sebi:WTM/KMA/IVD/413/07/2011
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Facts / Headnote
Caution/warning issued to Mr. Rajesh C. Talsania without any directions
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 6(a)
Parties
- Mr. Rajesh C. Talsania
Holding
The WTM of SEBI disposed of the show cause notice dated April 25, 2005 issued to Mr. Rajesh C. Talsania without any directions, and cautioned him from repeating the objectionable acts of using his demat account for off-market transfers of fraudulently allotted shares.
Full text
Page 2 of 5 I. An increase in authorised capital from `25 crores to `156 crores, divided into 15.60 crore equity shares of `10 each
Page 3 of 5 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. Thus, it was alleged that the Company had fraudulently issued and dematerialized shares over and above its authorized capital of 2,10,00,000 shares. In the said notice issued to Mr. Rajesh C. Talsania, it is alleged that he was one of the main beneficiaries of the shares of the Company that were fraudulently issued and dematerialized. It was mentioned that from his demat statement, it was observed that he had received shares in off-market from various entities who had dematerialized and those shares were then transferred to Mr. Ashish P. Shah and Mr. Anil K. Shah among others for their trades in the market. 2. Mr. Rajesh C Talsania, vide letters dated May 20, 2005 and September 14, 2010 submitted his reply to the said notice. Mr. Rajesh C Talsania was granted opportunities of personal hearing on October 23, 2008 and July 15,
Page 4 of 5 alleged him of contravening Regulation 6(a) of the PFUTP Regulations. From the contents of the notice, I find that Mr. Rajesh C. Talsania had received shares from Sanidhya Holiday Resorts and Estate Development Limited, Mr. Jagdish Kantilal Prajapati and Mr. Vijaykumar Dinanath Khanduja to the tune of 1,01,00,000 shares. As per the notice, the said shares were received in off- market. According to Mr. Rajesh C Talsania, the issue and dematerialization of shares were done by the Company and he had no involvement in the same. He further submitted that the transactions of the shares have take place before the irregularities in the allotment thereof were notice. It is his contention that after September 2001, he had not indulged in any transaction in the shares of the Company and denied contravening Regulation 6(a) of the PFUTP Regulations. He further stated that he had not received any consideration for the off market transactions and that he was not provided with an opportunity of cross examining the persons who made statements against him. He also denied of having colluded with other parties to offload the shares. It was also stated that his involvement was confined only to the extent of use of his demat account and that too for off-market transfer of shares of the Company. According to him, such off- market –in and out–entries recorded meant that they were pass through/ routing arrangement between the parties concerned. In other words, he didn’t purchase/ sell any
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Source: SecMarx — sebi:WTM/KMA/IVD/413/07/2011. 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.