TMI Blog2020 (5) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... his and the facts of the matter, we are of the view that the amount of penalty at the rate of ₹ 10 lakh on this violation is on the higher side particularly when the appellant did provide part of the information readily available with them. Non-reporting of the variations relating to the proceeds/funds raised through preferential allotment- It is an admitted fact that, during the interim, part of the funds were loaned out to various entities. Even if these funds have come back subsequently and in some cases with interest the matter needed to be disclosed to the Stock Exchange in terms of the requirements of Section 21 of SCRA and clause 43 of the Listing Agreement which has not been done. Note from paragraph 23 of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Vide the order impugned in this appeal issued by the Adjudicating Officer ( AO for convenience) of the Securities and Exchange Board of India ( SEBI for convenience) on February 26, 2019 a total penalty of ₹ 30 lakh has been imposed on the appellant. Out of this ₹ 10 lakh has been imposed under section 15A(a) of the SEBI Act, 1992 for violation of Sections 11(2)(i) and 11C(3) of the SEBI Act and ₹ 20 lakh has been imposed under section 23E of Securities Contracts (Regulation) Act, 1956 ( SCRA for convenience) for violation of Section 21 of the SCRA read with clause 43 of the Listing Agreement. Aggrieved by these directions this appeal has been filed. 2. The appellant Radford Global Limited ( RGL ) is a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds of the preferential allotment were found to be transferred to various entities in the form of loans and advances, advance against property etc. After giving time to file reply to the show cause notice, opportunity of hearing, inspection of documents etc. the impugned order has been passed on February 26, 2019. 4. It is the contention of the learned counsel for the appellant Shri Jaikishan Lakhwani, that whatever documents available with the appellant were provided to SEBI in response to the notice of summons as well as seeking information. Further it was contended that though the period of preferential allotment was during 2012 the AO had asked documents much prior to the same, even as old as 20 years, which were not available t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d through the preferential allotment. 6. We have also heard the learned counsel for the respondent SEBI, Shri Vishal Kanade, who reiterated the findings in the impugned order and contended that investigation suffered on account of appellant's non-cooperation. 7. The relevant questions to be considered are whether the appellant has violated provisions of Section 11C(3) of the SEBI Act by its non-compliance of summons issued by SEBI and whether clause 43 of the Listing Agreement has been violated by not disclosing to the Stock Exchange the alleged variations between the projected utilization of funds and the actual utilization of funds raised through the preferential allotment. These Sections are produced for convenience below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the appellant company. Moreover, the impugned order in paragraph 19 has clearly articulated how non-submission of certain information by the appellant has hampered the investigation into market manipulation by some entities such as Manisha Jayesh Shah and Artiben S. Kansara etc. At the same time, we note that investigation was relating to the period 2012-2014 and documents were sought in 2017 for periods much prior to 2012. Therefore, though the appellant may be charged with non-submission of full information the submission of the appellant that the management of the appellant was new etc. has to be given some weightage while imposing the penalty. Given this and the facts of the matter, we are of the view that the amount of penalty at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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