sebi:CO/484/IES/02/2003

SEBI · SEBI · 1996-01-22 · G. N. Bajpai, Chairman

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Facts / Headnote

Warning issued; recommended three-month suspension not imposed

Regulations

• Reg. 28(1)

Parties

• Industrial Finance Branch, Ahmedabad

Holding

The Chairman declined to impose the Enquiry Officer's recommended three-month suspension on the Industrial Finance Branch, Ahmedabad as Banker to an Issue and instead warned the banker to take utmost care in future.

Full text

Branch, Ahmedabad (hereinafter referred to as "Banker"), Securities and Exchange Board of India (hereinafter referred to as "SEBI") requested Reserve Bank of India (hereinafter referred to as "RBI") to ascertain whether there were instances of late receipt of applications by the Banker. On the basis of date-wise schedule for applications received by the banker, RBI observed that the applications of one Shri Rakesh Naval for 20,000 shares at Sr. No. 10 was subsequently included after striking the day's total on page 8 of the application schedule dated 22.01.96. It was also noted that the banker prepared the revised copy of the schedule wherein two more applications of Shri Ajit Jain and Shri C M Singhi for 20,00,000 shares each were included at serial nos. 101 and 102. RBI also observed that applications numbering at serial nos. 100, 101 and 102 were with stockinvests which were issued by Tamil Nadu Mercantile Bank Ltd., Mandvi Branch, Mumbai on 29.01.96 and 30.01.96 but the same were predated as 22.01.96. The report further observed that even current account was opened on 24.01.96 and deposits were received on 29.01.96 and 30.01.96 for obtaining such stockinvests. Therefore, it was concluded that these three applications have been received by the said banker after the date of closure of the issue, i.e., after 22.01.96. RBI further found that applications at serial nos. 98 and 99 of the application schedule prepared by the banker that State Bank of India, Udyog Bhavan Branch,

suspending the Branch as Bankers to the Issue for a period of three months. As the reply of the Banker was not found satisfactory, SEBI vide its letter dated 29.10.2001 advised the Banker to attend the personal hearing before the Chairman on 19.11.2001. Shri N Subramaniam (Chief Manager) attended the hearing and made oral

that subsequent to its earlier communication, one more official was found negligent in the case and the action had been initiated against him also. I have carefully considered the facts and circumstances of the

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