TaxTMI 
TaxTMI 
2016 (7) TMI 1660
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....he shareholding pattern in GIPL for the quarters ending June 2013; September 2013 and December 2013 [Source-Bombay Stock Exchange ("BSE") website], were as follows - June 2013 September 2013 December 2013 No. of Shareholders No. of Shares % No. of Shareholders No. of Shares % No. of Shareholders No. of Shares % Promoter 2 550400000 74.98 2 550400000 74.98 2 550400000 74.98 Non-Promoter 38364 183626438 25.02 37996 183626438 25.02 37625 183626438 25.02 Total 38366 734026438 100 37998 734026438 100 37627 734026438 100 iii. At the relevant time, GIPL was promoted by Gammon India Limited ("GIL") [71.93%] and Gactel Turnkey Projects Limited (subsidiary of GIL) [3.05%]. iv. Shri Abhijit Rajan was the Chairman and Managing Director ("CMD") of GIPL till September 20, 2013, when he resigned from the post of CMD. However, Shri Abhijit Rajan continued to be on the Board of GIPL even after the said resignation. v. In the year 2012, - • GIPL was awarded a road project by National Highways Authority of India ("NHA....
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....n with termination of the SHAs, wherein it was observed that communication regarding modifications in the draft Termination Agreement had continued between GIPL and Simplex upto August 9, 2013 i.e. date of Board meeting where a decision for termination of SHAs was taken. Further, vide the e-mail dated June 21, 2014, GIPL forwarded extracts of minutes of the Board Meeting of August 9, 2013, confirming that Shri Abhijit Rajan attended and chaired the said meeting. xiii. It was prima facie concluded that - • The UPSI i.e. termination of the SHAs dated April 26, 2012, entered into between GIPL and Simplex, came into existence during the second week of July 2013 and remained unpublished till September 3, 2013 i.e. date on which the said information was disclosed by GIPL to NSE & BSE. • As the CMD of GIPL, Shri Abhijit Rajan was reasonably expected to have had access to the UPSI from the second week of July 2013. In any case, Shri Abhijit Rajan came in possession of the UPSI at least on August 9, 2013, when the Board of Directors of GIPL approved termination of SHAs. • The sale of shares in GIPL, by Shri Abhijit Rajan on August 22, 2013, wa....
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....d upon me under Sections 11(1), 11(4) and 11B of the SEBI Act read with Section 19 thereof, hereby confirm the directions issued in respect of Mr. Abhijit Rajan vide Ad-Interim Ex-Parte Order dated July 17, 2014 ..." Securities Appellate Tribunal's Order dated February 4, 2016 - 1.5 Shri Abhijit Rajan challenged the abovementioned Confirmatory Order before the Hon'ble Securities Appellate Tribunal ("SAT") in Appeal no. 326 of 2015. The Hon'ble SAT disposed of the aforesaid Appeal vide an Order dated February 4, 2016, with the following directions - "2. Counsel for SEBI, on instruction, states that investigation in the present case is complete and the SEBI would issue a show-cause notice to the Appellant within a period of two months from today and pass final order thereon within a period of two months from the date of the Appellant filing a reply to the show-cause notice. The statements made by the Counsel for SEBI is accepted. 3. ... Counsel for the Appellant seeks to withdraw the appeal ... 4. Accordingly, appeal is allowed to be withdrawn ..." SEBI's Order dated March 21, 2016 - 1.6 Subsequent to completion of Investigation, the following d....
