sebi:CO/41/IES/05/2003/IES
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Facts / Headnote
Direction issued: Shri P P Verma directed to disassociate himself from capital market related activities and not access the capital market for five years.
Provisions invoked
- s. 4(3)
- s. 11
- s. 113
- s. 69
- s. 73
Parties
- Shri P P Verma
Holding
Shri P P Verma was directed to disassociate himself from all capital market related activities and barred from accessing the capital market for five years, for his role in the Hitek Industries public issue where the issue was bailed out by arranging loans disguised as subscription and shares were allegedly offloaded and then reported lost.
Full text
18, 1992 and Section 69, read with Clause 5 of Schedule II of Companies Act, 1956 and terms and conditions of the prospectus. 2.6 Hitek proceeded with the allotment of shares before the realization of stock invests which is not in conformity with the provisions of Section 69, Section 73 of Companies Act, 1956 and guidelines for disclosure and investor protection issued by SEBI on June 11, 1992. 3.0 Shri P P Verma vide letter dated 2.11.02 gave his reply to the above show cause notice and made the following
Sinha is an employee of Hitek. Shri P P Verma, during hearing admitted this fact.All the above nine applicants had given authority letter authorizing Shri Ramprasad Sinha to collect the share certificate from the Registrar. Further, all the above nine applicants had given irrevocable Power of Attorney in favour of th said Ramprasad Sinha which were registered with the company. 5.2 With respect to the complaint received by the company, it is noted that it was Shri Ramprasad Sinha himself who reported loss of 19,00,000 shares. These shares were originally in the name of Shri G.A. Jain, Shri D.S.Jain and Shri T.P. Dangi. They form part of the shares, for which these applicants had given irrevocable Power of Attorney to R.P. Sinha. The break up of the 19,00,000 shares in the name of original owners is as follows: Name Address Folio Quantity G.A. Jain M.G. Road, Opp. Rlwy Station, Santacruz(W), Bombay 400 054 G 0225 14,50,000 Dharmesh S. Jain B 13/4, Mayur Pankh D. Road, Mulund, Bombay 400 080 031 50,000 T.P. Dangi 58/60, Mint Road, Fort, Bombay 400 023 T 0140 4,00,000 5.3 It is further noted that M/s. Mahalaxmi Investments reported loss of another 1 lac shares. Shri Sanjay Chakraborty was the authorized signatory and the partner of M/s. Mahalaxmi Investments at the relevant time. The address of both Shri R.P. Sinha and M/s. Mahalaxmi Investments is 10, Paramjyoti, Pestom Sagar, Plot No.9, Road No.4, Chembur, Bombay 400 089. The letters written, both by M/s. Mahalaxmi Investments
7, 1994. All the above mentioned stock invests were either third party stock invests or were cancelled or were issued to some other company. 6.5 Stock invests no.392954 to 392956 of Rs.5 lacs each of Union Bank of India, Mulund Branch were purchased by Shri Dharmesh Jain on July 22, 1994 and were subsequently cancelled on September 13, 1994. Shri Dharmesh Jain stated that he had cancelled his stock invests. But shares were allotted in his name and were collected by Shri R.P. Sinha. It has been noted that he had not authorized anybody to collect shares on his behalf. It is further noted that out of 1,50,000 shares originally applied for by him, 50,000 shares were allotted to him. The rest of 1,00,000 shares were allotted to Shri G.A. Jain. 6.6 M/s. Business India T.V. International (erstwhile Shivalik projects Ltd) stated they were approached by a broker to provide a loan of Rs.200 lacs to Shri T.P. Dangi of M/s.TPD Finance Ltd. They extended the loan by providing them ten stock invests of Rs.20 lacs each, in the name of Hitek. These stock invests were issued by Bank of Madura, Fort Branch where the company had a current account. The company handed over the said stock invests to M/s. TPD Finance Ltd. through the broker. The company received an interest amounting to Rs.11,20,000/- on the loan given. M/s. Ispat Finance stated that they had provided a loan of Rs.1,20,00,000/- to TPD Finance by means of 5 stock invests issued by Vysya Bank Ltd., Calcutta Branch. The repayment was
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Source: SecMarx — sebi:CO/41/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.