Case: 1. SEBI, 2. In Re: Pyramid Saimira Theatre Limited Vs Mr. Rajesh jayantilal Shah and Ors.. Securities and Exchange Board of India
| Judges | K.M. Abraham, Member |
| Issue | Company Law |
| Judgement Date | December 14, 2009 |
| Court | Securities and Exchange Board of India |
Order:
K.M. Abraham, Member
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The Securities and Exchange Board of India (hereinafter referred to as SEBI), vide an ex-parte ad interim order dated April 23, 2009, in the matter of Pyramid Saimira Theatre Limited (hereinafter referred to as PSTL), inter alia directed Mr. Rajesh Jayantilal Shah, Mr. Shailesh Jayantilal Shah, Mr. Nirmal Rohitbhai Shah, Mrs. Binaben Shaileshkumar, Mrs. Ritaben Rohitkumar Shah and Mrs. Manishaben Rajeshkumar Shah (all the aforesaid persons shall henceforth be referred to as the noticees collectively and individually by their respective names) not to buy, sell or deal in the securities market including in Initial Public Offerings (IPOs) directly or indirectly, till further directions. Mr. Nirmal Rohitbhai Shah, vide letter dated May 12, 2009, on behalf of himself, Mrs. Binaben Shaileshkumar, Mrs. Ritaben Rohitkumar Shah and Mrs. Manishaben Rajeshkumar Shah, inter alia stated that he was doing sub broking business and was assisting his parents, uncles and aunts in trading and investment activities. He stated that none of his family members had received any amount of Mr. Nirmal Kotecha and that they had not assisted him in any manner. He further stated that apart from their family transactions, all the transactions in the shares of PSTL were undertaken through the firms of the sub-broker. Further, vide letter dated June 1, 2009, Mr. Nirmal Rohitbhai Shah requested to revoke the directions issued against him.
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Mr. Shailesh Jayantilal Shah, vide letter dated May 12, 2009 inter alia stated that he was a registered sub broker affiliated to J.M. Financial Services Private Limited. It was stated that he had met Mr. Nirmal Kotecha in a religious ceremony at Rajkot and thereafter, Mr. Nirmal Kotecha had become his client. He contended that the loan of Rs. 10,00,000/- was requested from Mr. Nirmal Kotecha to pay the fees for his nephew, Mr. D.R. Shah, who had been admitted to the University of Exeter. While acknowledging the receipt of Rs. 10,00,000/- from Mr. Viral Doshi, he submitted that he was not aware that the same was transferred to the account of Mrs. Viral Doshi from that of Mr. Nirmal Kotecha's bank account. Mr. Shailesh Jayantilal Shah submitted that British Pounds (£) were purchased out of Rs. 6,67,966/- to pay the fees for his nephew. He also stated that he had transferred Rs. 3,00,000/- on October 18, 2008 to his account maintained with the State Bank of India (Surendranagar Branch). According to Mr. Shailesh Jayantilal Shah, during November, 2008 he had transferred Rs. 1,20,000/- from his account maintained with the State Bank of India account to his account in the HDFC Bank, which was finally used for the purchase of pounds. He further stated that Rs. 1,42,000/- was transferred on November 28, 2008 and used for office expenses and that the balance amount of Rs. 70,000/- was also utilized in routine office expenses and personal expenses. He claimed that Rs. 10,00,000/- was repaid to Mrs. Viral Doshi in three tranches of Rs. 4,00,000/-, Rs. 5,00,000/- and Rs. 1,00,000/- on December 26, 2008, December 27, 2008 and December 31, 2008, respectively. With regard to the repayment, Mr. Shailesh Jayantilal Shah submitted that Rs. 4,00,000/- paid on December 26, 2008 to Mrs. Viral Doshi was from the amount earned as sub brokerage from J.M. Financial Services Private Limited. It was further stated that Rs. 5,00,000/- and Rs. 1,00,000/- was transferred to Mrs. Viral Doshi on December 27, 2008 and December 31, 2008 respectively, the said amounts being received from one of their associate, M/s. Tejas Cotton Co. With respect to the cash deposits seen in his bank account, Mr. Shailesh Jayantilal Shah submitted that all such deposits were legitimate and accounted for. He further contended that his transactions were not concerned with the purchase and sale of shares of PSTL by Mr. Nirmal Kotecha. In respect of his trading in the shares of PSTL, Mr. Shailesh Jayantilal Shah had submitted that he had been trading in various scrips including that of PSTL. He claimed that his purchase...
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