sebi:MO/131/IVD

SEBI · SEBI · 2005-02-16 · Madhukar, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Advisory order - noticees advised to be more careful in future dealings in the securities market and to diligently adhere to the provisions of the SEBI Act, 1992 and the Rules and Regulations made thereunder.

Provisions invoked

• s. 11B
• s. 19

Regulations

• Reg. 11

Parties

• Shri Dilip Thakkar
• Philoden Agro Chem Pvt Limited

Holding

The Whole Time Member found that Shri Dilip Thakkar, director of Philoden Agro Chem Pvt Ltd, acted as a mediator between the promoters/directors of VOL and Shri Ketan Shah and family to subscribe to VOL's public issue with an understanding that allotted shares would be bought back at a finance charge of 0.10 paise per share, and that the off-market share sales were in fact a buyback by VOL itself. The noticees were advised to be more careful in future dealings in the securities market.

Full text

a)  That being a Chartered Accountant by profession, he was having no idea about the public issue. With regard his association with VOL, he su that in order to honor the request made by the promoter and Managing Director of VOL, he joined the Board of VOL in the capacity of a from 14.03.2000 to 13.6.2001 so as to guide them in the field of Audit and Taxation. However, since he was never invited to any Board m and shareholders’ meetings by the Chairman and Managing Director of VOL and therefore no purpose was being served, he submitted res as a Director with immediate effect on 13.6.2001. b)  It was further submitted that the Promoter and Directors of VOL had tried to encash his name and standing for their favour by including his nam the Prospectus, without proper knowledge and information to him. c) Regarding the allegation of his association with Shri Ketan Shah, he submitted that he had known Shri Ketan Shah to be a registered Brok Vadodara Stock Exchange Ltd. and director and shareholder of SDFC Securities Ltd. and Director and shareholder of Vinay Capital Ltd and Phildon Agrochem Pvt. Ltd  and a stock market player in primary market with lots of financial resources, utilizing mainly in subscribing the p issue in crores of rupees and trading and dealing in various securities on NSE and BSE since very long (more than a decade). Shri Thakkar fu submitted that he has been handling the income tax case of Shri Ketan Shah since 1992. As regards his association with Philoden he s

find that the above shares sold by Shri Ketan Shah and family and bought by Ms. Jyoti Relwani, Ms. Shilpa Dave and Ms. Varsha Trivedi we fact a buy back of shares by VOL itself. 3.5 I further find that Shri Dilip Thakkar the director of Philoden acted as a mediator between the promoters of VOL and Shri Ketan Shah and fam subscribe to the public issue with an understanding that the shares allotted will be purchased back at a finance charge of 0.10 paise per sha further find that the same has been revealed by Shri Ketan Shah in his statement given to the Investigating Authority. Thus, I find that the a shares sold by Shri Ketan Shah and family were actually a buyback by the company through the above entities. 3.6 I find that the payment made by Ms. Jyoti Relwani, Ms. Shilpa Dave and Ms. Varsha Trivedi to Shri Ketan Shah and family for the off-m transactions was from their Bank account with HDFC Bank (Baroda Branch). The funds were received by them from one Ms. Leena Dave who also having an account with HDFC Bank. Ms. Leena Dave received funds in her account from a bank account of VOL with Bank of Punjab (Fort Branch, Mumbai). The funds were received in VOL account from Vision Equity Issue account with Bank of Punjab Ltd. (Fort Branch Mum The flow of funds from the account of VOL to Shri Ketan Shah and family is graphically depicted below: VOL (Bank of Punjab)

N.G. Trivedi 234980 07/06/2002 S.P. Relwani 185000 07/06/2002 3.11 Thus in entirety of the foregoing discussion I find Shri Dilip Thakkar by using the advantage of his relationship with Shri Ketan Shah and family Promoters of VOL, acted as a mediator between them to subscribe the issue. 3.12 Thus in the totality of the foregoing discussion, I find that Shri Dilip Thakkar was nothing but a mediator between  the Directors of VOL and Sh Shah and family. Without subscribing to the issue Shri Ketan Shah was merely acting as an intermediary for this public issue. 4.0 ORDER 4.1 Now therefore, having considered the nature and charges established, the facts and circumstances of the case, the mitigating factors as exp above, and the submissions made by Philoden Agro Chem Pvt. Ltd and its director Shri Dilip Thakkar thereto, in exercise of powers con upon me under section 19 of the SEBI Act, 1992 read with Section 11B and 11 (4) (b) of the SEBI Act, 1992 and Regulation 11 of Securitie Exchange Board of India ( Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, I hereby Shri Dilip Thakkar and Philoden  Agro Chem Pvt Limited , advise them to be more careful in future in its dealings in the securities mark diligently adhere to the provisions of SEBI Act, 1992 and the Rules and Regulations made there under.   MADHUKAR DATE:24-01-06 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA PLACE: MUMBAI

Source: SecMarx — sebi:MO/131/IVD. 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.