sebi:EAD/KS/VB/AO/144/2018-19

SEBI · SEBI · 2016-04-20 · K Saravan, General Manager & Adjudicating Officer

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Facts / Headnote

Allegations of violation of Clause 36, Clause 41, and Clause 50 of the Listing Agreement read with Section 21 of SC(R)A established; penalties imposed.

Provisions invoked

• s. 293
• s. 73
• s. 21
• s. 23
• s. 23E
• s. 23J
• s. 23A
• s. 291
• s. 45I

Parties

• M/s Oasis Securities Limited (Noticee-1)
• Shri Indra Kumar Bagri (Noticee-2)
• Shri Anil Kumar Bagri (Noticee-3)

Holding

The Adjudicating Officer held that Oasis Securities Limited (OSL) and its directors, Shri Indra Kumar Bagri and Shri Anil Kumar Bagri, violated Clause 36, Clause 41, and Clause 50 of the Listing Agreement read with Section 21 of the SC(R)A. A penalty of Rs. 20,00,000 was imposed on OSL under Sections 23A and 23E, and Rs. 5,00,000 each on Shri Indra Kumar Bagri and Shri Anil Kumar Bagri under Section 23A.

Full text

Page 2 of 39 APPOINTMENT OF ADJUDICATING OFFICER 2. Shri Prasad Jagdale was appointed as the Adjudicating Officer vide communique dated April 20,2016 under Section 23-I(1) of the SC(R)A read with Rule 3 of the Securities Contracts (Regulation) (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 2005 (hereinafter referred to as "SC(R)R") to inquire into and adjudge under Section 23A and Section 23E of SC(R)A the violation of Clause 36, Clause 41 and Clause 50 of the Listing Agreement read with section 21 of the SC(R)A alleged to have been committed by OSL and its Chairman and Managing Director i.e Indra Kumar Bagri(hereinafter referred to as “Indra / Noticee-2”), Anil Kumar Bagri (hereinafter referred to as “Anil / Noticee-3”) (hereinafter collectively referred to as “Noticees”). Pursuant to the transfer of Shri Prasad Jagdale, Shri Suresh Gupta was appointed as Adjudicating Officer and thereafter, the undersigned has been appointed as the Adjudication Officer vide an Order dated May 18, 2017.

Page 3 of 39 businesses to IKAB from April 1, 2010 to June 7, 2010 respectively. It is noted that discontinuance and sale of aforementioned businesses was a material event to OSL as major portion of OSL's revenue was contributed from these businesses. As per Clause 36 of the Listing Agreement, a company is required to make adequate disclosures regarding material events to the stock exchange. b) It was observed that the following announcements were made to BSE by OSL regarding the aforementioned transfer on the following dates which are reproduced as under: November 14, 2008 - "Oasis Securities Ltd has informed BSE that the Board of Directors of the Company at its meeting held on November 11, 2008, inter alia, has been decided to pass a resolution by the shareholders of the Company through postal ballot under Section 293 (1) (a) of the Companies Act, 1956 to sell, assign and transfer the Company's undertaking comprising of Broking - the Trading Membership of National Stock Exchange Ltd (NSE) and Depository Business - being a Depository Participant of National Securities Depository Ltd (NSDL)." June 24, 2009 - "With reference to the earlier announcement regarding passing of resolution for selling of Company's undertaking comprising of Broking - the Trading Membership of National Stock Exchange Ltd (NSE) and Depository Business - being a Depository Participant of National Securities Depository Ltd (NSDL), Oasis Securities Ltd has now informed BSE that the Company has now receive

Page 4 of 39 transfer of Depository Business of Oasis Securities Ltd to Ikab Securities & Investment Ltd is under process at regulatory authority." July 14, 2010 - "Oasis Securities Ltd has informed BSE that the Depository Business of the Company - being a Depository Participant of National Securities Depository Ltd (NSDL) has been transferred to sister concern namely Ikab Securities & Investment Ltd. with effect from June 07, 2010." c) Based on the examination of the aforementioned announcements made by OSL to BSE, it is alleged that OSL initially made an announcement on November 14, 2008 that its Board of Directors has decided to pass a resolution by the shareholders of the Company through postal ballot under Section 293 (1) (a) of the Companies Act, 1956 to sell, assign and transfer the Company's Broking and Depository Business. However, the company later did not make any announcement regarding approval of the shareholders for the aforementioned transfer of businesses. d) It is further alleged from the announcement made by OSL on November 14, 2008 and June 24, 2009 that the company did not even mention the name of the transferee, i.e. IKAB, and more importantly the fact that the transferee is a promoter group company of OSL. e) Further, it is also alleged that OSL failed to disclose the following material information regarding the aforementioned transfer to BSE: (i) Amount of sale consideration for the transfer (ii) Mode for receipt of the sale consideration (iii) Amount o

Source: SecMarx — sebi:EAD/KS/VB/AO/144/2018-19. 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.