sebi:WTM/KMA/37/ISD/09

SEBI · SEBI · 2009-01-17 · K.M. Abraham, 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

Ad interim ex-parte cease and desist order directing Temptation Foods Ltd and its Managing Director to stop publishing or circulating false or misleading information relating to dealing in securities until further orders

Provisions invoked

• s. 19
• s. 10(3)
• s. 11D
• s. 12

Regulations

• Reg. 7(1)
• Reg. 3
• Reg. 13(1)
• Reg. 13(3)
• Reg. 4(2)

Parties

• Temptation Foods Ltd
• Mr. Vinit Kumar

Holding

SEBI passed an ad interim ex-parte order directing Temptation Foods Ltd (TFL) and its Managing Director to cease and desist from publishing or circulating false or misleading information relating to dealing in securities, finding prima facie that TFL was not the beneficial owner of the shares it claimed to hold in Kohinoor Finance Ltd (KFL).

Full text

2 2. Preliminary findings 2.1 It was observed that vide its letter dated January 17, 2009, TFL has made the following submissions: a) that TFL holds 36,34,241 shares constituting 13.69% of the total equity share capital of KFL. b) that these shares were financed partly by means of margin finance arrangements with some share brokers and the beneficial interest in these shares continues to be with TFL and that the shares were provided as security towards margin. c) that TFL was not aware as to why the records of the depositories showed that as of January 5, 2009, the holdings of TFL were shown as 6,15,648 only .

3 2.4 Vide its letter dated January 19, 2009, BSE informed as under: a) that TFL was a net buyer and Venture Business Advisors Pvt. Ltd was a net seller on the BSE during the period December 1, 2008 to January 15, 2009. b) that only TFL was shown as a shareholder in the list of shareholders holding more than 1% share capital and above, with shareholdings of around 5% for the quarter ended September 2008 and 2.28% for the quarter ended December 2008.

4 b) that as a matter of internal policy, their clients are required to transfer the shares into their demat a/c against the loans taken by their clients as collateral/margin and they do not accept pledge as security. c) that 11,90,000 shares of KFL were received from TFL on December 22, 2008 and 4,53,648 shares of KFL were received from Venture Business Advisors Pvt. Ltd. as collateral/margin and that these entities are the real beneficial owners of the shares. d) that MFSL is not connected with either of these parties and is not a PAC. e) that Disclosure under Reg. 7(1) of Takeover Regulations was made on December 23, 2008 as the shares were acquired by MFSL. f) that MFSL is empowered by means of agreement with the borrowers to pledge or transfer the shares received as margin to any institution, lender, bank etc. for getting refinance against the securities. g) that at present, 11,90,000 shares of KFL are held as margin from TFL and all these shares were transferred to Arion Commercial Pvt. Ltd. for refinance.

Source: SecMarx — sebi:WTM/KMA/37/ISD/09. 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.