Case: 1. SEBI, 2. In Re: Uflex Limited (earlier known as Flex Industries Limited) Vs Anshika Investments Private Limited (earlier Known as Boeing Investment Private Limited) and its Director, Mr. Ashok Kumar Chaturvedi. Securities and Exchange Board of India
| Judges | K.M. Abraham, Member |
| Issue | Securities and Exchange Board of India Act, 1992 - Sections 11, 19; Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 - Regulation 11 |
| Judgement Date | January 27, 2009 |
| Court | Securities and Exchange Board of India |
Order:
K.M. Abraham, Member
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It was brought to the notice of Securities and Exchange Board of India (hereinafter referred to as SEBI) that there was unusual price increase in the shares of Flex Group of Companies namely, Flex Industries Limited (now known as UFLEX Limited), FCL Technologies and Products Limited and Flex Engineering Limited during 2000-2001. The shares of Flex group companies are listed on Bombay Stock Exchange Limited (hereinafter referred to as BSE), National Stock Exchange of India Limited (hereinafter referred to as NSE) and Delhi Stock Exchange Association Limited (hereinafter referred to as DSE). During the course of investigation, it was observed that majority of trades in the shares of Flex group companies were traded at NSE. The investigation conducted by SEBI inter alia observed that M/s Boeing Investment Private Limited (now known as Anshika Investment Private Limited) traded for 1,50,000 shares of M/s Flex Industries Limited (hereinafter referred to as the company) through the stock broker namely, M/s Frontline Capital Services Limited (Member, NSE) on January 5, 2001, by way of structured deal @ Rs. 35.60/- per share. It was alleged that M/s Boeing Investment Private Limited was introduced to the aforesaid stock broker by its promoter director, namely, Mr. Rakesh Kumar Jain (who had earlier served as the director of the company). The investigation conducted by SEBI observed that the payment of Rs. 53,71,815 in respect of the above mentioned trade was made to the stock broker on January 17, 2001. It was found that the current account No. 0032000010067 (belonged to M/s Boeing Investment Private Limited maintained with HDFC Bank, Kasturba Gandhi Marg, Delhi Branch) was credited with an amount of Rs. 54,00,000 on January 17, 2001 by way of a cheque (No. 422693) from the account (No. 00311000107452) of its director namely, Mr. Ashok Kumar Chaturvedi maintained in the same branch. In the facts and circumstances, it was prima facie observed that M/s Boeing Investment Private Limited was not having sufficient balance in its accounts to meet the purchase obligation of 1,50,000 shares. In addition, account No. 00311000107452 which belonged to Mr. Ashok Kumar Chaturvedi was inter alia credited with an amount of Rs. 54,09,541.57 on January 17, 2001 from the account No. 228500062 (belonged to M/s Frontline Capital Services Limited). In the facts and circumstances, it was prima facie appeared that Mr. Ashok Kumar...
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