sebi:CO/160/NRO/10/2003

SEBI · SEBI · G. N. Bajpai, Chairman, Securities and Exchange Board of India

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Facts / Headnote

Shri Tarun Goyal, Smt. Preeti Chaudhary, M/s. Zed Investments Ltd. and its promoters/directors at the time of public issue namely Shri R K Srivastava, Shri R K Shukla and Shri Arun Chaudhary restrained from accessing the securities market and prohibited from being associated with the securities market in any manner to buy, sell or deal in securities for a period of five years from the date of the order, with immediate effect.

Provisions invoked

• s. 11B
• s. 4(3)
• s. 11
• s. 420

Parties

• Shri Tarun Goyal
• Shri R K Srivastava
• Shri Raj Kumar Shukla
• Shri Arun Kumar Chaudhary
• Smt. Preeti Chaudhary
• M/s. Zed Investments Ltd.

Holding

SEBI restrained Shri Tarun Goyal, Smt. Preeti Chaudhary, M/s. Zed Investments Ltd. and its directors at the time of public issue namely Shri R K Srivastava, Shri R K Shukla and Shri Arun Chaudhary from accessing and being associated with the securities market for five years from the date of the order.

Full text

2.5. The takeover of ZIL by Shri R K Srivastava and others was negotiated and finalised by Sh. Arun Singh, a Chartered Accountant who also submitted a certificate to SEBI regarding full subscription of promoters quota. The final prospectus was signed on 2.7.96 by R K Srivastava for himself and on behalf of the other first three directors namely, Sh. Zile Singh, Sh. Neeraj Kumar and Sh. Anil Kumar, after which, ZIL was completely taken over by R K Srivastava and it became a part of PLS group. Office of the company was then set up at B-20, Lajpat Nagar, New Delhi – 110 024, which was the head office of PLS group of companies. All the operational work in regard to the public issue was carried out by R K Srivastava, Raj Kumar Shukla and Arun Kumar Chaudhary, as directors of the company. These persons (hereinafter referred to as "Noticees") opened current accounts with Canara Bank, Lajpat Nagar, New Delhi and The Bank of Rajasthan Ltd., Karol Bagh, New Delhi in the name of ZIL to collect money through its public issue. 2.6. Auditors’ report (as furnished in the prospectus) and balance sheets for A.Y. 1994-95 and 1996-97 signed by Sh. R.S. Aggarwal (Proprietor M/s. RSA & Co., Chartered Accountants) was submitted to various authorities including Income Tax and ROC by Tarun Goyal. As per statement of Sh. R.S. Aggarwal given to CBI, all these balance sheets, P&L accounts, audit reports, annexures, schedules etc. of ZIL had been signed by him on the instructions of Tarun Goyal and he h

b. Fraudulent public issue in 1996 c. (d) Mis-statements / concealment of material facts, viz. : Fake registered office address, non-existent persons projected as promoter-directors along with their fake profile and details, fictitious addresses projected as addresses of promoter-directors, fraudulent disclosures related to financial performance of the company, concealment of material fact related to involvement of Tarun Goyal as a person controlling the affairs of ZIL, concealment of material facts related to acquisition of the company by Rakesh Kumar Srivastava, Chairman-cum-MD of PLS group of companies, before public issue, non-disclosure of details related to associate concerns of Rakesh Kumar Srivastava. (e) Irregularities in issue process in violation of SEBI (Disclosure and Investor Protection) Guidelines (DIP Guidelines) viz.: Allotment of promoter quota shares to investors at large, offer of buy-back scheme without disclosing the same in prospectus in violation of SEBI DIP guidelines for buy-back of securities, issue of advertisements in violation of SEBI DIP guidelines for issue of advertisement, Fraudulent operations and conduct of business of the company, Fraudulent operations of bank accounts, Diversion and mis-appropriation of public issue proceeds.

facts in the prospectus, allotment of promoter quota shares in violation of SEBI (DIP) guidelines, fraudulent operations and conduct of business etc., he submitted that he was not responsible for the acts of omission and commission of the company and its promoters / directors after the company was taken over by Shri R K Srivastava & Ors. and as such his association with the company was purely in professional capacity.

Source: SecMarx — sebi:CO/160/NRO/10/2003. 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.