sebi:WTM/RKA/SRO/66/2012

SEBI · SEBI · 2011-01-05 · Rajeev Kumar Agarwal, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Show Cause Notices dated June 09, 2011 and June 30, 2011 disposed of; noticees restrained from buying, selling and dealing in securities and prohibited from accessing the securities market for a period of two years from the date of the order.

Provisions invoked

Regulations relied on

Parties

Holding

The Company and its promoter Mr. A. Venkatramani were found to have contravened regulations 3(c), 3(d), 4(2)(f) and 4(2)(k) of the PFUTP Regulations, and the Company additionally contravened regulations 5(5), 54(1) and 60(4) of the ICDR Regulations and regulation 53A of the DP Regulations read with the SEBI Circular dated December 27, 2002. Both noticees were restrained from buying, selling and dealing in securities and prohibited from accessing the securities market for two years from the date of the order.

Full text

Page 2 of 22 received the minimum subscription in the rights issue and the promoter of the Company, Mr. A. Venkataramani had failed to bring in his contribution before the closure of the rights issue. In view of the same, SEBI vide letter dated January 05, 2011 instructed Vivro to advise the Company to refund the application money to the shareholders. Pursuant to the same, the Company had refunded the money to the shareholders on January 08, 2011.

Page 3 of 22 refund was made voluntarily. Did not publish advertisements in the newspapers informing the investors about the material developments that happened in its rights issue. Regulation 60(4) of the ICDR Regulations Did not enter into a valid agreement with Knack before engaging it as its Registrar to the Issue in the rights issue. Regulation 5(5) of the ICDR Regulations Failed to hand-over records of signatures, etc, to Knack

Page 4 of 22 (a) Mr. A. Venkatramani is not the Managing Director and does not hold any official position in the Company but only a promoter and , therefore, the SCN should not have been addressed to him. (b) Out of the total 9500 shareholders, only 75 shareholders had complained about non- receipt of CAFs and this is not abnormal. The shareholders may have not updated the change of their addresses to the RTI and in some cases there could have been lapses in the postal delivery system, which is not uncommon. On receipt of information about such complaints, the Company took immediate steps to send the CAFs afresh to those shareholders. Subsequently, there were no complaints and many shareholders had applied to subscribe in the rights issue. (c) The allegation that the RTI was not able to produce any proof of dispatch of CAFs or the claim of the RTI that the Company made the dispatch is not admitted. Only Knack made the dispatch and the proof of the same could only be with Knack or Vivro and not with the Company. (d) Though the advertisement in name of the Company was issued on November 15, 2010 in the "Financial Express" and "Dhinaboomi", it is to be noted that the said advertisement was drafted, released and published by Vivro, the Lead Manager. Vivro had sent the draft advertisement on October 28, 2010 for the Company's acceptance and indicated that the details therein would be filled in later. On that date, the CAFs had not yet been dispatched by the RTI and therefore, the

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.

Analyse this matter in Ontology · Plans

Source: SecMarx — sebi:WTM/RKA/SRO/66/2012. 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.