sebi:WTM/PS/34/MRD/DSA/SEPT/2014
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Facts / Headnote
JSE found negligent in discharge of its functions and duties; charges of violation of Regulation 8(1) of MIMPS Regulations not made out against individual noticees; no independent violation proved against individual directors
Provisions invoked
- s. 19
- s. 12A
- s. 193
- s. 7A(2)
- s. 7A
- s. 7A(1)
Regulations
- Reg. 8
- Reg. 11(1)
- Reg. 8(1)
- Reg. 2(e)(1)
- Reg. 2(e)(2)(i)
- Reg. 2(e)(2)
- Reg. 11(3)
Parties
- Jaipur Stock Exchange (JSE)
- Governing Board of JSE
- Mr. Rajender Prashad Gupta
- Ms. Veena Gupta
- Mr. Amit Gupta
- Mr. Rajeev Gupta
- Mr. Puneet Jain
- Mr. C.P. Mittal
- Mr. Anil Gadodia
- Mr. Manish Gadodia
- Ms. Manjula Jain
Holding
JSE was found negligent in the discharge of its functions and duties for various regulatory non-compliances, while the charges of violation of Regulation 8(1) of MIMPS Regulations and acting in concert were not established against the individual noticees (directors/shareholders).
Full text
Page 2 of 27 have violated the provisions of Regulation 11(3) of MIMPS Regulations. The SCNs further alleged that JSE has failed to appoint an Executive Director since September 2007 and Mr. Puneet Jain, Chairman of JSE is acting as chief executive for all practical purposes and interfering in the day to day affairs of JSE. It has also been alleged that JSE amended the 'memorandum of association' and adopted new 'articles of association' without approval from SEBI, negligently handled the board meeting minutes, failed to maintain the Base Minimum Capital, etc.
Page 3 of 27 date fixed. The request of the noticees were considered and the hearing was postponed to March 08, 2013. The noticees namely JSE, Mr. C.P. Mittal, Mr. Manish Gadodia, Mr. Anil Gadodia and Ms. Manjula Jain again requested for adjournment. Accordingly, the hearing was rescheduled to April 05, 2013. On the date fixed Mr. Neeraj Matta, Advocate and Mr. Joel, Advocate appeared for JSE and the Governing Board of JSE and made oral
Page 4 of 27 - The appointment of Mr. C.P. Mittal as Whole Time Director was done as a need was felt to strengthen the management. The introduction of Mr. Mittal came from a reliable source and his qualifications/ experience also met with the requirements of the Exchange, hence, his name was considered by the Board. Prior to his appointment, a legal opinion was also sought on the issue of appointment and remuneration of Whole Time Director. - On this bonafide understanding of the SEBI circular, the Board felt that there is no bar on the appointment of Whole Time Director and appointed Mr. C.P. Mittal as Whole Time Director from the quota of shareholder directors for which there was no procedure laid down by SEBI. However, later, on becoming aware that the appointment of Mr. C.P. Mittal required prior approval from SEBI, Mr. C.P. Mittal resigned from the post of Whole Time Director of the exchange. During his tenure he had exercised only administrative powers. He had no powers to sign the cheques above an amount of `25,000 that too jointly with the General Manager of JSE. He had no powers to sanction any financials, the only power he had was of approving the proposals received from the General Manager. The acquisition of shares of JSE by Mr. C.P. Mittal, was his individual
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Source: SecMarx — sebi:WTM/PS/34/MRD/DSA/SEPT/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.