sebi:WTM/RKA/ISD/48/2016
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Facts / Headnote
Interim directions confirmed; ad interim ex-parte order dated April 17, 2015 remains in force till further directions
Provisions invoked
- s. 19
- s. 10(38)
Holding
The directions issued vide the ad interim ex-parte order dated April 17, 2015 against Mishka Finance and Trading Limited and the noticees are confirmed and shall remain in force till further directions.
Full text
Order in the matter of Mishka Finance and Trading Limited Page 2 of 5 period"), Securities and Exchange Board of India ("SEBI") undertook a preliminary inquiry in the dealings in the said scrip.
Order in the matter of Mishka Finance and Trading Limited Page 3 of 5 3. In this backdrop, SEBI, vide an ad interim ex-parte order dated April 17, 2015 (hereinafter referred to as “interim order”), restrained Mishka along with other 128 entities, including 24 entities mentioned above (hereinafter referred to as "noticees"), from accessing the securities market and further prohibited them from buying, selling or dealing in securities in any manner whatsoever, till further directions.
Order in the matter of Mishka Finance and Trading Limited Page 4 of 5 preferential allotment and the promoters of the company transferred their holding to the entities belonging to promoter related entities. After the expiry of the lock-in period, the Exit Providers provided the exit opportunity to the preferential allottees and promoter related entities by buying the shares of Mishka at artificially increased prices. In the whole process, the entities of Exit Providers provided a hugely profitable exit to the preferential allottees and the promoter related entities. Hence, the preferential allottees and the promoter related entities with the aid of the Exit Providers misused the stock exchange mechanism to exit at a high price in order to book illegitimate gains with no payment of taxes as long term capital gain (LTCG) is tax exempt under section 10(38) of the Income Tax Act, 1961. Further, the interim order especially discusses the manner in which the preferential allottees and the promoter related entities sold their shares pursuant to abnormal increase in price in a manipulative way and made huge illegitimate profit in the whole event. It is in this background and the facts and circumstances, I find that the acts and deeds of Mishka, its directors, its promoters, preferential allottees, the promoter related entities and the Exit Providers are fraudulent and in contravention of the Securities Laws.
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Source: SecMarx — sebi:WTM/RKA/ISD/48/2016. 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.