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1.
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 1 of 15
subsequently deleted them either after updating the price or after part
execution of the order.
2.
The Investigating Authority (IA) issued Summons dated June 16, 2004 to
ShriSanjeev Bansal(herein after referred to asNoticee)who was Director
in both Arihant Equity Fund Ltd and New Age Shares and Stock Brokers
Pvt. Ltdfor production of documents and personal appearance to ascertain
his role in the irregularities in the scrip of SRG.
3.
4.
Shri Satya Ranjan Prasad was appointed as the Adjudicating Officer (AO)
vide communication of proceedings dated 16.11.04 and consequent upon
the transfer of Shri Satya Ranjan Prasad, Shri A Sunil Kumar was
appointed as the AO vide communication of proceedings dated 09.04.2014
and 15.01.2015. Consequent to the transfer of Shri. A. Sunil Kumar,the
undersigned,
was
appointed
as
the
Adjudicating
Officer
vide
provisions of Section 11C(3), (5) and (6) of SEBI Act, 1992, by the
Noticee.
5.
6.
Noticee submitted his reply to SCN vide letter dated 11.01.2016and the
relevant portionsare reproduced hereunder:
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 3 of 15
That all the decisions were taken by Mr. Ashok Agarwal who forced
me to sign on the dotted lines. Sometimes he would ask his employee to
forge signatures.
That Arihant Equity belonged to Mr. Santosh Jain and Mr. Pramod
Jain. I was a director of the co. for a very short period of time.
That during the year 1999 I used to sign as per my signature in bank
documents (Annexure V), prima facie to the best of my knowledge and
memory I dont remember having signed the documents annexed as
annexure VII, VIII, and IX as they have been different sign than my
usual.
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 4 of 15
IMS for which orders were placed by him on behalf of the management
of UMNL.
7.
8.
Thus, the Noticee was provided with fair and reasonable opportunity to
beheard which he failed to avail and hence, I proceed with the matter on
the basisof the material available on record.
9.
I have carefully perused the written submissions of the Noticee and the
documents available on record. The issues that arise for consideration in
the present case are :
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 5 of 15
a)
Whether the Noticee had made incorrect statement before the IA and
whether he violated the provisions of section 11C(3), 11C(5)and
11C(6) of SEBI Act, 1992?
b)
c)
10.
Section 11C(3), 11C(5) and Section 11C(6) of the SEBI Act, 1992
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 6 of 15
11.
Against the backdrop of unusual price rise in the scrip of SRG from ` 9 to
` 20 and entering of large quantities of orders and subsequent deletion of
the same either after updating the price or after part execution of the order
by Arihant Equity Fund Ltd(now known as Universal Media Network Ltd)
and New Age Shares and Stock Brokers Pvt. Ltd who are the promoters of
SRG, Summons dated June 16, 2004 was issued to the Noticee who was
Director in both Arihant Equity Fund Ltd and New Age Shares and Stock
Brokers Pvt. Ltd for production of documents and personal appearance to
ascertain his role in the alleged irregularities.
12.
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 7 of 15
13.
14.
I find from the material available on record that the Depository account
opening form dated 28.05.1999, executed with Integrated Master
Securities (IMS) for the purpose of opening of trading account in the
name of Arihant Equity Fund Ltdbears the name of Shri Sanjeev Bansal as
the sole authorized signatory for operating the DP account and he also
signed the application form, signature card and DP agreement as the
Director of Arihant Equity Fund Ltd.I also find from the records available
that the Bank A/c No. 325052 was opened in the name of Arihant Equity
Fund Ltd on 20.01.1999 with the Bank of America with Sanjeev Bansal
and Pramod Jain as authorized signatories. It is also not in dispute that the
said Bank account was used for the trading activity in the scrip of SRG by
Arihant Equity Fund Ltd. I find from the letterdated 10.05.1999 signed by
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 8 of 15
15.
16.
