sebi:WTM/MB/IVD/ID14/13306/2021-22
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Facts / Headnote
Violations held established; Achal Investments Ltd. restrained from accessing/dealing in securities market for five years and directed to bring back Rs.1,38,29,600 with due interest and file quarterly compliance reports.
Provisions invoked
- s. 19
- s. 11(1)
- s. 12A
- s. 21
- s. 11
- s. 15H
- s. 12
- s. 11A
- s. 15J
- s. 15
- s. 23E
- s. 23
Regulations
- Reg. 3
- Reg. 4
- Reg. 15
- Reg. 3(a)
- Reg. 2(1)
- Reg. 103
- Reg. 2(1)(c)(2)
- Reg. 2(1)(c)(1)
Parties
- Achal Investments Ltd.
Holding
Achal Investments Ltd. mis-utilised and diverted preferential issue proceeds of Rs.1,38,29,600 and misled shareholders in obtaining ratification, violating Regulations 3(a)-(d), 4(1), 4(2)(f), 4(2)(k), 4(2)(r) of PFUTP Regulations read with Sections 12A(a)-(c) of SEBI Act and Section 21 of SCRA read with Clause 43 of Listing Agreement; it was restrained for five years and directed to restore the amount with interest.
Full text
Order in the matter of Achal Investments Ltd. Page 2 of 30 2. Securities and Exchange Board of India (hereinafter referred to as SEBI) has conducted an investigation in dealing in securities by raising of funds through preferential issue of equity shares and utilization thereof by the Company to ascertain whether there was any violation of the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act), Listing Agreement read with provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as LODR Regulations) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as PFUTP Regulations).
Order in the matter of Achal Investments Ltd. Page 3 of 30 5. As against the stated objects mentioned above, the company, in response to BSE notice dated June 13, 2018 has admitted before BSE, vide its letter dated October 25, 2018 that it has deviated from the stated objects in utilization of the issue proceeds. Further, the company vide its letter dated June 7, 2019, has informed SEBI that it has obtained ratification for the deviation from its shareholders in the AGM held on September 18, 2018. The ratified details of utilization of proceeds of preferential issue is mentioned below:
Order in the matter of Achal Investments Ltd. Page 4 of 30 SEBI Act Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control Section 12A: No person shall directly or indirectly: (a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder; (b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stock exchange; (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder; PFUTP Regulations Regulation 2(1) (c) 2. (1) In these regulations, unless the context otherwise requires, — (c) fraud” includes any act, expression, omission or concealment committed whether in a deceitful manner or not by a person or by any other person with his connivance or by his agent while dealing in securities in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance
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Source: SecMarx — sebi:WTM/MB/IVD/ID14/13306/2021-22. 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.