sebi:WTM/GA/44/IVD/01

SEBI · SEBI · 2004-03-08 · G Anantharaman, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Prima facie finding that Jermyn LLC is not a fit and proper person; fit case to invoke Sections 11(4) and 11B and pass emergency directions pending detailed investigation

Provisions invoked

• s. 11B
• s. 11
• s. 11(4)
• s. 19

Regulations

• Reg. 13
• Reg. 3
• Reg. 200
• Reg. 6(1)
• Reg. 21
• Reg. 3(1)
• Reg. 3(2)

Parties

• Jermyn LLC

Holding

SEBI prima facie determined that Jermyn LLC, as an associate under common control of Jermyn Plc and under the de facto control/influence of Dharmesh Doshi, was not a fit and proper person and that emergency directions under Sections 11(4) and 11B of the SEBI Act, 1992 were warranted pending detailed investigation.

Full text

c. SEBI vide order dated March 8, 2004 and March 31, 2004, cancelled the certificate of registration granted to other broking entities associated with/controlled by Ketan P Classic Shares and Stock Broking Services (CSSB), Triumph Securities Ltd (TSL), NH Securities Ltd. (NH Sec), V N Parekh Securities Ltd (VNP Sec) and KNP Securities Sec). d. SEBI filed criminal complaint on July 27, 2004 against Triumph International Finance (India) Ltd (TIFIL) and their following directors vide case no. 233/M/2004 in the co Additional Chief Metropolitan Magistrate’s, 47th Court, Esplanade, Mumbai : i. Mr. Dharmesh Hasmukh Doshi, Managing Director ii. Mr. Jatin Rajnikant Sarvaiya, Director iii. Mr. Ketan Vinaychandra Parekh, Director iv. Mr. Kartik Kirtikumar Parekh, Director v. Mr. Abdul Razzak Kapadia, Director vi. Mr. Vipul Dinesh Parekh, Director vii. Mr. Dharmen Bhaskar Shah, Director e. SEBI vide order dated December 12, 2003 has prohibited Mr. Ketan Parekh and following entities associated with/controlled by him from buying, selling or dealing in se any manner directly or indirectly and also debarred them from associating with the securities market, for a period of fourteen years. i. Mr. Ketan V. Parekh ii. Mr.Kartik K. Parekh iii. Classic Credit Ltd iv. Panther Fincap and Management Services Ltd. v. Luminant Investment Pvt Ltd. vi. Chitrakut Computers Pvt. Ltd. vii. Saimangal Investrade Ltd. viii. Classic Infin Ltd ix. Panther Investrade Ltd. 3.2.3 It is seen from the above that pur

a e a d dd ess ate o appo t e t ate o Ceas g 5.0 Submissions of Jermyn LLC 5.1 The submissions made by Jermyn LLC in its reply dated January 10, 2006 and during the personal hearing held before me on January 10, 2006 are as under: 5.2 Jermyn LLC invests in Indian capital market on proprietary basis and its Memorandum of Association prohibits investment of funds for the account of third parties. 5.3 Jermyn Plc is an associate of Jermyn LLC to the extent that both these entities have two common directors including a common chairman and one, not two as alleged in th Cause Notice, common shareholder Mr. Hugh Hamilton Andrews, who is the sole shareholder of Jermyn Plc. Mr. Andrews beneficially holds 100% of the shareholdings of Plc through Jermyn Investments and Holdings, a British virgin island company. 5.4 Mr. Dharmesh Doshi is employed as a director and compliance officer of Jermyn Plc after reference check being made by the FSA to SEBI seeking information on Mr. Doshi. 5.5 Jermyn Investments and Holdings purchased 100% of the shares of Triumph Securities UK Plc. (now Jermyn Plc) from International Holdings (Triumph) Ltd. The f acquisition were the proprietary funds of Mr. Andrews. 5.6 Mr. Dharmesh Doshi manages key functions at Jermyn Plc and does not manage and is not involved in anyway in the business of Jermyn LLC. Merely because Mr. Do director of a company which is an associate of Jermyn LLC it cannot be said that Jermyn LLC ceases to be a fit and proper person. Also SEBI

6.1             I have carefully considered the materials available on record, show cause notice issued to Jermyn LLC, the reply of Jermyn LLC and oral submissions made by their Ad during the personal hearing held on January 10, 2006. 6.2             At the outset, before dealing with the objections raised by Jermyn LLC, it is to be highlighted that the putative averments made by Jermyn LLC with insuppressible volubilit assertion in their submission and during hearing peters out to mere ipse dixit without any corroboration in material particulars on the strength of authentic proof, whereas Show Cause Notice is based upon official verifiable data. 6.3             It is an admitted fact that Jermyn LLC is an associate of Jermyn Plc. Jermyn Plc is a corporate entity based in United Kingdom having its registered office at Devlin House George Street, Mayfair, London, WIS 2FW. Jermyn Plc is a limited liability company registered with Financial Services Authority, UK (FSA). Jermyn Plc is also a membe London Stock Exchange since the year 2002. I have noted that Jermyn Plc is presently 100% owned by Mr. Hugh Hamilton Andrews. 6.4             Jermyn Plc was formerly known as Triumph Securities UK Plc which was ultimately a 100% subsidiary of Triumph International Finance (India) Ltd. (TIFIL). TIFIL had he stake in Triumph Securities UK Plc through its Mauritius based subsidiary viz. International Holdings (Triumph) Ltd. TIFIL was a SEBI registered member of Nationa Exchange India Ltd.

Source: SecMarx — sebi:WTM/GA/44/IVD/01. 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.