sebi:EAD-2/AO/68-70/2012
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Facts / Headnote
Noticees found liable for violations of section 12A(a),(b),(c) of the SEBI Act, 1992 and Regulations 3(a),(b),(c),(d), 4(1), 4(2)(e) of the PFUTP Regulations, 2003; penalty imposed under section 15HA
Provisions invoked
- s. 12A
- s. 15H
- s. 15J
- s. 15
Regulations
- Reg. 4
- Reg. 3
Parties
- Shri Jayesh Shah
- Shri Parag Shah
- Shri Tushar Shah
Holding
The Noticees, promoters of PCL, were held liable for fraudulent and unfair trade practices in connection with misleading corporate announcements and offloading of shares at artificially inflated prices, in violation of section 12A(a),(b),(c) of the SEBI Act and Regulations 3(a),(b),(c),(d), 4(1), 4(2)(e) of the PFUTP Regulations. The Noticees were deemed to have admitted the charges by failing to reply to the SCN or appear for hearing.
Full text
Page 2 of 32 up from ` 1.36 to ` 3.15 and closed at ` 2.82, a rise of 107% during July- September 2005. Such announcements created artificial demand for the stock and at the same time Shri Jayesh Shah, Shri Parag Shah and Shri Tushar Shah (hereinafter collectively referred to as "the Noticees” and individually referred to as "Noticee 1, Noticee 2 & Noticee 3") who were the promoters of PCL transferred shares of PCL to the persons connected to them and also pooled up shares from various persons and ensured to dump shares in the market. It is alleged that such price sensitive and misleading announcements were made by the PCL to induce trading and to increase /influence price and volume of the scrip. The daily average volumes during July -September 2005 were 17,98,489 shares an increase of 1272% of average trading volumes prior to the announcement. It is also alleged that pursuant to the said corporate announcement made by PCL the Noticees in collusions with the other connected entities off-loaded their shares at such artificially risen price and made unlawful gains.
Page 3 of 32 Show Cause Notice, Reply and Personal Hearing 5. A Common Show Cause Notice dated July 21, 2011 (hereinafter referred to as “SCN”) in terms of the provisions of Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995(hereinafter referred to as “Adjudication Rules”) was issued to the Noticees calling upon the Noticees to show cause why an inquiry be not held against them under Rule 4(3) of the Adjudication Rules for the aforesaid alleged violations. SCN was sent to the Noticees separately by speed post but returned undelivered. Thereafter, the SCNs were affixed at the last known addresses of the Noticees on June 01, 2012 in terms of Rule 7(c) of the Adjudication Rules. The Noticees neither submitted any reply to the SCN nor entered into any correspondence in this regard.
Page 4 of 32 Consideration of Issues, Evidence and Findings 8. I have carefully perused the charges made against the Noticees as mentioned in the SCN and the documents available on record. In the instant matter the following issues arise for consideration and determination:
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Source: SecMarx — sebi:EAD-2/AO/68-70/2012. 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.