sebi:WTM/GA/28/ISD/09/07

SEBI · SEBI · 2007-03-12 · G. Anantharaman, Whole Time Member

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Facts / Headnote

Ad-interim Order dated February 22, 2007 confirmed with modifications to permit capital restructuring and credit of shares to promoter accounts

Provisions invoked

• s. 11B
• s. 11
• s. 11(1)

Parties

• Atlanta Ltd
• Rajhoo Bbarot
• Rikiin R Bbarot
• Bhavana R Bbarot
• Ridhima M Doshi
• Rajendra A Barot (HUF)
• Ambalal P Barot (HUF)

Holding

The Ad-interim directions restraining Atlanta Ltd and its six promoters from dealing in securities and altering capital structure were confirmed, subject to modification allowing capital restructuring and credit of shares to promoter accounts, to be given effect by exchanges and depositories.

Full text

2 and promoters of Atlanta Ltd. Accordingly, Shri Rajhoo Bbarot, Shri Rikiin R Bbarot, Smt Bhavana R Bbarot, Smt Ridhima M Doshi, Rajendra A Barot,(HUF) and Ambalal P Barot (HUF) promoters of the company were directed not to buy, sell or deal in securities of Atlanta Ltd, directly or indirectly, till further directions in this regard. Further, Atlanta Ltd was also directed not to issue any equity shares or any other instruments convertible into equity shares, in any manner, or shall not give effect to any alteration in its capital structure in any manner till further directions. In addition, the Stock exchanges were directed not to approve the listing of convertible warrants and listing of shares issued on conversion till further directions. Also the depositories were directed not to dematerialize the convertible warrants and shares issued upon conversion and not to give effect to the stock split, till further directions and not to give effect to any transfer of shares of Atlanta Ltd. lying in the beneficial owner accounts of the entities mentioned as above. 1.2 The entities/persons against whom the Ad-interim order was issued were given opportunity to file their objections, if any, to the said order within 15 days from the date of the said order at the Securities and Exchange Board of India, SEBI Bhavan, C4-A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051. 2.1 Aggrieved by the said Ad-interim Order, Atlanta Ltd and its promoters viz. Rajhoo Bbarot, Bhavana R B

3 upon in the Ad-interim Order. An opportunity of personal hearing was also granted on September 3, 2007 and September 13, 2007, which was attended by the following persons: ? Shri Amit Desai, Sr. Advocate ? Shri Vinay Chauhan, Advocate ? Shri Indranil Deshmukh, Advocate ? Shri Rajhoo Bbarot, Managing Director, Atlanta Ltd ? Shri G. Radhakrishnan, Director, Atlanta Ltd ? Shri Sachin Jain, Company Secretary, Atlanta Ltd Shri Amit Desai made oral submissions on behalf of Atlanta and its promoters and sought relief by withdrawal of the directions of SEBI imposed on the Atlanta Ltd and its promoters viz. Rajhoo Bbarot, Rikiin Bbarot, Bhavana R Bbarot, Ridhima M Doshi, Rajendra A Barot (HUF) and Ambalal P Barot (HUF). Subsequent to the hearing, written submissions were filed on 18/9/2007, 19/9/2007 and 21/9/2007. 3.1 The gist of the submissions made on behalf of Atlanta and the promoters made in writing and orally during the hearing are as under: a. SEBI has drawn inferences of nexus between Atlanta Ltd and Marwah/Nabera entities based on unconnected facts viz. i). pre-IPO allotment of shares to three entities connected with Manish Marwah/Dilip Nabera group ii) post-IPO allotment of convertible warrants to another three entities connected with Manish Marwah/Dilip Nabera group and iii) cornering of shares by another set of entities of Manish Marwah/Dilip Nabera group upon listing of shares of Atlanta Limited. The pre-IPO placement to the said entities was made through Devam Interna

4 b. All the announcements made were either routine disclosure in terms of listing agreement as per the legal obligations and requirements or in the nature of disclosure about future plans of the company. All the disclosures were adequately substantiated and were not fraudulent or misleading or which the company did not believe to be true. The inference of linkage between the announcements made by the company and the price movement of the scrip is erroneous. With regard to announcements to the Stock Exchanges relating to raising of funds for new real estate projects by issuing post-IPO convertible warrants, the company had utilized the funds raised for the stated purpose as disclosed to stock exchanges. The funds, which were raised through said warrants issue were invested in purchasing the real estate property at Goregaon (E), Mumbai and at Malad (E), Mumbai. c. Funds raised by issue of warrants were neither diverted to various entities nor transferred back to the promoters from whom the warrant subscription money was received. The funds were used for various business purposes during the

Source: SecMarx — sebi:WTM/GA/28/ISD/09/07. 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.