sebi:WTM/KMA/IVD/275/06/2010
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Facts / Headnote
Mr. Yogesh Babulal Mehta held entitled to Rs.12,71,556/- with interest from BSE; clients restrained from accessing securities market until they deposit money paid to them by BSE; BSE directed to initiate steps to recover payments from clients.
Provisions invoked
- s. 24
- s. 15A
- s. 19
Parties
- Mr. Atul J. Patira
- Mrs. Rita Atul Patira
- Dr. Deepak Sheth
- Ms. Smita Nagda
Holding
Mr. Yogesh Babulal Mehta is entitled to receive Rs.12,71,556/- (the difference between standard rate and purchase price for 24,700 shares) with interest from BSE, and the four clients are restrained from accessing the securities market until they deposit the money paid to them by BSE.
Full text
Page 2 of 16 2. Pursuant to the aforesaid order, Securities and Exchange Board of India (hereinafter referred to as SEBI) initiated a limited purpose investigation in the matter and sought information from the Bombay Stock Exchange Limited (hereinafter referred to as BSE), Mr. Yogesh Babulal Mehta and his clients namelly, Mr. Atul J. Patira, Mrs. Rita Atul Patira, Dr. Deepak Sheth and Ms. Smita Nagda (Respondent Nos. 3 to 6 in Appeal No. 45 of 2008). Mr. Atul J. Patira, Mrs. Rita Atul Patira, Dr. Deepak Sheth and Ms. Smita Nagda shall henceforth be referred to as the clients. The letter sent to Dr. Deepak Sheth returned undelivered. Though, Mr. Atul J. Patira, Mrs. Rita Atul Patira and Ms. Smita Nagda acknowledged the letters of SEBI seeking various information/documents, from them, they had failed to furnish the information. Thereafter, summons dated December 31, 2008 were issued to the aforesaid three clients. Summons sent to Mr. Atul J. Patira and Mrs. Rita Atul Patira returned undelivered. Summons were then sent to the Ahmedabad Stock Exchange Limited for service on the said clients, which attempt also went futile. Ms. Smita Nagda received the summons dated December 31, 2008 and January 16, 2009 issued to her in the matter, but failed to respond to them. In view of the failure of Ms. Smita Nagda to comply with the summons, SEBI initiated adjudication proceedings against her. The Adjudicating Officer so appointed, vide order dated November 19, 2009 had found Ms. Smita Nagd
Page 3 of 16 Order) on April 1, 2009. The stock exchanges were advised to monitor that none of the clients (Mr. Atul J. Patira, Mrs. Rita Atul Patira, Dr. Deepak Sheth and Ms. Smita Nagda) of the Claimant are trading on their stock exchange. As the Hon’ble SAT in its aforesaid order directed the said clients to deposit the money received by them, with BSE, SEBI advised BSE to take appropriate steps to recover the money from the said clients. Though, the aforesaid communication dated April 1, 2009 was challenged by the Claimant in Appeal No. 103 of 2009 before the Hon’ble SAT, the same was disposed of vide Order dated August 31, 2009, as premature. Thereafter, SEBI had also sent letters dated September 30,2009 to Mr. Atul Patira, Mrs.Rita Atul Patira and Dr. Deepak Sheth. The letters sent to Mr. Atul Patira and Mrs.Rita Atul Patira were returned undelivered with the remark “refused”. Though, Dr. Deepak Sheth acknowledged the delivery of the said letter, no response was received from him in that regard. SEBI, had subsequently issued paper advertisements in the newspapers Jai Hind & Sandesh (regional newspapers in vernacular language on November 20,2009) and in Daily News and Analysis (DNA) on December 16, 2009. Despite acknowledging SEBI letters and the publication of advertisement in the newspapers, the said clients failed to furnish information to SEBI.
Page 4 of 16 Smita Nagda (Respondent Nos. 3 to 6 in the aforesaid Appeal No.45 of 2008) were also afforded an opportunity of hearing on June 3, 2010. Though, Ms. Smita Nagda and Dr. Deepak Sheth acknowledged the letter intimating the date of hearing, no appearance was made by them. The letters sent to Mr. Atul J. Patira and Ms. Rita Atul Patira returned delivered. In view of the above, I proceed to decide the matter on the basis of the available material on record including the submissions made on behalf of the Claimant and BSE.
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Source: SecMarx — sebi:WTM/KMA/IVD/275/06/2010. 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.