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....f the SEBI Act, 1992, hereby order to impound the alleged unlawful gains of a sum of Rs.1,44,37,670/- (alleged gain of Rs.1,10,23,658 + interest of Rs.34,14,012 from August 23, 2013 upto March 21, 2016), jointly and severally from the persons/entity tabulated in the paragraph above." 1.7 In compliance with paragraph 15 of the abovementioned Order, Shri Abhijit Rajan informed SEBI (vide letter dated April 14, 2016) that he had deposited an amount of approximately Rs.1.09 Crores in an account 'SEBI Escrow A/c Abhijit Rajan (A/c No. 50330382173)' with Allahabad Bank. Similarly, vide letter dated April 15, 2016, CICPL informed SEBI that it had deposited an amount of approximately Rs.35.24 Lakhs in an account 'SEBI Escrow A/c Consolidated Infrastructure Co. Pvt. Ltd. (A/c No. 50330378961)' with Allahabad Bank. Show Cause Notice dated March 29, 2016 - 2.1 During the intervening period, SEBI issued a Show Cause Notice ("SCN") dated March 29, 2016, to Shri Abhijit Rajan; CICPL and its Directors i.e. Shri Kiran Indru Hingorani and Shri Indru B. Hingorani, calling upon the said entities to show cause as to why suitable directions under Sections 11(4) and 11B of the SEBI Act includin....
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....corporate development. Further, as per the Code of Conduct of GIPL framed under PIT Regulations, 1992, inter alia "any significant changes in policies, plans or operations of the company" is a deemed price sensitive information. Hence, it is revealed that the corporate announcement dated September 3, 2013, pertaining to termination of tie-up with Simplex was a price sensitive information. PERIOD OF UPSI Second Week of July 2013 i.e. July 8, 2013 - September 2, 2013. The price sensitive information came into existence during the second week of July, 2013, wherein through telephonic discussions, the termination of the tie-up between Simplex and GIPL, was discussed. However, since no exact date was provided by GIPL, UPSI was taken to have existed since the first day of the second week of July, 2013 i.e. July 8, 2013. PSI PUBLICATION DATE September 3, 2013 iv. The trading details of Shri Abhijit Rajan and CICPL before and during the Investigation Period, are given below - Before UPSI Period (July 1, 2013 to July 7, 2013) Client Name Buy Quantity Sell Quantity Sell Date Net Abhijit Rajan 0 0 NA....
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....entered into transactions in the scrip of GIPL. The price sensitive information was made public on September 3, 2013. Shri Abhijit Rajan could have sold shares on any day after September 4, 2013, if there was indeed any urgency to infuse funds. Therefore, it was alleged that Shri Abhijit Rajan sold the shares prior to the announcement of termination of SHAs being made public on September 3, 2013, to avoid any loss that may arise on account of possible adverse impact of the announcement on the price of the scrip of GIPL. vii. CICPL sold approximately 28.57 Lakh shares during the UPSI period. In its letter dated September 2, 2015, CICPL stated that they were introduced to Shri Abhijit Rajan around August, 2013. CICPL had acquired several properties from Shri Abhijit Rajan for an aggregate consideration of approximately Rs.5.15 Crores on August 28, 2013. However, neither Shri Abhijit Rajan nor CICPL showed any kind of urgency to register the sale of those properties. The demat statements of CICPL notes that the shares of GIPL in CDSL were pledged with India Infoline Finance Ltd. in 2011 and again in 2012 and CICPL decided to un-pledge and sell shares of GIPL. In view of the t....
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....i Abhijit Rajan filed his reply vide letter dated April 22, 2016; ii. CICPL and its Directors i.e. Shri Kiran Indru Hingorani and Shri Indru B. Hingorani, filed their reply vide letter dated May 24, 2016. 3.2 In conformity with the principles of natural justice, an opportunity of personal hearing was granted as under - i. To Shri Abhijit Rajan on May 12, 2016; ii. To CICPL and its Directors i.e. Shri Kiran Indru Hingorani and Shri Indru B. Hingorani, on May 27, 2016. 3.3.1 For the hearing held on May 12, 2016, Shri Abhijit Rajan appeared before me through his Advocates. During the aforementioned hearing, Shri Abhijit Rajan was directed to submit the following information, viz. - i. Explanation for the source of funds indicated at paragraph 12.1 of the SCN i.e. details of amounts infused by Shri Abhijit Rajan in GIL, the parent company of GIPL, as part of the CDR Scheme. 3.3.2 Shri Abhijit Rajan submitted the abovementioned information alongwith written submissions vide letter dated May 16, 2016. 3.4.1 For the hearing held on May 27, 2016, CICPL and its Directors appeared before me through their Advocates. During the aforementioned hea....
