sebi:MO/197/IVD/02/2006

SEBI · SEBI · 2003-02-06 · 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

Prohibition from buying, selling or dealing in securities for a period of one year

Provisions invoked

• s. 11(4)

Regulations

• Reg. 11
• Reg. 6
• Reg. 4(a)
• Reg. 6(a)

Parties

• Shri Ramesh K. Parikh
• Shri M. K. Parikh
• Ms. Varsha R. Parikh

Holding

The Whole Time Member of SEBI prohibited Shri Ramesh K. Parikh, Shri M. K. Parikh and Ms. Varsha R. Parikh from buying, selling or dealing in securities in any manner for a period of one year for assisting allottees in off-loading preferential shares of Manna Glass in the market, in violation of SEBI (PFUTP) Regulations, 1995.

Full text

2 and 4,37,600 which constituted 95% and 85% of the total traded volume at BSE. 1.4 The investigation further revealed that in January 2000, Manna Glass had issued 1.8 crores shares @ Rs 17/- on preferential basis to 4 promoters namely, Mr. Tushar A Majumdar, Mr. Amidhar Majumdar, Ms Rena A Majumdar , Ms Reema T Majumdar and Dr Beena A Shah (hereinafter referred to as promoters) and 12 non-promoter entities namely Sarlee Fabrics Exports Ltd., Growth Agro Industries Ltd., Indian Shelters Ltd., Shalin Resorts Ltd., Indo Care Pharmaceuticals Ltd., Gujarat Fun’ N Water Park Ltd., Shree Corporation, G Bhavasar & Company, Sofitel & Finstock, Shri Ashok Chokshi, Omega Avenues Limited and Shri Noopur Kansara (hereinafter referred to as non-promoter entities). Total number of shares of Manna Glass were increased from 83,39,500 to 2,63,39,500 shares and total issued equity capital of Manna Glass increased to Rs. 26.33 crores divided into shares of Rs.10/- each. The investigations have also revealed that Manna Glass the promoter companies namely Manna Exports, Manna Machineries Pvt. Ltd. and Mannapule Machineries Pvt. Ltd (hereinafter referred to as promoter companies) and non promoter entities had opened bank accounts at the same time in the same bank branch just prior to the preferential issue. One common person had introduced all of them to the bank. Scrutiny of the bank account of the company revealed that it had issued cheques to the promoter company/ entities who had in turn issue

3 of the company that money was received from the allottees towards subscription amount. However, there was actually no real flow of funds from the allottees to the company by way of allotment money and preferential issue did not really bring additional funds to the company. Promoter director Shri Tushar Majumdar appearing on behalf of himself and three of his family members confirmed that they were among four of the allottees in the preferential allotment and received shares without investigating any funds for the same directly from their own interest. Further, Shri Noopur Kansara and Indian Shelters, had confirmed in his statement dated February 06,2003 that one of the promoter companies had arranged them the subscription money at the time of preferential issue.

4 2.0 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 2.1 Accordingly, a show cause notice dated September 29, 2003 was issued to Shri Ramesh Parikh , Ms Varsha Parikh and Mr Manubhai Parikh wherein they were alleged to have violated SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market) Regulations, 1995. Vide the aforesaid show cause notice, they were called upon to show cause as to why suitable directions under Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market) Regulations, 2003 read with Section 11(4) (b) and 11B of SEBI Act, 1992 should not be issued against them.

Source: SecMarx — sebi:MO/197/IVD/02/2006. 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.