sebi:WTM/KMA/IVD/394/06/2011
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Facts / Headnote
Show cause notice dated September 23, 2005 disposed of without any directions
Provisions invoked
- s. 19
Parties
- Somplast Leather Industries Limited
- Mr. N.R. Vekaria
- Mr. R.N. Vekaria
- Mr. S.N. Vekaria
- Mr. R. D. Patel
- Mr. M.P. Shah (alias Mr. Bhagwati Shah)
- Mr. Ramanlal Hathi
- Mr. Girish Shah
- Ms. Yogini Vyas
- Mr. Sanjay Patel
Holding
The show cause notice dated September 23, 2005 issued to Somplast Leather Industries Limited and its directors in the matter of preferential allotment of 2,42,50,000 equity shares was disposed of without any directions.
Full text
Page 2 of 4 them. The Company and its directors have not responded to the notice. An opportunity of hearing was also provided to the Company and its directors on July 10, 2009. One of the directors of the Company, Ms. Yogini Vyas attended the said hearing and submitted that she was only a salaried employee and not a director as alleged. She further stated that one Amit Shah had floated several penny stock companies and had made his employees including peons, drivers as directors. She informed that she had not received earlier notices nor had been informed by the Company officials of any such notices. Mr. N R Vekaria, Mr. S N Vekaria and Mr. R N Vekaria informed SEBI that they could not attend the hearing and requested for another hearing. Accordingly, another opportunity of hearing was afforded on January 29, 2010. On the scheduled date, Mr. S.N. Vekaria (represented himself and also for Mr. N R Vekaria and Mr. R N Vekaria), Mr. Sanjay Patel and Mr. Girish Shah, attended the hearing and submitted that they were not involved in the preferential allotment and that they had resigned as directors of the Company well before the impugned preferential allotment. They also agreed to furnish evidence of their resignation from the Company. It was also submitted that the Company was controlled and managed by Dr. Amit Shah during the relevant period. Considering the
Page 3 of 4 obtaining in-principle approval for listing such shares on the stock exchange, in contravention of the aforesaid provisions. It was stated therein that the Company informed the Bombay Stock Exchange Limited (hereinafter referred to as BSE) that they had allotted shares on preferential basis listed on the Ahmedabad Stock Exchange Limited (hereinafter referred to as ASE). However, ASE had responded that the scrip was not listed/permitted to be traded on its floor. In short, it was alleged that the Company had not obtained in-principle approval from the stock exchange for listing, before the allotment. The notice had also mentioned that the Company and its directors did not co- operate during the investigation and did not produce documents relating to the issue and allocation of preferential issue and in-principle approval for listing the said shares with the stock exchange. In this regard, I note that in the aforesaid investigation conducted by SEBI in the matter, the Saurashtra Kutch Stock Exchange Limited and the Company had responded to SEBI summons and informed, vide their respective letters dated June 10, 2010 and July 30, 2010, that the resolution for the purpose of allotment of preferential shares was passed on April 4, 2000 and that the shares were allotted on July 24, 2000. The requirement of obtaining ‘in-principle’ approval was incorporated in Clause 24(a) of the listing agreement, pursuant to the directive of SEBI, vide Circular dated March 8, 2001. Acco
Page 4 of 4 3. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(4) and 11B thereof, hereby dispose of the show cause notice dated September 23, 2005 issued to Somplast Leather Industries Limited, Mr. N.R. Vekaria, Mr. R.N. Vekaria, Mr. S.N. Vekaria, Mr. R. D. Patel, Mr. M.P. Shah (alias Mr. Bhagwati Shah), Mr. Ramanlal Hathi, Mr. Girish Shah Ms. Yogini Vyas, and Mr. Sanjay Patel in the matter of Somplast Leather Industries Limited, without any directions.
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Source: SecMarx — sebi:WTM/KMA/IVD/394/06/2011. 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.