sebi:WTM/MSS/ISD/78/2010
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Facts / Headnote
Violations found; directions issued including prohibition, disgorgement of Rs.4,04,20,658 with interest totaling Rs.5,25,46,855, and further restraint of seven years in case of non-payment
Provisions invoked
- s. 11B
- s. 11
- s. 11(4)
- s. 19
- s. 12A
Regulations
- Reg. 3
Parties
- Jayesh P. Khandwala-HUF
- Mr. Jayesh P. Khandwala
Holding
Jayesh P. Khandwala-HUF and Mr. Jayesh P. Khandwala were held to have violated Section 12A(a), (b) and (c) of the SEBI Act, 1992 and regulations 3 and 4(1) of the PFUTP Regulations by financing key operators to corner shares meant for retail individual investors in three IPOs, and were directed to disgorge Rs.4,04,20,658 with interest totaling Rs.5,25,46,855.
Full text
2 of 11 2. On completion of the investigation in the meantime, SEBI issued a show cause notice dated April 08, 2009 (SCN) under Sections 11, 11(4) and 11B of the SEBI Act, 1992 alleging that Jayesh provided finance to three key operators (KOs) viz., Ms. Roopalben Panchal (Roopal), M/s. Sugandh Estates and Investment Pvt. Ltd. (SEIPL) and Mr. Biren Kantilal Shah (Biren) to make applications in the retail category of the IPOs of IDFC Ltd. (IDFC), Sasken Communication Technologies Ltd. (Sasken) and Suzlon Energy Ltd. (Suzlon). On receipt of allotment in those IPOs, the KOs transferred the shares and corresponding refunds to Jayesh, who, in turn, disposed of the said shares and made an unlawful gain of Rs.4,04,20,658. The SCN, therefore, alleges that Jayesh, in collusion with the KOs, employed fraudulent, deceptive and manipulative practices to corner the shares meant for retail individual investors (RIIs) in the three IPOs. It accordingly alleges that these acts were in violation of Section 12A (a), (b) and (c) of the SEBI Act, 1992 and regulations 3 and 4 (1) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (PFUTP Regulations). It called upon Jayesh to show cause as to why suitable
3 of 11 Table A: Summary of Transactions Issue Details Receipt of Shares and Refunds by Jayesh Retail Application Size Retail Allotment Size Receipt of Shares Disposal of Shares received IPO KO Amount (Rs.) provided to KOs Issue Price (Rs.) No. of Shares Amount (Rs.) No. of Shares Amount (Rs.) No. of Applicatio ns made No. of Shares Value at issue price (Rs.) Refund Amount (Rs.) Transfer red to/ through
4 of 11 4. Jayesh appeared before me through its authorized representatives (Mr. Anish Kharidia and Mr. Gaurang H. Dalal) for the personal hearing on June 17, 2009 and made oral
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Source: SecMarx — sebi:WTM/MSS/ISD/78/2010. 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.