sebi:WTM/MSS/ISD/45/2010
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Facts / Headnote
Directions issued: restraint from buying, selling or dealing in securities for one year, and disgorgement of Rs.77,77,296 with interest of Rs.20,99,870 (total Rs.98,77,166) within 45 days, failing which restraint extended by seven years.
Provisions invoked
- s. 11B
- s. 11
- s. 11(4)
- s. 19
- s. 12A
Regulations
- Reg. 3
Parties
- Amadhi Investments Limited
Holding
Amadhi Investments Limited violated Section 12A(a), (b) and (c) of the SEBI Act, 1992 and regulations 3 and 4(1) of the PFUTP Regulations by financing a known operator (KO) to apply in the RII category of the IDFC, Sasken and FCS IPOs, cornering shares meant for retail investors and making unlawful gains of Rs.77,77,296.
Full text
Page 2 of 8 individual investors (RIIs) in the IPOs of IDFC, Sasken and FCS and made unlawful gains by selling the shares so cornered. These acts of Amadhi were in violation of Section 12A (a) (b) and (c) of the SEBI Act, 1992 and regulations 3 (a), (b) (c) and 4 (1) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (PFUTP Regulations). Accordingly, it called upon Amadhi to show cause as to why suitable directions under Section 11(4) read with Section 11 and Section 11B of the SEBI Act, 1992, including
Page 3 of 8 stated that the list of documents stated in the letter dated May 15, 2009 was merely illustrative and it might seek further documents. The list was perused. The first item listed the statements, if any, of SEIPL. The presenting officer stated that SEBI was not relying on such statements for the charge. The second item listed consent order passed by SEBI against SEIPL. The presenting officer responded that SEBI was not relying on such order for the charge. Besides, the consent orders are available in public domain. A perusal of the other additional documents sought for inspection indicated that these were either available in public domain, or not being relied upon by SEBI for the charge or have no bearing on the matter in hand. For example, Amadhi has sought documents relating to any reference received from parliamentary standing committee indicating its role. The presenting officer clarified that the charge relies mostly on demat and bank statements of Amadhi which establish the flow of funds and securities between Amadhi and the KO and these have already been provided. I agreed with the presenting officer. I found that Amadhi was attempting to use SEBI to gather even those documents which it did not need for its defence, with the sole aim of delaying the disposal of the proceedings. SEBI cannot be obliged to provide the documents which have no bearing on the matter or which, in the opinion of Mr. Kharidia, could have been relied by SEBI. Moreover, there was no di
Page 4 of 8 gratis and refunded the balance money. The details of these transactions between Amadhi and the KO are as under: Finance to KO Refund through of Shares from KO Refund through money from KO Name of IPO Issue Period / Date of Listing Issue price (Rs.) Date Cheque No. Amount (Rs.) Date No. of Shares Value (Rs.) Date Cheque No. Amount (Rs.) 1 2 3 4 5 6=(9+12) 7 8 9 ( 3 * 8) 10 11 12 21.07.05 391214 2,00,00,000 09.08.05 2,65,468 90,25,912 10.08.05 266106 1,73,00,000 26.07.05 391211 2,00,00,000 02.09.05 266 9,044 10.08.05 266109 2,11,00,000 26.07.05 391212 76,00,000 10.08.05 266132 1,65,044 IDFC 15.7.2005- 22.7.2005/ 12.08.2005 34 Total 4,76,00,000 2,65,734 90,34,956
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Source: SecMarx — sebi:WTM/MSS/ISD/45/2010. 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.