sebi:WTM/AB/EFD/DRA-1/01/2018-19
Facts / Headnote
Noticees 1, 2, 3, 5, 6 and 7 restrained from accessing the securities market and dealing in securities for five years; existing holdings frozen; proceedings against Noticee 4 abated due to demise
Provisions invoked
- s. 19
- s. 12A
- s. 376
Regulations relied on
- SEBI (PFUTP) Regulations, 2003 — 3(a)
- SEBI (PFUTP) Regulations, 2003 — 3(b)
- SEBI (PFUTP) Regulations, 2003 — 3(c)
- SEBI (PFUTP) Regulations, 2003 — 3(d)
- SEBI (PFUTP) Regulations, 2003 — 4(1)
- SEBI (PFUTP) Regulations, 2003 — 4(2)(f)
- SEBI (PFUTP) Regulations, 2003 — 4(2)(k)
- SEBI (PFUTP) Regulations, 2003 — 4(2)(r)
Parties
- Sybly Industries Limited
- Mr. Mahesh Chand Mittal
- Mr. Umesh Kumar Mittal
- Mr. Vimal Prakash Mittal
- Mr. Satya Prakash Mittal
- Mr. Mahendra Kumar Gupta
- Mr. Subodh Kumar Goel
Holding
The Adjudicating Officer held that Sybly Industries Limited violated Section 12A(a) to (c) of the SEBI Act read with Regulations 3(a) to (d) and 4(1), 4(2)(f), (k) and (r) of the SEBI (PFUTP) Regulations, 2003, and that Noticees 2, 3, 5, 6 and 7 violated Section 12A(a) to (c) read with Regulations 3(a) to (d) and 4(1) of the PFUTP Regulations. All restrained Noticees were prohibited from accessing the securities market for five years with existing holdings frozen.
Full text
Order in the matter of Sybly Industries Ltd. Page 2 of 19 Show Cause Notice, Reply and Personal Hearing: 2. A Show Cause Notice (“SCN”) dated June 07, 2018 containing the findings of the investigation was issued to the Noticees asking them to show cause as to why action should not be taken for the alleged violation of the provisions Section 12A(a), (b), (c) of the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) read with Regulations 3 (a), (b), (c), (d) and 4(1), 4(2) (f), (k), (r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘SEBI (PFUTP) Regulations, 2003’). Along with the SCN, copies of documents relied on to substantiate the
Order in the matter of Sybly Industries Ltd. Page 3 of 19 (hereinafter referred to as “EURAM Bank”) vide Loan Agreement dated May 30, 2008 (Annexure 3 to SCN). The loan was secured by Pledge Agreement dated May 30, 2008 (Annexure 7 to SCN) between Sybly and EURAM Bank whereby the GDR issue proceeds were pledged to EURAM Bank. The Loan Agreement was entered into between Vintage and EURAM Bank for the specific purpose of subscribing to the GDR issue by Sybly.
Order in the matter of Sybly Industries Ltd. Page 4 of 19 Resolution authorizing the company and on its behalf Mr. Mahesh Chand Mittal, Managing Director and Mr. Umesh Kumar Mittal, Director to execute the Pledge Agreement acted as party to the fraudulent scheme.
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Source: SecMarx — sebi:WTM/AB/EFD/DRA-1/01/2018-19. 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.