sebi:WTM/GA/87/ISD/08/06

SEBI · SEBI · 2003-07-07 · G. Anantharaman, Whole Time Member

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Facts / Headnote

No penalty imposed on TSL; prohibitions dated October 29, 2002 and January 16, 2004 vacated

Provisions invoked

• s. 11B

Regulations

• Reg. 13(4)

Parties

• M/s. Times Securities Limited

Holding

SEBI's Whole Time Member did not find it a fit case to impose any penalty on the sub-broker M/s. Times Securities Limited and vacated the prohibitions imposed on it by orders dated October 29, 2002 and January 16, 2004.

Full text

Kumar Giridhar, Member, Bhubaneshwar Stock Exchange Ltd. (hereinafter referred to as BhSE) who is a stock broker registered with SEBI under certificate of registration no. INB170254010. 1.2 The Council of Management of BhSE at its meeting held on Agust 07, 1996 had established a Trust called ‘Bhubaneshwar Stock Exchange Members Welfare Trust’ (hereinafter referred to as MWT). A trust deed was executed between BhSE and the trustees of MWT and the same was registered on September 23, 1996. As per the terms of the trust deed, every member of BhSE contributed a sum of Rs.3,000/- per annum to the corpus of the fund. One of the objectives of MWT was to sanction loans to members to tide over temporary financial difficulties on their part in payment of dues to the clearing house of the exchange. 2.0 Inquiry Proceedings 2.1 Pursuant to the request made by BhSE, SEBI, vide order dated September 20, 2001, instituted an inquiry under Section 6 of Securities Contract (Regulations) Act, 1956, into the affairs of BhSE with respect to the allegations of financial irregularities in the MWT’s Funds by its Trustees to the extent of Rs.1.30 crores. 2.2 The Inquiring Authority submitted his report on October 22, 2001, interalia specifying the following findings: · BhSE had neither sought the permission nor sent any intimation to SEBI regarding the formation of MWT. · Major portion of the loans sanctioned were used for making payments to IFGL, member of NSE. Shri Tulsi D. Bhayana and Shri Ashok Sa

4.0 Enquiry proceedings 4.1 An Enquiry Officer was appointed vide order dated 07.07.2003 to conduct an enquiry in terms of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing

entities earlier, there does not appear to be any case to proceed against TSL further in the matter. (f) Further, TSL vide letter dated August 2, 2004 surrendered the certificate of sub-broker to SEBI for cancellation. The enquiry officer also noted that the main broker of TSL i.e. M/s. Girdhar & Co. had also vide their letter dated August 2, 2004 inter-alia submitted that the agreement entered into with their sub broker had been terminated and hence requested for the cancellation of the said certificate of registration granted to their sub broker. 4.5 In view of the aforesaid, the Enquiry Officer recommended that present proceedings initiated against TSL be dropped. 5.0 Consideration of issues 5.1 I have carefully considered the facts of the matter, the Enquiry Report and other material on record. 5.2 I note that SEBI after detailed investigation has concluded that neither Shri Ashok Sardana nor IFGL had anything to do with the financial irregularities relating to the Members Welfare Trust of BhSE and thereafter passed the orders dated September 22, 2004 vacating the prohibition orders imposed on the said entities earlier. 5.3 I also note that Shri Tulsi D. Bhayana resigned as Director of TSL on December 29, 1999 which was intimated to SEBI vide letter dated December 29, 1999 and that Form 32 and receipt dated February 11, 2000 was issued by the ROC to this effect. Therefore, there does not appear to be any case to proceed against TSL further in the matter. 5.4 I also note t

Source: SecMarx — sebi:WTM/GA/87/ISD/08/06. 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.