sebi:WTM/GA/36/MIRSD/12/05

SEBI · SEBI · 1997-11-29 · G Anantharaman, Whole-Time Member

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Facts / Headnote

Proceedings terminated and ad-interim order dated September 8, 2003 vacated

Provisions invoked

• s. 11
• s. 19
• s. 6(3)
• s. 302
• s. 506

Parties

• Shri Tulsi D Bhayana

Holding

The proceedings against Shri Tulsi D Bhayana were terminated and the ad-interim prohibitory order dated September 8, 2003 was vacated.

Full text

Dec 06, 2005 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTIONS 11 AND 11B OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN THE CASE OF TULSI D BHAYANA                                                                                     WTM/GA/36/MIRSD/12/05 1.0     BACKGROUND

relation to the alleged siphoning of funds out of the exchange to the tune of Rs.1.30 crore including interest through the Bhubaneshwar Stock Exchange Members Welfare Trust (hereinafter referred to as “the Trust” or “MWT”) by the members of the Exchange. 1.2 The Inquiring Authority appointed vide order dated 28th September 2001, conducted inquiry in the manner laid down in Rule 11 of the Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as “SC(R)R”) and submitted his report to SEBI on 22.10.2001. In his report the Inquiring Authority inter alia found that : - 1.2.1 The exchange established MWT in the year 1996. The Exchange had neither sought permission nor sent any intimation to SEBI regarding the formation of the Trust. 1.2.2 As per the Trust Deed, the number of trustees of that trust shall not be less than three and more than five. It was observed that the trustees have always been from among the elected members of the exchange. The President and the Treasurer of the exchange are also the Chairman and Treasurer of the Trust respectively. No Public Representative and SEBI nominee Director was made a Trustee. The Executive Director of the exchange was present in meetings of the Trust as a special invitee without having any say in the decision for grant of loan by the trust to the members of the exchange. 1.2.3 Thereafter, the Council of Management of the exchange at its meeting held on November 29, 1997 amended the Rules of the Trust to provide that “in

extend the aforesaid period of two months in appropriate cases from time to time as may be deemed fit.” 1.2.4 As on the date of inquiry approx 98% of the total outstanding loans was due from members who were either office bearers of the exchange or the trustee of the Trust. Further, out of the total loan outstanding (excluding interest), one Shri Babulal Sharma’s outstanding

Source: SecMarx — sebi:WTM/GA/36/MIRSD/12/05. 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.