sebi:Order/SM/AR/2018-19/1084

SEBI · SEBI · 2014-12-04 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Penalty imposed under Section 15A(a) of the SEBI Act

Provisions invoked

• s. 15A
• s. 15
• s. 19
• s. 15J
• s. 11C(6)
• s. 12
• s. 11C
• s. 11C(2)
• s. 11C(3)

Parties

• Kiran Vinodchand Shah

Holding

The Noticee violated Sections 11C(2) and 11C(3) by failing to furnish the information/documents sought vide summons dated December 04, 2014 and is liable for penalty under Section 15A(a). The allegation that furnishing false information violates Sections 11C(2) and 11C(3) is not sustainable and no penalty can be levied on that ground.

Full text

Page 2 of 19 of the IPO proceeds of RKDL was siphoned off by RKDL in connivance with the associate/connected entities of the Merchant Banker associated with the IPO of RKDL viz. Comfort Securities Limited (hereinafter referred to as ‘CSL’). During the course of investigation, it was observed by SEBI that CIL, which has been referred in the aforementioned news article was a group/associate company of CSL.

Page 3 of 19 4. A pictorial representation of the above mentioned flow of funds from the account of RKDL to the account of Heranba and then to CSL, which was also mentioned in the IR that was enclosed along with the SCN issued to the Noticee is mentioned below:

Page 4 of 19 and mentioned that the above transactions had taken place with the knowledge of Mrs. Pratusha Roshan Kadu, another director of Heranba, without his knowledge. However, during the course of investigation by SEBI, it was observed from the MCA database that Noticee’s name was still shown as one of the directors of Heranba as on November 14, 2015. In view of the above, it is alleged that Noticee, in his capacity as the director of Heranba, had furnished false information w.r.t the summons issued to Heranba. Specifically, the IR had made the following observations w.r.t the role of Heranba and the Noticee: “15. Fund transactions with Heranba Finvest Services Pvt Ltd Heranba (Kapol Coop Bank A/c no. 6980) (Annexure 40) had received Rs. 5 crore from RKDL (Axis Bank A/c no. 910020037719618) out of the IPO proceeds, details of which are given below: i. Rs 2 crore on Jan 18, 2011 ii. Rs 1 crore on Jan 19, 2011 iii. Rs 1 crore on Jan 20, 2011 iv. Rs 1 crore on Jan 21, 2011 Heranba in turn transferred the same amounts to CSL (broker) on the same days of receipt of the above amounts. During the period Jan 01, 2011 to Feb 15, 2011, Heranba through its broker CSL had bought 22,77,600 shares of Splash Media & Infra Ltd for a total value of approx. Rs 23.21 crore at BSE. It is further observed that Heranba is a part of connected entities (connection basis given at Annexure 61). Vide summons dated Dec 04, 2014 sent to Heranba at one of its director's address (Kiran Vinodchand Shah

Source: SecMarx — sebi:Order/SM/AR/2018-19/1084. 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.