sebi:CO/39/IES/05/2003/IES
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Facts / Headnote
Directed M/s Hitek Industries (Bihar) Limited to disassociate itself in every respect from the capital market related activities and not to access the capital market for a period of five years.
Provisions invoked
- s. 4(3)
- s. 11
- s. 113
- s. 69
- s. 77
- s. 73
- s. 77(2)
Parties
- M/s Hitek Industries (Bihar) Limited
Holding
SEBI held Hitek Industries (Bihar) Limited cornered its public issue stock through financing arrangements and violated company law, and directed it to disassociate from capital market related activities and not access the capital market for five years.
Full text
2.1 The issuer company cornered stock at the time of public issue, through financing arrangement this created an artificial scarcity of floating stock in the market which facilitated rigging the price of shares. The said act of Hitek is detrimental to the interests of the investors in capital market.
3.0 Hitek did not reply to the above show cause notice. However, Shri P.P. Verma, MD & Promoter of Hitek vide letter dated 2.11.02 gave his reply, on the company’s letter head, to the show cause notice dated 16.10.02 issued to him on similar grounds. During personal hearing Shri P P Verma represented company as well as for himself. Therefore, the submissions made by Shri P P Verma are also considered for the company. Shri P P Verma made the following submissions:
of Rs.10/- per share was to be paid at the time of application. Out of this, 7,50,000 equity shares of Rs.10/- each at par was reserved for preferential allotment to NRI’s/ persons of Indian origin residing abroad on a repatriation basis, 7,50,000 equity shares of Rs. 10/- each at par were reserved for preferential allotment to FIIs on repatriation basis and 12,60,000 equity shares of Rs.10/- each at par reserved for preferential allotment to Indian Mutual Funds on a competitive basis. Thus the net offer to the Indian public was 35,40,000 equity shares of Rs.10/- each at par. The paid up capital after the public issue was 99,30,648 equity shares of Rs.10/- each aggregating to Rs. 9,93,06,480. The public issue opened on March 21, 1994 and closed on the earliest closing date i.e. March 24, 1994.
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Source: SecMarx — sebi:CO/39/IES/05/2003/IES. 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.