sebi:WTM/KMA/IVD/295/09/2010
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Facts / Headnote
Company, its Chairman and Managing Director and Whole Time Director restrained from accessing securities market and prohibited from buying, selling or dealing in securities for one month; Right Finstock Private Limited and Cavalier Securities Limited prohibited from buying and selling in securities as a client for one month; promoters given benefit of doubt on PFUTP charges but held with RFPL/CSL to have violated Takeover Regulation 10.
Provisions invoked
- s. 19
- s. 11B
Regulations
- Reg. 11
- Reg. 3
- Reg. 44
- Reg. 10
- Reg. 3(a)
Holding
India Polyspin Limited, its Chairman Arjunlal N. Uttamchandani and Whole Time Director Nilesh G. Uttamchandani violated PFUTP Regulations 3(a)-(d), 4(1) and 4(2)(k) & (r), and the promoters with Right Finstock Private Limited and Cavalier Securities Limited violated Takeover Regulation 10, resulting in one-month market restraint.
Full text
Page 2 of 17 price was in the range- ` 0.98/- to ` 2.82/- before the investigation period. During the investigation period, the shares of the company were traded on the Bombay Stock Exchange Limited (hereinafter referred to as BSE) in 32 days for 8,38,426 shares and the share price had increased from ` 1.93/- to reach the peak of ` 14.40/- on January 16, 2004. It was observed that the company had not submitted the quarterly results for the period July to September 2003, to BSE and that it had in its Board Meeting held on January 14, 2004 took on record, the un-audited quarterly results for the quarter ending December 31,
Page 3 of 17 Uttamchandani, Mr.Jivanlal N. Uttamchandani, Mr. Hitendra J. Uttamchandani, Ms. Kamlaben S. Uttamchandani, Ms. Rekhaben M. Uttamchandani, Mr. Shailesh G. Uttamchandani and Ms. Laxmiben S. Uttamchandani have violated Regulation 3 (a), (b), (c) & (d), 4 (1) and 4(2)(d) and (e) of the PFUTP Regulations. iii. the promoters of the company, Mr. Arjunlal N. Uttamchandani, Mr. NIlesh G. Uttamchandani, Mr. Sureshkumar N. Uttamchandani, Mr. Maheshkumar N. Uttamchandani, Mr. Shankerlal N. Uttamchandani, Mr. Jivanlal N. Uttamchandani, Mr. Hitendra J. Uttamchandani, Ms. Kamlaben S. Uttamchandani, Ms. Rekhaben M. Uttamchandani, Mr. Shailesh G. Uttamchandani and Ms. Laxmiben S. Uttamchandani and entities namely, Right Finstock Private Limited and Cavalier Securities Limited were alleged to have violated Regulation 10 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the Takeover Regulations).
Page 4 of 17 Uttamchandani, Mr. Shailesh G. Uttamchandani, Ms. Laxmiben S. Uttamchandani inter alia stated that they had transferred shares to the demat account of Right Finstock Private Limited and Cavalier Securities Limited in the month of January, 2004 and that the same were re-transferred to their respective demat accounts in the month of July, 2004. According to them, Right Finstock Private Limited and Cavalier Securities Limited are trading members of Ahmedabad Stock Exchange Limited and that they had transferred the shares to the pool account of the said stock brokers in order to avail finance. They have also contended that the said stock broker was not entitled to deal in shares transferred to its account except on receipt of their instructions. According to them, since the stock broker had failed to avail finance, the said shares were re-transferred to their respective accounts and that there was no sale or purchase of securities. They also submitted that the said transaction was not covered under the provisions of the Takeover Regulations. Though, the notice was served on Right Finstock Private Limited and Cavalier Securities Limited through Ahmedabad Stock Exchange Limited, they did not file any reply. Subsequently, an opportunity of hearing was granted to the entities on August 13, 2009. The company and its promoters were represented through Mr. Arjunbhai Uttamchandani and Mr. Maheshbhai Uttamchandani. Ms. Bharati Daga, Authorized Representative of Right Finstock
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Source: SecMarx — sebi:WTM/KMA/IVD/295/09/2010. 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.