sebi:WTM/GA/35/ISD/10/07
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Facts / Headnote
Confirmed ad interim order dated January 17, 2007
Provisions invoked
- s. 19
- s. 11(1)
Parties
- Shri Mukesh Agarwal
- Shri Tanmay Agarwal
- Smt. Sharvari M Agarwal
Holding
The ad interim ex-parte order dated January 17, 2007 impounding suspected gains was confirmed against Shri Mukesh Agarwal, Shri Tanmay Agarwal and Smt. Sharvari M Agarwal pending investigation.
Full text
Page 2 of 5 referred to as the noticees). Shri Mihir Thakore, Sr. Advocate appeared on behalf of the noticees and inter alia submitted that the noticees had not purchased the shares of the company except which were allotted to them at the time of initial allotment in the IPO of the company. He also stated that the allotted shares were sold through a stock broker at 2:30 p.m. on December 29, 2006 for which the instruction was given at 1:30 p.m. In view of the above submissions, the learned advocate requested SEBI to revoke the directions passed vide interim order dated January 17, 2007. Pursuant to the hearing , vide letter dated April 10, 2007, Shri Mukesh R Agarwal inter alia stated that he had sold the shares of the company on the day of its listing, as according to him the price of the said shares was hovering around Rs.115/- as against the opening price of Rs.39/- on the date of listing. He also stated that his trade was too insignificant to have any effect on market volume or price. He further contended that there were instances of similar price rise in the shares of other IPOs. He also contended that there was no relationship between the Reniwal group and the noticees except the fact that his sister viz. Smt. Sweety is married to Shri Rajiv Reniwal of the Reniwal Group. He contended that the mere fact of the noticees sharing a common address did not mean that the sale of the shares took place as a result of pre determined scheme to jack up the price. He also added that
Page 3 of 5 2.2 Before proceeding further, I would like to deal with the contention of the noticees that the exercise of powers by SEBI under various sections as mentioned above was unjustified and unwarranted. The said contention is at once trite and reckons without the attendant circumstances of the case. In this context, I note that the primary function and duty of SEBI is to protect the interests of the investors in securities and to regulate the securities market. SEBI has been mandated to protect the interests of investors in securities by such measures as it thinks fit which provide a large sweep to SEBI. The enabling provisions of the Act must be so construed as to subserve the purpose for which it has been enacted. Further, the powers of SEBI to pass directions (even by way of an interim order) has been judicially recognized. The interim order dated January 17, 2007 was passed in order to protect the interest of investors and the integrity of the securities market. In view of the settled judicial pronouncements in the subject, I do not find it necessary to say anything further on this issue. Accordingly, I do not find any merit in the argument of the noticees in this regard.
Page 4 of 5 company allotted to the noticees (on the initial allotment of the company) were sold by them on the date of listing and made profits.
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Source: SecMarx — sebi:WTM/GA/35/ISD/10/07. 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.