sebi:PM/NR/2020-21/9591-9595

SEBI · SEBI · 2017-09-01 · Prasanta Mahapatra, Adjudicating Officer

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Disposed without penalty - Noticees exonerated

Provisions invoked

• s. 15
• s. 19
• s. 12
• s. 15H
• s. 15I
• s. 108

Regulations relied on

• SEBI (PFUTP) Regulations, 2003 — 3(a)
• SEBI (PFUTP) Regulations, 2003 — 3(b)
• SEBI (PFUTP) Regulations, 2003 — 3(c)
• SEBI (PFUTP) Regulations, 2003 — 3(d)
• SEBI (PFUTP) Regulations, 2003 — 4(1)

Parties

• Unique Image Production Private Limited
• First Entertainment Private Limited
• Murali Shanmugam
• Prabu Sekar
• Sekar Vasu

Holding

The Adjudicating Officer held that the allegation that the five Noticees were participants in the fraudulent scheme to manipulate the price of Pine Animation Ltd. was not established and exonerated them, disposing the adjudication proceedings initiated vide SCN dated July 11, 2018 without any penalty.

Full text

Adjudication Order in respect of 5 entities in the matter of Pine Animation Ltd., Page 2 of 12 3. On May 17, 2013, the shares of PAL were split from the face value of ₹10 each to ₹1 each. Thereafter, the price of the scrip touched a high of ₹100.60 (split adjusted price) on June 20, 2013 (i.e price of the scrip without split rose upto ₹1006.00 per share with a face value of ₹10). The price of the shares of the Company rose from ₹441 to ₹1,006 (Split adjusted price ₹100.6) in a span of less than 3 months, despite the fact that the shares of the Company were suspended from trading on the exchange platform for around 14 years and the Company had neither any history of profit in previous financial years nor the Company made any material corporate announcements pertaining to its business affairs. It was noticed that after July 2014, the price of the scrip of the Company started falling.

Adjudication Order in respect of 5 entities in the matter of Pine Animation Ltd., Page 3 of 12 were participants in the fraudulent scheme/device that was orchestrated for manipulating the price of scrip of PAL for the benefit of these off-market recipients of the shares of the Company. Accordingly, it has been alleged that the Noticees have violated the provisions of Sections 12A (a), (b) and (c) of the SEBI Act and Regulations 3(a), (b), (c) and (d) and 4(1) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’) by being a part of manipulative scheme described above. APPOINTMENT OF ADJUDICATING OFFICER

Adjudication Order in respect of 5 entities in the matter of Pine Animation Ltd., Page 4 of 12 entities of PAL, viz. Unique Image Production Private Limited (Noticee 1) as well as of First Entertainment Private Limited (Noticee 2). He has stated that Mr. Nagaraja Sharma Rajagopalan Director of PAL called him up sometime in January 2012 and told him that two persons from Mumbai, namely Mr. Nimesh S Joshi and Mr. Hitesh Kawa want to buy the shares of PAL held by Unique Image Production Pvt., Ltd., and First Entertainment Pvt., Ltd., Thereafter, he along with Mr. Nagaraja Sharma visited to meet Mr. Nimesh S Joshi and Mr. Hitesh Kawa at their Mumbai Office and discussed about selling the shares of PAL.

Source: SecMarx — sebi:PM/NR/2020-21/9591-9595. 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.