BFL (P.) LTD. Vs. SECURITIES AND EXCHANGE BOARD OF INDIA

JUDGEMENT

(1.) THIS Order will dispose of a bunch of thirteen Appeal Nos. 125 to 137 of 2007 all of which are directed against the common Order dated 31 -3 -2007 passed by the whole -time member of the Securities and Exchange Board of India restraining the appellants from associating with the capital market relating activities including buying and selling and dealing in securities directly or indirectly and also from accessing the capital market in any capacity whatsoever and associating with any of the intermediaries in the capital market for a period of five years. By the same Order, one Alok Khetan had also been issued a similar restraint Order who filed Appeal No. 55 of 2007 before this Tribunal which came up for hearing on 17 -7 -2007 and the same was partly allowed. The findings recorded by the Board against Alok Khetan were that he had received the allotment of preferential shares without making payment to the issuer company which was illegal and that he sold the allotted shares in off market transactions even before they were listed which transactions were contrary to Section 16 read with Section 2(i) of the Securities Contracts (Regulation) Act, 1956 (for short 'SCRA'). While disposing of Appeal No. 55 of 2007 we upheld the findings recorded against him and found that there was no allegation against him that he had sold the shares to Ketan Parekh and his entities to enable them to manipulate the market. In the absence of any such allegation in the show -cause notice we reversed the finding of the Board that he transferred his shares to Ketan Parekh and his entities and facilitated them to manipulate the market. Accordingly, we modified the impugned Order qua the appellant therein and reduced the period of debarment to three months.

(2.) HAVING heard the learned Counsel for the parties in this bunch of appeals we find that the allegations made and the findings recorded against the appellants are identical to those which were recorded against Alok Khetan. In the case of the appellants also the Board has found that they transferred the shares to Ketan Parekh and his entities to facilitate them to manipulate the market. There is no such allegation made in the show -cause notices issued to them. This finding goes beyond the show -cause notice. The issues involved in these appeals are identical to those which were raised by Alok Khetan in Appeal No. 55 of 2007. For the reasons recorded in our Order dated 17 -7 -2007 disposing of Appeal No. 55 of 2007 we modify the impugned Order qua the appellants herein and reduce the penalty to the period already undergone. The appeals are accordingly disposed of with no Order as to the costs.