TMI Blog2018 (6) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... sent 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 the liability of SCCL towards unsecured creditors. In such a case, merely debarring Mr. Mishra from accessing the securities market for 10 years and not even initiating penalty proceedings against Mr. Mishra who had collected crores of rupees by selling the unauthorized excess shares is wholly unjustified. When 17 entities including the appellant were found to have aided and abetted Mr. Mishra in off-loading the fraudulently dematted excess shares of SCCL to innocent investors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nu Mitra and Mr. AnubhavGhosh, Advocates i/b Desai Diwanji ORDER Per: Justice J.P. Devadhar (Oral) 1. Appellant is aggrieved by the order passed by the Adjudicating Officer ( AO for short) of Securities and Exchange Board of India ( SEBI for short) on 19.01.2018. By the said order penalty of ₹ 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Securities Market) Regulations, 2003 ( PFUTP Regulations for convenience). On appeal this Tribunal set aside the said ex-parte order and directed SEBI to pass fresh order on merits after hearing the appellant. 5. Accordingly, the appellant was heard and by the impugned order it is held that the appellant has violated the PFUTP Regulations and penalty of ₹ 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 ₹ 1 lac has been set aside by this Tribunal and remanded for fresh decision, SEBI is not justified in enhancing the penalty up to ₹ 16 lac. Secondly, having not taken any action against the depositories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Charman and Director of SCCL had dematted 29,24,500 shares after 23.02.2005 and sold the same on-market to the innocent investors through various entities including the appellant who received shares from Mr. Mishra in offmarket transactions. It is also recorded that Mr. Mishra had transferred 41,31,000 shares of SCCL in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of some of the entities involved in the present case (eg. In the case of Narendra M. Patel and Umesh H. Patel) the adjudication proceedings have been dropped by recording a specific finding that they had not received shares of SCCL in off-market from Mr. Mishra. In fact, the investigation report specifically records that those two persons (like the 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