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....; additional submissions (both written and oral) made by them during the personal hearing before me alongwith the documents submitted by them and all other relevant material available on record. In light of the same, I shall now proceed to deal with the merits of the case. 4.2 The issues for determination in the instant proceedings are as under - i. Whether the information regarding the termination of SHAs entered into between GIPL and Simplex, was a price sensitive information? ii. Whether Shri Abhijit Rajan comes under the definition of 'insider' as per Regulation 2(e)(i) of the PIT Regulations, 1992? iii. Whether the trades executed by Shri Abhijit Rajan in the scrip of GIPL during the Investigation Period were done while in possession of UPSI i.e. the termination of SHAs entered into between GIPL and Simplex? By doing so, whether Shri Abhijit Rajan avoided any potential loss? iv. Whether CICPL is a connected person to GIPL (through Shri Abhijit Rajan) in terms of Regulation 2(c)(ii) of the PIT Regulations, 1992? Whether Shri Abhijit Rajan communicated the price sensitive information regarding termination of SHAs entered into between GIPL a....
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....gulations made thereunder; 4.4 The aforementioned provisions of the PIT Regulations, 1992, were repealed by the PIT Regulations, 2015. However, as per Regulation 12(2)(a) of the PIT Regulations, 2015, the previous operation of the PIT Regulations, 1992 or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the repealed regulations, any penalty, forfeiture or punishment incurred in respect of any offence committed against the repealed regulations, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, shall remain unaffected as if the repealed regulations had never been repealed. Further, as per Regulation 12(2)(b) of the PIT Regulations, 2015, anything done or any action taken or purported to have been done or taken including any adjudication, enquiry or investigation commenced or show cause notice issued under the repealed provisions of PIT Regulations, 1992, prior to such repeal, shall be deemed to have been done or taken under the corresponding provisions of PIT Regulations, 2015 (i.e. Regulation 12 ....
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....he information in question had a material bearing on the price of the shares of GIPL, when such re-alignments for an infrastructure company are in ordinary course of business. [Gujarat NRE Mineral Resources Limited vs. SEBI (Order dated November 18, 2011); Anil Harish vs. SEBI (Order dated June 22, 2012)] iv. In the instant case, the termination of the SHAs had two consequences: (i) it resulted in GIPL acquiring exclusive control of the larger project worth Rs.1648 Crores and (ii) GIPL exited Simplex's project of Rs.940 Crores in which GIPL had invested only Rs.4.9 Crores i.e. just 0.5% of the value of Simplex's project. This sum of Rs.4.9 Crores represented less than 0.05% of GIPL's order book value as at the end of August 2013 and only around 0.7% of its turnover for the year ending March 31, 2013. GIPL's exclusive control over its own project meant that the benefits from the project would accrue exclusively to GIPL. These are hardly capable of being regarded as material exposures by any reasonable man. Therefore, the termination of the SHAs cannot be regarded as information adverse to GIPL, much less, even material to GIPL. v. GIPL itself did not regard the inf....
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....o do so would be a violation of the principles of natural justice." 5.1.3 CICPL's replies to the allegations contained in the SCN - Vide letter dated May 24, 2016 and also through oral submissions made during the hearing held on May 27, 2016, CICPL made the following submissions - i. "At the threshold, a foundational element for a charge of insider trading to be levelled is that there has to be UPSI i.e. information that can be said to have a material impact on the price of the securities, if published. That foundational element, as is evident from the SCN itself, is absent. As borne out by the price movement of the scrip on September 3, 2013, when the purported UPSI was published there was in fact a negligible increase in the price by 10 paise followed by a decline of 0.30 paise, which can by no stretch be considered material. CICPL adopts the arguments made by Mr. Rajan in this regard." Findings - 5.1.4 As stated earlier at paragraph 1.2(v)-(vi), GIPL was awarded a road project in Andhra Pradesh in the year 2012, by NHAI, for a total cost of Rs.1648 Crores. Similarly, in that same year, Simplex was awarded a road project by NHAI in Jharkhand and West Bengal f....
