sebi:WTM/GA/27/IVD/9/07
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Facts / Headnote
Directions restraining Shri Jayendra K. Shukla, Shri Alap Shukla, Shri Vinod Shukla and Shri Suresh K. Shukla from accessing the securities market and from buying, selling or dealing in securities directly or indirectly for a period of two years, with immediate effect.
Provisions invoked
- s. 19
- s. 11B
Regulations
- Reg. 3
- Reg. 11
Parties
- Shri Jayendra K. Shukla
- Shri Alap Shukla
- Shri Vinod Shukla
- Shri Suresh K. Shukla
- Smt Hansa J Shukla
- Shri Milap J Shukla
Holding
The four directors of OTPL (Jayendra K. Shukla, Alap Shukla, Vinod Shukla and Suresh K. Shukla) at the time of the January 13, 2000 preferential allotment were found guilty of violating Regulation 3 of the FUTP Regulations and were restrained from accessing the securities market and dealing in securities for two years.
Full text
Page 2 of 16 the price of the shares of OTPL had sharply increased (from Rs. 9/- to Rs.18.85) between settlement numbers 44 and 46 (January 17, 2000 to February 4, 2000). The shares of OTPL were also listed on the Vadodara Stock Exchange Ltd. (VSE), Ahmedabad Stock Exchange Ltd. (ASE). In view of the unusual price/ volume increase as stated above, SEBI conducted investigations to find out as to whether there was any manipulation in respect of the said price/volume increase in the shares of OTPL and look into the role of various entities/persons, if any, including the promoters/ directors of OTPL in respect of the said increase. 1.2 During the course of investigation, SEBI vide its various summons/ letters, had sought information / documents inter alia from Shri Vinod K Shukla, Shri Alap Shukla, Smt Hansa J Shukla, and Shri Milap J Shukla, promoters / directors of OTPL. As the said persons failed to comply, SEBI appointed an adjudicating officer to adjudge the violations committed by them, under the provisions of Securities and Exchange Board of India Act, 1992 (Act) and the adjudicating officer, thus appointed, after conducting the proceedings under the provisions of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995, vide his separate orders dated July 29, 2005 imposed a penalty of Rs.30,000/- each on the aforesaid persons and the said penalty amount had already been remitted. 1.3 As the promoters
Page 3 of 16 from various investors were pending with BSE. VSE inter alia informed SEBI that OTPL had made preferential allotment of 60,00,000 equity shares of Rs.10/- on January 13, 2000 to various allottees as per the information given below;
Page 4 of 16 the actual receipt of consideration from the allottees. As per the information provided by VSE, it has been found that OTPL had maintained a bank account (Account No. CD 315) with the Punjab National Bank, Ashram Road Branch, Ahmedabad (erstwhile M/s. Nedungadi Bank Ltd.) which inter alia showed that the consideration received in respect of the preferential allotment was credited back to the account of the respective allottees on the same date. The entries in the aforesaid bank account of OTPL prima facie revealed that no genuine flow of funds took place in respect of the preferential allotment of the company made on January 13, 2000 and that the said account was used as a conduit to transfer funds among entities. In respect of allottees viz. Smt. Pratima G Jhaveri and Shri Saumil A Bhavanagri, it was observed that there were no transfer entries in the bank account of OTPL. As OTPL had not received consideration in respect of the preferential allotment, it was inferred that the allottees were connected with OTPL. Further, it was felt that such an arrangement of allotment of shares without consideration to various allottees facilitated the promoters/ directors of OTPL to exercise control over the allotted shares which enabled them to offload the shares of OTPL in the securities market when the prices were jacked up.
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Source: SecMarx — sebi:WTM/GA/27/IVD/9/07. 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.