sebi:WTM/SM/IVD/ID7/27507/2023-24

SEBI · SEBI · 2017-04-29 · S. K. Mohanty, Whole Time Member

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Facts / Headnote

Noticee Nos. 1, 2, 3, 4, 5 and 6 restrained from accessing securities market for 1 year; Noticee Nos. 1, 2, 3, 5 and 6 directed to disgorge unlawful loss avoided with simple interest @9% p.a. from May 11, 2017 to Investor Protection and Education Fund within 45 days; monetary penalties imposed under SEBI Act and SCRA.

Provisions invoked

• s. 11B
• s. 11
• s. 19
• s. 12A
• s. 12
• s. 13
• s. 16
• s. 15G
• s. 15J
• s. 15
• s. 15F
• s. 23J
• s. 18
• s. 138
• s. 23H
• s. 29A
• s. 17
• s. 11(5)
• s. 194A

Regulations

• Reg. 68
• Reg. 13
• Reg. 2(1)(e)
• Reg. 199
• Reg. 2
• Reg. 4(1)
• Reg. 4
• Reg. 2(1)(l)
• Reg. 2(1)(d)
• Reg. 2(1)(d)(i)
• Reg. 30
• Reg. 2(1)
• Reg. 2(1)(g)
• Reg. 2(1)(n)
• Reg. 2(1)(f)

Parties

• Dinesh Gupta
• Dinesh Gupta HUF
• Rajesh Gupta
• Rajesh Gupta HUF
• Nirmala Gupta
• Ajay Fincap Consultants Private Limited

Holding

Off-market transfer of 64 Lakh shares of SCTL to Noticee Nos. 1-4 violated Section 16, 13 and 18 of SCRA, and trading by Noticee Nos. 1, 2, 3, 5 and 6 during UPSI period constituted insider trading in violation of Section 12A(d) and (e) of SEBI Act read with Regulation 4(1) of PIT Regulations, warranting market restraint, disgorgement and penalty.

Full text

Order in the matter of Shilpi Cable Technologies Limited Page 2 of 76 of India (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as the “PIT Regulations, 2015”).

Order in the matter of Shilpi Cable Technologies Limited Page 3 of 76 Goel, who were the Promoters-Directors of SCTL, were also the Promoters-Directors of Shilpi Communication along with one Mr. Vishal Goel. Out of the aforementioned shares held by Shilpi Communication, a total of 64 Lakh shares of SCTL (19.82% of the total paid up capital of SCT) were transferred to the Noticee nos. 1 to 4 on May 02, 2012 in such a manner that each of them got 16 Lakh shares of SCTL. vi. In terms of the disclosure dated May 04, 2012 made under Regulations 13 (4), 13 (4A) and 13 (6) of SEBI PIT Regulations, 2015, the said 64 Lakh shares of SCTL were transferred against the total consideration amount of INR 12.80 Crore, thereby shares were sold at a price of INR 20 per share, though the market price of the shares of SCTL on May 02, 2012 was INR 11.29. Thus, the said sale of shares was executed at a premium of INR 77.15% of the market price. vii. The bank account statements of the Noticee nos. 1 (Dinesh Gupta), 2 (Dinesh Gupta HUF), 3 (Rajesh Gupta) and 4 (Rajesh Gupta HUF) indicate that payment of INR 3.20 Crore by each of the above Noticees was made to Shilpi Communication, partly in May, 2014 and remaining amount in July, 2014, i.e., after a period of two years from the transfer of the said shares, which was made through off-market mode. Further, for the delayed payment, neither any contractual document was executed indicating any timelines for making such delayed payment, nor any interest w

Order in the matter of Shilpi Cable Technologies Limited Page 4 of 76 details of the said loans and the pledge of shares of SCTL would be discussed in the later part of this order. ix. In the statement dated March 18, 2021 of the Noticee no. 1 (Dinesh Gupta) recorded during the investigation, he inter alia stated that he knew the Directors of SCTL viz., Mr. Mukesh Gupta and Mr. Manish Goel in relation to the financial transaction of extending loans to them or their connected entities. He further stated that the loans so extended by BDR to SCTL and Shilpi Cable were initially being repaid, however, from the end of the year 2016, there were certain issues regarding payment of interest. It has further been stated that BDR had followed up with Mr. Mukesh Gupta and Mr. Manish Goel for delay in payment of interest and subsequently, the said two Directors of SCTL had proposed for extension of the loan period. x. The Noticee no. 1 (Dinesh Gupta) also stated that Mr. Mukesh Gupta and Mr. Manish Goel had visited the office of BDR on a few occasions. xi. The Noticee no. 3 in his statement dated March 09, 2021 made during the investigation, inter alia stated that he had visited the office of SCTL twice during the end of the year 2016 in relation to the recovery of the loan extended by his company, BDR and had discussions with Mr. Mukesh Gupta and Mr. Manish Goel. xii. The Noticee no. 1 (Rajesh Gupta) vide his email dated July 26, 2020 has informed that BDR had filed an application to ini

Source: SecMarx — sebi:WTM/SM/IVD/ID7/27507/2023-24. 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.