sebi:EAD-2/AO/38/2012
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Facts / Headnote
Alleged violations do not stand established; matter disposed of with benefit of doubt to the Noticee.
Provisions invoked
- s. 15
- s. 12A
- s. 15I
Regulations
- Reg. 3
- Reg. 4
Parties
- Noticee (promoter of PPL)
Holding
The Adjudicating Officer concluded that the alleged violations of the PFUTP Regulations, PIT Regulations and Section 12A(d) and (e) of the SEBI Act against the Noticee do not stand established, and disposed of the matter giving the Noticee the benefit of doubt.
Full text
Page 2 of 9 ‘Noticee’), a promoter of PPL, had allegedly sold shares of PPL during the investigation period fraudulently and made disproportionate gains by insider trading by taking advantage of unpublished price sensitive information of the financial results being inflated and manipulated.
Page 3 of 9 6. The SCN alleged that the Noticee held 17,99,990 shares constituting 33.15% of the shareholding of PPL as on March 31, 2005 which reduced to 3,02,194 shares constituting 5.57% of the total shareholding as on September 30, 2005. The Noticee had traded after the announcement of issue of bonus shares & declaration of dividend i.e. on June 23, 2005. Shri Babubhai A Patel, who was the director of the Noticee, in the capacity of Chairman and Managing Director of PPL, had declared inflated and manipulative quarterly financial results which were misleading and created curiosity among the investors thereby unduly influencing the decision of the investors. It was alleged that the Noticee acted in concert with Shri Babubhai A Patel by continuously off-loading shares during the investigation period, thereby reducing its shareholding from 33.15% to 5.57% and making disproportionate gains. Further, it was alleged that the Noticee might have indirectly procured the unpublished price sensitive information from Shri Babubhai A Patel which helped the Noticee to off- load shares to the tune of 2 lacs on June 23, 2005 (the date of announcement of issue of bonus shares in the ratio of 1:5 & declaration of dividend @ Rs.1 per equity share). Thus, the Noticee was alleged to have violated Regulations 3 (a), (b), (c), & (d), 4 (1) and 4 (2) (a) of the PFUTP Regulations and Regulations 3 (i), (ii) and 3A read with Regulation 4 of the PIT Regulations and also Section 12A (d) and (e) of th
Page 4 of 9 sent to it. However, the Noticee did not make payment and thus the consent application was rejected. The undersigned provided an opportunity of personal hearing to the Noticee on February 27, 2012 vide letter dated February 08, 2012. The Noticee attended the personal hearing and submitted a written reply dated February 27, 2012 to the SCN.
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Source: SecMarx — sebi:EAD-2/AO/38/2012. 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.