ADJUDICATION ORDER� UNDER RULE 5 OF THE SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 IN THE MATTER OF ADJUDICATION PROCEEDINGS AGAINST MOTOROL ENTERPRISES LIMITED.

I was appointed as the Adjudicating Officer by the Securities and Exchange Board of India (hereinafter referred as SEBI) vide order dated November 28, 2004, to inquire into and adjudge under Section 15C of SEBI Act, 1992 the violation alleged to have been committed by Motorol Enterprises Ltd. (hereinafter referred to as the company) on account of its failure to redress the grievances of the investors.

�� NOTICE AND REPLY

2. A show cause notice (No: A&E/BS/27544/2004) dated December 7, 2004 was issued to the company in terms of the provisions of Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. In the show cause notice it was alleged that the company failed to redress the grievances of investors when called upon to do so by SEBI vide its letter OIAE/SK/19721/2004 dated September 3, 2004. Vide the said letter, SEBI informed the company that as on July 30, 2004, 80 complaints of the investors are pending to be redressed and the said complaints have been pending against the company for more than six months. Vide the said letter, the company was called upon to resolve the complaints.�

3. As the company is alleged to have failed to redress the complaints of the investors, adjudication proceedings were initiated against it vide SEBI�s order dated November 28, 2004.� In view of the 80 unresolved complaints, the company was asked to show cause as to why an inquiry should not be held against the company in terms of Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 and why penalty should not be imposed on it under Section 15C of the SEBI Act, 1992.

4. The company replied to the show cause notice vide its letter dated December 21, 2004 and made the following submissions

a) It is not in a position to make regular payments of fees to its R & T agent. This has created piling up of investor�s grievances.

b) The company has however amicably settled the payment issues with its R & T agent and it is expected to clear the issues within 3 to 4 weeks time.

c) The company assures that once the issues with R & T agent gets settled, it will be resolving the pending investor complaints at the earliest.

In view of the above the company requested that considering the difficulties faced by it, the inquiry proceedings initiated against it may be dropped.

5. Considering the reply received from the �company, in the interest of justice it was felt that an opportunity of hearing may be granted to it and accordingly the company was advised to attend the hearing scheduled on January 17, 2005. However as the company failed to attend the hearing scheduled on the said date, opportunity of hearing was granted to the company subsequently on �January 28, 2005, March 16, 2005 and April 13, 2005. However, it is noted that the company failed to avail the opportunity of hearing granted to it.

CONSIDERATION OF EVIDENCE AND FINDINGS

6. It is noted that vide letter OIAE/SK/19721/2004 dated September 3, 2004,� SEBI� had informed� the company that as on July 30, 2004 , 80 complaints of the investors are pending against the company for more than six months and called upon the company to resolve these grievances. In this regard the provisions of section 15 C of the SEBI Act reads as under

�If any listed company or any person who is registered as an intermediary after having been called by the Board in writing, to redress the grievances�� of investors, fails to redress such grievances within the time specified by the Board, such company or intermediary shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.�

7. It is noted from the reply dated December 21, 2004 submitted by the company in the adjudication proceedings, that the failure to redress the grievances of the investors was due to its inability to make payment of fees to its Registrar and Transfer Agent.

8. In this regard it is pertinent to note that some of the complaints are pending against the company since 1997. It is further noted from the analysis of the 80 pending complaints, as mentioned in the show cause notice that majority of the complaints relate to non receipt of share certificates after transfer/ conversion/ transmission etc. In this regard, it is pertinent to note that transfer of share certificate does not involve outflow of funds of the company or cause any financial liability on the company and it is the investor who is at great disadvantage for non receipt of share certificates after transfer within the stipulated time frame as it deprives the ��investor of the opportunity of selling the shares at the opportune time. �In view of the same, the failure on the part of the company to redress the grievances of the investors have to be viewed seriously.

9. The company in its reply dated December 21, 2004 stated that it was not in a position to make regular payments to its R&T agent, however no further details or proof have been provided by the company to substantiate its contention regarding its poor financial state. Further it is pertinent to note that the company also did not attend the personal hearing despite being provided the opportunity of hearing on four occasions on the following dates i.e. January 17, 2005, January 28, 2005, March 16, 2005 and April 13, 2005. This clearly indicates that the company is not serious in resolving the complaints and has not taken any measures for redressing the complaints of the investors. Further, though the company �vide its letter dated December 21, 2004 submitted that it shall clear the issues within 3 to 4 weeks time, the company has not submitted any information regarding the measures taken by it to redress the grievances of the investors. Hence though the company was provided sufficient time and opportunity, the company failed to provide any details regarding the action taken by it to redress the grievances of the investors. In view of the same, it is concluded that the company failed to redress the grievances of the investors when called upon to do so by SEBI vide its letter ref: OIAE/SK/19721/2004 dated September 3, 2004 and hence the company is liable to the penalty prescribed under Section 15 C of the SEBI Act 1992.�

10. In this regard, the provisions of Section 15J of the SEBI Act, 1992 and Rule 5 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 require that while adjudging the quantum of penalty, the adjudicating officer shall have due regard to the following factors namely:

a) The amount of disproportionate gain or unfair advantage wherever quantifiable, made as a result of default

b) The amount of loss caused to an investor or group of investors as a result of the default

c) The repetitive nature of default

��

11. In this regard it is noted that no data is available to assess the amount of disproportionate gain or unfair advantage made as a result of default or the amount of loss caused to the investors as a result of the default. However it can be concluded that the failure on the part of the company� to redress the grievances of the investors� caused loss to the investors. As it is contended by the company that the default had arisen on account of the financial difficulties faced by the company, it would be appropriate to refer to the order dated 9.8.2004 passed by the Hon�ble Securities Appellate Tribunal in Alkan Projects Pvt Ltd Vs SEBI (Appeal No.88/04) �wherein it has been held that the capacity to pay the penalty also has to be considered while imposing penalty.� In this regard, as mentioned earlier, the company has not submitted any details or proof regarding its financial state, and in the absence of such information, it is not possible to draw any conclusion as to the financial state of the company.

