sebi:PKK/AO/55/2011
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Facts / Headnote
Charges not established; matter disposed of
Provisions invoked
- s. 15
- s. 15J
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Charanjit Singh
Holding
The Noticee is not guilty of violating Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, and the charges in the SCN do not stand established.
Full text
Page 2 of 7 transactions entered by and between various entities were provided to Noticee as an Annexure 1 to Show Cause Notice (SCN). It is alleged that Noticee transferred through off market 4,40,000 shares to one Mr. Amit Khanna on December 27, 2004 who in turn offloaded the same in the market after premature and misleading corporate announcement and the December 2004 quarter results. It is alleged that Noticee had offloaded the said shares in the market at higher prices through the said entity. The Noticee was thus alleged to have violated SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as PFUTP Regulations.
Page 3 of 7 SEBI Website under the head undelivered Summons / Notices. Simultaneously, a publication was made in the English and Hindi Edition of Newspaper ‘Hindustan Times’ intimating the Noticee to collect the said SCN from AO at the address mentioned therein. The Noticee vide his letter dated February 02. 2011 submitted inter-alia that he was not residing at the address published in the Newspaper since last two years and provided his new address. The Noticee requested me to give another date to appear before me. Accordingly, he was advised to appear before me on February 23, 2011. The Noticee through its authorized representative appeared before me inter-alia submitted that “KEWL had denied that the statements made by it were misleading in any way. The carrying on of off-market transactions by Mr. Charanjit Singh 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. Mr. Charanjit Singh had sold the shares to Mr. Amit Khanna who in turn had sold the shares in the market before the date of announcement of the quarterly results of the quarter ended December, 2004, by KEWL. It is only a quantity o
Page 4 of 7 Mumbai Stock Exchange during the period from January 1, 2005 to January 31, 2005 is set out in the attachment marked Annexure 2. It is further mentioned that the issued and paid up capital of KEWL is Rs. 1388.89 lacs divided into 138,88,900 fully paid by shares of Rs. 10 each. The sale of subject shares by Mr. Charanjit Singh after the date of announcement of quarterly results by KEWL is a miniscule quantity of 79,500, which is a small fraction of 0.57% of total issued shares of KEWL, and it cannot be gainsaid that sale of 0.57% shares by Mr. Amit Khanna made in the course of an off-market transaction would have altered the liquidity of shares of KEWL already available in the market. Such numbers of shares sold after January 11, 2005, were insignificant in comparison to the trading volumes recorded in the stock exchanges.
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Source: SecMarx — sebi:PKK/AO/55/2011. 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.