sebi:Order/GR/PU/2023-24/28332

SEBI · SEBI · 2010-01-11 · G. Ramar, Adjudicating Officer

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Facts / Headnote

Adjudication proceedings initiated afresh after SAT remand; Noticee found in violation of Section 12A(a),(b),(c) of SEBI Act read with Regulations 3(a),(b),(c),(d) and 4(1) of PFUTP Regulations, 2003; penalty imposed (amount not specified in extract)

Provisions invoked

• s. 15
• s. 12A
• s. 15H
• s. 15J
• s. 28A
• s. 23E
• s. 376

Regulations

• Reg. 2(c)
• Reg. 3
• Reg. 200
• Reg. 3(a)

Parties

• Mr. Arun Panchariya

Holding

The Noticee, Mr. Arun Panchariya, was held to have violated Section 12A(a),(b),(c) of the SEBI Act read with Regulations 3(a)-(d) and 4(1) of the PFUTP Regulations, 2003, by participating in a fraudulent GDR issuance scheme by Rainbow Papers Ltd. involving a circular loan-pledge arrangement with EURAM Bank and Vintage FZE, and by failing to disclose price-sensitive information to the stock exchange.

Full text

Adjudication Order in respect of Mr. Arun Panchariya in the matter of GDR Issue by Rainbow Papers Ltd. Page 2 of 33 contending that the show cause notice was never served upon him and no opportunity of hearing was provided. Hence, present proceeding was initiated.

Adjudication Order in respect of Mr. Arun Panchariya in the matter of GDR Issue by Rainbow Papers Ltd. Page 3 of 33 (the sole subscriber of GDR). Therefore, it was alleged that the scheme of issuance of GDRs was fraudulent.

Adjudication Order in respect of Mr. Arun Panchariya in the matter of GDR Issue by Rainbow Papers Ltd. Page 4 of 33 9. Subsequently, the Hon’ble Securities Appellate Tribunal (hereinafter referred to as ‘SAT’) in Appeal No.136 of 2023 of the Noticee allowed the same on the ground of violation of the principles of natural justice that the show cause notice was never served upon him and no opportunity of personal hearing was provided. Accordingly, the impugned SEBI order dated May 27, 2022 was set aside by Hon’ble SAT vide an order dated March 28, 2023 and the matter was remitted back to the AO for passing a fresh order on merits after giving an opportunity of personal hearing to the appellant. Further, directed the appellant to appear before the AO on April 10, 2023 on which date the AO would serve the show cause notice upon the appellant or his learned counsel and from there onwards the matter would be proceeded in accordance with law.

Source: SecMarx — sebi:Order/GR/PU/2023-24/28332. 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.