sebi:CO/241/ISD/03/2004

SEBI · SEBI · 1988-08-20 · G. N. Bajpai, Chairman

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Facts / Headnote

Directions issued restraining Shri Ajay Agarwal from associating with any corporate body in accessing the securities market and from buying, selling or dealing in securities for a period of five years with immediate effect.

Provisions invoked

• s. 11B
• s. 4(3)
• s. 11
• s. 113
• s. 56
• s. 11O

Parties

• Shri Ajay Agarwal

Holding

Shri Ajay Agarwal, Joint Managing Director of Trident Steels Ltd, was restrained from associating with any corporate body in accessing the securities market and from buying, selling or dealing in securities for a period of five years for his role in the company's non-disclosure of pledged shares, misstatement regarding dividend payment in the prospectus, and non-transfer of shares.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ DIRECTIONS UNDER SECTION 11B READ WITH SECTION 11OF SECURITIES AND EXCHANGE BOARD OF INDIA, ACT, 1992 AGAINST SHRI AJAY AGARWAL IN THE MATTER OF TRIDENT STEELS LTD

FINDINGS " All the provisions of the Companies Act, 1956 and the guidelines issued by the Government and SEBI from time to time have been complied with and no statement made in prospectus is contrary to the provisions of Companies Act, 1956 and SEBI Rules thereunder". "56(1) Every prospectus issued – Shall state the matters specified in Part I of Schedule II and set out the reports specified in Part II of that schedule; and the said Parts I and II shall have effect subject to the provisions contained in Part III of that schedule. …… …… I also note that clause (6) of Part II of Schedule II requires the company to disclose the principal terms of loan and assets charged as security in the prospectus. I also note that clause 13 of Part II of Schedule II enjoins the company to disclose the restrictions, if any, on transfer and transmission of shares / debentures and on their consolidation / splitting. Hence, non-disclosure of such an important fact is a grave act of omission on the part of the company.

The Complaint SEBI had received a complaint from Mr Radheshyam Khandelwal, a member of the BSE, alleging the following : Non payment of Dividend : The company mentioned in the prospectus about declaration of dividend in the previous year. The same was certified by Bank of Baroda in its due diligence certificate. It is alleged by the complainant that almost 2000 investor complaints regarding non receipt of dividend had been filed either before the Bombay High Court or the Investor Service Cell of the BSE. It is further alleged by the complainant that the company, while replying to the complaints, stated that it had not declared any dividend during the preceding year. Therefore, the company is alleged to have committed a deliberate act of mis-stating of the facts in the prospectus and thereby misguided the investors. Non Delivery of Shares It is alleged by the complainant that the company had deliberately contravened the provisions of Section 113 (1) of the Companies Act, 1956 by not dispatching the share certificates to the applicants even after the lapse of almost 2 ½ years after the closure of the public issue. Mis – Statement in the prospectus It is alleged by the complainant that the directors of the company had pledged their personal holdings of 7,50,000 shares to the Bank of Baroda while availing an increase in the credit limit of the company for the purpose of working capital requirements. It is alleged that the directors Mr A.A Kazi and Dowell Leasing and Financing Ltd

Source: SecMarx — sebi:CO/241/ISD/03/2004. 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.