sebi:SRP/RK/AO-59/2009-10
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Facts / Headnote
Penalty of Rs. 4,00,00,000 imposed on the Noticee for violation of Section 12A(a), (b), (c) of the SEBI Act and regulations 3 and 4(1) of PFUTP Regulations
Provisions invoked
- s. 11
- s. 15
- s. 12A
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 3
Holding
The Noticee was found to have violated Section 12A(a), (b), and (c) of the SEBI Act and regulations 3 and 4(1) of the PFUTP Regulations by acting in collusion with Jayesh Khandwala and Ms. Panchal to corner shares reserved for retail individual investors in the IDFC and Sasken IPOs, and a penalty of Rs. 4,00,00,000 was imposed.
Full text
Page 2 of 13 Infrastructure Development and Finance Company Ltd. (hereinafter referred to as ‘IDFC’) and Sasken Communications Ltd. (hereinafter referred to as ‘Sasken’), and a beneficiary of the scheme.
Page 3 of 13 any shares in any IPO, not even in the IPO of IDFC. The purchase of 11,00,000 shares of IDFC from Ms. Roopal Panchal (hereinafter referred to as ‘Ms. Panchal’) on August 13, 2005 was made on ‘spot’ basis and that those shares were sold in the market on August 16, 2005 through the stock broker Khandwala Integrated Fin. Services Pvt. Ltd. (hereinafter referred to as ‘KIFSPL’) in settlement No. 2005156.
Page 4 of 13 • He is engaged in the business of share trading and he invests in shares of various companies. • He has running accounts with financiers who provide him short/medium term loan for share business on orally agreed terms. • He bought 11,00,000 IDFC shares @ Rs.35.50 per share from Ms. Panchal on August 13, 2005 for a total consideration of Rs.3,90,50,000/-. He borrowed a sum of Rs.3.74 crore from Jayesh on August 13, 2005 and transferred the entire amount to Ms. Panchal on the same day. He paid balance Rs.16, 50,000/- in 3 installments by cheques in the month of June 2006. He sold said 11,00,000 IDFC shares @ Rs.66.18 on August 16, 2005 for a total consideration of Rs.7,28,00,520/-. He made a short term gain of Rs.3.36 crore and paid an amount of Rs.33,75,052 towards short term capital gain tax. • He paid Rs.7,28,75,000/- to Jayesh Khandwala towards his loan obligations. • He bought 14,275 shares of Sasken @ Rs.300.40 per share from Jayesh on September 7, 2005 for a total consideration of Rs.42,88,210/-. He sold these shares on the day of listing i.e. September 9, 2005 @ Rs.493.54 per share for a total consideration of Rs.70,38,257.25. He paid a short term capital gain tax of Rs.2,75,000/-. He paid an amount of Rs.70.45 lakh to Jayesh towards his loan obligations. • He was not aware of as to how Jayesh Khandwala and / or Ms. Panchal obtained the shares or the shares were tainted with any fraud or mischief. He purchased shares on his own account from the finance rec
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Source: SecMarx — sebi:SRP/RK/AO-59/2009-10. 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.