sebi:WTM/MSS/ISD/07/09
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Violation found; 3-year restraint from securities market and disgorgement of unlawful gains with 20% interest ordered
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 3(b)
Parties
- Mr. Kishore S. Jain
- Mr. Jayantilal R. Jain
- Mr. Shripal J. Shah
- Mr. Rajesh Prakashchandra Jain
- Mr. Pravin Kumar Devichand Jain
Holding
The five noticees violated regulation 3(b) and (c) of the PFUTP Regulations by donning the cloak of employees to corner shares under the employee category of the PSTL IPO. They were restrained from the securities market for three years and directed to disgorge collective gains of Rs.1,23,50,505 with 20% interest.
Full text
Page 2 of 12 issue for 4 to 6 months with the sole purpose of receiving shares under the employee category. Five of them abandoned the cloak after making applications but before the allotment, whereas two others did so immediately after the allotment. The details of shares applied for and received on allotment by these seven persons and the duration of their ‘employment’ are as under: No. of Shares Applicant Applied Allotted Duration of ‘Employment’ (Months) Mr. Kishore S. Jain 50,040 48,837 4+ Mr. Jayantilal R. Jain 48,000 46,846 5+ Mr. Shripal J. Shah 18,000 17,567 5+ Mr. Rajesh Prakashchandra Jain 22,020 21,490 5 Mr. Pravin Kumar Devichand Jain 48,000 46,846 5+ Mr. Dheeraj Jain 1,20,000 1,17,115 5+ Mr. Sanjay Jhabak 1,20,000 1,17,115 5+ Total 4,26,060 4,15,816
Page 3 of 12 response, the noticees, vide separate letters dated April 4, 2008, sought time for filing replies to the SCNs. SEBI, vide separate letters dated April 17, 2008, granted time to the noticees up to April 25, 2008. The noticees sought further extensions of time vide their separate letters dated April 23 2008. SEBI once again granted an extension of time as sought, with a reminder, vide separate letters dated April 30, 2008, to furnish replies by May 6, 2008. However, the noticees vide their separate letters dated May 5, 2008, again sought extension of time. Vide letters dated September 12, 2008, SEBI advised them to submit the reply by September 25, 2008. The noticees filed separate replies dated September 29, 2008 broadly denying the charges.
Page 4 of 12 9. Evidence of Employment: One normally looks at the records of attendance, salary, provident fund, etc., as evidence to determine if a person is an employee of an organization.
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Source: SecMarx — sebi:WTM/MSS/ISD/07/09. 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.