SEBI has directed Shailesh S Jhaveri and Harsha M Shah to collectively pay Rs2.72 crore for their involvement in fraudulent and unfair trade practices during preferential allotment of shares of Ojas Technochem Products in 2000
Mumbai: The Securities and Exchange Board of India (SEBI) has directed two individuals—Shailesh S Jhaveri and Harsha M Shah—to collectively pay Rs2.72 crore for their involvement in fraudulent and unfair trade practices during preferential allotment of shares of Ojas Technochem Products (OTPL) in 2000, reports PTI.
“The noticees namely Shailesh S Jhaveri and Harsha M Shah shall disgorge the unlawful gain of Rs60,72,000 each. In addition to the above, they shall also pay Rs75,31,111 each, being the simple interest at the rate of 12% per annum on the unlawful gain of Rs60,72,000, for the period of January 2000 to May 2010,” the regulator said in an order.
It has directed the duo to pay the total Rs2,72,06,222 within 45 days failing which they will be “restrained from buying, selling or dealing in securities market in any manner whatsoever or accessing the securities market, directly or indirectly.”
SEBI had earlier in 2007 barred Mr Jhaveri and Ms Shah from the market for two years for their involvement in the case.
Pursuant to that, the regulator had issued a show-cause notice in February 2008 to them asking why directions to disgorge the amount equivalent to the illegal profits should not be issued against them as a remedial measure, in order to protect the interest of the securities market and to prevent the noticees from retaining the ill gotten gains.
The show-cause notice alleged that the shares allotted to the noticees in the preferential allotment by OTPL on January 2000, were without actual infusion of funds by them as consideration.
Further, Mr Jhaveri and Ms Shah were found to have sold these shares subsequently at an average price of Rs10.12 per share, making illegal profits of over Rs1.21 crore.
After several adjournments, the two noticees filed their written submissions in December 2009 and again in March 2010.
After consideration of the submission, SEBI said that OTPL had made the preferential allotment for its 60 lakh shares in January 2000 and of these, six lakh shares each were allotted to Mr Jhaveri and Ms Shah.
“The sequence of events show that entities/persons viz., OTPL, the allottees in the preferential allotment, Top Cassettes and M/s Rajesh N Jhaveri were maintaining their bank accounts in the same bank at the same branch and all these bank accounts bear entries of transactions in relation to the preferential allotment by OTPL,” it said.
While stating that having accounts in the same branch cannot be co-incidental, SEBI also said that all cheques involved in the transactions were presented on the same day.
“The common date for presenting the said cheques also raised suspicion, as it appears that the entity that presented the cheque was aware of common funds moving from one account to another. The pattern of fund flow indicates deliberate efforts on the part of the controlling entity.
“These facts points that the bank entries were mere book entries and there was no actual fund transfer to OTPL for making the allotment to the noticees,” SEBI said.
The regulator said that the noticees have failed to produce documents showing their bank details or any communication regarding the preferential allotment.
“... find that the noticees had got the preferential allotment of shares without any consideration. Later on the noticees sold these shares in the market and made profits,” SEBI said in its order, adding that this amounted to employing fraudulent and unfair trade practices to get the shares and making unlawful gains by selling them.
As the matter is also before the Gujarat High Court, SEBI has stated that if Mr Jhaveri and Ms Shah furnish bank guarantees of Rs1,36,03,111 each within 45 days, the implementation of the order shall be kept in abeyance, as per the direction of the court.
The apex court asked the MLM company to deposit about Rs1,300 crore, the amout payable to investors and concerned authorities
NEW DELHI: The Supreme Court has directed the Singapore-based firm Speak Asia, accused of duping investors to the tune of Rs1,300 crore, to deposit before it the amount payable to investors and concerned authorities, reports PTI.
A bench of justices Dalveer Bhandari and Dipak Verma asked the mediator, appointed by it earlier, to ascertain the exact amount which is payable by Speak Asia to the investors and other authorities and directed the company to deposit the same within two weeks after that.
"We request the learned mediator to ascertain how much amount in fact is due and payable to the petitioners and other authorities.
"We direct the concerned respondents (Speak Asia) to deposit the amount indicated by the learned Mediator with the Secretary General of the Supreme Court within two weeks of the order of the learned Mediator," the bench said.
"All the parties would be at liberty to participate in the proceedings before the learned Mediator," it added.
The bench passed the order on a plea filed by a group of investors of Speak Asia for recovering their money. Around 115 investors, who had put their money in the firm, had filed a petition before the apex court last year.
The court had in October last year asked Speak Asia Online Pvt Ltd and its related company Haren Ventures Pvt Ltd to file an affidavit stating that in case of ascertaining financial liability by the Mediator the same would be paid by them.
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