sebi:SRP/RK/AO-12/2009
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Facts / Headnote
Penalty of Rs.31,00,000 imposed under Section 15HA for violation of Section 12A and Regulations 3 and 4 of PFUTP Regulations
Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 3
Parties
- Jayantilal Jitmal
Holding
The Adjudicating Officer held that Jayantilal Jitmal violated Section 12A(a), (b) and (c) of the SEBI Act and Regulations 3 and 4(1) of the PFUTP Regulations, 2003 by cornering shares meant for retail investors in the IPOs of IDFC, Nectar, YBL, FCS, TCS and NTPC and imposed a penalty of Rs.31,00,000 under Section 15HA.
Full text
Page 2 of 18 ‘key operator’ or ‘master account holder’. It was also observed that, subsequent to the allotment of shares in IPOs, the shares from the demat accounts of fictitious/benami allottees were transferred in the demat account of key operators / master account holders. The key operators subsequently transferred these shares through off market deals to ultimate beneficiaries, who were allegedly the financiers of this scheme or arrangement to corner shares from the quota for retail investors in the IPOs of various companies.
Page 3 of 18 5. Consequent upon proceeding of Shri Biju S. on study leave, the undersigned has been appointed as the Adjudicating Officer vide order dated May 05, 2009.
Page 4 of 18 names and manage allotted shares. Depending upon the availability of funds, the aforesaid about 75 family members used to apply in IPOs from the family fund and partly from finances received from banks (Bharat Overseas Bank, C G Road Branch, Ahmedabad and Worli Branch, Mumbai and Indian Overseas Bank, Stadium Road Branch, Ahmedabad and Thaltej Branch, Ahmedabad). The banks did not respond favorably for disbursing loans to the Noticee and his family members for applying in IPOs during the relevant period and suggested to approach Ms. Roopalben Panchal for the purpose. The Noticee agreed with the bank that the bank would provide 50% finance for IPOs but some paperwork would be routed through Ms. Roopalben Panchal’s account. In the circumstances, 50% of the subscription money was paid and routed through Ms. Panchal from the account of Shripal Sanjay Kumar (Prop. Jayantilal Jitmal) while 50% was obtained from the banks. When the shares were allotted to him and his family members, Karvy (Karvy Stock Broking Ltd. – DP) effected those allotments by wrongly transferring it in the demat account of Ms. Panchal instead of transferring those to his demat account and that of his family members – who were the actual allottees in the said IPOs. Thereafter, to rectify the mistake Karvy transferred back the shares from the demat account of Ms. Panchal to his demat account.
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Source: SecMarx — sebi:SRP/RK/AO-12/2009. 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.