sebi:EAD/AO/BJD/VS/113/2018

SEBI · SEBI · 2017-10-04 · B J Dilip, Adjudicating Officer

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Facts / Headnote

Penalty of INR 5,00,000 imposed on India Focus Cardinal Fund under Section 15HB for violation of Regulation 6(1)(d) and SEBI Circular dated April 15, 2010; charge under Regulation 10(c)/Regulation 23(1)(c) and Section 15A(b) held not attracted.

Provisions invoked

Regulations

Parties

Holding

India Focus Cardinal Fund violated Regulation 6(1)(d) of FII Regulations and SEBI Circular CIR/IMD/FIIC/1/2010 dated April 15, 2010 and is liable to penalty of Rs 5,00,000 under Section 15HB of SEBI Act. The allegation under repealed Regulation 10(c) corresponding to Regulation 23(1)(c) of FPI Regulations and penalty under Section 15A(b) was held not attracted to the Noticee as a sub-account.

Full text

Adjudication Order in respect of India Focus Cardinal Fund Page 2 of 22 and adjudge under Section 15HB and/ or Section 15A (b) of the SEBI Act the alleged violations committed by IFCF. Further, consequent to the inter-departmental transfer and postings, the undersigned has been appointed the AO, vide order dated October 4, 2017 to inquire and adjudge in the instant matter. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

Adjudication Order in respect of India Focus Cardinal Fund Page 3 of 22 addressed to the liquidator, the attorney on record on behalf of the liquidators and Trustlink International Limited, it was advised to submit reply to the SCN, if any, and another opportunity of hearing was also granted on July 31, 2018. However, no reply was received and no appearance was made for the hearing on behalf of the Noticee. Considering the fact that sufficient time has passed since the SCN was made available to the Noticee which was responded by the liquidators appointed, I am of the opinion that sufficient opportunity to submit reply and hearing has been granted in the instant case. However, the said Noticees failed to reply and also to avail the opportunity of hearing, In view of the aforesaid and as per Rule 4(7) of AO Rules, if any person fails, neglects or refuses to appear as required by sub-rule (3) before the Adjudicating Officer, he may proceed with the inquiry in the absence of such person after recording the reasons for doing so. Thus, I am proceeding with the matter on the basis of material available on record with respect to the said Noticees. CONSIDERATION OF ISSUES

Adjudication Order in respect of India Focus Cardinal Fund Page 4 of 22 105. Proceedings against company (1) At any time after the presentation of a petition under section 102 and before a winding up order is made, the company, a creditor or a contributory may, where any action or proceedings against the company is pending, apply to the Court to stay or restrain further proceedings in the action or proceedings, and the Court may stay or restrain the proceedings accordingly on such terms as it thinks appropriate. (2) Where a winding up order has been made or a provisional liquidator has been appointed, no action or proceedings shall be proceeded with or commenced against the company except – (a) by leave of the Court; and (b) on such terms as the Court thinks appropriate.

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Source: SecMarx — sebi:EAD/AO/BJD/VS/113/2018. 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.