sebi:WTM/VKC/ID8/125/08
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Facts / Headnote
Show cause notice dated May 10, 2007 against M/s Surana Maloo & Co. disposed of without directions under Sections 11 and 11B of SEBI Act; matter referred to the Institute of Chartered Accountants of India
Provisions invoked
- s. 11B
- s. 11
- s. 21
- s. 227
- s. 22
Regulations
- Reg. 11
Parties
- M/s Surana Maloo & Co.
Holding
The show cause notice dated May 10, 2007 against M/s Surana Maloo & Co. was disposed of without any directions under Sections 11 and 11B of the SEBI Act. The matter was referred to the Institute of Chartered Accountants of India for possible professional misconduct under Section 22 of the Chartered Accountants Act, 1949.
Full text
Page 2 of 7 of the shares have sold the shares through off-market transfers starting from April 2004 to December 2005. Consideration had not been received in full for the shares re-issued. These shares, issued fraudulently through a layer of off-market transfers, have gone into the hands of gullible investors. The shares were offloaded from April 2004 to December 2005 at an average price of Re 0.51 per share. It was also revealed that the allottees of the re-issued shares have also aided and abetted the company promoter/directors in the process of fraudulent issue of shares and offloading them in the market. The company promoter/directors have also offloaded their holding as the holding of the promoter entities has become nil as on March
Page 3 of 7 6. Vide letter dated September 14, 2007, an opportunity of personal hearing was given to SMC before me on October 08, 2007. Shri Omkar Maloo, Partner of SMC appeared on that date and reiterated the submissions already made. A period of seven days was also granted to file additional submissions but no further
Page 4 of 7 the organization were to still come to a different finding based on their prudent understanding of such matters, it may have been possible to give them the benefit of doubt. However examining certain documents while ignoring others, equally part of the transaction, cannot be justifiably termed as professional discretion. In matters involving the capital markets especially where the decision may have wide-ranging impact on large numbers of small investors, the prudence to be displayed by professionals assisting the process must be of a higher standard.
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Source: SecMarx — sebi:WTM/VKC/ID8/125/08. 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.