sebi:Settlement_Orders_216_Order_against_M_s._Majestic_Industries_Ltd
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Facts / Headnote
Restrained Majestic Industries Ltd., its directors and associates from accessing the securities market and from being associated with the securities market for a period of 5 years; Shri Amit Gupta discharged from the proceedings.
Provisions invoked
- s. 4(3)
- s. 11(4)
Regulations
- Reg. 2(c)
- Reg. 3
Parties
- Majestic Industries Ltd.
- Shri VS Gupta
- Shri N K Gupta
- Shri Vinod Gupta
- Shri G K Gupta
- Prof. RK Gupta
- Smt Indu Gupta
- Seema Gupta
- Kamlesh Gupta
- M/s Majestic Metaliks Pvt Ltd.
- M/s. Bhatia Financiers
- M/s. Goyal Finance & Investment Co.
Holding
Majestic Industries Ltd., its directors and associates committed fraud and violated Regulations 3, 5, 6(a) and 6(d) of the SEBI (PFUTP) Regulations, 1995 by financing rights issue applications through diverted company funds, and were restrained from accessing the securities market for 5 years. Shri Amit Gupta was discharged as his name did not appear in the flow of funds.
Full text
day i.e. Rs.3,53,00,000 was transferred to the account of MIL ( PNB Sector 9 A/c No. 953). Ø MIL then released Rs. 4,08,00,000 from its account ( PNB Sector 9 A/c No. 953) to the account of M/s Bhatia Financiers ( PNB Sector 9 A/c 988 ) on 24.4.96. Ø M/s Bhatia Financiers used this amount of Rs 4,08,00,000 to transfer the following amounts to the following persons as per details given be :- Name Date of transfer Amount ( in Rs ) Cheque No. Seema Gupta 24.4.96 412000 851163 Kamlesh Gupta 24.4.96 1060000 851162 N.K. Gupta 24.4.96 13100000 851160 G.K. Gupta 24.4.96 13100000 851159 Vinod Gupta 24.4.96 13100000 851158 Ø All of them deposited these applications in PNB, Sector 9. SHOW CAUSE NOTICES AND REPLIES TO THE SHOW CAUSE NOTICES The above findings of the investigation conducted by SEBI were taken up with the MIL and directors of MIL and the associated entities that applied in the rights issue vide Show Cause Notices dated 25/06/2004. Show cause notice was not issued to Shri Subhash Gupta as he was then deceased. There was no response to the show cause notice from Smt. Seema Gupta, M/s. Bhatia Financiers and M/s. Goyal Finance and Investment Co. The show cause notice sent to Prof. R K Gupta was received undelivered. The replies received from MIL and other entities are being analysed herebelow: Vide letter dated 8.7.04 Shri Amit Gupta has stated that he was never associated with the company except as a shareholder nor did his name figure in the flow/chain of fund
1. That they had no association with MIL since 1998 due to division and restructuring of the group companies and as such had no acc records of the company.
· That the transactions in the show cause notice had nothing to do with the company is also not acceptable as the transactions described show cause notice could not have taken place without the active involvement of the company.
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Source: SecMarx — sebi:Settlement_Orders_216_Order_against_M_s._Majestic_Industries_Ltd. 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.