sebi:WTM/PS/18/IVD/ID-3/AUG/2011
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Facts / Headnote
Show cause notice disposed of without further direction
Provisions invoked
- s. 11(4)
- s. 19
Regulations
- Reg. 4(b)
Parties
- CSI Technologies Limited
Holding
The show cause notice issued to CSI Technologies Limited on August 17, 2007 was disposed of without any further direction, despite findings that the noticee's off-market transfers of large quantities of Mascon shares without consideration raised serious doubts.
Full text
Page 2 of 4 Parekh related entities and the OCBs named above remained active in the scrip. 3. On completion of the investigation, SEBI, inter-alia issued show cause notice dated August 17, 2007 (hereinafter referred to as ‘SCN’) to the noticee under Sections 11B and 11(4)(b) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’). The SCN alleged that the noticee, a Maurititus based OCB, was allotted 7,20,000 shares of Mascon in the preferential allotment made by the company in April, 2000. The noticee off-loaded large number of shares of Mascon in the off-market, for which no payment was received by it. These shares were later-on used for creating artificial volume and price in the scrip of Mascon. It was further alleged that the noticee had knowingly aided and abetted entities/ OCBs related/ connected to Ketan Parekh to manipulate in the scrip. The SCN, therefore, alleged that the acts of noticee were in violation of the Regulation 4(b) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995 (hereinafter referred to as ‘PFUTP Regulations’). Accordingly, it called upon the noticee to show cause as to why suitable directions under Section 11(4) and 11B of the SEBI Act should not be issued.
Page 3 of 4 5. Upon considering the material available on record, now I proceed with the matter. I note that Mascon was a closely held company and the floating stock in the scrip was thin. It is seen from the SCN that the noticee has been referred as promoter group company of Mascon. I note that the noticee is a Mauritius based OCB, which had furnished the registered office address of Mascon as their contact address in India. Further, the same address of Mascon has been given by the noticee in its demat account opening form. It is observed that the noticee was allotted 7,20,000 shares of Mascon in a preferential allotment made by the company in April, 2000. Later-on, the holding of the noticee was further increased by a bonus announcement by Mascon.
Page 4 of 4 8. Under the facts and circumstances of the case, I, in exercise of the powers conferred upon me in terms of Section 19 of the Securities and Exchange Board of India Act, 1992, hereby dispose of the show cause notice issued on August 17, 2007 to CSI Technologies Limited without further direction.
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Source: SecMarx — sebi:WTM/PS/18/IVD/ID-3/AUG/2011. 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.