sebi:IVD-ID6/AIL/AO/DRK/AKS/EAD-3/180-09/83-10
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Facts / Headnote
Ex-parte penalty of Rs. 10,00,000 imposed on the noticee for violation of Section 11C(6) of the SEBI Act
Provisions invoked
- s. 11
- s. 24
- s. 15A
- s. 15
- s. 15J
Parties
- Shri Atul B Shah, Proprietor of Charmi Investments
Holding
The noticee violated Sections 11C(3), 11C(5) and 11C(6) of the SEBI Act by failing to produce information/documents and to appear before the Investigating Authority, and a penalty of Rs. 10,00,000 under Section 15A(a) was imposed ex-parte.
Full text
Page 2 of 10 APPOINTMENT OF ADJUDICATING OFFICER 2. I was appointed as the Adjudicating Officer, (subsequent to the transfer of Shri Biju S.) vide order dated December 10, 2008 under section 15 I of the SEBI Act read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Rules’) to inquire into and adjudge under Section 15A (a) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) the violation of Section 11 C (6) of the SEBI Act. SHOW CAUSE NOTICE, HEARING AND REPLY
Page 3 of 10 a. Sources of income / annual income as per the last returns filed with the Income Tax during the years 2003-04. b. Confirm and indicate your relationship with Aditya Infosoft Ltd. and its Promoters & Directors / associate companies and their Directors, if any. c. Names and addresses of all the stock brokers / sub-brokers through whom you traded in the scrip of Aditya Infosoft Ltd. d. Number of shares of Aditya Infosoft Ltd. that were purchased / sold by you? Furnish the settlement wise details like purchases / sales made, average rate of purchases / sales during the settlement, delivery taken / given in each settlement, distinctive number of deliveries taken / given, if any. e. The mode and source of payment to the stock brokers / sub- brokers for all the purchases / sales made in the secondary market. f. Indicate the source of acquisition of all the shares of Aditya Infosoft Ltd. by you at any point of time. Also indicate the source of funds that you used for the acquisitions of these shares (please enclose supporting documents for the above). g. In case the shares were acquired by you through off-market transactions, please indicate the name / address / phone nos / of the person from whom the acquisition was made. Please also indicate the source of funds which were used for purchasing these shares through off-market transactions.
Page 4 of 10 a. He had approached Shri Anil Patel, Promoter and Director of Aditya Infosoft Ltd., and had put a proposal before him to manipulate the shares of Aditya Infosoft Ltd. b. He had also told him to give him 5 lakhs to 7 lakhs shares of Aditya Infosoft Ltd. and had put a plan before him stating that false advertisement relating to the handsome financial results of the company and some fictitious company namely M/s Share Incorporation shall buy the shares of the company @ Rs. 16-18 per share, shall be published in the newspaper. In return Shri Anil Patel will give him 60 paise per share transferred if the shares are sold later. c. He had also taken the shares from Shri Anil Patel in the demat account of other persons including Shri Viral V Mewada, his employee. The summons also stated that if the noticee omitted to attend and give evidence or to produce the books of accounts and / or documents as required, SEBI would initiate adjudication proceedings under Section 15 A of the SEBI Act, 1992. Further, criminal prosecution might also be launched against the noticee under Section 11 C (6) and under Section 24 of the SEBI Act, 1992. Section 11 C (6) provides for a punishment with imprisonment for a term which may extend to one year, or with fine, which may extend to one crore rupees, or with both, and also with a further fine which may extend to five lakhs rupees for every day after the first during which the failure or refusal continues.
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Source: SecMarx — sebi:IVD-ID6/AIL/AO/DRK/AKS/EAD-3/180-09/83-10. 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.