sebi:WTM/KMA/IVD/412/07/2011
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Facts / Headnote
Show cause notice disposed of without any directions (benefit of doubt)
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 6(a)
Parties
- Mr. Gautam N. Jhaveri
Holding
The show cause notice dated April 25, 2005 issued to Mr. Gautam N. Jhaveri in the matter of Accurate Exports Limited was disposed of without any directions, as the charge under Regulation 6(a) of the PFUTP Regulations was not established.
Full text
Page 2 of 7 by the Managing Director, Mr. Dinesh Sharma, calling for an Extra-Ordinary General Meeting (EGM) on April 30, 2001. The following proposals were made in the first notice:
Page 3 of 7 shares and 7,50,00,000 equity shares of `10 each respectively. Subsequently, vide letters dated September 19, 2001 and September 24, 2001, the Company had written to ASE informing that the said allotments were null and void as various regulatory compliances under the SEBI Act and the Companies Act 1956 had not been met. However, substantial quantity of shares had been dematerialised and transferred to various entities during the period between the preferential allotment and the application for listing. The shares issued by the Company were dematerialized by the allottees, who then transferred those shares to certain other entities and they in turn, transferred the shares to other set of entities who offloaded the same in the market, without the shares being listed on the stock exchange. The notice had mentioned that Mr. Gautam Jhaveri was the proprietor of the stock broking firm M/s. Rajesh N. Jhaveri and alleged that on a scrutiny of the demat account, it was found that huge quantity of shares were transferred to/from his demat account from/to the pool account of the stock brokers for trading done by various clients. It was further stated that instructions had been given to the stock brokers by the clients for delivery/receipt to/from his account. The details of such transactions were given in the notice. The notice had therefore alleged that from the details mentioned therein, Mr. Gautam Jhaveri had colluded with various parties to offload shares that were fraud
Page 4 of 7 Mr. Deepak Shah, Advocate, who made submissions. The learned counsel reiterated the submissions made by Mr. Gautam Jhaveri in his aforesaid reply. As it was alleged that Mr. Gautam Jhaveri had transferred shares to one Nrupesh C Shah, he was advised to provide an affidavit from Mr. Nrupesh Shah stating the source of shares which were credited in his demat account and also to affirm that he was acting as per the instructions of Mr. Nrupesh Shah. Mr. Gautam Jhaveri, vide letter dated June 4, 2011 provided the required documents.
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Source: SecMarx — sebi:WTM/KMA/IVD/412/07/2011. 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.