sebi:WTM/KMA/ISD/239/03/2010

SEBI · SEBI · 2007-09-07 · Dr. K.M. Abraham, Whole Time Member

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Facts / Headnote

Ad interim ex-parte order restraining JTREL and listed connected entities from accessing the securities market and buying, selling or dealing in shares till further orders; directing depositories, RTA, and stock exchanges to freeze transfers and square off positions; order forwarded to Ministry of Corporate Affairs.

Provisions invoked

• s. 11B
• s. 11(4)
• s. 15
• s. 19
• s. 11(1)
• s. 81
• s. 293
• s. 372
• s. 11C
• s. 21

Regulations

• Reg. 3
• Reg. 7
• Reg. 200

Holding

SEBI, acting through the Whole Time Member, prima facie found that the promoters of JTREL and their connected/benami entities control approximately 96.99% of the share capital while publicly declaring only 68.55%, and issued an ad interim ex-parte order restraining the company and listed connected entities from dealing in securities pending investigation.

Full text

2 under public shareholding in the category of ‘Individuals holding nominal share capital in excess of Rs. 1 lakh’, constituting 27.75% of the share capital of the company. The salient features of the shareholding of these entities are given below: i. 13 entities were holding 24.6% of the share capital of JTREL, only in the physical form. The firm had a market capitalization of more than Rs. 4000 crore as per closing price of Rs.465.40 on Feb 08, 2010. ii. Out of these 13 entities, 7 entities had addresses located in chawls of Mumbai (defined for the purpose of this order as a collection of predominantly hut or kutcha tenements where the residents are largely those with poor economic means). iii. The physical share certificate numbers for shares held across these entities run in nearly continuous serial numbers. iv. Some of these entities (11 names identified and referred to below) hold shares in the company from dates going as far back as March 2002 as per data on persons holding more than 1% shareholding as available in website of BSE. v. Six entities were holding shares in demat form constituting only 3.17%of share capital of JTREL and all of them opened their demat account with one Depository Participant (Keynote Capital Ltd) on the same day i.e. September 17, 2002. vi. Several entities have a same address as that of registered offices of different companies of the Tayal group.

3 • The entity, along with EDC Securities, was debarred by SEBI vide interim order dated 07/09/2007. 2. Hitesh Dodiya, holding 9,22,500 physical shares. His address is Silvassa Police Lane, Bldg No F2, D and N Haveli Silvassa , Gujarat • As per RTA data, the address of the entity is also shown as c/o SKPL, Bhilad, Vapi, Gujarat. It appears that SKPL stands for Shri Krishna Polyester Ltd., the old name of Krishna Lifestyle Technologies Ltd, a company of the Tayal group. • As per the Bank Statement (with Bank of Rajasthan) on 09/01/04 Hitesh Dodiya had received dividend warrants of Rs.44,872 from Bank of Rajasthan (BOR) and on 12/01/04 transferred the entire amount to M/s Solid Vision, which has a similar address as that of Jayshree Petrochemicals Pvt Ltd and Megna Developers Pvt Ltd., both promoter connected entities that were debarred vide SEBI order September 7, 2007. • Similarly on 28/07/04 Dodiya had received Rs.44,872 from BOR and on 29/07/04 transferred an amount of Rs.44,800 to KSL and Industries Ltd.

4 • Similarly Panchal received a dividend of Rs.11,28,000 from BOR on 18/9/2007 and on 20/09/07 transferred Rs. 11,27,000 to account of Starview Mercantile Pvt Ltd, a promoter connected entity.

Source: SecMarx — sebi:WTM/KMA/ISD/239/03/2010. 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.