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....;6.85 6.55 6.78 NSE Volume 40572 BSE Volume 15413 4.09.2013 O H L C NSE (Rs.) 6.8 7.5 5.55 6.5 BSE (Rs.) 6.5 6.85 6.05 6.63 NSE Volume 72549 BSE Volume 23647 On the day of the announcement, the scrip closed marginally higher at Rs.6.8 (increase of Rs.0.10) on NSE. On the subsequent day i.e. 4.09.2013, the closed price of the scrip fell to Rs.6.5 (decrease of Rs.0.30 on previous close). There was also an intraday low of Rs.5.55 on NSE. The volume of shares traded on NSE and BSE increased on the day subsequent to announcement. 5.1.8 In terms of clause (vii) of the Explanation to Regulation 2(ha) of PIT Regulations, 1992, which is reproduced as under, any information pertaining to significant changes in policies, plans or operations of the company, which relates directly or indirectly to a company and which if published is likely to materially affect the price of securities of company, shall be deemed to be price sensitive information. - "Price sensitive info....
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....er appropriate nor correct. On the contrary, a more reasonable comparison would be the turnover expected from the Simplex Project vis-à-vis turnover for the year ending March 31, 2013. 5.1.11 Shri Abhijit Rajan has also contended that the termination of the SHAs had two consequences: (i) it resulted in GIPL acquiring exclusive control of the larger project worth Rs.1648 Crores (through acquisition of a further 49% equity interest from Simplex) and (ii) GIPL exited Simplex's project of Rs.940 Crores. Shri Abhijit Rajan has also submitted that the development resulting from the termination of SHAs rather than being a negative, may have been beneficial to GIPL since it acquired 100% equity interest in the GIPL Project. Further, during the personal hearing before me, Shri Abhijit Rajan submitted that the GIPL Project worth Rs.1648 Crores was indeed operational at the relevant time as opposed to the Simplex Project, which was yet to take off. The price movement in the scrip of GIPL showed a small increase of Rs.0.10 paise (refer to table at paragraph 5.1.8 at page 19). If the price movement in the scrip of GIPL for September 4, 2013, is considered, a decrease of Rs.0.30 paise ....
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....by Shri Abhijit Rajan on August 22, 2013, the position regarding price sensitive information does not change even if the date is considered as August 9, 2013 and the price sensitive information was revealed to the market only on September 3, 2013. Further, as borne out from paragraph 5.1.9, it is evident that the price sensitive information did come into existence during the second week of July, 2013, during which period the termination of the tie-up between Simplex and GIPL, was discussed. As the CMD of GIPL, Shri Abhijit Rajan would surely have been aware of the aforesaid discussion. Since no exact date was provided by GIPL, the UPSI is deemed by SEBI to have existed since the first day of the second week of July, 2013 i.e. July 8, 2013. 6.1 Whether Shri Abhijit Rajan comes under the definition of 'insider' as per Regulation 2(e)(i) of the PIT Regulations, 1992? Findings - 6.1.1 Shri Abhijit Rajan was the CMD of GIPL during the Investigation Period. A meeting of the Board of Directors of GIPL was held on August 9, 2013, wherein a resolution authorizing the termination of the SHAs entered into between GIPL and Simplex, was passed. The said meeting was admittedly attend....
