sebi:ORDER/NH/RJ/2024-25/31217

SEBI · SEBI · 2012-05-14 · N Hariharan, Chief General Manager and Adjudicating Officer

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

Provisions invoked

• s. 15A
• s. 15
• s. 19
• s. 15H
• s. 15J

Regulations

• Reg. 13
• Reg. 199
• Reg. 14(3)
• Reg. 27
• Reg. 4
• Reg. 201
• Reg. 3(1)
• Reg. 11(1)
• Reg. 245(3)
• Reg. 14(1)(e)

Parties

• First Overseas Capital Limited

Holding

The Adjudicating Officer found that the Noticee submitted false information during inspection by presenting the wrong individual as Compliance Officer, contrary to SEBI's records. The order also addresses allegations of failure to file half-yearly reports, failure of due diligence in IPOs, concealment of information, non-disclosure of an open offer, and non-submission of quarterly reports.

Full text

Adjudication Order in the matter of inspection of First Overseas Capital Limited Page 2 of 35  Regulation 245(3) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (hereinafter referred to as ‘ICDR Regulations’) and  SEBI Circular CIR/MIRSD/6/2012 dated May 14, 2012 and SEBI Circular SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 2, 2017.

Adjudication Order in the matter of inspection of First Overseas Capital Limited Page 3 of 35 observed from Post Inspection Analysis (PIA) that the said reports have not been filed by the Noticee since its registration January 1, 2015) till date. o In addition to above, it is also observed from the material available on record that SEBI had repeatedly sent reminders to the MB to submit the half-yearly report for March 31, 2014, September 30, 2014, September 30, 2017-March 31, 2020. Despite these reminders, Noticee did not submit the report. o In view of the aforesaid failure on the part of the Noticee, it is alleged that the Noticee has violated the provisions of SEBI circular CIR/MIRSD/6/2012 dated May 14, 2012 and SEBI circular SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 2, 2017.  Failure to undertake independent due diligence in 3 IPOs handled during IP w.r.t.: a) Verification of background of directors and promoters as to whether any of them are willful defaulters. fugitive economic offenders or debarred by SEBI. b) Verification of physical existence of issuer company/ site. o As regards captioned alleged violation, it is observed from the IR that in case of 3 IPOs handled by the Noticee, namely Nidan Laboratories and Healthcare Limited, BEW Engineering Limited and Veerkrupa Jewellers Limited during the IP, the inspecting team had sought details with respect to verification of

Adjudication Order in the matter of inspection of First Overseas Capital Limited Page 4 of 35 o Accordingly, in view of the aforementioned failures on part of the Noticee, it is alleged that the Noticee has violated the provisions of Clause 4 of Schedule III (Code of Conduct) r/w Regulation 13 of SEBI (Merchant Banking) Regulations, 1992, Regulation 245(3) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Regulation 14(1)(e) of SEBI (Merchant Banking) Regulations, 1992.  Furnishing of false information o It is further observed from the IR that the Noticee apprised the inspecting team that Ms. Mala Soneji was the Compliance officer of the Noticee during the IP. However, as per SEBI's record, Mr. Rushabh Shroff was the Compliance Officer during that period. This change in the position of compliance officer was not intimated to SEBI. o In view of the aforesaid, it can be construed that the Noticee had furnished false information by presenting the wrong individual as the Compliance Officer in its replies to PIQ and during the inspection and is accordingly alleged to have violated the Regulation 13 read with Clause 20 of Schedule III of (Merchant Bankers) Regulations, 1992.  Concealment of information in reply to PIO and during inspection. o With regard to the captioned allegation, it is observed from IR that the Noticee in its reply to PIQ had submitted the following w.r.t. details of last 2 inspections carried out by SEBI (SEBI observations and corre

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