sebi:WTM/GA/44/IVD/01/06

SEBI · SEBI · 2005-11-30 · G. Anantharaman, Whole Time Member

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Facts / Headnote

Direction restraining Jermyn LLC from accessing the capital market and/or buying, selling or dealing in securities pending investigation/enquiry; continuation of stop trading direction dated November 30, 2005

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 Capital LLC

Holding

SEBI held that Jermyn LLC prima facie does not satisfy the 'fit and proper person' criteria under Regulation 3 of SEBI (Criteria for Fit and Proper Person) Regulations, 2004 read with Regulation 13(bb) of FII Regulations, 1995, and continued the stop trading direction while restraining Jermyn LLC from accessing the capital market pending investigation/enquiry under Sections 11(4) and 11B of the SEBI Act.

Full text

1.1 Jermyn Capital LLC (hereinafter referred to as ‘Jermyn LLC’), having its office at 111, Oud Metha Offices, P.O Box No. 103709, Dubai, is a limited liability company incorporated in the Emirate of Dubai under the provisions of the United Arab Emirates Federal Law. Jermyn LLC is registered with SEBI under SEBI (Foreign Institutional Investors) Regulations, 1995 (hereinafter referred to as ‘FII Regulations’) as foreign corporate sub-account (bearing sub-account code No. 2004859) of SEBI registered Foreign Institutional Investor Taib Bank E.C. (bearing FII Registration No. IN-UE-FA-0119-93-hereinafter referred to as ‘Taib Bank’). The above sub-account had been granted registration by SEBI on July 2, 2004 under the Foreign Corporate category. 1.2 As per information available, at present Jermyn LLC has the following directors: a. H. H. Juma Muktoum Juma Al Maktoum U.A.E National, Holder of Passport No. A-10882, Born in 1974, residing at P.O. Box: 111567, Deira, Dubai, UAE b. Mr. Hugh Hamilton Andrews British National holder of Passport No. 740179555, Born in 1942, residing at P.O. Box: 25922, Dubai, UAE c. Mr. Mihir D. Kapadia Indian National holder of Passport No. A-5453851, Born in 1972, residing at Devlin House, 36, St George Street, Mayfair, London W1S 2FW d. Mr. Amit Shah Indian National holder residing at P.O. Box 103709, Dubai, UAE 1.3 As per the Memorandum of Association of Jermyn LLC, the capital of the company is 3,00,000 DHS divided into 300 shares, the value of each

1000 shares. The capital of the company is divided among the following partners (shareholders) in the following manner: a. Mr. H. H. Juma Maktoum Al Maktoum, (51 % share) b. Mr. Hugh Hamilton Andrews, (40 % share) c. Mr. Mihir Dhirajlal Kapadia, (09 % share) The capital contribution of the above shareholders is stated to be in kind. The management of company is entrusted to Mr. Hugh Hamilton Andrews who is the Chairman of Jermyn Capital LLC. 2.0 SEBI vide FII Division’s communication dated November 30, 2005 addressed to Taib Bank had directed it to stop trading in the Indian securities market on behalf of its sub-account Jermyn LLC with immediate effect and until further notice. In the said communication, it was informed that SEBI was in receipt of credible information which indicated that Jermyn LLC did not meet the criteria for ‘Fit and Proper person’ which all registrants have to adhere to mandatorily through out the period of validity of their registration under the FII Regulations. Further, SEBI also sought certain information from Taib Bank as specified in the said communication. Taib Bank vide its letter dated December 6, 2005 and also Jermyn LLC vide its letter dated December 8, 2005 have furnished their reply to SEBI. Jermyn LLC in its said letter dated December 8, 2005 also requested SEBI to withdraw the ‘stop trading order’. Simultaneously, Jermyn LLC also filed an appeal before the Hon’ble Securities Appellate Tribunal on December 13, 2005. The Hon’ble Securities

3.1 Pursuant to the above, a show-cause notice dated January 5, 2005 was issued to Jermyn LLC. 3.2 The show cause notice based on the facts and material narrated therein, inter- alia, alleges and sets out that: 3.2.1 There are linkages between Jermyn Capital LLC, Jermyn Capital Partners Plc (hereinafter referred to as ‘Jermyn Plc’) and Dharmesh Doshi/Ketan Parekh in view of the following commonalities – i) common name of Jermyn Capital, ii) two common directors including Chairman. iii) two common shareholders (accounting for 49% shares in Jermyn Capital LLC), iv) the earlier name of Jermyn Plc being Triumph Securities UK Plc which was a 100% subsidiary of Triumph International Finance (India) Ltd (TIFIL), a Ketan Parekh related entity, v) Mr. Dharmesh Doshi, a co-accused in the Ketan Parekh scam and a person against whom non-bailable warrant has been issued by the Indian Court and Red Corner Notice has been issued by the Interpol, being the Executive Director in Jermyn Plc looking after vital functions, vi) Jermyn LLC being an associate of Jermyn Plc indicating interlacing and interlocking of operations and control and vii) trading/investment in the shares of HFCL by Jermyn LLC which is a K-10 scrip. 3.2.2 Pursuant to the findings of investigation into the ‘stock market scam of 2001’, SEBI had taken the following actions against entities associated with Mr. Ketan Parekh: a. SEBI in an ad-interim order dated April 4, 2001 and April 10, 2001 passed under section 11, 11B of SEBI

Source: SecMarx — sebi:WTM/GA/44/IVD/01/06. 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.