sebi:WTM/KMA/MIRSD/17/11/2008
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Facts / Headnote
Directions in ad interim ex parte order dated September 3, 2007 revoked in so far as they relate to Mr. Swaminathan Mahalingam prohibiting him from accessing the securities market and freezing his demat accounts; prohibition on borrowing and lending of securities without registration as approved intermediary continues; directions continue against M/s Mega Millennium Investment Private Limited and M/s Mega Millennium Securities Private Limited; noticee directed to submit compliance report.
Provisions invoked
- s. 11
- s. 19
Parties
- Swaminathan Mahalingam
Holding
SEBI revoked the market access ban and demat account freeze imposed on Mr. Swaminathan Mahalingam under the ad interim ex parte order dated September 3, 2007, while continuing the prohibition on him from engaging in borrowing and lending of securities without registration as an approved intermediary under the Securities Lending Scheme, 1997.
Full text
Page 2 of 8 and passing of the final order by SEBI, thereon. SEBI passed the said order pursuant to the receipt of complaint dated July 16, 2007 from one T.S. Nilkanthan and his wife Lakshmi Nilkanthan (collectively referred to as the complainants). They alleged that they had given shares (including shares belonging to their daughter) of various listed companies to M/s Mega Millennium Securities Private Limited on August 24, 2003 and August 01,
Page 3 of 8 2. Pursuant to the order dated June 3, 2008, Juris Matrix, Advocates vide letter dated July 17, 2008 forwarded its letter dated June 27, 2008 (submissions on behalf of Mr. Swaminathan Mahalingam) to SEBI. Mr. Swaminathan Mahalingam is hereinafter referred to as the noticee for the sake of brevity. The noticee stated that all the securities of the complainants (valued about Rs.52,41,000/-) were transferred to his personal demat account in the year 2005, for which he had already paid an interest of approximately Rs.7,00,000/-. The noticeee stated that, the transactions had been amicably settled by entering into an agreement with the complainants whereby, the noticee agreed to pay an amount of Rs.15,53,630/- in 54 monthly installments of Rs.28,771/- from March 2008 to August 2012. According to the noticee, he is regularly making the payments as per the said agreement. The noticee further requested to revoke the directions passed by SEBI, vide order dated September 3, 2007. SEBI granted an opportunity of hearing to the noticee on August 21, 2008. Mr. Anil Shah, advocate and the noticee appeared before me on the said date and made submissions. During the course of hearing, the noticee undertook to sell the shares held by him in his demat accounts, if SEBI lifts the ban, and pass on the sale proceeds to the complainants on account of the balance amount payable to them as advance payments due from October 2008. Thereafter, the noticee, vide letter dated September 29, 200
Page 4 of 8 circumstances of the case, the issue for consideration is whether the directions issued by SEBI vide ad interim ex parte order dated September 3, 2007 needs to be continued, revoked or modified in any manner in so far as it relates to the noticee. I note that the details of shares given by the complainants to the noticee are mentioned in detail in the interim order dated September 3, 2007. I further note that the complainants vide letter dated December 18, 2007 informed SEBI that they (including their daughter) had given shares to M/s Mega Millennium Securities Private Limited (on August 1, 2005) for which the noticee had given the acknowledgment on the letter head of the said M/s Mega Millennium Securities Private Limited. The noticee admitted, in his reply dated June 27, 2008 that the shares received from the complainants were transferred to his personal demat accounts in the year
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Source: SecMarx — sebi:WTM/KMA/MIRSD/17/11/2008. 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.