sebi:Order/AK/BS/2023-24/27388-27393

SEBI · SEBI · 2019-07-19 · Amit Kapoor, Adjudicating Officer

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Facts / Headnote

Penalties imposed on all six Noticees for violations of PIT Regulations and SEBI circulars

Provisions invoked

Regulations

Parties

Holding

The Noticees were found to have violated Regulation 7(2)(a) of PIT Regulations (disclosure violations), Regulation 9 of PIT Regulations (Code of Conduct deficiencies), clause 4 of Schedule B (trading during window closure), and clause 10 of Schedule B (contra trades), and penalties were imposed under sections 15A(b) and 15HB of the SEBI Act.

Full text

Adjudication Order in respect of six entities in the matter of Brightcom Group Limited Page 2 of 24 2. Based on the examination, it was alleged that Vijay Kumar Kancharla HUF (Noticee No. 1), Vijay Kumar Kancharla , Karta of HUF (Noticee No. 2), M Suresh Kumar Reddy (Noticee No. 3), S V Rajyalaxmi Reddy (Noticee No. 4), Geetha Kancharla (Noticee No. 5) and Brightcom Group Limited (Noticee No. 6) (hereinafter collectively referred to as “the Noticees”) have violated the following provision(s); 2.1 Disclosure violations – Noticee Nos. 1, 2, 3, 4 & 5 violated Regulation 7 (2) (a) of PIT Regulations. 2.2 Code of Conduct violations- Code of Conduct formulated by the Noticee No.6 did not meet the minimum standards for “Code of Conduct” prescribed under Schedule B read with Regulation 9 of PIT Regulations. Noticee No. 6 failed to comply with the provisions of SEBI circular no. SEBI/HO/ISD/ISD/CIR/P/2019/82 dated July 19, 2019, and SEBI circular no. SEBI/HO/ISD/ISD/CIR/P/2020/dated July 23, 2020 regarding reporting violations related to “Code of Conduct” in prescribed format. 2.3 Execution of Trades during trading window closure period- Noticee Nos. 1, 2, 3, 4 & 5 violated clause 4 of Schedule B read with Regulation 9 of PIT Regulations by executing trades during the “Trading Window closure period”. 2.4 Contra Trades- Noticee Nos. 3, 4 & 5 executed “Contra Trades” in violation of clause 10 of Schedule B read with Regulation 9 of PIT Regulations.

Adjudication Order in respect of six entities in the matter of Brightcom Group Limited Page 3 of 24 4. Show Cause Notice ref. no. SEBI/EAD-6/AK/BS/58902/6/2022 dated November 23, 2022 (hereafter referred to as “SCN”) was issued to the Noticees, in terms of the provisions of rule 4(1) of the Adjudication Rules r/w Section 15-I of SEBI Act, requiring the Noticees to show cause within 14 days from the date of receipt of SCN, as to why an inquiry should not be held against them and why penalty, if any, should not be imposed on them under the provision of Section 15A(b) and/ or 15 HB of SEBI Act for the alleged violations. The SCN was sent to the Noticees via speed post acknowledgement due (SPAD) and on their email ids, digitally signed. The SPAD was delivered to the Noticees, except Noticees No. 3 and 4. The SCN was sent again to the said Noticees on their new address on December 07, 2022, which was delivered. The SCN was also delivered to the Noticees by email, which constitutes valid service in terms of Rule 7 of the Adjudication rules.

Adjudication Order in respect of six entities in the matter of Brightcom Group Limited Page 4 of 24 7. Noticees No. 1, 2, and 5 submitted their response to the allegations made against them in the SCN, vide email dated January 23, 2023. Another opportunity of personal hearing was granted to the said Noticees on February 10, 2023, vide Hearing Notice dated January 30, 2023. The authorised persons of the said Noticees appeared before me on the scheduled date and reiterated the

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Source: SecMarx — sebi:Order/AK/BS/2023-24/27388-27393. 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.