sebi:WTM/RKA/IVD/ID-6/34/2013
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Noticees restrained from accessing the securities market and prohibited from buying, selling or otherwise dealing in securities for three years; SCN against AIL disposed of without enforcement action due to winding up.
Provisions invoked
- s. 11B
- s. 11(4)
- s. 19
- s. 138
- s. 445(3)
- s. 146
Regulations
- Reg. 11
- Reg. 3
- Reg. 2(1)(c)
- Reg. 2(1)
Parties
- Mr. Atul Shah
- Mr. Anil Patel
- Mr. Jasmin Patel
- Ms. Kokilaben Patel
- Aditya Infosoft Ltd. (AIL)
Holding
The Noticees (Mr. Atul Shah, Mr. Anil Patel, Mr. Jasmin Patel and Ms. Kokilaben Patel) were found to have contravened regulations 3(a), (b), (c) and 4(1) and 4(2)(a), (f), (k), (r) of the PFUTP Regulations by manipulating the price of AIL shares through false disclosures, misleading advertisements and artificial trading, and were restrained from accessing the securities market for three years.
Full text
Page 2 of 17 Business Line on January 20, 2004. In the notes to the accounts of the said quarterly financial results, AIL had stated that Share Incorporation Limited, a multinational company (MNC), will purchase 10 lakh shares of AIL at the rate of `16 to `18 per share. e) The above disclosures published by AIL in its quarterly financial results were false. AIL was not in function for the last 8 years from the investigation period. It had no staff and its registered office and corporate office were seized by banks and financial institutions. Admittedly, AIL had incurred heavy losses and its entire capital had eroded. Further, there was no such company in the name of Share Incorporation Limited in existence. Therefore, it was observed that the advertisement published by AIL with regard to its strategic stake sale to the said MNC was not only false but also a deliberate attempt to mislead the investors. f) AIL had also circulated numerous misleading information on its website www.adityainfosoft.com; for example, AIL's solution were based on more than 20 years of research, whereas it had ventured into software business only in the year 2000. According to Mr. Anil Patel, he didn't know anything about this information and the information was false. He had even stated that he was hearing about the website for the first time. g) Mr. Anil Patel (Promoter and Chairman and Managing Director of AIL) had stated that one Mr. Atul Shah related to Charmi Investment Ltd. came to his office a
Page 3 of 17 i) The trading in the scrip resumed on December 04, 2003 with active participation of Parshwa Finance (Proprietor-Mr. Piyush Jhaveri) a sub- broker of P. Suryakant Share & Stock Brokers Pvt. Ltd. and the connected clients of Parshwa Finance. In the beginning, some of the shares transferred to the entities related/associated with Mr. Atul Shah were sold to Smt. Bela H. Kayastha (Smt. Bela)- wife of Mr. Piyush Jhaveri, Proprietor of Parshwa Finance through off market transactions by Mr. Dinesh Patel (another client of Parshwa Finance) who was connected / known to Mr. Viral V. Mewada. Thereafter, these shares were bought by Mr. Dinesh Patel from Smt. Bela through market transactions. All the trading was done amongst the inter-connected persons to create artificial / false market for the scrip.
Page 4 of 17 4. While Mr. Jasmin Patel and Ms. Kokilaben Patel have not filed their replies to the SCN, Mr. Anil Patel had filed his replies dated May 26, 2007 and September 01, 2009. He was provided an opportunity of personal hearing before the then Whole Time Member on March 03, 2010 which he had availed. Since the then Whole Time member had demitted the office, in observance of principles of natural justice, another opportunity of personal hearing was granted to Mr. Anil Patel, Ms. Kokilaben Patel and Mr. Jasmin Patel on June 11, 2013 and communicated to them vide notice dated May 20, 2013. While Mr. Anil Patel, vide his letter dated May 28, 2013, expressed his inability to remain present for the personal hearing due to poor health and the injury sustained during the journey for his cross-examination by Mr. Atul Shah and reiterated his submissions contained in his written reply, Ms. Kokilaben Patel and Mr. Jasmin Patel neither appeared for personal hearing nor did they file any reply despite service of the notice upon them.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:WTM/RKA/IVD/ID-6/34/2013. 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.