sebi:Order/AK/GN/2024-25/31254

SEBI · SEBI · 2001-05-09 · Amit Kapoor, Adjudicating Officer

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

Facts / Headnote

Disposed of — adjudication proceedings cannot be proceeded with

Provisions invoked

• s. 15A
• s. 15
• s. 12
• s. 11C(2)
• s. 446
• s. 391
• s. 446(1)

Regulations

• Reg. 13
• Reg. 9
• Reg. 6
• Reg. 200
• Reg. 2
• Reg. 14

Parties

• Sharepro Services (I) Private Limited

Holding

The adjudication proceedings initiated against the Noticee (Sharepro Services (I) Private Limited) vide Show Cause Notice dated March 14, 2022 cannot be proceeded with in the absence of leave of the Hon'ble High Court of Bombay, as required under Section 446 of the Companies Act, 1956 following the winding-up order and appointment of the official liquidator. The matter is disposed of on this preliminary issue without adjudicating the merits.

Full text

Adjudication Order in the matter of Sharepro Services (I) Private Limited Page 2 of 8 3. In view of the above observations SEBI initiated adjudication proceedings in the matter of Sharepro Services (I) Pvt. Ltd against the Noticee under Section 15A(a) & (c), 15C, 15HA and 15HB of Securities and Exchange Board India Act, 1992 (“SEBI Act”) for the alleged violation of Section 12 A (a) (b) (c) of SEBI Act, Regulation 2 (1) (c), 3 (b) (c) (d), 4 (1) & (2) (p) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations 2003”); Clauses (1),(2), (3), (5), (6), (16), (17), (18), (20), (25), (28), (30) of Code of Conduct specified in Regulation 13 of SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 (“RTA” Regulations”), Regulation 9 (A) (e) & (f), Regulation 6 (g) and Regulation 14 (3) (b) & (c) of RTA Regulations, SEBI Circular No RTI Circular No. 1 (2000-2001) Dated May 09, 2001; Section 11C(2) and 11C (3) of SEBI Act.

Adjudication Order in the matter of Sharepro Services (I) Private Limited Page 3 of 8 penalty not be imposed against Noticee under Sections 15A(a) & (c), 15C, 15HA and 15HB of SEBI Act, 1992 for the following alleged violations; 5.1 that Noticee and its top management in connivance with various other entities facilitated diversion of assets (securities and dividend) belonging to genuine and rightful shareholders to entities related to management of Noticee. It was further alleged that, records at Noticee were not maintained properly and there was deliberate falsification of records to blur the audit trail. Internal checks and balances were compromised to a high degree in Noticee. Various entities actively conspired with the top management of Noticee and had also substantially benefitted from the scheme of fraud. 5.2 that not only the dividends due to genuine investors were fraudulently siphoned off by Noticee but the records were also falsified so as not to reflect the correct position. The system/database of Noticee showed that dividends were paid to the original shareholders, but the verification of the bank accounts revealed that the dividends were paid to persons who were not the rightful shareholders or were not at all the shareholders of the companies. 5.3 that Noticee deliberately did not maintain proper records in its system so that demand drafts issued to persons belonging to or connected with the management of Sharepro instead of the genuine shareholders are not imm

Adjudication Order in the matter of Sharepro Services (I) Private Limited Page 4 of 8 of investors as the aggrieved investors obtained their shares only after long and repeated correspondences with Noticee. 5.8 that the noticee was served summons, to which Noticee either did not respond/or responded with incomplete information.

Source: SecMarx — sebi:Order/AK/GN/2024-25/31254. 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.