sebi:MO/6/IVD/04/04
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Debarred the 16 noticees from buying, selling or dealing in securities in any manner for a period of two years, effective on expiry of 3 weeks from the date of the order.
Provisions invoked
- s. 11
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 4
- Reg. 13
- Reg. 4(b)
Holding
The 16 Desai family members and group entities were debarred from the securities market for two years for financing subscription to reissued forfeited shares of Malvica Engineering Ltd. and creating artificial volumes through matched/structured deals.
Full text
out with a public issue in June 1996 and issued 56,26,500 shares to the public. In March 1999, the company forfeited 37,63,500 shares held by the public on account of non-payment of call money. The company reissued 35,14,100 shares out of the 37,63,500 forfeited shares in December 1999 to 46 allottees. At present the company’s capital is Rs. 5,41,21,000/-. The company’s shares are listed at Vadodara Stock Exchange (Regional), Ahmedabad Stock Exchange and The Stock Exchange, Mumbai.
4.1 The directors and proprietors of above entities who are relatives to each other subscribed to 8,50,000 shares in the reissue of forfeited shares in January, 2000. The following were the persons who acted in concert for acquiring the shares of Malvica Engineering Ltd. The relationship of the persons mentioned below with Mr Pankaj A Desai is as indicated in the bracket.
why appropriate action under Section 11 and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995. The allegations against Shri Pankaj Desai and the group entities in the said show cause notice are that they received loans from the company Malvica Engineering Ltd. to subscribe to its reissued shares and subsequently created artificial volumes in the market by entering into synchronized deals. Shri Pankaj Desai vide letter dated 15.09.2003 replied to the said show cause notice making the following submissions. 5.1 Shri Pankaj Desai submitted that they are in all three brothers who are all residing and carrying on their business activities at their different addresses. Shri Pankaj Desai submitted that he resides at 7, Mangal, 76/C R A Kidwai Road, Matunga, Mumbai 400 019 whereas his brother, Shri Dilip Desai resides at 501, A wing, Pathak Avenue, CS Road No.5, Behind Anandnagar, Dahisar (E), Mumbai 400 068 and Shri older brother Shri Praful A. Desai resides at 301, Amit Apt. Ashanagar, West Express Highway, Borivilli (E), Mumbai 400 066. 5.2 Shri Pankaj Desai further stated that all 16 addresses (allotees) referred are having different assets and liabilities, having different Income Tax assessment, different Income Tax PAN numbers and are all filing different Income Tax Returns from past two decades. He further stated that all the referred
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:MO/6/IVD/04/04. 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.