9911796707
TMI Blog2018 (6) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... rt) on 19.01.2018. By the said order penalty of Rs. 16 lac is imposed on the appellant under Section 15HA of the Securities and Exchange Board of India, Act, 1992 for aiding and abetting Mr. Bimlesh Kumar Mishra (Mr. Mishra) in off-loading the fraudulently dematted excess shares of Somani Cement Company Limited. ("SCCL" for convenience) to the innocent investors in the securities market. 2. SEBI conducted investigation in the scrip of SCCL a public listed company for the period from 02.07.2004 to 01.04.2005. Investigation carried out by SEBI revealed that during the investigation period SCCL made several corporate announcements which appeared to be false and misleading. It was also noticed that during the investigation period SCCL had issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the appellant has violated the PFUTP Regulations and penalty of Rs. 16 lac has been imposed on the appellant. 6. Grievance of the appellant is that firstly, just because the ex-parte order initially passed by imposing penalty of Rs. 1 lac has been set aside by this Tribunal and remanded for fresh decision, SEBI is not justified in enhancing the penalty up to Rs. 16 lac. Secondly, having not taken any action against the depositories who were equally responsible for issuing the excess dematted shares and having not initiated any penalty proceedings against Mr. Mishra who was the main culprit in the present case, SEBI is not justified in imposing penalty of Rs. 16 lac on the appellant. 7. It is further submitted on behalf of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off-market to a number of entities who sold those shares in the market and created artificial volume in the scrip of SCCL. 10. Issuing shares in excess of authorised share capital and further dematting those unauthorized excess shares and allowing those shares to be sold on-market to innocent investors is a serious fraud on the securities market. In such a case, SEBI is unjustified in not initiating any action against the depositories. 11. It is not in dispute that in the present case, the main architect in committing serious fraud on the securities market was Mr. Mishra, Chairman and Director of SCCL. In fact Mr. Mishra, vide letter dated 27.04.2007 had admitted that the shares in excess were intentionally sold by him in order to meet t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant) had also received shares of SCCL in off-market from Mr. Mishra. Thus, it is apparent that some of the violators have been let off by recording a finding contrary to the facts on record. It is difficult to believe that dropping of the adjudication proceedings in case of some of the violators by recording findings which are contrary to the facts on record was an inadvertent error. 15. In these circumstances, the appellant is justified in contending that he is being victimized for approaching this Tribunal and that there is no reason to treat the appellant differently from other similarly situated violators. In our opinion, the course adopted by SEBI in the present case is detrimental to the interests of the securities market. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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