sebi:QJA/KS/CFID/CFID/29897/2023-24
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Facts / Headnote
Penalties imposed on Noticee Nos. 1, 2, 3 (and others) under Sections 15HA and 15HB of the SEBI Act; SCN against Noticee No. 5 disposed of without adverse directions; no penalty under Section 23E of SCRA against Noticee Nos. 1, 2, 3 and 4
Provisions invoked
- s. 11
- s. 15
- s. 19
- s. 11(1)
- s. 11B
- s. 12A
- s. 12
- s. 15H
- s. 27
- s. 15J
- s. 15F
- s. 21
- s. 23
- s. 23E
- s. 166
- s. 291
- s. 11(2)
- s. 205
- s. 134
- s. 177
Regulations
- Reg. 4
- Reg. 2(c)
- Reg. 3
- Reg. 4(1)
- Reg. 4(2)
- Reg. 200
- Reg. 3(c)
- Reg. 3(b)
- Reg. 103
- Reg. 3(d)
- Reg. 18(3)
- Reg. 4(2)(r)
- Reg. 4(2)(e)
- Reg. 4(2)(f)
- Reg. 4(2)(k)
- Reg. 23(2)
- Reg. 4(2)(f)(i)
- Reg. 33(2)(a)
- Reg. 17(8)
- Reg. 25(7)(c)
Parties
- Noticee No.1 - Mr. Akhter Aziz Siddiqi
- Noticee No.2 - Mr. Sham Sunder Dhawan
- Noticee No.3 - Ms. Bindu Dogra
- Noticee No.4
- Noticee No.5 - Ms. Anita Kakar Sharma
- Noticee No.6
Holding
SEBI found Noticee Nos. 1, 2, 3, 4 and 6 liable for fraudulent and unfair trade practices in the affairs of Fedders Electric and Engineering Limited (FEEL), imposing penalties under Sections 15HA and 15HB of the SEBI Act, while disposing of the SCN against Noticee No. 5 without adverse directions and finding no penalty attracted under Section 23E of SCRA against Noticee Nos. 1, 2, 3 and 4.
Full text
Final Order in the matter of Fedders Electric and Engineering Limited Page 2 of 103 managerial persons, as alleged by the complainant, in contravention of the provisions of the Securities and Exchange Board of India Act, 1992 ( “SEBI Act”) read with the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation,2015 (“LODR Regulations”) and Securities Contracts (Regulation) Act, 1956 ( “SCRA”).
Final Order in the matter of Fedders Electric and Engineering Limited Page 3 of 103 purchases in Financial Year (“FY”) 2012-13 to 48.95% of total sales and 43.53 % of total purchases in FY 2017-18. Parties involved in two way dealings with FEEL were either related parties (“RPT”) or potentially interlinked parties (“PILE”) or potentially non-existing parties. Significant portion of turnover of FEEL was from one time customers and non- corporate entities, whose details were not available in public domain. Forensic Auditor and Transaction Auditor were not provided sufficient evidence in support of such transactions. They made adverse observations with regard to such transactions. Further, statutory auditor of FEEL for FY 2017-18 observed that it was not able to comment on sales and purchase figures owing to insufficient supporting evidences.
Final Order in the matter of Fedders Electric and Engineering Limited Page 4 of 103 Forensic auditor and the qualifications by the statutory auditor indicated that FEEL had recorded fictitious debtors and creditors, and in turn manipulated the net-worth shown in the Financial Statements during the IP and gave rosy picture of the financials to the stakeholders of the company.
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Source: SecMarx — sebi:QJA/KS/CFID/CFID/29897/2023-24. 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.