sebi:VSS/AO-165/2009
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Facts / Headnote
Penalty imposed on the Noticee for violation of sections 2(i)(a) and 13 of SCRA
Provisions invoked
- s. 13
- s. 18
- s. 23
- s. 23H
- s. 23J
- s. 23I
- s. 2(4)
Parties
- Noticee (unnamed in text)
Holding
The Noticee violated sections 2(i)(a) and 13 of SCRA by selling 3,46,000 shares off-market without receiving the consideration within the time prescribed for a spot delivery contract, and a penalty of Rs.5,00,000 was imposed under section 23H of SCRA.
Full text
Page 2 of 17 APPOINTMENT OF ADJUDICATING OFFICER 3. The undersigned was appointed as Adjudicating Officer, vide order dated June 20, 2008 under section 23I of SCRA read with rule 3 of Securities Contracts (Regulation) (Procedure for Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 2005 (hereinafter referred to as the ‘Rules’) to inquire into and adjudge under section 23H of the SCRA for the alleged violation of section 2 (i) (a) read with section 13 of SCRA.
Page 3 of 17 • The consideration for the shares sold through off-market is yet to be paid by the entities who have purchased the shares. In terms of section 2 (i) (a) of SCRA, a spot delivery contract means a contract which provides for actual delivery of securities and the payment of a price therefor within the time specified therein. The provision has two requirements, (1) delivery of securities and (2) payment of price. In the given case, the Noticees have sold shares. They have effected the deliveries to the buyer within the time specified in the said section.
Page 4 of 17 8. Before moving forward, it will be appropriate to refer to the relevant provisions of SCRA, which reads as under:
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Source: SecMarx — sebi:VSS/AO-165/2009. 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.