sebi:Order/PM/PA/2021-22/15130-15143
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Facts / Headnote
Violations found against Noticees; penalties imposed under SEBI Act and SCRA Act (specific penalty amounts not stated in the excerpt)
Provisions invoked
- s. 11
- s. 15A
- s. 15
- s. 19
- s. 11(3)
- s. 12A
- s. 61
- s. 15H
- s. 27
- s. 12
- s. 15J
- s. 11C(6)
- s. 21
- s. 23J
- s. 23E
- s. 23
- s. 23A
- s. 3(42)
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(1)
- Reg. 7
- Reg. 200
- Reg. 2
- Reg. 2(c)
- Reg. 3(a)
- Reg. 3(c)
- Reg. 2(1)
- Reg. 57(1)
- Reg. 106P
- Reg. 14(1)
- Reg. 4(2)(c)
- Reg. 2(1)(c)(5)
Parties
- HPC Biosciences Ltd.
- Noticee nos. 1 to 12 (including directors, funding entities such as Raj Kumar (Bright Securities), Prakash Gupta (Shiv Traders), AMS Powertronic Pvt. Ltd., Madhukar Dubey, and others)
Holding
The Noticees, including HPC Biosciences Ltd. and connected entities, were found to have violated the PFUTP Regulations, ICDR Regulations, and sections 12A(a), (b) and (c) of the SEBI Act by fabricating a fraudulent scheme in the HPC IPO, including funding IPO allottees through Funding Group Entities to meet minimum subscription requirements and diverting IPO proceeds for purposes not stated in the prospectus.
Full text
Adjudication order in the matter of HPC Biosciences Ltd. Page 2 of 83 A. BACKGROUND 1. HPC Biosciences Ltd. (hereinafter referred to as “Company”/”HPC”) came out with an initial public offer (hereinafter referred to as “IPO”) to raise Rs. 1575 lakhs by issuing 45,00,000 equity shares of Rs. 10 each at an issue price of Rs. 35. The aforesaid scrip was listed at the SME segment of BSE Ltd. (hereinafter referred to as “BSE”) on March 19, 2013. It was observed that the price of the scrip opened at Rs 37.25 subsequently went to a high of Rs 39.10 and closed at Rs 39.10 on the listing day. A preliminary inquiry was undertaken as huge rise was observed in the traded volume and price of scrips of the Company and three other companies during the period from January 01, 2013 to December 31, 2014. In this backdrop, SEBI conducted an investigation in the scrip of HPC to ascertain manipulation, if any, in the IPO process of the Company. The focus of the aforesaid investigation was to ascertain whether (a) there was any irregularity in bidding and allotment in the HPC IPO in violation of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (hereinafter referred to as “ICDR Regulations”); and (b) proceeds of the IPO were diverted for objects other than the ones stated in the prospectus.
Adjudication order in the matter of HPC Biosciences Ltd. Page 3 of 83 exchange system to artificially increase volume and price of the HPC scrip for making illegal gains and to convert ill-gotten gains into genuine one (hereinafter referred to as the “Confirmatory Orders”).
Adjudication order in the matter of HPC Biosciences Ltd. Page 4 of 83 # Entity Amount paid to IPO allottees of Company Amount received from IPO proceeds of Company Other funding movements /connections
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Source: SecMarx — sebi:Order/PM/PA/2021-22/15130-15143. 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.