sebi:Order/SD/KS/2022-23/18773-18775

SEBI · SEBI · 2021-08-23 · Sandeep P Deore, Adjudicating Officer

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

Provisions invoked

• s. 15
• s. 19
• s. 12A
• s. 12
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 3
• Reg. 200
• Reg. 3(a)

Parties

• Esaar India Limited
• Vinod Gupta HUF
• Bharat Bhushan Gupta
• Jaidev Gupta HUF

Holding

The Adjudicating Officer rejected the Noticees' contention that the transfer of Rs. 34,06,200/- to Spectra Industries Ltd. was repayment of a loan, finding Noticee No.1 failed to produce the basic loan agreement document. The order also rejected the Noticees' plea of inordinate delay in initiation of proceedings.

Full text

Adjudication Order in the matter of Esaar India Limited Page 2 of 23 1992(SEBI Act) r/w Regulations 3 (b), (c), (d) & 4(1) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 (hereinafter referred as ‘PFUTP Regulations’) APPOINTMENT OF ADJUDICATING OFFICER

Adjudication Order in the matter of Esaar India Limited Page 3 of 23 EIL’s preferential allotment. On perusal of account number 001710100050966, it was observed that ₹34,06,200/- was transferred on May 21, 2011, to the bank account of Spectra Industries Ltd having account number 010630100001082 i.e. the same day it had received ₹35,00,000 from EIL. ii. It is noted that Spectra Industries Ltd is listed on Bombay Stock Exchange (Scrip Code – 513687). On perusal of annual reports of Spectra Industries for the year 2011-12, it was observed that Vinod Gupta was the Managing director and Jaidev Gupta was the executive director of Spectra Industries. It was also observed that Mr. Bharat Bhushan Gupta was the chairman of Spectra Industries Ltd. Further, It was observed that Bharat Bhushan Gupta was also one of the allottees in the said preferential allotment of EIL dated May 25, 2011. In this regard, it is alleged that the flow of money forms a ‘to and fro’ pattern where the personnel on the boards of directors of Spectra Industries Limited remitted ₹45,00,000/- as subscription amount to EIL and received ₹35,00,000/- in return on May 21, 2011 from the said company.

Adjudication Order in the matter of Esaar India Limited Page 4 of 23 Spectra Industries Ltd(Chairman Bharat Bhushan Gupta & 2 Directors namely Vinod Gupta HUF, Jaidev Gupta HUF). iv. In this regard, SEBI vide e-mail dated June 21, 2021 had sought information and reasons from Vinod Gupta HUF, with regard to receipt of amount of ₹35,00,0000 from EIL. Further, SEBI sought the information related to the nature of relationship / Association (Past or present) of Jaidev Gupta HUF, Vinod Gupta HUF and Bharat Bhushan Gupta with the company EIL. However, it was observed that no reply has been received in this regard from the NoticeeNo. The bank statement indicating their fund transfers are annexed as Annexure 4. v. In View of the above, it is alleged that Esaar India Limited , Vinod Gupta HUF, Bharat Bhushan Gupta and Jaidev Gupta HUF have violated Section 12A(a), (b), (c) of the SEBI Act, 1992 read with Regulations 3 (b), (c), (d) & 4(1) of the SEBI (PFUTP) Regulations, 2003 for refunding the subscription amount of paid by the three allottees namely Vinod Gupta HUF, Jaidev Gupta HUF & Bharat Bhushan Gupta out of Issue Proceeds thereby funding the preferential allotment dated May 25,2011 to the extent of amount refunded i.e ₹35,00,000/-.

Source: SecMarx — sebi:Order/SD/KS/2022-23/18773-18775. 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.