sebi:WTM/KMA/OIAE/375/04/2011
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Facts / Headnote
Restrained Dharnendra Overseas Limited from accessing the securities market and prohibited it from buying, selling or otherwise dealing in securities, directly or indirectly, with immediate effect, till all pending investor grievances are resolved and confirmed by SEBI.
Provisions invoked
- s. 19
Parties
- Dharnendra Overseas Limited
Holding
SEBI restrained Dharnendra Overseas Limited from accessing the securities market and dealing in securities until all pending investor grievances against it are resolved and confirmed by SEBI. The order was passed under Sections 19, 11(4)(b) and 11B of the SEBI Act.
Full text
Page 2 of 4 such letters and public notice, SEBI had not received any response from the Company or its directors. 3. In view of the above, a show cause notice dated November 6, 2009 was issued by SEBI under Sections 11B and 11(4)(b) of the SEBI Act to the Company requiring it to show cause as to why it should not be restrained from accessing the securities market and prohibit it from dealing in securities till such time the pending investor grievances against the Company are resolved. The said notice was sent to the Company. However, the said notice could not be delivered on the Company. Thereafter, an opportunity of personal hearing was also granted by SEBI to the Company, on August 5, 2010. As the show cause notice issued to the Company returned undelivered from the last known address, a copy of the same along with the notice of hearing was delivered to the Company at its corporate office at 2nd Floor, Chakravarti Complex, Near Vijay Char Rasta, Ahmedabad – 380 009. Mr. Shailesh Shah an employee of the Company accepted the said notices on behalf of the Company. A paper publication was also made by SEBI on June 13, 2010, in respect of the said show cause notice and hearing in various newspapers having nationwide and state wide circulation including ‘Sandesh’ (Rajkot Edition) and ‘Gujarat Samachar’ (Vadodara Edition). Thereafter, the Company, vide letter dated August 4, 2010 inter alia enclosed an affidavit (affirmed by Mr. Dharmendra Gandhi, director of the Company) to the
Page 3 of 4 September 2, 2010, while acknowledging the receipt of details of the pending complaints as on August 30, 2010 informed SEBI that the Company was in the process of approaching the shareholders for resolving their complaints and submit an action taken report on or before September 27, 2010. In view of the above, the Company had requested to adjourn the personal hearing scheduled on September 7, 2010. The said request was acceded to by SEBI and another opportunity was provided to the Company on October 12, 2010. Though, the said letter was acknowledged by the Company, there was no appearance on behalf of the Company on the said date of hearing. The Company also failed to submit the action taken report.
Page 4 of 4 The said period had expired on September 27, 2010. Till date, no action taken report was filed by the Company in respect of the redressal of the pending investor complaints. No sanctity was given by the Company to its own affirmation through its director. The protection of the investors in the securities market is one of the paramount duties of SEBI and the present case involves a listed company that not only failed to redress the investors’ grievances but also failed to respond to the letters/show cause notice issued by SEBI. In such circumstances, permitting such a company to access or deal in the securities market would be against the interests of the investors. In view of the lapses of the Company in redressing the investor grievances as advised by SEBI, I find it appropriate to issue necessary directions against the Company for its failure to redress the grievances of the investors.
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Source: SecMarx — sebi:WTM/KMA/OIAE/375/04/2011. 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.