sebi:WTM/RKA/IVD/ID-8/36/2013

SEBI · SEBI · 2002-12-27 · Rajeev Kumar Agarwal, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Gennex Laboratories Ltd. and Mr. Vinod Baid restrained from accessing the securities market and prohibited from buying, selling or otherwise dealing in securities for three years; independent directors given benefit of doubt; other charges found technical and venial or without blemish.

Provisions invoked

• s. 19
• s. 12A
• s. 12
• s. 11C(6)
• s. 21

Regulations

• Reg. 11
• Reg. 3
• Reg. 4(2)
• Reg. 2
• Reg. 3(a)
• Reg. 4(2)(r)
• Reg. 53A

Parties

• Gennex Laboratories Ltd.
• Mr. Vinod Baid
• Mr. U. C. Bhandari
• Mr. Y. Ravinder Reddy
• Mr. Kishore Jhunjhunwala

Holding

The order finds that Gennex Laboratories Ltd. violated regulation 3(a), (b), (c) and (d) and regulation 4(2)(r) of the PFUTP Regulations and that Mr. Vinod Baid violated section 12A(a), (b) and (c) of the SEBI Act read with regulation 3 of the PFUTP Regulations, by planting false corporate announcements to prop up the share price and offload shares at inflated prices through MFMCL. GLL and Mr. Vinod Baid are restrained from accessing the securities market for three years; the independent directors are given benefit of doubt and the share registry default is found technical and venial.

Full text

2 3. It was further noted that the shareholding of the promoters of GLL had reduced substantially from 54,42,836 shares (53.62% of the paid up capital during March 2007) to 25,14,800 shares (24.72% of the paid up capital during September 2007) which included 25,00,0000 shares pledged with Bank of India. From March 2008 onwards, two preferential allotees i.e. Silver Gold Property Development Finance Private Ltd. and Carwin Mercantiles Private Ltd. holding 15,00,000 shares and 10,00,000 shares respectively, were also shown as promoters of GLL. As on March 2009, the paid up equity capital of the Company was ₹ 12.65 Crores comprising 1, 26, 50,300 shares of ₹10 each.

3 (314.03%) whereas the Sensex had increased only by 6823.05 points (147.46%) from 14383.72 (April 2007) to 21206.77 (January 2008). (d) During the investigation period, certain corporate announcements were made by GLL. The details of these announcements and price movement in the scrip of GLL during the relevant period is given in the following Table:- Table I: Details of corporate announcements and consequent price movement: Date Particulars of announcement Price Movement Status July 5, 2007 (1:22:31 P.M.)

4 (1:35:02 PM) consider the allotment of 25,00,000 equity shares and issue of 25,00,000 equity warrants as under: Silver Golden Property Develop Fin Investment Ltd, Mumbai. – 15,00,000 shares and 25,00,000 warrants Carwin Mercantiles (P) Ltd, Kolkata – 10,00,000 shares was ₹ 27.50) and fell down to. ₹ 27.35. There were 36 trades during the day. September 4, 2007 (3:08:51 PM) Informed BSE about approval of above decision. The scrip opened at ₹31.35 (4.85% higher than the previous day closing price of ₹29.90) and same was the closing price. There were 22 trades during the day. Similarly on 05.09.07, the scrip opened at ₹32.90 and remain the price of the day with 28 trades. Implemented August 27, 2008 (11:12:43 AM) Informed BSE that in the Board Meeting held on August 26, 2008, it was unanimously decided to make an offer for purchase of 51% Stake in Ammana Bio Pharma Ltd and authorized the Managing Director of the Company to enter into necessary Shareholders Agreement with them for acquisition of said stake. The scrip opened at ₹46.25 on August 27, 2007 (previous day closing price was ₹46.40) and reached to ₹48.00 and closed at ₹45.05. There were 246 trades during the day. Not implemented

Source: SecMarx — sebi:WTM/RKA/IVD/ID-8/36/2013. 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.