sebi:PKK/AO/53/2011
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Facts / Headnote
Charges not established; matter disposed of
Provisions invoked
- s. 15
- s. 15J
Regulations
- Reg. 7(1)
- Reg. 3
- Reg. 13(1)
- Reg. 3(a)
Parties
- Amit Khanna
Holding
The Adjudicating Officer found the Noticee (Amit Khanna) not guilty of violations of PFUTP Regulations, SAST Regulations, and Insider Trading Regulations, and disposed of the matter without imposing any penalty.
Full text
Page 2 of 10 sold the shares when the prices were high following misleading announcement made by KEWL. Noticee therefore, alleged to have violated SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as PFUTP Regulations. The Noticee had not made any disclosures as required under SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (hereinafter referred to as ‘SAST Regulations) and SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as ‘Insider Trading Regulations’).
Page 3 of 10 5. The AO considered the facts of the case and other materials available on record and decided to conduct an inquiry in the matter. The AO granted an opportunity of personal hearing to the Noticee and accordingly he was advised to attend the hearing on March 19, 2010. The authorised representatives of the Noticee appeared before the AO and submitted that an application under consent scheme could be filed by April 10, 2010. The consent application filed by the Noticee had seems been rejected by the High Powered Advisory Committee and another opportunity of personal hearing was granted to the Noticee on September 27, 2010. The representatives of the Noticee appeared before me and submitted that he would submit revised consent terms. As the revised terms were not acceptable, another opportunity of personal hearing was granted to the Noticee on February 23, 2011. The representatives of the Noticee appeared before me and made oral submissions followed by written submissions. The Noticee inter-alia submitted that “Mr. Amit Khanna has not filed the relevant returns under regulations 7(1) and 7(2) of SAST Regulations and regulations 13(1) and 13(5) of the IT Regulations and to that extent had defaulted in compliance of the said regulations. Mr. Amit Khanna is not a regular trader in shares and securities and hence, was not aware of the applicable regulations. The default of Mr. Amit Khanna was bona fide and unintentional and was not prejudicial to the interests of any pe
Page 4 of 10 It is understood that the alleged misleading announcements that had been referred to in the aforesaid show cause notice were the announcements which were made as part of the quarterly results of the quarter ended December 31, 2004, which were published by KEWL on January 11, 2005. It is also understood that KEWL had denied that the statements made by it were misleading in any way. The carrying on of off-market transactions by Mr. Amit Khanna with the promoters/ directors of KEWL cannot by itself be a charge. In this regard, reliance is placed on the observation of the Hon’ble Securities Appellate Tribunal, Mumbai, in the matter of Amrik Singh versus Securities and Exchange Board of India in Appeal No. 30 of 2010, wherein it has been stated that the transfer of shares in off market transactions to a person who in turn sold the same in the market cannot by itself be a charge.
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Source: SecMarx — sebi:PKK/AO/53/2011. 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.