sebi:Order/SM/AR/2018-19/943
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Facts / Headnote
Noticee held liable for violation of Sections 11C(2) and 11C(3) of the SEBI Act and penalty of Rs 5,00,000 imposed under Section 15A(a)
Provisions invoked
- s. 15A
- s. 15
- s. 19
- s. 15J
- s. 11C(6)
- s. 12
- s. 11C
- s. 11C(2)
- s. 11C(3)
Parties
- Laxminarayana Veeramallu Doosa
Holding
The Noticee violated Sections 11C(2) and 11C(3) of the SEBI Act by failing to comply with summons dated January 29, 2014 and June 04, 2014, and is liable to monetary penalty under Section 15A(a). A penalty of Rs 5,00,000 was imposed on Laxminarayana Veeramallu Doosa.
Full text
Page 2 of 14 the IPO of RKDL viz. Comfort Securities Limited ( hereinafter referred to as “CSL”). It was also observed during the investigation that CIL, which has been referred in the aforementioned news article was a group/associate company of CSL.
Page 3 of 14 4. A pictorial representation of the above mentioned flow of funds from the account of RKDL to the Noticee through S5 Trading, which was mentioned in the IR that was enclosed along with the SCN issued to the Noticee is given below:
Page 4 of 14 “Similarly, vide summons dated Jan 29, 2014 and June 04, 2014, Everready and Laxminarayana were advised to inter alia inform reasons for their above fund transactions. However, Everready and Laxminarayana have not provided the desired information/ documents, thereby hampering the investigation.” “Based on the above fund transactions, routing of funds to traders, aforesaid connection of entities, RKDL's submission regarding siphoning off (and later refunding) of IPO proceeds through S5 Trading, non- furnishing of information by S5 Trading, Everready and Laxminarayana, transfer of funds among entities mostly on the same day, the following is observed: i. Rs 2 crore was initially siphoned off and routed for purchasing shares of RKDL on the date of listing, out of IPO proceeds from RKDL through S5 Trading and then through Everready, Bunnings, Laxminarayana and Rajanbabu. Subsequently, S5 Trading refunded the same amount of Rs 2 crore to RKDL.”
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Source: SecMarx — sebi:Order/SM/AR/2018-19/943. 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.