sebi:WTM/PS/47/FII/MAR/2010
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Facts / Headnote
Application for grant of certificate of registration as Foreign Institutional Investor rejected
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 6(1)
- Reg. 11(2)
- Reg. 6A
- Reg. 6(1)(f)
Holding
SEBI rejected the application of First Global (UK) Ltd. for registration as a Foreign Institutional Investor, holding that the applicant is not a 'fit and proper person' under Regulation 6(1)(f) of the FII Regulations.
Full text
Page 2 of 7 4. Subsequently, in accordance with the requirement of Regulation 11(2) of the FII Regulations, a letter dated November 19, 2009 was issued to the applicant communicating thereby that prima-facie, it is not a ‘fit and proper person’ for grant of registration as FII, for the reasons stated therein and registration as a FII should not be granted to it as it was not fulfilling the requirements of Regulation 6(1)(f) of the FII Regulations. It was inter alia stated that Mr. Shankar Sharma, the Director on the board of applicant has been prohibited from associating with the Indian securities market for a period of one year vide SEBI order dated February 13, 2009 and further prosecution proceedings have been initiated against First Global Stockbroking Pvt. Ltd. (hereinafter referred to as ‘FGSB’), Mr. Shankar Sharma, Smt. Devina Mehra, and others. Vide this letter applicants were advised to make submissions, if any, within a period of 10 days from the date of receipt of the said letter.
Page 3 of 7 are common directors on the board of various companies of the First Global group. - SEBI order dated February 13, 2009 has no relevance for the FII application made by applicant since the said order has been passed against Mr. Shankar Sharma in his individual capacity and does not concern the applicant or FGSB. - Once certificate is granted Mr. Shankar Sharma will in no way be involved in the day to day workings of the applicant. - FGSB and others have filed a revision petition before the Hon’ble Bombay High Court, against the prosecution proceedings for non-compliance of summons issued by SEBI and the proceedings have been stayed. As regards other prosecution which were solely based on the SEBI order dated September 12, 2002 against FGSB and Vruddhi Confinvest Pvt. Ltd. The said order has been set aside by Hon’ble SAT and the prosecution proceedings should have been withdrawn suo moto.
Page 4 of 7 8. It is observed that SEBI, vide its order dated February 13, 2009, had restrained Mr. Shankar Sharma from buying, selling or dealing in securities and prohibited him from associating in securities market in any manner whatsoever for a period of one year. I note that Mr. Shankar Sharma had preferred an appeal before Hon’ble SAT. Hon’ble SAT after considering the material available, vide its order dated October 28, 2009 upheld the order passed by SEBI and dismissed the appeal. Mr. Shankar Sharma, aggrieved by this order of Hon’ble SAT, preferred an appeal before the Hon’ble Supreme Court of India. Hon’ble Supreme Court, vide its order dated February 01, 2010 upheld the order of Hon’ble SAT and dismissed the
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Source: SecMarx — sebi:WTM/PS/47/FII/MAR/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.