sebi:WTM/KMA/IVD/111/07/2009
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Facts / Headnote
Restrained from accessing the securities market for a period of one month
Provisions invoked
- s. 11B
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 6
- Reg. 6(a)
Parties
- M/s. Laxmi Movers
- Mr. Chandrakant Mohanlal Sangani
- Mr. Pankaj Natwarlal Mavani
Holding
M/s. Laxmi Movers and its partners, Mr. Chandrakant Mohanlal Sangani and Mr. Pankaj Natwarlal Mavani, were restrained from accessing the securities market and from buying, selling, or otherwise dealing in securities for a period of one month for violating Regulation 6(a) of the PFUTP Regulations.
Full text
Page 2 of 6 acted as the Registrar to the Issue and Share Transfer Agent to the aforesaid public issue of the company. 2. The investigation conducted by SEBI inter alia observed that 3,300 cheques, drawn on United Bank of India by the entity namely M/s Laxmi Movers (hereinafter referred to as the ntoicee) were deposited along with 3,300 multiple applications in various names and addresses, in the public issue of the company. It was revealed that the above mentioned 3,300 cheques (blank cheques) were issued by United Bank of India to M/s Laxmi Movers (the account holder) only on December 02, 1995 i.e after the closure of the issue. The investigation further revealed that the noticee had handed over 1,000 cheques to one Asiatic Infrastructure and Shelters Limited, Ahmedabad and 2,300 cheques to one Atlantic Credit and Capital Limited, Ahmedabad, which enabled the said entities to submit multiple/benami applications in the public issue of the company. It was also found that the noticee had received a sum of Rs.33,000/- as commission for issue of 3,300 cheques to the aforesaid entities. In view of the above, it was alleged that the noticee had aided and abetted the process of submission of multiple/benami applications in the public issue of the company, thereby contravening the provisions of the PFUTP Regulations.
Page 3 of 6 Chandrakant Mohanlal Sangani and Mr. Pankaj Natwarlal Mavani. The said show cause notice alleged that the noticee had violated Regulation 6(a) of the PFUTP Regulations, which clearly provides that no person shall in the course of his business, knowingly engage in any act, or practice which would operate as a fraud upon any person in connection with the purchase or sale of, or any other dealing in, any securities. The show cause notices dated August 27, 2004 were returned undelivered. Thereafter, show cause notices dated August 03, 2005 were issued to the noticee and its partners, Mr. Chandrakant Mohanlal Sangani and Mr. Pankaj Natwarlal Mavani. The noticee and its partners, Mr. Chandrakant Mohanlal Sangani and Mr. Pankaj Natwarlal Mavani shall be referred to as noticees for the sake of reference. The aforesaid show cause notices, required the noticees to show cause as to why directions should not be issued against them debarring them from dealing in the securities market. The said notices were not accepted by the noticees and thus returned back on August 22, 2005. Thereafter, the said show cause notices issued to the noticees were posted on the website of SEBI. An opportunity of personal hearing to the noticees was scheduled on July 17, 2009. The hearing notices were also posted on SEBI website on June 29, 2009 and were also sent to the noticees on July 06, 2009 through courier service. However, none of the noticees appeared on the said date of hearing and no resp
Page 4 of 6 regard to the irregularities in respect of the said public issue of the company. The SEBI investigation revealed that Mr. Amit Shah and Mr. Girish D Shah (brothers) were found to own eight companies, out of which two companies, viz. Asiatic Infrastructure Shelter Limited and Atlantic Credit and Capital Limited, were found to be engaged in financing activities, making applications in public issues and financing on interest. I note that, Mr. Amit Shah and Mr. Girish D Shah admitted before the Income Tax Authorities that they have made 3,460 multiple/benami applications in the public issue of the company and that the payment for those applications were made from Account No. 1686 of Asiatic Infrastructure & Shelters Limited, maintained with the Bhadra Branch (Ahmedabad) of the Bank of Madura and Account No. 1671 of Atlantic Credit & Capital Limited held with the Noble Building Branch (Ahmedabad) of Vijaya Bank. It was also stated by Mr. Amit Shah and Mr. Girish Shah that an entry was passed in the name of Mr. Kishor Barot in the books of Asiatic Infrastructure & Shelter Limited and Atlantic Credit & Capital Limited, since public limited companies were not allowed to make applications in multiple names. Mr. Amit Shah and Mr. Girish Shah further admitted that the names and addresses mentioned in the 3,460 applications were not genuine and the work of filling these applications was done by Mr. Kishor Barot and Mr. Girdhar Patel of Kapadia Finance. They also stated that c
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Source: SecMarx — sebi:WTM/KMA/IVD/111/07/2009. 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.