sebi:WTM/KMA/IVD/372/03/2011
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Facts / Headnote
Interim ex-parte directions dated December 02, 2010 confirmed against Murli Industries Limited, its promoters and four entities (Krishnum Investments, Lakhi Packaging, Simple Mining and Power, Taitan Management Services); directions revoked against six entities (Kanhaiya Mining, Ambaji Papers, Inco Infrastructures, Ramji Agri Business, Runicha Alloys & Steel, Ramkrishna Fabrications & Machineries) with immediate effect, subject to cooperation with the ongoing investigation.
Provisions invoked
- s. 11(4)
- s. 19
- s. 11D
- s. 15I
Holding
The interim ex-parte directions issued on December 02, 2010 were confirmed against Murli Industries Limited, its promoters, and four entities alleged to have provided an exit route to the Dangi group, while the directions against six entities that had not traded in the shares during the relevant period were revoked. The Court also held that SEBI is empowered to issue interim directions under Sections 11(4), 11B and 11D of the SEBI Act without a prior adjudicatory enquiry.
Full text
Page 2 of 18 Packaging Private Limited, Ramji Agri Business Private Limited, Ramkrishana Fabrication & Machineries Private Limited, Runicha Alloys and Steel Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited (hereinafter collectively referred to as the entities and individually by their respective names) were directed not to buy, sell or deal in the securities of the company and its listed group companies, in any manner whatsoever, till further directions. The said company and their respective promoters were directed to cease and desist from carrying out activities mentioned in the Order which was prima facie in contravention of the securities laws. They were further directed to ensure that the shareholding of the promoters/promoter group in the said company is not altered in any manner till further directions. Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Kanhaiya Mining and Minerals Private Limited, Krishnum Investments Private Limited, Lakhi Packaging Private Limited, Ramji Agri Business Private Limited, Ramkrishana Fabrication & Machineries Private Limited, Runicha Alloys and Steel Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited would be collectively referred to as the ten entities. Thereafter, the company and its promoters had challenged the Order by way of an appeal in Appeal No. 198 of 2010 before the Hon’ble Securities Appellate Tribunal
Page 3 of 18 Nandlal B. Maloo (HUF) and Mr. Sunilkumar S. Maloo, and made submissions. Mr. Prakash Shah made submissions on behalf of Ambaji Papers Private Limited, Ramji Agri Business Private Limited, Runicha Alloys and Steel Private Limited, Inco Infractructures Private Limited and Kanhaiya Mining and Minerals Private Limited. Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Ramkrishna Fabrication and Machineries Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited were represented by Mr. J.C. Patel, Advocate, who made submissions. During the hearing, while making
Page 4 of 18 rise in the scrip during the ‘pricing period’ of FCCBs and thereafter, exited the scrip at a profit, as per the alleged agreement made with the promoters of the company. In this regard, the company had submitted that the document dated December 12, 2006 (enclosed with the reference from IT Department to SEBI) is unreliable and the same does not indicate any strategy sought to be implemented by the company. It was further contended that the signature of Mr. Lalchand Maloo in the document dated January 31, 2007 was not his. According to the company, the share price was not manipulated to wrongfully determine a higher price for the FCCB issue and submitted that the price for the FCCB issue was determined in accordance with the provisions of the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993. It is submitted that large volumes of trading were done sometime around November 2006 mainly due to the expansion plans of the company. It is the contention of the company that the entire basis for the Order is the alleged ‘note’ entered into between the company and Mr. Sanjay Dangi and contended that the same was not admissible in evidence. The company further submitted that the IT department had recorded statements of Mr. Murli Manohar Maloo (promoter of the company) in which he had clearly stated that he did not know of the contents of the above mentioned document dated December 12, 2006 and had denied all t
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Source: SecMarx — sebi:WTM/KMA/IVD/372/03/2011. 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.