Appeal No.93 of 2013. Case: Parag Vanijya Pvt. Ltd. Vs Securities and Exchange Board of India. Securities and Exchange Board of India
| Case Number | Appeal No.93 of 2013 |
| Counsel | For the Appellant: Mr. S.K. Jain, Advocate with Mr. Jagannath Kar, Practising Company Secretary and For the Respondents: Mr. Prateek Seksaria, Advocate with Mr. Mihir Mody and Mr. Akhilesh Singh, Advocates |
| Judges | Jog Singh, Member & Presiding Officer (Offg.) A.S. Lamba, Member |
| Issue | Securities and Exchange Board of India - Sections 11C(2), 11C(3), 15A(a) |
| Judgement Date | July 01, 2013 |
| Court | Securities and Exchange Board of India |
Order:
Jog Singh (Oral)
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The present appeal has been filed against an order dated February 28, 2013 passed by the Adjudicating Officer imposing a penalty of Rs.5,00,000 on the appellant under section 15A(a) of the SEBI Act, 1992 for violation of sections 11C(2) and 11C(3) of the SEBI Act.
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Brief facts leading to the case are as follows. M/s. Parag Vanijya Private Limited (the appellant) is a private company limited by shares duly registered under the Companies Act, 1956. Mr. Joyanta Majumdar and Mr. Gautam Ghosh were the promoter directors of the appellant company since incorporation. Due to change in management of the appellant company, Mr. Manish Dalmia and Mr. Girish Dalmia were appointed on May 03, 2010 as promoter directors of the appellant company. Thereafter, Mr. Joyanta Majumdar and Mr. Gautam Ghosh resigned from the Board on June 14, 2010.
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Securities and Exchange Board of India (SEBI) received a reference from the Income Tax Department (ITD), containing certain findings in the matter of Murli Industries Limited (MIL). It was stated in the said reference that ten entities were holding substantial shares of MIL and the affairs of the ten companies were being looked after by Mr. Amit Raja, Chartered Accountant, who happened to be their auditor. The ITD had found certain documents suggesting manipulation in the share price of MIL. The reference stated that the following ten private limited companies were found to be dummy companies incorporated by MIL which had together cornered a large part of the shareholding of MIL.
i. Ambaji Papers Private Limited (Ambaji)
ii. Inco Infrastructures Private Limited (Inco)
iii. Kanhaiya Mining And Minerals Private Limited (Kanhaiya)
iv. Krishnum Investments Private Limited (Krishnum)
v. Lakhi Packaging Private Limited (Lakhi)
vi. Ramji Agri Business Private Limited (Ramji)
vii. Ramkrishna Fabrication and Machineries Private Limited (Ramkrishna)
viii. Runicha Alloys And Steel Private Limited (Runicha)
ix. Simple Mining And Power Private Limited (Simple)
x. Taitan Management Services Private Limited (Taitan)
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The reference made by the ITD stated that none of the dummy companies had proper offices and that the directors of these dummy companies were of no means to carry out huge transactions running into millions of rupees.
As per the said reference, ITD conducted survey under Section 133A of the Income Tax Act, 1961 at the premises of the dummy companies and found that the companies were not...
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