sebi:WTM/MPB/ISD-FAC/57/2018
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Facts / Headnote
Directions issued: Mr. Rajendra Gothi restrained from dealing in securities market for 10 years and from association with listed/public companies or SEBI-registered intermediaries for 5 years; M/s C V Pabari & Co. restrained from issuing audit certificates of listed companies for a period (duration partially cut off in text).
Provisions invoked
- s. 19
- s. 12A
- s. 11
- s. 27
- s. 372A
- s. 24
- s. 292A
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(1)
- Reg. 200
- Reg. 3(b)
- Reg. 4(2)(a)
- Reg. 4(2)(e)
- Reg. 4(2)(r)
- Reg. 4(2)
Parties
- Mr. Rajendra Gothi (Noticee No. 1)
- M/s C.V. Pabari & Co. (Noticee No. 2)
Holding
PAL misstated its accounts and misrepresented its business operations; Mr. Rajendra Gothi (Executive Director) and M/s C.V. Pabari & Co. (statutory auditor) were held liable for violating Section 12A(a),(b),(c) of the SEBI Act and Regulations 3(b),(c),(d) and 4(1), 4(2)(a),(e),(f),(k),(r) of the PFUTP Regulations, and were restrained from market participation and association for specified periods.
Full text
Order in the matter of Parekh Aluminex Limited Page 2 of 45 2. The details of Board of Directors of the company for the period 2010-2012 are as follows: As on March 31, 2010 As on March 31, 2011 As on March 31, 2012 Late Mr. Amitabh Parekh (CMD) Late Mr. Amitabh Parekh (CMD) Late Mr. Amitabh Parekh (CMD) Mr. Rajendra Gothi (ED) Mr. Rajendra Gothi (ED) Resigned on October 25, 2011. Mr. Devanshu Desai (NEID) Mr. Devanshu Desai (NEID) Mr. Devanshu Desai (NEID) Mr. Kiran C Parikh (NEID) Mr. Kiran C Parikh (NEID) Mr. Kiran C Parikh (NEID) Mr. Vikram Mordani (NEID) Mr. Vikram Mordani (NEID) Mr. Vikram Mordani (NEID)
Order in the matter of Parekh Aluminex Limited Page 3 of 45 December 31, 2013 which is as follows: 5. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) received a reference dated December 15, 2015 from the State Bank of India (hereinafter referred to as ‘SBI’) informing that the “Due Diligence Audit” Report dated June 28, 2013 of PAL carried out for the period 2012-2013 by Deloitte Touche Tohmatsu India Pvt. Ltd. (hereinafter referred to as ‘Deloitte’) observed various irregularities of serious nature in the day to day affairs of PAL. SBI also informed that they reported the account of PAL as fraud and lodged a complaint with Central Bureau of Investigation. The said complaint filed by SBI inter alia alleged that PAL and its Directors fraudulently availed credit facilities from a consortium of banks including SBI, misused such credit facilities with an intention to defraud and cheat the banks, thereby causing a loss to the tune of ` 122.07 crore and interest and other charges to SBI.
Order in the matter of Parekh Aluminex Limited Page 4 of 45 as ‘Noticee No. 1’) and M/s C.V. Pabari & Co., statutory auditor (hereinafter referred to as ‘Noticee No. 2’) in the extant matter. The Noticees were advised to show cause as to why suitable actions/directions in terms of Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) should not be initiated against them for the alleged violation of the provisions of Sections 12A (a), (b) and (c) of the SEBI Act and Regulations 3(b), (c) and (d) read with Regulations 4(1) and 4(2)(a), (e), (f), (k) and (r) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’).
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Source: SecMarx — sebi:WTM/MPB/ISD-FAC/57/2018. 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.