sebi:WTM/GA/80/ISD/07/06
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Certificate of registration of IEIL as Depository Participant of NSDL suspended for 15 days
Provisions invoked
- s. 19
- s. 153
Regulations
- Reg. 5(1)
- Reg. 13(2)
- Reg. 13(4)
- Reg. 5
- Reg. 6(1)
- Reg. 20
- Reg. 13(1)
Parties
- Integrated Enterprises (India) Limited
Holding
IEIL, as a Depository Participant, failed to exercise basic care and due diligence in verifying the genuineness of the Trust Deed, the authority of the trustee to open the account, and the existence of the Trust's bank account, and its registration was suspended for 15 days.
Full text
Page 2 of 17 in the secondary market, 6 million shares came through the beneficiary account opened with IEIL. 1.4 In view of the findings of the investigations, an enquiry was initiated against IEIL for suspected violations of SEBI Act, 1992, Depositories Act, 1996, SEBI (Depositories and Participants) Regulations, 1996 and Bye laws and business rules of NSDL.
Page 3 of 17 Trustees to be the Chairman of the Trustees. The Compensation Committee shall also nominate an alternate Chairman from its trustees who shall act in the absence of the Chairman and shall exercise all powers of Chairman. Further, the Enquiry Officer observed that IEIL had accepted the signature of Shri Dinesh Dalmia, one of the Trustees of the aforesaid Trust despite the fact that his name was not authorized by Chairman or alternate Chairman of the Trust as mentioned in clause 13 of the Trust deed. Therefore, there was no document available authorizing Shri Dinesh Dalmia to open the Demat Account in the name of the Trust.
Page 4 of 17 3.0 SHOWCAUSE AND REPLY OF IEIL 3.1 After considering the Enquiry Report, a Show Cause Notice dated January 25, 2005 under regulation 13(2) of the Enquiry Regulations was issued to IEIL enclosing therewith a copy of the Enquiry Report. IEIL submitted its reply vide letter dated February 14, 2005, wherein the following
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Source: SecMarx — sebi:WTM/GA/80/ISD/07/06. 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.