sebi:WTM/MPB/EFD-1-DRA-IV/44/2019
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Facts / Headnote
Show cause notice disposed of; company restrained from accessing securities market; directors held not liable for excess dematerialization
Provisions invoked
- s. 11
- s. 19
- s. 27
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(1)
- Reg. 4(2)
- Reg. 3(a)
- Reg. 55A
- Reg. 4(2)(h)
Parties
- Seagull Leafin Limited
- Shri Philip Amolik
- Shri S. R. Pujari
- Shri Rajkumar Sharma
- Shri Vinodbhai D Patel
Holding
The company Seagull Leafin Limited was held liable for dematerializing shares in excess of eligible quantity and dealing in counterfeit securities, in violation of PFUTP Regulations 3(a)-(d), 4(1) and 4(2)(h), and was restrained from accessing the securities market. The four directors were not held liable for the excess dematerialization as it occurred prior to their tenure or in the absence of material connecting them to the violation.
Full text
Order in the matter of Seagull Leafin Limited Page 2 of 34 investment and financial services related activities and had been operating in the capital market.
Order in the matter of Seagull Leafin Limited Page 3 of 34 (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’). The investigation period in the matter was from October 25, 2004 to February 6, 2005.
Order in the matter of Seagull Leafin Limited Page 4 of 34 of the said seizure and requested the stock exchange not to allow any transactions in those shares. The details of the share certificates including their numbers and distinctive numbers were also furnished to BSE Ltd. by the Income Tax Department. vi. After making an enquiry, BSE Ltd. found that the total listed equity share capital of the company is 5,01,78,000 shares. As the shares in the custody of the Income Tax Department were 3,20,00,000, the equity shares in the dematerialised form could not be more than 1,81,78,000 shares [5,01,78,000 – 3,20,00,000 = 1,81,78,000]. On a confirmation received from both the depositories, National Securities Depository Limited and Central Depository Services (India) Limited, it was found by BSE Ltd. that the total shares held in the depositories were 2,63,87,260 shares. This indicated that the shares that have been dematerialized were in excess of the quantity that was eligible to be in the dematerialised mode. Therefore, BSE Ltd. suspended the trading in the scrip with effect from February 7, 2005. vii. Aggrieved by this decision of BSE, the company filed an appeal before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as ‘SAT’) in
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Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-IV/44/2019. 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.