sebi:WTM/GM/EFD-I/DRA-II/16/2020-21

SEBI · SEBI · 2015-10-20 · G. Mahalingam, 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

Noticee nos. 1,2,3,4,5 and others restrained from accessing/dealing in securities market for specified periods (including 5 years for Noticee nos. 10,16,17,18,21,22,23,24,25,26,27,28 and 3 years for Noticee nos. 29 and 31, with set-off for restraint already undergone from March 22, 2016); proceedings against Noticee nos. 11 and 12 disposed without direction; depository directed to de-freeze demat account DP ID 010100 Client ID 1601010000032814 of Dina Bhalakia.

Provisions invoked

• s. 12A
• s. 12
• s. 11C

Regulations

• Reg. 3
• Reg. 13
• Reg. 2(1)(c)
• Reg. 6
• Reg. 2

Holding

SEBI held Sharepro Services (I) Pvt. Ltd. and its top management in collusion with connected front entities liable for diversion of securities and dividends of genuine shareholders through falsification of records, and restrained them from the securities market; proceedings against Dina Bhalakia and Jayshree Shah were disposed without direction.

Full text

______________________________________________________________________________ Order in the matter of Sharepro Services (I) Pvt. Ltd. Page 2 of 101

______________________________________________________________________________ Order in the matter of Sharepro Services (I) Pvt. Ltd. Page 3 of 101 2018 was issued to Noticee nos. 1 to 28, SCN dated January 31, 2018 was issued to Noticee no. 29 and SCN dated January 30, 2018 was issued to Noticee nos. 30 and 31. A synopsis of the findings of investigation is given below in paras 3 to 21 of this order. From a perusal of the SCNs, I note that the entire details of the alleged fraudulent transfer of dividends, misappropriation of shares, the movement of funds, details of bank accounts involved, the relevant evidences and records considered by the investigation etc. have already been provided to the Noticees, at length. As the abovementioned SCNs are quite voluminous running to close to 300 pages without the annexures, and contain all the relevant details pertaining to the findings of the investigation, this order does not duplicate the entire details and refers to only sample instances with respect to each Noticee to consider the roles of the entities for a focused adjudication.

______________________________________________________________________________ Order in the matter of Sharepro Services (I) Pvt. Ltd. Page 4 of 101 Sharepro. Investigation further revealed that records were not maintained properly and there was deliberate falsification of records to blur the audit trail. Internal checks and balances were compromised to a high degree in Sharepro. Various entities actively connived with the top management of Sharepro and had also substantially benefitted from the scheme of fraud. Based on the transaction patterns, various information received from brokers/DPs/Banks, documents collected, statements of various entities recorded etc. a group of entities were found to be linked with each other and the management of Sharepro. The relationship among them is given in a tabular form below:

Source: SecMarx — sebi:WTM/GM/EFD-I/DRA-II/16/2020-21. 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.