sebi:WTM/AB/CFID/CFID-SEC1/24081/2022-23

SEBI · SEBI · 2020-09-12 · Ananta Barua, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Penalties imposed on Noticee no. 1 (Rs. 20,00,000), Ms. Sashi Pandey (Rs. 2,00,000), Mr. Mahesh Sharma (Rs. 2,00,000), Mr. Varun Pravinchandra Aghara (Rs. 6,00,000); Noticee no. 1 restrained from accessing the securities market for one year; existing holdings frozen during restraint period.

Provisions invoked

• s. 15A
• s. 19
• s. 11(1)
• s. 11B
• s. 12A
• s. 11(2)
• s. 11
• s. 15H
• s. 27
• s. 15J
• s. 149(6)
• s. 21
• s. 23E
• s. 23H
• s. 177
• s. 12A(1)
• s. 12(5)

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(b)
• Reg. 30
• Reg. 4(2)(f)
• Reg. 18
• Reg. 19
• Reg. 4
• Reg. 4(1)(a)
• Reg. 33
• Reg. 30(1)
• Reg. 48
• Reg. 18(3)
• Reg. 17(8)
• Reg. 33(2)(a)
• Reg. 17
• Reg. 25(5)
• Reg. 46
• Reg. 16(1)(b)
• Reg. 17(1)(b)

Parties

• Shivom Investment & Consultancy Limited (Noticee no. 1)
• Noticee no. 2 (director)
• Noticee no. 3 (director)
• Noticee no. 4 (director)
• Noticee no. 5 (director)
• Noticee no. 6 (director)
• Noticee no. 7 (director)
• Noticee no. 8 (Managing Director and CFO)

Holding

SICL and its directors/CFO were found liable for misrepresentation in financial statements, accommodation transactions, misuse of funds, and violations of LODR Regulations, 2015 and the listing agreement under Section 21 of SCRA, 1956. Penalties were imposed under Section 15HB of the SEBI Act, 1992 and Section 23H of SCRA, 1956 on the company and certain individuals, with the company also restrained from the securities market for one year.

Full text

Final Order in the matter of Shivom Investment & Consultancy Limited Page 2 of 55 read with Sections 15 A(a), 15HA and 15HB of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act, 1992”), Section 12A(1) and (2) read with Sections 23E and 23H of Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as “SCRA, 1956”) against them. The SCN, inter alia, alleged that Shivom Investment and Consultancy Limited (Noticee no.1, hereinafter referred to as “the company” or “SICL”), its directors and the Chief Financial Officer (hereinafter referred to as “CFO”) (Noticee nos. 2 to 8) of Noticee no. 1, had failed to present true and fair financial statements, executed transactions which are non- genuine in nature resulting in misrepresentation of the accounts/ financials statement and misuse of account/ funds of the Company and such acts were found to be fraudulent in nature as they induced the investors to trade in the securities of the Company and had the potential to mislead the investors.

Final Order in the matter of Shivom Investment & Consultancy Limited Page 3 of 55 11(2)(i) and 11(2)(ia) of the SEBI Act, 1992 and Regulations 3(b), (c) and (d) and 4(1) and 4(2) (f) and (r) of the PFUTP Regulations, 2003, Regulations 4(1)(a),(b),(c),(e),(g), 4(2)(f)(ii)(6)&(7), 4(2)(f)(iii)(3),(6) and (12) of LODR Regulations, 2015 read with Section 27 of SEBI Act, 1992, Regulation 17(8) read with Part B of schedule II, Regulations 16(1)(b)(vi), 17(1)(b), 18(1)(b), 18(1)(d), 19(1)(b)(c), 19(2), 30(1), 33(2)(a) 46, and 48 of LODR Regulations, 2015 read with Section 21 of SCRA, 1956.

Final Order in the matter of Shivom Investment & Consultancy Limited Page 4 of 55 An email was received on June 02, 2021 from Noticee no. 1 seeking adjournment of the hearing, citing Covid- 19 pandemic. However, Noticee no. 2, 3, 4 and 8 neither attended the hearing nor made any request for adjournment of hearing. Considering the Covid- 19 pandemic, a hearing was granted to Noticee nos. 1 to 4 and 8 on September 28, 2021. Vide email dated August 05, 2021, Noticee no. 4 stated the following: a) She had been appointed as Director of the company in March 2016 in Shivom Investment and Consultancy Limited. After her appointment she felt that the company was not good for her, then she never visited/attended any Meeting or Company Office. b) After that, she had started to continuously request the Company to remove her as Director of Company and accept her resignation. The Company filed her resignation letter with Ministry of Corporate Affairs in February 2018. c) She did not know about company business or activities and not liable for the same. Noticee no. 4 further submitted that she did not wish to attend any hearings since she had no further submissions to make. Noticee no. 8, vide an email dated September 27, 2021 sought an adjournment to the hearing citing festivals. Vide letter dated October 01, 2021, the Noticee no. 8 sought an inspection of documents. After completion of inspection of documents, a hearing was granted to him on November 16, 2021. On the said date the Noticee

Source: SecMarx — sebi:WTM/AB/CFID/CFID-SEC1/24081/2022-23. 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.