sebi:WTM/TCN/ISD/06/15133
Facts / Headnote
Direction not to open fresh demat accounts against MOSL vacated; issues left open for Enquiry Officer
Provisions invoked
- s. 11
- s. 19
Parties
- Motilal Oswal Securities Limited
Holding
The direction prohibiting Motilal Oswal Securities Limited from opening fresh demat accounts, issued by the ad interim ex-parte order dated April 27, 2006, need not be continued and is vacated. All other issues and contentions are left open for consideration by the Enquiry Officer.
Full text
APPEARANCE : FOR NOTICEE : Shri. T.N. Subrahmanian, Senior Advocate Shri Anil Shah, M/s Juris Matrix , Advocates Shri Motilal Oswal, Chairman and Managing Director Shri Ajay Menon, Director FOR SEBI : Shri R. Ravichandran, Chief General Manager Shri J.Ranganayakulu, Joint Legal Adviser
1.1 By an ad interim ex-parte order dated April 27, 2006 (hereinafter referred to as the ‘Order’) under section 19 read with sections 11, 11B and 11(4) of the Securities and Exchange Board of India Act, 1992 and section 19 of the Depositories Act, 1996 pending enquiry and passing final Order, certain interim
2.1 The focus of the SEBI investigations has been on entities indulging in off-market transactions after allotment of shares but prior to listing and commencement of trading on the stock exchanges, in connection with cornering of IPO shares in retail segment through benami/fictitious Demat Accounts. 2.2 At paragraph 9.5, 12.1, and 12.39 of the Order, it has been mentioned that inspection of the Depository Participant (DP) by a Chartered Accountant (CA) firm engaged by CDSL found various violations by MOSL. It was also observed that 697 demat accounts sharing the common address was held with the Depository Participant, MOSL. 2.3 At paragraph 10.9 of the Order, it is mentioned that MOSL was the DP of Shri Dharmesh Bhupendra, a key operator, who was financed by Shri Narendra Harilal Dadia, Dhaval Narendra Dadia and Shri Kashmira Narendra Dadia in the IPO of IDFC Limited. 2.4 At paragraph 12.92 and 16.49 of the Order, the findings of the inspection of MOSL by a CA firm engaged by CDSL indicates that the DP failed to exercise due diligence while opening demat accounts. The inspection also found the irregularities such as failure to obtain proof of identity, failure to obtain proof of address, not including the names of second and third holders in the DP–BO agreement, not verifying the photocopies of documents received towards Proof of Identity (POI), Proof of Address (POA) with the originals and the agreement between the DP and the client being incomplete and not obtaining signatu
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/TCN/ISD/06/15133. 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.