporated on March 6, 1992 under the name and style of M/s. Square D Software Limited with its registered office at Calcutta. The company later on changed its registered office effective from August 16, 1994 from Calcutta to Chennai and its registered office is at G R Complex, 407-408, Mount Road, Nandanam, Chennai 600 035. Effective from 01/04/1997, the company, changed its name from M/s. Square D Software Limited to M/s. DSQ Software Limited. The shares of the company are listed on the stock exchanges of Mumbai, Kolkata, Madras, Delhi, Ahmedabad and the National Stock Exchanges. As per the Prospectus filed with SEBI for its public issue during 1993, the promoters of the company were Shri Dinesh Dalmia and his group concerns viz., a. Ganapati Commerce Ltd., b. Ganapati Combines Ltd., c. Lexus Exports (P) Ltd., and d. Square D Exports It was observed from the details of promoter’s share holding submitted by the company vide its letter dated 07/08/2001 to SEBI that share holdings of M/s. Powerflow Holding & Trading Co., Pvt., Ltd., M/s. DSQ Holdings Ltd., and Radha Dalmia (w/o Dinesh Dalmia) as on 31/03/1999, 31/03/2000 and 30/06/2000 were shown under promoters’ share holding. It was also observed from the promoter’s share holding details submitted vide its letter dated 09/05/2001 to SEBI that share

It was observed that a majority of these shares allotted on a preferential allotment basis to New Vision Ltd., were used to meet the pay-in obligation of DSQ Hol Properties & Trades Ltd. The shares which were not listed on the exchanges were sold on the terminals of the exchanges by entities which belong to DSQ group and Hulda Properties & Trades Ltd. and delivered at the time of pay-in obligations as good delivery knowing that the shares were not listed. Therefore, it was observed In respect of the 30,00,000 shares allotted to New Vision on 20.5.2000 that the shares were allotted to New Vision Ltd., UK on a part however, in its application to the depository – National Securities Depository Limited (NSDL) for dematerialization, the company had indicated that the shares w and consequently, the partly paid up shares were dematerialized by the depository as fully paid up and given the same ISIN in which the shares issued earlie Shares were then sold by promoter associated entities. All the shares were thus offloaded by December 2000 itself i.e. within 7 months and the listing applic afterwards to the Stock Exchanges in January 2001 (i.e. after 8 months) for these shares. Moreover, it was seen from the Board resolution of the company passe that the 30,00,000 partly paid up shares were later forfeited by the company on account of non-payment of call money by New Vision Ltd., UK. In this regard, on examination of details of the demat transaction statement and account opening form o

Source: SecMarx — sebi:CO/16/ISD/09/2004. 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.