sebi:WTM/KMA/83/IVD/06/2009
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Facts / Headnote
Restrained Karuna Cables Limited, Mr. Mahendra C. Shah, Ceetee Trading and Leasing Private Limited and Mr. Sanjay B Shah from accessing the securities market and prohibited them from buying, selling or dealing in securities market, directly or indirectly, for a period of six months.
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 4(1)
- Reg. 4(2)(f)
- Reg. 2
- Reg. 3(a)
- Reg. 4(2)(d)
Parties
- Karuna Cables Limited
- Mr. Mahendra C. Shah
- Ceetee Trading and Leasing Private Limited
- Mr. Sanjay B. Shah
Holding
Karuna Cables Limited, Mr. Mahendra C. Shah, Ceetee Trading and Leasing Private Limited and Mr. Sanjay B Shah were held liable for violating Regulation 3(a), 3(b), 3(c) & 3(d) and 4(1) of the PFUTP Regulations, with Karuna Cables Limited and Mr. Mahendra C. Shah additionally violating Regulation 4(2)(f) and 4(2)(r), and Ceetee Trading and Mr. Sanjay B Shah additionally violating Regulation 4(2)(d) and 4(2)(e). All four were restrained from accessing the securities market and prohibited from buying, selling or dealing in securities for a period of six months.
Full text
Page 2 of 18 preliminary findings, pending investigation and passing of final order, SEBI, vide an ex-parte ad-interim order dated November 29, 2005, issued various
Page 3 of 18 and Leasing Private Limited (hereinafter referred to as Ceetee Trading) and its Director Mr. Sanjay B. Shah to show cause as to why suitable directions including restraining them from accessing the capital market and prohibiting from buying, selling or dealing in the securities in any manner whatsoever for a particular period should not be issued. It was inter alia, alleged that the company and its Managing Director Mr. Mahendra C Shah had indulged in making misleading and premature announcements, showing partly paid shares as fully paid shares without receiving allotment money etc. It was further alleged that the said false and misleading information had induced the innocent investors to purchase the shares of the company at high prices and also created false and artificial market for the said scrip. It was also alleged that Mr. Sanjay B. Shah was hand in glove with Mr. Mahendra C. Shah in the above acts, and transferred the shares of the company held by Ceetee Trading to a group of connected clients, who in turn used these shares for manipulation in the securities market. It was alleged that the above acts of the company, Mr. Mahendra C. Shah, Ceetee Trading and Mr. Sanjay B. Shah were prima facie in violation of Regulation 3 (a), (b), (c), (d) and 4(1) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as the PFUTP Regulations). It was also al
Page 4 of 18 The High Powered Advisory Committee (constituted in terms of the above circular) in its meeting held on March 10, 2008 rejected the application as it was not a fit case for a consent order. The said decision was communicated to them by SEBI, vide letter dated May 07, 2008. Thereafter, vide letter dated January 5, 2009, Mr. Mahendra C. Shah made submissions on his behalf and also on behalf of the company in respect of the show cause notice dated October 16,
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Source: SecMarx — sebi:WTM/KMA/83/IVD/06/2009. 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.