sebi:WTM/VKC/MIRSD/DPS-I/96/07

SEBI · SEBI · 2007-07-16 · Mr. V K Chopra, Whole Time Member

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Facts / Headnote

Interim ex-parte order directing MMS, MMI and their directors not to buy, sell or deal in securities; demat accounts frozen; direction not to engage in borrowing and lending of securities without registration; show cause notice issued

Provisions invoked

• s. 19

Holding

SEBI passed an ex-parte interim order directing MMS, MMI and their directors Mahalingam and Chatterjee not to buy, sell or deal in securities, freezing their demat accounts pending enquiry proceedings, and directing them not to engage in borrowing and lending of securities without obtaining registration from the Board.

Full text

Sub-Broker (INS 23697034) of NSE & (INS 12042433) of BSE affiliated to ISE Securities & Services Ltd (ISS). 1.2 One Mr. T.S. Nilkanthan (aged 81 years) and Mrs. Nilkanthan (aged 75 years) vide letter dated July 16, 2007 made a complaint to SEBI against MMS, MMI and their directors Mr. Mahalingam and Mr. Chatterjee. The complainants have alleged that on August 24, 2003 and August 01, 2005 they had given shares of various listed companies to MMS. They had also given shares belonging to their daughter on August 01, 2005. The shares were given with the understanding that MMS would give periodical returns in the nature of interest / yield under the Securities Lending Scheme. They had been getting the returns including the dividends and bonus shares declared by the respective companies till November 2006. Thereafter MMS has neither been paying interest/yield on borrowed shares nor returning the shares to the said complainants. One cheque received from them for Rs.15,000 which was presented to the bank twice, but was bounced for want of funds.

the only directors of MMS. Both of them are the only directors of MMI also. ii) As alleged by the complainants, MMS borrowed shares of various listed companies as mentioned below:

Table 3: Securities borrowed from Ms. Revathi Nilkanthan (Daughter of Mr. T S Nilkanthan) S. No. Scrip Name Quantity Date 1 Reliance Ind. 1400 August 1st, 2005 2 L&T 50 August 1st, 2005 3 Grasim 100 August 1st, 2005 4 ICICI Bank 100 August 1st, 2005 5 ONGC 100 August 1st, 2005 6 TATA Tea 300 August 1st, 2005 7 Hind Lever 5000 August 1st, 2005 8 Garware 900 August 1st, 2005

Source: SecMarx — sebi:WTM/VKC/MIRSD/DPS-I/96/07. 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.