sebi:EAD-7/BJD/NJMR/219-230/2018-19

SEBI · SEBI · 2000-03-02 · B J Dilip, Adjudicating Officer

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Facts / Headnote

Noticees 1 to 10 held liable for violating Section 16 of SCRA read with SEBI Notification G.S.R 219(E) dated March 2, 2000, and Sections 13 and 18 of SCRA read with Section 2(i) of SCRA; Noticee 12 held guilty of violating Regulation 7(1A) of SEBI (SAST) Regulations, 1997 read with Regulation 35 of SEBI (SAST) Regulations, 2011 and Regulation 13(4) of SEBI (PIT) Regulations, 1992; Noticee 11 held liable for non-disclosure of shares held in physical form; penalties imposed.

Provisions invoked

Regulations

Holding

Noticees 1 to 10 were held to have violated Section 16 of SCRA read with SEBI Notification G.S.R 219(E) dated March 2, 2000, and Sections 13 and 18 of SCRA read with Section 2(i) of SCRA by carrying out off-market share transfers without receipt/payment of consideration, and are liable for monetary penalty under Section 23H of SCRA. Noticee 12 was held guilty of violating Regulation 7(1A) of SEBI (SAST) Regulations, 1997 read with Regulation 35 of SEBI (SAST) Regulations, 2011 and Regulation 13(4) of SEBI (PIT) Regulations, 1992 for failure to disclose acquisition of 75,76,935 shares.

Full text

Adjudication Order in the matter of Vertex Spinning Ltd., Page 2 of 37 BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted investigation in the scrip of Vertex Spinning Ltd., (hereinafter referred to as “VSL” / “Company”) for any possible violation of the provisions of SEBI Act and the Regulations made thereunder during the period April 1, 2010 to September 30, 2010 (hereinafter referred to as “Investigation Period”). The investigation revealed that the promoter entities of VSL viz., Green Cottage & Resorts Pvt., Ltd., (Noticee 7), Zoom Colonizers Pvt., Ltd., (Noticee 8), Phenomenal Craft Pvt., Ltd., (Noticee 9), Yellow Consultants Pvt., Ltd., (Noticee 10) and the counterparties namely, Chetan Dogra (Noticee 1), Chetan Dogra HUF (Noticee 2), Daffodil Tradex Pvt., Ltd., (Noticee 3), Subah Multimedia Pvt., Ltd., (Noticee 4) Shraddha Entertainment Pvt., Ltd., (Noticee 5) and Tulip Expotrade Pvt., Ltd., (Noticee 6) had carried out transfer of shares through off-market without receipt / payment of consideration and thereby violated the provisions of Section 16 of Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as “SCRA”) read with SEBI Notification G.S.R 219 (E) dated March 2, 2000, Section 13 and Section 18 of SCRA, 1956 read with Section 2(i) of SCRA,

Adjudication Order in the matter of Vertex Spinning Ltd., Page 3 of 37 2. Ms. Anita Kenkare was appointed as Adjudicating Officer, vide Order dated October 26, 2015 under Sub-section (1) of Section 23-I of SCRA and Rule 3 of Securities Contracts (Regulation) (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 2005 (hereinafter referred to as “SCR Rules”) and under Section 19 read with Sub-section (1) of Section 15-I of the SEBI Act, 1992 and Rule 3 of the SEBI (Procedure for Holding Inquiry and imposing penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as “Adjudicating Rules”) to inquire into and adjudge the alleged violations committed by the Noticees of the provisions of the corresponding Act, Notification and Regulations, under respective Sections of SCRA and SEBI.

Adjudication Order in the matter of Vertex Spinning Ltd., Page 4 of 37 SEBI (SAST) Regulations, 2011. 11 Suresh Sharma Regulation 13(3) and 13(4) r/w Regulation 13(5) of SEBI (Prohibition of Insider Trading) (PIT) Regulations, 1992 and Regulation 12 of SEBI (PIT) Regulations, 2015 as applicable. Reg. 7(1A) of SEBI (SAST) Regulations, 1997 r/w Regulation 35 of SEBI (SAST) Regulations,

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Source: SecMarx — sebi:EAD-7/BJD/NJMR/219-230/2018-19. 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.