sebi:ORDER/NH/RJ/2023-24/29955

SEBI · SEBI · 1994-10-11 · N Hariharan, Adjudicating Officer

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Facts / Headnote

Noticee held liable for violations; penalty of Rs. 6,00,000 imposed under Section 15HB of the SEBI Act

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15J

Regulations

• Reg. 4
• Reg. 13
• Reg. 3
• Reg. 9
• Reg. 9A
• Reg. 9A(1)(e)
• Reg. 7
• Reg. 9A(1)(b)
• Reg. 39(2)
• Reg. 40(3)

Parties

• Maheshwari Datamatics Private Limited

Holding

The Noticee, Maheshwari Datamatics Private Limited, was found to have violated multiple provisions of SEBI Act, RTA Regulations, LODR Regulations, Certification Regulations, and SEBI Circulars relating to NISM certification, client agreements, inward processing, issuance of duplicate share certificates, transmission requests, change of address/bank requests, and maintenance of destruction registers. A penalty of Rs. 6,00,000 was imposed under Section 15HB of the SEBI Act.

Full text

Adjudication Order in the matter of Maheshwari Datamatics Private Limited 2 ● Regulations 9A(1)(b), 9A(1)(e) and 13 of SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 (hereinafter referred to as ‘RTA Regulations’). ● Regulations 4, 5, 6, 9(2) and 10 of SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007. ● Clauses 2, 3, 5 and 16 of Schedule III (Code of Conduct) of RTA Regulations. ● Clause (a) and (b) of Point 1 "Specific Activities" of Schedule I of SEBI Circular "Instruction to Registrars to an Issue/Share Transfer Agents" dated October 11, 1994. ● Clause 15 of Part II (Provisions with regard to Transfer / Transmission / Correction of Errors etc.”) of the Annexure to SEBI Circular SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated April 20, 2018. ● Clause 25(a) of “Draft of Agreement between the STA and the Company” of Annexure B of Schedule II of SEBI Circular “Instruction to Registrars to an Issue/ share Transfer Agents” dated October 11, 1994. ● Clause 8 of Annexure B and point 1 of Schedule I of Model agreement between the share transfer agent and the company as specified in RRTI Circular dated October 11, 1994. ● RRTI Circular no.1 (2000-2001) dated May 09, 2001. ● Clause 1 (a) of Schedule I to the “Draft of Agreement between the STA and the Company” as specified in SEBI RRTI Circular No. 1 (94-95) dated October 11, 1994. ● Clauses 11, 12 and 17 of Draft Agreement in Annexure A of Schedule II in SEBI Circular “Instructi

Adjudication Order in the matter of Maheshwari Datamatics Private Limited 3 with Section 15-I of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) and under Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) to enquire into and adjudge under Section 15HB of the SEBI Act for the alleged violations committed by Noticee as mentioned above.

Adjudication Order in the matter of Maheshwari Datamatics Private Limited 4 o In view of the above, it is alleged that the Noticee has not complied with the requirement of the said Notification dated September 04, 2009 and the extant Regulations during the inspection period and the post-inspection period. o Therefore, Noticee is alleged to have violated the said SEBI Notification dated September 04, 2009 read with Regulations 4, 5, 6, 9(2) and 10 of SEBI Certification of Associated persons in the Securities Market Regulations, 2007 and Clauses 3 and 16 of Schedule III (Code of Conduct) read with Regulation 13 of RTA Regulations. ● Agreements / Tripartite agreement entered into by the RTA o During the inspection, the agreement entered into by the Noticee with two of its clients were checked. It was observed that Clauses 11, 12 and 17 of the Draft Agreement as provided in Annexure A of Schedule II in SEBI Circular “Instruction to Registrars to an Issue/ share Transfer Agents” dated October 11, 1994 (hereinafter referred to ‘Draft Agreement’) were missing from the said agreements. o In this regard, the Noticee in its reply dated March 20, 2023 has inter alia stated as under: “We are arranging to incorporate the same by suitable exchange of letters which will form integral part of the Agreement. …” o In view of the above, it is alleged in the PIA report that agreements entered into by the Noticee with its clients did not align with the Draft Agreement. o Therefore, Noticee is all

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