sebi:WTM/PS/04/MRD/DSA/APR/2014
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Warning issued to ASE and its Governing Board; five-year ban on Keyur B. Mehta and Kush B. Shah from ASE board; Hemant Singh Jhala restrained from holding director position with any SEBI-registered intermediary pending probe; proceedings against Apurva R. Hathi and Sunil B. Patel disposed of without directions; ASE directed to appoint independent auditor and restrict use of IPF/ISC funds.
Provisions invoked
- s. 19
- s. 58
- s. 4(1)
- s. 12A
- s. 179
- s. 193
- s. 193(2)
Parties
- Ahmedabad Stock Exchange Limited
- Hemant Singh Jhala
- Keyur B. Mehta
- Kush B. Shah
- Apurva R. Hathi
- Sunil B. Patel
Holding
ASE was found negligent in the discharge of its functions and duties, and its directors were found to have violated SEBI circulars and the Code of Ethics for Directors and functionaries of Exchanges; a warning was issued to ASE, certain directors were barred from the board, and proceedings against two directors were disposed of without directions.
Full text
Page 2 of 19 to the Shareholder Directors of ASE namely Mr. Hemant Singh Jhala, Mr. Keyur B. Mehta, Mr. Kush B. Shah, Apurva R. Hathi and Trading Member Director of ASE namely Mr. Sunil B. Patel (hereinafter all collectively referred to as ‘noticees' and individually by their respective names). The SCN inter alia alleged that the then Chairman of ASE, had interfered with the day to day functioning of the exchange and the decision taken by the board of ASE were not in the best interest of the exchange. The SCN further alleged that the accounts of ASE were not maintained properly, the exchange has failed to maintain statutory funds like Investor Service Fund (hereinafter referred to as 'ISF'), etc. and also failed to conduct the inspections of the subsidiary and sub-brokers etc.
Page 3 of 19 Singh Jhala also filed his reply to the SCN vide his letters dated January 05, 2013, March 01, 2013, April 02, 2013 and April 04, 2013. As no reply was coming from the other noticees, SEBI proceeded further with the matter and as requested, an opportunity of personal hearing was granted to ASE and other noticees on July 25, 2013. In the meantime, one more noticee namely Mr. Sunil B. Patel submitted his reply to the SCN vide letter dated June 03, 2013, which was taken on record.
Page 4 of 19 - As regards the signatures on the minutes of the meetings, ASE has submitted that as per the powers conferred under Section 193 of the Companies Act, 1956, the Chairman of the meeting is empowered to sign the minutes. - Sunil Patel being the interested person had abstained from participating in the decision when his relative's offices was finalized for rent/ lease. Further, the board of ASE had in principle decided to conduct Investors' seminar and programmes with other SEBI registered investors association also. However, none came forward with any such request. - The exchange maintains Broker database in hard as well as soft copy. - The holding of ASE Capital Market Limited (hereinafter referred as 'ACML') in ASE Capital Market Development Board (hereinafter referred to as 'ACMDB') (both subsidiaries of ASE) falls under the provisions of Section 4(1)(b) of the Companies Act, 1956, and therefore, is in compliance to the SEBI circulars.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:WTM/PS/04/MRD/DSA/APR/2014. 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.