Noticee has also submitted that all the decisions were taken by Mr. Ashok
Agarwal who acted with iron hands as per his whims and fancies. He
forced me to sign on the dotted lines and things like that. Sometimes he
would ask his employee to forge signatures. in addition to this he also
submitted that during the year 1999 I used to sign as per my signature in
bank documents (Annexure V), prima facie to the best of my knowledge
and memory I dont remember having signed the documents annexed as
annexure VII, VIII, and IX as they have been different sign than my
usual.The SCN in the present matter is limited to the chargesof false and
incorrect statement before the IA. Therefore, I do not find any relevance in
the said submissions.It is relevant to note that, in the SEBI order no.
WTM/TCN/ 46 /ID3/Sept /2008 dated 23.09.2008it was observed that
documents annexed to SCNs include application form, signature card,
DP agreement and a copy of delivery instruction and none of them are
signed by any other director apart from Mr. Sanjeev Bansal and the
same was not disputed by the Noticee.
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 9 of 15
17.
18.
Noticee has also submitted that the matter is related to the events in the
year 1998-2000, therefore there has been a significant lapse of time of
approx. 16-18 years. Delay in initiating the proceedings itself cannot be a
ground for discharging the Noticee.Under the SEBI Act, 1992 there is
nolimitation on initiation of adjudication proceedings.
19.
Now as regards the violation of section 11C (3), 11C (5) and 11C (6) of
SEBI Act, 1992, I note that section 11C (3) of SEBI Act, authorize the IA
to summon any person associated with securities market in any manner to
furnish such informations, documents, records etc. if the same are
considered relevant for the investigation. This section also authorizes the
IA to call upon the persons before him to provide the necessary or relevant
information for the purposes of its investigation. SAT has observed in the
matter of DKG Buildcon Pvt. Ltd. V/s SEBI, Appeal No. 106/2006, order
dated 07.01.2009 thatSection 11C of the Act was introduced with effect
from 29.10.2002 and sub-section (3) thereof provides that the
investigating authority may require any person associated with the
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 10 of 15
20.
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 11 of 15
21.
In view of the aforesaid discussions and findings, I find that the Noticee
made incorrect statement before the IA. It is settled position of law that
making a false statement or if the information furnished is incorrect or
misleading would amount tofailure to furnish the information sought and
thereby violative of section 11C(3) and (5) of SEBI Act, 1992. Reference
may also be made to SAT order dated 21.07.2011 in Appeal no. 54 of
2011 in Kemefs Specialties Pvt. Ltd V/s SEBI. The following is extracted
from the said order: We are inclined to agree with the learned counsel for the respondent that
if the information furnished is incorrect or misleading, the aforesaid
provisions would come into play and it could be said that the delinquent
had failed to furnish the required information.
Issue II Whether Noticee is liable for monetary penalty under section 15HB
of SEBI Act, 1992?
22.
It, would also be appropriate here to refer the provision of Section 15HB
of SEBI Act, as it existed at the relevant point of time, which reads as
under: -
24.
25.
For the reasons stated earlier I hold that the Noticee is liable for monetary
penalty under section 15HB of SEBI Act.
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 13 of 15
27.
I note that the material made available on record has not quantified the
amount of disproportionate gain or unfair advantage made by the Noticee
and the loss suffered by the investors as a result of the Noticee's default.
Also there is no material made available on record to assess the amount of
loss caused to investors or the amount of disproportionate gain or unfair
advantage made by the Noticee as a result of default. However, I am of the
view that making incorrect statement before the IA hampers the
investigation. The matter relates to investigation into the unusual price rise
of the Scrip from ` 9 to ` 20, an increase of 122%and the role of various
persons including the Noticee.Further, any delay or hurdle in investigation
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 14 of 15
ORDER
28.
After taking into consideration all the facts and circumstances of the
case,I, in exercise of the powers conferred upon me under Section 15I (2)
of the SEBI Act read with Rule 5 of the Adjudication Rules, hereby
impose a penalty of `1,00,000/- (RupeesOne Lakh Only) on the Noticee
i.e. Sanjeev Bansal.
29.
30.
In terms of rule 6 of the Rules, copies of this order are sent to the Noticee
and also to the Securities and Exchange Board of India.
S. V. Krishnamohan
Chief General Manager & Adjudicating Officer
Adjudication Order against Shri Sanjeev Bansalin the matter of SRG Infotech Ltd.Page 15 of 15