sebi:WTM/KMA/IVD/187/12/2009
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Facts / Headnote
Proceedings initiated against the noticees disposed of without any directions; benefit of doubt granted to each noticee.
Provisions invoked
- s. 11B
- s. 11
- s. 19
Regulations
- Reg. 3
Parties
- Mr. Dilip Nabera
- Mrs. Sadhana Nabera
- Adhunik Finance Private Limited
Holding
The proceedings against Mr. Dilip Nabera, Mrs. Sadhana Nabera and Adhunik Finance Private Limited in the matter of Sun Infoways Limited were disposed of without any directions, with each noticee granted the benefit of doubt as SEBI's show cause notice failed to establish their involvement in the alleged manipulation.
Full text
Page 2 of 17 The investigation conducted by SEBI inter alia found that Mr. Shrikant Vasant Joglekar and his family members had sold their stake in the company in January 2000 to Mr. Anil Pujari, Mr. Tanvir Zaki, Mr. Pravin Sonalkar, Ms. Hafeza Vohra, Mr. Rajan Tawate and Mr. Kuldeep Kumar Handoo for a total consideration of Rs.98,34,659/-. The investigation also observed that the company had agreed to merge with another company namely, Zap Infotech Private Limited (hereinafter referred to as ZAP) and in consideration of which, the company had issued 55,88,200 shares of Rs.10.00/- each at a premium of Rs.840/- per share to the promoters of ZAP. It was further revealed that the new promoters of the company and the promoters of Zap namely Mr. Arif Mithani and Mr. Abbas Mithani had valued ZAP exorbitantly and unrealistically and ultimately merged a bogus unlisted company (ZAP), with the company. It was alleged that, by the said merger, the new promoters of the company manipulated its books of accounts as also its share prices through issue of shares at an unrealistic consideration of Rs. 475/- crores whereas the annual accounts of ZAP for the year ending March 31, 2000 revealed that its total income was Rs.4.52 crores with a net profit of merely Rs.5 lakhs. It was also alleged that, after acquiring the shares of the company, the new acquirers/directors had traded heavily in the shares of the company through various related entities including Mr. Dilip Nabera, Mrs. Sadhna Nabera
Page 3 of 17 Rupani to offload shares in the market and to increase liquidity in the market ultimately leading to artificial price rise. In view of the above, it was alleged that Mr. Dilip Nabera, Mrs. Sadhana Nabera and Adhunik Finance Private Limited contravened the provisions of Regulations 3, 4(a), 4(b), 4(c), 4(d), 4(e) and 6(d) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as the PFUTP Regulations).
Page 4 of 17 ii. That the transactions of his wife and Adhunik Finance Private Limited were of insignificant volume/value and that the same were delivery based. iii. That his introduction of Great Eastern Mercantile Private Limited and Act React Holding Private Limited to the concerned sub brokers was done in good faith and that he had not derived any benefit therefrom. That the correlation of his telephone number as his introduction of Great Eastern Mercantile Private Limited in the client member agreement form of Shreepati Holding and Finance Private Limited (sub broker) was misinterpreted. That the telephone number/address mentioned in the member client agreement below his signature was as per the requirement in the form. That he was not authorized to place orders on behalf of the said Great Eastern Mercantile Private Limited. iv. That he did not undertake any off market dealing or transactions in the shares of the company with any one. v. That he had not transacted in the shares of the company in violation of the provisions of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act) or the PFUTP Regulations. vi. That the powers under Sections 11(4) and 11B of the SEBI Act are not available for routine application.
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Source: SecMarx — sebi:WTM/KMA/IVD/187/12/2009. 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.