sebi:Order/PM/PA/2021-22/14275-14290

SEBI · SEBI · 2018-04-27 · Prasanta Mahapatra, 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

Noticees held liable for violating regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(a) and 4(2)(e) of PFUTP Regulations, 2003; monetary penalty imposed under section 15HA of the SEBI Act, 1992

Provisions invoked

• s. 15
• s. 11(1)
• s. 15H
• s. 15J
• s. 179
• s. 168

Regulations

• Reg. 3
• Reg. 2(1)(c)
• Reg. 4(1)
• Reg. 3(a)

Holding

The Noticees, including the company and its directors, were held to have violated regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(a) and 4(2)(e) of the PFUTP Regulations, 2003 by being party to a scheme to manipulate the price of VLFL scrip, attracting monetary penalty under section 15HA of the SEBI Act, 1992.

Full text

Adjudication order in respect of various entities in the matter of Voltaire Leasing and Finance Ltd. Page 2 of 63 possible violation, if any, of the provisions to ascertain the violation, if any, of the provisions of Securities and Exchange Board of India, Act 1992 (hereinafter referred to as the SEBI Act, 1992) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as the PFUTP Regulations, 2003). Investigation was conducted in the scrip of VLFL for the period August 12, 2014, to July 31, 2015 (hereinafter referred to as Investigation Period/ IP). The company is listed on BSE. During the IP the price of the scrip opened at Rs. 2.42 and reached a high price of Rs. 32.10 and closed at Rs.32.10. On the basis of the said investigation, it is alleged that by Voltaire Leasing and Finance Limited (Company/ Noticee 1), Amlesh Sadhu (Noticee 2), Dilip Rajkumar Patodia (Noticee 3), Harivallabh Mundra (Noticee 4), Chandrakant Babu Mohite (Noticee 5), Rajesh Tukaram Dambre (Noticee 6), Archana Tiwari (Noticee 7), Awadhraj Badrinath Chaubey (Noticee 8), Reshma Rajesh Dambre (Noticee 9), Mukesh Kumar Purohit (Noticee 10), Reeta Sanjay Sharma (Noticee 11), Jaya Ramchand Kotwani (Noticee 12), Ajay Niranjan Thaker (Noticee 13), Mangesh Madhukar Dhotre (Noticee 14), Looklike Trade Private Limited (Noticee 15) and Badriprasad Chiripal (Noticee 16) (hereinafter collectively referred to as you / Noticees’) manipula

Adjudication order in respect of various entities in the matter of Voltaire Leasing and Finance Ltd. Page 3 of 63 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

Adjudication order in respect of various entities in the matter of Voltaire Leasing and Finance Ltd. Page 4 of 63 c) The profits of the company decreased in the F.Y 2014-15 and 2015-16. The Profit After Tax of VLFL is as follows: Description 2013-14 2014-15 2015-16 Profit After Tax (Rs. lakhs) 24.5 20.1 4.2 (Source: BSE website) d) Investigation observed that the company registered decreasing profits during the investigation period. Further, the total shareholding of the company during the period was 41,18,000 shares and the high price during IP was observed as Rs. 32.10 /-. Accordingly, the market capitalization of the VLFL scrip on the high price day was Rs. 13.21 crores. Therefore, the profit of Rs 20.1 lakh and 4.2 lakhs registered by the company during the F.Y 2014-15 and 2015-16 does not justify the price rise in its scrip's price during the investigation period. e) Investigation observed that the company had come out with 3 preferential allotment of shares during the period November 2012 to August 2013. f) Investigation observed, that most of the corporate announcements pertained to shareholding pattern, closure of trading window, change in compliance officer, financial results, open offer, limited review report, board meeting, book closure for AGM, change of CFO, etc. Thus, it is observed that there were no major announcements or developments which could support the price rise in the scrip during the investigation period. g) It was observed that the scrip (VLFL) was s

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