The SEBI has been continuously conducting surveillance of functions and actions of stock exchanges and operations of intermediaries. The SEBI undertakes investigations to trace the facts associated with anomalies noticed in the functioning of companies and intermediaries in the capital market. The decisions and judgement of the SEBI are announced publically.
Orders passed by High Court of Mumbai in the writ petition filed by Shri J.C. Parekh, former President of BSE.
The Appellate Authority i.e. Central Government in the appeal filed by Shri J.C. Parekh former President, BSE vide its order dated 9.4.99 upheld the order of SEBI dated 23.3.99 directing Shri J.C. Parekh to reliquish the office of President of BSE and that he shall not be eligible to hold any public position in future as the member of governing Board and office bearer of the exchange as well as any capital market related public institution for a period of 3 years and dismissed the appeal filed by Shri J.C. Parekh.
Shri J.C. Parekh filed a writ petition in the Bombay High Court interalia challenging the said order of the Appellate Authority dated 9.4.99 and also made a prayer for stay of the SEBI order till the writ petition is finally heard. Shri Soli Sorabjee, Attorney General of India, representing SEBI opposed grant of any interim relief, in view of concurrent findings of two authorities and that the allegations which have been found proved against Shri Parekh are of serious nature. He further submitted that directions issued by the SEBI were in the interest of fostering investor confidence and for promoting transparency and the integrity in the functioning of capital market and was justified in the circumstances of the case. The Honorable Division Bench of Mumbai High Court consisting of Mr. Justice N.J.Pandya and Hon’ble Mr. Justice SS Parkar, while admitting the writ petition on 20.04.99 refused to grant any interim relief. The interim relief granted to Mr Parekh on 8th April 1999 permitting him to act as Director without any power till 19.4.99, has not been extended and stands vacated. Shri J.C. Parekh, therefore, cannot act as Director of BSE Governing Board and will not be eligible to hold any public position in capital market related public institution as per SEBI order dated 23.3.99. The Hon’ble Court directed that the vacancy created on BSE Governing Board on account of operation of SEBI order should not be filled up by BSE till the writ petition is finally heard.
Investigations of Kamakshi Housing and Finance Ltd.
The SEBI initiated investigations into the alleged price manipulation in the scrip of Kamakshi Housing and Finance Ltd. (KHFL) specially during the period December 04, 1995 to February 28, 1996 when price of the scrip had moved from Rs. 24/- to Rs. 310/-. Investigations revealed that Mr. Dipak Dalal of M/s. Asian Finstock Ltd., Mr. Mihir Ghelani of Mohan Investment and
Mr. Yogesh Ruparel of R. K. Investments had dealt in the said scrip with an intention to manipulate the prices of the said share. It was found that Mohan Investment and Asian Finstock Ltd. were related to each other and had cornered large quantity of shares through R. K. Investment, which caused an artificial spurt in the price of the scrip. Thus, these entities were responsible for creating a false market and artificial rise in the price of the scrip. A notice was issued to them to show cause as to why appropriate actions prohibiting them from further dealing in the securities market should not be issued under Regulation 11 read with Regulation 12 (a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, read with Section 11 (B) of SEBI Act, 1992. They were also given an opportunity to appear before the Chairman SEBI for personal hearing, which was availed only by Mr. Yogesh Ruparel of R. K. Investments. After carefully examining the records and other relevant material, SEBI has passed an order prohibiting these entities from dealing in securities in any manner for a period of two years w.e.f. April 06, 1999.
Investigations of M/s. Loggar Finance & Trading Ltd
M/s. Loggar Finance & Trading Limited
came out with its maiden public issue for 60,00,000 equity shares of Rs.10/-
each during January 1997. The SEBI therefore, conducted enquiries into
the affairs of M/s.Loggar Finance & Trading Ltd as complaint was received
regarding irregularities in the public issue. However, investigations prima
facie revealed that the promoters did not genuinely bring in their contributions
and the same was brought in by means of transfer entries. Moreover, an
illusion was created by promoters regarding subscription in the public
issue of the company by way of financing arrangements. The company has
already refunded the subscription amount received from the public. Pursuant
to investigation a show cause notice was issued to M/s. Loggar Finance
& Trading Ltd and its promoters Shri. Kumar Shah and Shri Kirtibhai
Shah. An opportunity for personal hearing was also granted. Based on oral
submissions, documents and evidence on record, the SEBI has issued directions
against the aforesaid entities debarring them from accessing the capital
market for a period of one year.
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