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....y, GIL, of which I was a Promoter. ii. In March 2013, GIL with 37500 public shareholders, had a substantial debt burden of upto Rs.14000 Crores owed to leading public financial institutions. As GIL's financial position was precarious and it was on the verge of bankruptcy, there was a possibility of lenders invoking provisions of SARFAESI Act, 2002 and declaring GIL a non-performing asset. Such a course of action would have been detrimental to the interests of all the stakeholders of GIL and GIPL, especially the public shareholders of the two companies since it would have entailed change in management of GIL and GIPL and assets of GIL being sold to recover dues owed to its creditors. iii. Accordingly, GIL proposed a debt restructuring package to its lenders in March 2013 under the aegis of the guidelines issued by the RBI. ... On June 29, 2013, the Empowered Group of Lenders ... approved the debt restructuring proposal (CDR Scheme) subject to GIL and its Promoters complying with certain conditions. ... iv. The CDR Scheme envisaged that Rs.100 Crores would be infused by the Promoters of GIL. The CDR Scheme provided that this amount was to be infused into GI....
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....f the SHAs, I ought to have bought shares of GIPL and not sold them. This would have been the common and expected course of human conduct. [Mrs. Chandrakala vs. SEBI (Appeal no. 209 of 2011) - "...where an entity is privy to unpublished price sensitive information it will tend to purchase shares and not sell the shares prior to the unpublished price sensitive information becoming public if the information is positive. ... A person who is in possession of unpublished price sensitive information which, on becoming public is likely to cause a positive impact on the price of the scrip, would only buy shares and would not sell the shares before the unpublished price sensitive information becomes public and would immediately offload the shares post the information becoming public.] ix. My trading was contrary to the positive nature of the information which establishes that the charge that the Sale Transaction was motivated by possession of UPSI is untenable. x. ... I liquidated approximately 70% of my holding in GIPL on a single day. This clearly evidences that the motivation behind and the result of the Sale Transaction was not the gaining of any unfair advantage. As s....
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....package could be treated as implemented by a lender if the following conditions are fulfilled: ... (ii) Promoters' contribution to the extent envisaged in the package had been brought in and (iii) MRA was executed binding the lender(s) and the company for compliance of all terms and conditions of the approved package. xv. The MRA was first scheduled to be signed on August 22, 2013 and then got postponed twice to September 6, 2013 and September 20, 2013 and eventually got signed on September 24, 2013. Email correspondence to demonstrate this is annexed ... All of this could have been scrutinized by SEBI since the passing of the Ex Parte Order on July 17, 2014 and it had two years to do so. Now that there are clear and evident answers to every charge leveled on a purportedly 'prima facie' basis, every explanation is being second- guessed with the restraint on dealing securities and accessing capital markets being continued against the Noticees." Findings - 7.1.3 On a perusal of the SCN, it is clear that the charges levied against Shri Abhijit Rajan was on the following basis - i. The disclosure of termination of SHAs would have an adverse impact on the price o....
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....ncement on the price of the scrip of GIPL. 7.1.8 In his written submissions dated May 16, 2016 (subsequent to the personal hearing before me), Shri Abhijit Rajan submitted - "The net sale proceeds from the Sale Transaction (trades executed in the scrip of GIPL) on the BSE and NSE was approximately Rs.5.07 Crores and Rs.5.18 Crores, respectively, totalling approximately Rs.10.25 Crores as evident from the Contract notes issued by the broker." Further, Shri Abhijit Rajan submitted that the CDR Master Circular of 2012 clarifies that CDR Package is only treated as implemented inter alia upon (i) Promoter's contribution being brought in and (ii) MRA being executed. 7.1.9 I note that the SCN records the fact that Shri Abhijit Rajan had submitted that the rationale for trading in GIPL was the requirement for infusing funds in GIL on account of the CDR Scheme. The SCN also records that the following amounts were infused in GIL - Name of Entity Date of Amount Infusion Amount (Rs. in Crores) Abhijit Rajan 24.06.2013 5.00 Pacific Energy Pvt. Ltd. 28.06.2013 6.00 Abhijit Rajan 13.07.2013 5.00 Abhijit Rajan 02.08.2013 5.00 Abhijit Rajan ....
