sebi:WTM/RKA/CFD/2/2012
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Facts / Headnote
Direction issued vide ad-interim ex-parte order dated July 11, 2011 against Rikhav Securities Limited confirmed and continued till further order in the matter.
Provisions invoked
- s. 11B
- s. 11
- s. 19
Regulations
- Reg. 3
- Reg. 107
Parties
- Rikhav Securities Limited
Holding
The Whole Time Member confirmed the ad-interim ex-parte direction dated July 11, 2011 against Rikhav Securities Limited, which shall remain in force till further order in the matter, as the investigation is still ongoing and prima facie contravention of regulations 3 and 4 of the PFUTP Regulations, 2003 is indicated.
Full text
Page 2 of 9 Retail Individual Investors (RIIs) clients and then cancelling/withdrawing, had inflated the bid book to a large extent and thus appears to have induced the investors to subscribe to the issue.
Page 3 of 9 such allegation deserves to be expunged. In Para-4 of the order as many as 12 syndicate members have been mentioned where substantial quantities of bids had been lodged and were later withdrawn. No orders have been passed against any of these entities as SEBI has concluded that there is no violation. Therefore, the order dated July 11,2011 against it is discriminatory, unfair, unjust and untenable. c. In the NII category, except for 2 bids all other six bids were received through IPO sub brokers. Manba Investments Securities Pvt. Ltd. and Manba Broking Services Pvt. Ltd. had applied through IPO sub broker Nikita Manisha Shah. Other NII applications (except group entities of Rikhav) were new clients introduced by one IPO sub broker Jayantilal B Shah. It is not responsible for financing done by Client (Manba). Post closure of bidding, there were developments in the market like listing of Muthoot Finance Ltd., at a discount, and another major public issue of Power Finance Corporation Limited etc., which affected investor sentiments, which resulted in the withdrawals. d. Financing by an NBFC is common and permitted activity under the law. IPO financing by the group entity of Rikhav was genuine and neither it nor its financing NBFC had any control on the applications of the clients. Further, the withdrawal of such financed bids was only to the extent of 40% and the same was at the decision of respective applicants. If All such applications and the cheques of NBFC were
Page 4 of 9 4. I note that investigation in the matter is still on -going.Therefore, in the present proceedings, the limited issue for my consideration at this stage is whether in the facts and circumstances as reflected from the material available on record, the direction issued vide order dated July 11, 2011 in so far as it relates to Rikhav needs to be continued, revoked or modified in any manner.
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Source: SecMarx — sebi:WTM/RKA/CFD/2/2012. 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.