sebi:WTM/GA/7/IVD/5/07
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Facts / Headnote
Confirmed the ad interim ex parte order dated April 27, 2006 against Shri Kamal P Jhaveri, Shri Parag P Jhaveri and Sugandh Estate and Investments Pvt. Ltd. restraining them from buying, selling or dealing in the securities market including in IPOs, directly or indirectly, till further directions.
Provisions invoked
- s. 19
Regulations
- Reg. 3
Parties
- Shri Kamal P Jhaveri
- Shri Parag P Jhaveri
- Sugandh Estate and Investments Pvt. Ltd.
Holding
The ad interim ex parte order dated April 27, 2006 against the three Jhaveri group entities as key operators / master account holders is confirmed. They prima facie cornered the retail portion of IPOs through fictitious/benami afferent accounts in violation of FUTP Regulations and investor protection guidelines.
Full text
Page 2 of 50 in the IPOs, by making applications in fictitious/ benami names with each of the applications being of small value so as to make it eligible for allotment under the retail category. The aforesaid demat accounts are hereinafter referred to as “afferent accounts” for the sake of brevity. The investigation conducted by SEBI further revealed that subsequent to the allotment of IPO shares of various companies, the fictitious/benami allottees had transferred the said shares to their principals which were identified by SEBI as key operators / master account holders. The modus operandi as detailed above led to the prima facie view that the thousands of entities in whose names demat accounts and bank accounts had been opened and IPO applications made, were either benami, name lenders or non existent. 1.2 In the above facts and circumstances, SEBI vide an ad interim ex parte
Page 3 of 50 prima facie found to be instrumental in tilting the IPO allotment process to their favour by the intricate modus operandi as clearly seen in the
Page 4 of 50 Jhaveri group and the available material on record, as mentioned below. 2.0 REPLY RECEIVED FROM THE JHAVERI GROUP
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Source: SecMarx — sebi:WTM/GA/7/IVD/5/07. 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.