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.... the trades in the scrip of GIPL were executed prior to the information regarding termination of SHAs having been made public through disclosure to BSE & NSE. The point remains that being the CMD of GIPL, it was not proper on his part to have undertaken the sale transaction in the scrip of GIPL. Having said this, however, the trades executed by him in the scrip of GIPL do appear to have been executed for meeting the requirement of Promoter's contribution as per the CDR Scheme for GIL. Further, the proceeds of trades from the said transactions also appear to have been transferred to GIL as borne out from the bank statements submitted by him. The fact that Shri Abhijit Rajan also sold some of his properties (as detailed at paragraphs 7.1.11-7.1.12) does lend credence to his contention that the sale transaction was only to infuse funds in GIL, which was necessitated on account of the CDR Scheme. Even accepting that the transactions entered into by Shri Abhijit Rajan in the scrip of GIPL were the result of a legitimate requirement to infuse funds in GIL, the fact however, remains that such transactions were in breach of law, however necessary and bonafide his requirement was. 8.1 Wh....
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.... cannot be alleged that CICPL was a 'connected person' under the PIT Regulations. A connected person is one who has professional or business relationship with the listed company by virtue of which he is reasonably expected to have access to UPSI in relation to such company. The SCN does not set out how CICPL is at all connected to GIPL and there is no admission by CICPL that it is connected with me, as wrongly alleged." 8.1.3 CICPL's replies to the allegations contained in the SCN - Vide their reply to the SCN and also through oral submissions made during the hearing, CICPL made the following submissions - i. "The Noticees are not 'connected persons' to GIPL and did not have access to UPSI, as wrongly alleged. ii. The Sale Transaction i.e. sale of 28,56,618 shares of GIPL by CICPL on August 6, 2013 for an aggregate consideration of Rs.2.14 Crores, was undertaken for clearing a margin shortfall owed to a RBI registered Non-Banking Finance Company. iii. The Sale Transaction took place prior to the alleged UPSI actually coming into existence. iv. CICPL did not procure any UPSI from Abhijit Rajan; v. The Sale Transaction did not result in....
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....teral and was to maintain a minimum margin to account for any possible fall in the value of the securities that were pledged. xiv. IIFL Finance vide its letter dated July 30, 2013, informed CICPL that there was a margin shortfall of Rs.2.55 Crores and called upon CICPL to clear the shortfall amount by a deposit of funds equivalent to this amount by August 7, 2013. xv. The Sale Transaction was undertaken to raise funds to meet a margin shortfall that CICPL was supposed to clear by August 7, 2013. xvi. CICPL's decision to sell shares of GIPL was driven by commercial considerations and like any investor in the stock market, it was based on publicly available information that outlook for companies in the infrastructure sector was negative. In fact, research analysts at the relevant time had indicated that these companies are likely to default on their bank debt obligations and lenders might approve forced debt restructuring packages. A reference is made to the publicly available research report of Fitch Group's Indian arm - India Ratings & Research dated February 1, 2013. In fact, GIL ... had posted a huge loss for the first time for the financial year end March 31, 2....
