sebi:Order/KS/AS/2021-22/11379

SEBI · SEBI · 2020-11-09 · K SARAVANAN, ADJUDICATING OFFICER

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Facts / Headnote

Penalty imposed on Noticee

Provisions invoked

• s. 15A
• s. 15
• s. 19
• s. 11
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 29(1)
• Reg. 29(2)
• Reg. 29(3)
• Reg. 201

Parties

• Garg Corporation Ltd

Holding

The Noticee violated Regulation 29(2) read with Regulation 29(3) of the SAST Regulations, 2011 by failing to disclose the disposal of 60,10,000 shares of Himachal Fibres Ltd to BSE and HFL, and a monetary penalty of Rs 1,00,000 was imposed under Section 15HB of the SEBI Act, 1992.

Full text

Adjudication order in respect of Garg Corporation Ltd in the matter of Himachal Fibres Ltd Page 2 of 14 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

Adjudication order in respect of Garg Corporation Ltd in the matter of Himachal Fibres Ltd Page 3 of 14 Supplementary Show Cause Notice (hereinafter referred to as 'Supplementary SCN') dated November 13, 2020 was served on the Noticee via SPAD and digitally signed email. The SPAD was duly delivered as per the record. The allegations in the Supplementary SCN are given below in brief: This SCN is issued in continuation of and is supplementary to the original SCN. This supplementary SCN has to be read in conjunction with the original SCN. In the said original SCN, the following was interalia noted: “It was observed that during IP, Noticee transferred 60,10,000 shares (representing 6.97% of the total paid up capital of HFL) to one Mr. Romesh Kumar Aggarwal, on June 11, 2015 in physical form. The same was confirmed by Beetal Financial & Computer Services Pvt. Ltd, Registrar of HFL, vide email dated December 09, 2016. ………… Thus, it is alleged that the Noticee did not make disclosures in respect of off-loading of shares of HFL, to BSE and HFL, and thereby, Noticee allegedly violated regulation 29(2) read with regulation 29(3) of SAST Regulations, 2011”

Adjudication order in respect of Garg Corporation Ltd in the matter of Himachal Fibres Ltd Page 4 of 14 That we vehemently object to appointment of Mr. K. Saravanan, Chief General Manager, SEBI as Adjudicating Officer, in the absence of any Order dated 03.09.2020 of SEBI. That without any specific Order appointing Mr. K. Saravanan, Chief General Manager, SEBI as the Adjudicating Officer, any proceedings, if any, held for inquiry made shall be ultra-virus and void-ab- initio. That in the absence of complete Investigation Report conducted by SEBI in the scrip of M/s Himachal Fibres Limited for the period specified in the Notice i.e. 21.03.2014 to 21.10.2015 (hereinafter referred as “IP”), we cannot comment upon the competency & fairness of investigation conducted by SEBI. That further, in the absence of any letter of the Competent Authority, who was of the prima facie view that there are sufficient grounds to adjudicate upon the alleged violations, as referred to hereinabove, the exercise of the powers shall be void-ab-initio and are not sustainable under the law. Therefore, Notice issued on that basis shall be withdrawn with immediate effect. That it has already been submitted that in our earlier submissions dated 27.02.2015 and 18.04.2018 that the Company M/s Himachal Fibres Limited became a sick Company under Sick Industrial Companies Act (SICA) and according the Board of Industrial and Financial Reconstruction (BIFR)

Source: SecMarx — sebi:Order/KS/AS/2021-22/11379. 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.