2006 (8) TMI 672

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....acts of the case are that the Securities and Exchange Board of India ('the Board') had initiated an investigation into the violations alleged to have been committed by various entities in the process of allotment of shares of one Design Auto Systems Ltd. (DASL) on swap and preferential basis. Violations of various provisions of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 and Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 were also alleged. The Board's findings reveal that the appellant had been allotted 10 crore shares of DASL at par value on a preferential swap basis on 29-10-2001. The said allotme....

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....shares of DASL allotted to the appellants were not listed on the Bombay and Ahmedabad stock exchanges. However, these shares were dematerialized at the Central Depository Services (India) Ltd. (CDSL) even though these were not listed on the Bombay and Ahmedabad stock exchanges. The price of the scrip of DASL was Rs. 4.25 as on 12-10-2001 and moved up to Rs. 11.20 on 7-11-2001, i.e., just prior to the date when these 10 crore unlisted shares were dematerialized. 4. While the learned counsel for the respondent mentioned that about two crore unlisted dematerialized shares were released in the market by the appellant, the learned counsel for the appellant admitted that the appellant had directly released about 1 crore shares and another bloc....

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....ng officer. By the writ petition the appellant had challenged the jurisdiction of the Board. However, the writ petition was dismissed in March, 2005 and the appellant was directed by the Hon'ble High Court of Madhya Pradesh to co-operate with the investigating authority. The investigating authority had issued a series of summons subsequently but the appellant did not respond to the summons or comply with them. As such, the appellant rendered itself liable for a penalty under section 15A of the Act for the failure to comply with the summons issued under section 11C by failing to furnish the details and information and also to appear in person before the investigating authority. Section 15A of the Act provides that in case of failure to furni....