sebi:WTM/MSS/01/ISD/OCT/08
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Facts / Headnote
Violation established; disgorgement with interest and market restraint imposed
Provisions invoked
- s. 11
- s. 19
- s. 12A
Regulations
- Reg. 3
Parties
- Ms. Himani N. Patel
Holding
Ms. Himani N. Patel was found guilty of violating Section 12A(b) of SEBI Act, 1992 and Regulations 3 and 4(1) of PFUTP Regulations by acting as key operator and financier to corner RII shares in the Suzlon IPO. She was directed to disgorge Rs. 33,52,636 with 10% interest from October 19, 2005 within 45 days and restrained from the securities market for a further 3 years, with an additional 4 years restraint on disgorgement default.
Full text
Page 2 of 9 3. In view of the above, SEBI issued a show cause notice (SCN) dated June 5, 2008 under Section 11, 11(4) and 11B of the SEBI Act, 1992 to the Noticee to show cause as to why suitable directions should not be issued against her. The Hon’ble Securities Appellate Tribunal (SAT), vide its Order dated July 7, 2008, directed SEBI to complete the proceedings initiated against the Noticee, on or before October 31, 2008. The Noticee, vide her letter dated August 25, 2008, replied to the SCN. An opportunity of personal hearing was granted to the Noticee before me at SEBI’s Head Office at Mumbai on October 08, 2008 at 2.30 PM. Mr. Joby Mathew, Advocate, appeared before me on behalf of the Noticee and made oral
Page 3 of 9 receipt of refunds of balance application money after allotment in respect of 643 applications. These refunds were subsequently transferred to bank accounts of the Noticee. i. Most of the 22 joint bank accounts and 635 demat accounts had the same address as that of the Noticee. All these accounts reflected uniform behaviour /set of transactions. j. The said 635 demat accounts have now been closed. k. The aforesaid transactions deprived the RIIs of their legitimate share in allotment in the Suzlon IPO.
Page 4 of 9 relied upon by SEBI to arrive at the findings. i. SEBI has not shown how and what manner she earned Rs. 33.52 lakh. j. To a query during the hearing, the Advocate for the Noticee clarified that all the 61 persons were her relatives and friends and they were residing at the same address and hence the bank and demat accounts had same address. k. At the hearing, the Advocate requested me to pass the Order in this proceeding only after the Adjudicating Officer completes the adjudication proceedings. Otherwise, the Adjudicating Officer may be influenced by the Order in this proceeding.
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Source: SecMarx — sebi:WTM/MSS/01/ISD/OCT/08. 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.