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....ximately 28.57 Lakh shares on August 6, 2013 i.e. during the UPSI period. ii. CICPL had acquired several properties from Shri Abhijit Rajan for an aggregate consideration of Rs.5.15 Crores on August 28, 2013, details of which are provided below - Nature of Property Value (Rs. in Crores) Date of Payment Date of Agreement Date of Registration of Sale Agricultural Land - Village Kale, District - Pune 0.90 28.08.2013 28.08.2013 Not Yet Registered Agricultural Land - Village Kolgaon, District - Raigad 1.10 28.08.2013 28.08.2013 20.12.2013 Agricultural Land - Village Kolgaon, District - Raigad 2.40 28.08.2013 28.08.2013 20.12.2013 Flat at Four Bungalows, Andheri, Mumbai 0.75 28.08.2013 28.08.2013 19.09.2013 Total 5.15 iii. The loss avoided by CICPL is detailed below - NAME NO OF SHARES SOLD (X) WT. AVERAG E PRICE (Rs.) TOTAL SALE VALUE (Rs.) (A) WT. AVG. CLOSING PRICE ON 4.09.2013 (Rs.) (Y) APPROX. SALE VALUE AS ON 4.09.2013 (Rs.) (B)=(Y)*(X) LOSS AVOIDED (Rs.) (A)-(B) CICPL 2856618 7.51 21466740.50 6.57 18776017 269072....
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....th IIFL Finance. Vide their written submissions, CICPL inter alia stated that the value of shares of GIPL pledged with IIFL Finance was closest in value to the margin shortfall that CICPL was required to fund. Further, CICPL has further stated that the shares of GIPL were acquired by CICPL in the IPO at a price of around Rs.167 per share (in 2008) and had subsequently dropped to around Rs.6 per share around the time of the sale transaction and therefore, a sale of GIPL shares was the obvious choice to generate proceeds that were commensurate to the margin shortfall. In this context, I note - i. From the letter dated July 30, 2013 (addressed to CICPL by IIFL Finance), it is observed that as on that date, there was a net outstanding loan of approximately Rs.16.98 Crores under the account M/s Consolidated Infrastructure Co. Pvt. Ltd. It is also observed that the net margin shortfall was approximately Rs.2.55 Crores and accordingly, CICPL was requested to arranged for the aforesaid funds by August 7, 2013, failing which, IIFL Finance would be entitled to exercise all its rights over the collateral. ii. As per details submitted by CICPL, it is observed that the schedul....
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....ermission in accordance with the Maharashtra Private Forest Act, 1975. 8.1.10 In the instant proceedings, CICPL and its Directors, have been able to substantiate their contention with adequate evidence that the sale of GIPL shares were executed to clear the margin shortfall. As stated earlier, the letter dated July 30, 2013 (addressed to CICPL by IIFL Finance), clearly stated that the net margin shortfall was approximately Rs.2.55 Crores and accordingly, CICPL was required to arrange for the aforesaid funds by August 7, 2013. Hence the action of selling the shares appear to be pursuant to the demand made by IIFL Finance. Further, the property transactions entered into between CICPL and Shri Abhijit Rajan were registered within the permissible statutory limit permitted by law. While it is possible that discussions in respect of the property transactions entered into between CICPL and Shri Abhijit Rajan may have been happening a few months prior to the impugned trades, no material evidence has been placed before me in the instant proceedings in support of such negotiations actually taking place prior to the execution of said trades. In the aforementioned context, the allegations a....
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....ther directly or indirectly, in any manner whatsoever, till further directions vide the Interim Order dated July 17, 2014 and the said directions were confirmed vide the Confirmatory Order dated March 23, 2015. This restraint against Shri Abhijit Rajan continues to be in operation till date. Shri Abhijit Rajan has already undergone a restraint from July 17, 2014 till date i.e. a period of almost 2 years. It is noted that SEBI has already initiated Adjudication Proceedings inter alia against Shri Abhijit Rajan in respect of the same violations alleged in the instant proceedings. This being the factual position, I am of the view that no further restraint is required to be imposed on Shri Abhijit Rajan on account of the reasons detailed in the preceding paragraphs. However, it is made clear that the Adjudicating Officer shall independently verify the facts and arrive at findings including quantum of penalty, if any, without being influenced by the observations recorded in this Order. 10.2 I note that vide the Order dated March 21, 2016, SEBI directed the impounding of an amount of Rs.1,44,37,670, jointly and severally, from Shri Abhijit Rajan; CICPL and its Directors i.e. Shri Kira....