sebi:WTM/AB/IVD/ID19/12261/2021-22
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Facts / Headnote
Fraud charges under Section 12A SEBI Act and PFUTP Regulations not established; violations of LODR Regulations and listing agreement / Section 21 SCRA upheld; Noticees restrained from accessing/dealing in securities market and directed to pay penalties within 45 days.
Provisions invoked
- s. 11
- s. 19
- s. 11(1)
- s. 11B
- s. 12A
- s. 11(2)
- s. 15H
- s. 27
- s. 15J
- s. 15F
- s. 21
- s. 23E
- s. 23H
- s. 56
- s. 149(12)
- s. 179
- s. 188
- s. 269S
- s. 185
- s. 12A(1)
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 4(2)
- Reg. 4(2)(f)
- Reg. 200
- Reg. 3(b)
- Reg. 2(1)
- Reg. 201
- Reg. 103
- Reg. 30
- Reg. 33
- Reg. 25(5)
- Reg. 1(2)
- Reg. 103(2)
- Reg. 30(6)
- Reg. 46
- Reg. 33(1)(d)
Parties
- Inter Globe Finance Limited (Noticee no. 1)
- Noticee no. 2 - director of IGFL
- Noticee no. 3 - director of IGFL
- Noticee no. 4 - director of IGFL
- Noticee no. 5 - director of IGFL
- Noticee no. 6 - director of IGFL
Holding
SEBI held that violations of Section 12A of SEBI Act and PFUTP Regulations for misrepresentation/fraud were not made out, but IGFL and its directors violated LODR provisions on peer-review auditor, disclosure of acquisition, and directors' due-diligence duties read with Section 21 SCRA, warranting market restraint directions and monetary penalty.
Full text
Final Order in the matter of Inter Globe Finance Limited Page 1 of 62 WTM/AB/IVD/ID19/12261/2021-22 SECURITIES AND EXCHANGE BOARD OF INDIA FINAL ORDER
Final Order in the matter of Inter Globe Finance Limited Page 2 of 62 deemed fit under Sections 11(1), 11(4), 11(4A), 11A and 11B(1), 11B(2) read with Section 15HA and 15HB of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act, 1992”), Section 12A(1) and 12A(2) read with Section 23E and 23H of Securities Contracts (Regulations) Act, 1956 (hereinafter referred to as “SCRA, 1956”) against them. The SCN, inter alia, alleged that Inter Globe Finance Limited (hereinafter also referred to as “IGFL” / “the Company”) and its directors i.e. Noticee no. 2 to 6, have failed to present true and fair financial statements of IGFL and had executed transactions which are non-genuine in nature tantamounting to misrepresentation of the accounts/ financials statement and misuse of 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. It was also alleged that the directors of IGFL had failed to exercise duty of care, and failed to discharge their fiduciary responsibility. In view of the above, the SCN alleged that the Company (Noticee no. 1) and its directors (Noticee no. 2 to 6) have violated Sections 12A(a), (b) & (c) of the SEBI Act,1992 and Regulations 3(b), (c) & (d) and Regulations 4(1), 4(2) (f) & (r) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to S
Final Order in the matter of Inter Globe Finance Limited Page 3 of 62 vide the said interim order, the stock exchange (BSE) was directed to appoint an independent forensic auditor to, inter-alia, further verify:
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Source: SecMarx — sebi:WTM/AB/IVD/ID19/12261/2021-22. 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.