sebi:EAD/SR/SM/AO/40/2017-18

SEBI · SEBI · 2017-07-10 · Sangeeta Rathod, Adjudicating Officer

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Facts / Headnote

Violations upheld in part; total penalty of Rs. 18,00,000 imposed (Rs. 15,00,000 under SCRA and Rs. 3,00,000 under SEBI Act)

Provisions invoked

Regulations

Parties

Holding

The Noticee violated section 2(i) r/w sections 13, 16 and 18 of SCRA, 1956 for off-market transfers without timely payment/receipt of consideration and violated regulation 13(1), regulations 13(3) & 13(4) r/w 13(5) of PIT Regulations, 1992 and regulations 29(1) & 29(2) r/w 29(3) of SAST Regulations, 2011 for failure to disclose acquisition/disposal of 8,00,000 shares (5.33%) on March 25, 2013. A total monetary penalty of Rs. 18,00,000 (Rs. 15,00,000 under section 23H of SCRA and Rs. 3,00,000 under section 15A(b) of SEBI Act) was imposed.

Full text

Adjudication Order in respect of Shri Naresh Shah in the matter of GFL Financials Ltd. Page 2 of 15 view of the same, it is alleged that the Noticee had entered into spot delivery contracts without payment/receipt of consideration within the time frame as stipulated under the provisions of SCRA, 1956 and thus alleged to have violated section 2(i) read with (r/w) sections 13, 16 and 18 of the SCRA, 1956.

Adjudication Order in respect of Shri Naresh Shah in the matter of GFL Financials Ltd. Page 3 of 15 PIT regulations, 1992, regulations 13(3) & 13(4) r/w regulation 13(5) of PIT Regulations, 1992 and regulations 29(1) & 29(2) r/w regulation 29(3) of SAST Regulations, 2011 by the Noticee. Subsequent to the promotion of Shri Nagendraa Parakh, I was appointed as Adjudicating Officer vide order dated July 10, 2017.

Adjudication Order in respect of Shri Naresh Shah in the matter of GFL Financials Ltd. Page 4 of 15 6. The allegations levelled against the Noticee in the SCN inter alia states as under: a) During Investigation Period the Noticee had received 8,20,000 shares of GFL from Shri Kirti Kantilal Mehta, Shri Nilesh Palande, Ms. Jayshree Bhosle, and transferred 10,35,000 shares of GFL to Inventure Growth and Securities Ltd. and Shri Bijal Dolia in off-market transactions. The details of transactions are tabulated below: S.N Date of transaction Transferred out/ Received No. of shares Shares transferred to/from 1 March 25, 2013 Received 6,00,000 Shri Kirti Kantilal Mehta 2 March 25, 2013 Received 1,50,000 Shri Nilesh Palande 3 March 25, 2013 Received 50,000 Ms. Jayshree Bhosle 4 March 25, 2013 Transferred out 8,00,000 Inventure Growth and Securities Ltd. 4 April 16, 2013 Received 20,000 Ms. Jayshree Bhosle 5 April 26, 2013 Transferred out 2,35,000 Shri Bijal Dolia b) For the above transactions, IA vide its letter dated Feb 13, 2015, advised the Noticee to give proof of receipt/payment of funds towards the off-market transactions executed by the Noticee in compliance of SCRA, 1956. No reply was received by IA in this regard and it was alleged that the Noticee did not receive/pay the consideration towards the off-market transactions within the period specified for spot delivery contracts and hence violated the provisions of section 2(i) of SCRA, 1956 r/w sections 13, 16 and 18 of SCRA, 1

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Source: SecMarx — sebi:EAD/SR/SM/AO/40/2017-18. 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.