sebi:WTM/AB/IVD/ID19/12587/2021-22
Facts / Headnote
VDPL held to have violated specified LODR disclosure, related-party and compliance-officer provisions; allegation that equipment transactions were mere book entries and PFUTP fraud charges held not proved on record; board-function obligations under Regulation 4(2)(f) held not attributable to the listed entity itself.
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. 134(3)
- s. 2(76)
- s. 12A(1)
- s. 188(1)
- s. 188(2)
- s. 203(1)
- s. 18(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. 19
- Reg. 4
- Reg. 4(1)(a)
- Reg. 6
- Reg. 6(1)
- Reg. 48
- Reg. 23(4)
- Reg. 33(2)(a)
- Reg. 34(3)
- Reg. 25(5)
- Reg. 46(1)
- Reg. 46(2)
Parties
- Venmax Drugs & Pharmaceuticals Limited (VDPL / the Company) (Noticee No. 1)
- Directors of VDPL (Noticee Nos. 2 to 7)
Holding
VDPL violated LODR Regulations 23(4), 34(3), 33(1)(c), 48 and 6(1) for undisclosed related-party sales, misleading trade receivables/financial statements and failure to appoint a Company Secretary, while the allegation that the Nama-VDPL-Syntho/Unimax equipment transactions were mere book entries and the PFUTP fraud case were not established and Regulation 4(2)(f) board-function liability does not attach to the company itself.
Full text
Final Order in the matter of Venmax Drugs & Pharmaceuticals Limited Page 1 of 51 WTM/AB/IVD/ID19/12587/2021-22 SECURITIES AND EXCHANGE BOARD OF INDIA FINAL ORDER
Final Order in the matter of Venmax Drugs & Pharmaceuticals Limited Page 2 of 51 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 (Regulation) Act, 1956 (hereinafter referred to as “SCRA, 1956”) against them. The SCN, inter alia, alleged that Venmax Drugs & Pharmaceuticals Limited (hereinafter also referred to as “VDPL” / “the Company”) and its directors i.e. Noticee no. 2 to 7, have failed to present true and fair financial statements of VDPL 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 is also alleged that the directors of VDPL 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 and its directors (Noticee no. 2 to 7) 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 SEBI (Prevention of Fraudulent and Unfair Trading Practices relating to securities market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulation, 2003”), Regulations 4
Final Order in the matter of Venmax Drugs & Pharmaceuticals Limited Page 3 of 51 the said interim order, the stock exchange was directed to appoint an independent forensic auditor to, inter-alia, further verify:
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Source: SecMarx — sebi:WTM/AB/IVD/ID19/12587/2021-22. 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.