�� ORDER��

12. SEBI vide its letter OIAE/SK/19721/2004� dated September 3, 2004 required Motorol Enterprises Limited to redress the grievances of the investors.� The failure on the part of Motorol Enterprises Limited to redress the grievances of investors makes it liable to the penalty prescribed under Section 15 C of the SEBI Act 1992.

13. In exercise of the powers conferred under Section15 (ii) of the SEBI Act, 1992, and Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995� I hereby impose a penalty of Rupees Two Lakhs (Rs.2,00,000/-) �on Motorol Enterprises Ltd. in terms of the provisions of Section 15 C of SEBI Act, 1992.

14. The penalty shall be paid by way of demand draft drawn in favour of �SEBI � Penalties Remittable to Government of India� payable at Mumbai within 45 days of receipt of this order. The said demand draft� shall be forwarded to Deputy General Manager, Office of Investor Assistance and Education, Securities and Exchange Board of India, Exchange Plaza, NSE Building, 4^th Floor, Bandra Kurla Complex, Bandra (E), Mumbai � 400 051

15. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 copies of this order are sent to Motorol Enterprises Limited and to SEBI.

PLACE:�� Mumbai�� Biju. S

DATE� :�� May 9, 2005�� Adjudicating� Officer

�

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ADJUDICATION ORDER� UNDER RULE 5 OF THE SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 IN THE MATTER OF ADJUDICATION PROCEEDINGS AGAINST MOTOROL ENTERPRISES LIMITED. I was appointed as the Adjudicating Officer by the Securities and Exchange Board of India (hereinafter referred as SEBI) vide order dated November 28, 2004, to inquire into and adjudge under Section 15C of SEBI Act, 1992 the violation alleged to have been committed by Motorol Enterprises Ltd. (hereinafter referred to as the company) on account of its failure to redress the grievances of the investors. �� NOTICE AND REPLY 2. A show cause notice (No: A&E/BS/27544/2004) dated December 7, 2004 was issued to the company in terms of the provisions of Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. In the show cause notice it was alleged that the company failed to redress the grievances of investors when called upon to do so by SEBI vide its letter OIAE/SK/19721/2004 dated September 3, 2004. Vide the said letter, SEBI informed the company that as on July 30, 2004, 80 complaints of the investors are pending to be redressed and the said complaints have been pending against the company for more than six months. Vide the said letter, the company was called upon to resolve the complaints.� 3. As the company is alleged to have failed to redress the complaints of the investors, adjudication proceedings were initiated against it vide SEBI�s order dated November 28, 2004.� In view of the 80 unresolved complaints, the company was asked to show cause as to why an inquiry should not be held against the company in terms of Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 and why penalty should not be imposed on it under Section 15C of the SEBI Act, 1992. 4. The company replied to the show cause notice vide its letter dated December 21, 2004 and made the following submissions a) It is not in a position to make regular payments of fees to its R & T agent. This has created piling up of investor�s grievances. b) The company has however amicably settled the payment issues with its R & T agent and it is expected to clear the issues within 3 to 4 weeks time. c) The company assures that once the issues with R & T agent gets settled, it will be resolving the pending investor complaints at the earliest. In view of the above the company requested that considering the difficulties faced by it, the inquiry proceedings initiated against it may be dropped. 5. Considering the reply received from the �company, in the interest of justice it was felt that an opportunity of hearing may be granted to it and accordingly the company was advised to attend the hearing scheduled on January 17, 2005. However as the company failed to attend the hearing scheduled on the said date, opportunity of hearing was granted to the company subsequently on �January 28, 2005, March 16, 2005 and April 13, 2005. However, it is noted that the company failed to avail the opportunity of hearing granted to it. CONSIDERATION OF EVIDENCE AND FINDINGS 6. It is noted that vide letter OIAE/SK/19721/2004 dated September 3, 2004,� SEBI� had informed� the company that as on July 30, 2004 , 80 complaints of the investors are pending against the company for more than six months and called upon the company to resolve these grievances. In this regard the provisions of section 15 C of the SEBI Act reads as under �If any listed company or any person who is registered as an intermediary after having been called by the Board in writing, to redress the grievances�� of investors, fails to redress such grievances within the time specified by the Board, such company or intermediary shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.� 7. It is noted from the reply dated December 21, 2004 submitted by the company in the adjudication proceedings, that the failure to redress the grievances of the investors was due to its inability to make payment of fees to its Registrar and Transfer Agent. 8. In this regard it is pertinent to note that some of the complaints are pending against the company since 1997. It is further noted from the analysis of the 80 pending complaints, as mentioned in the show cause notice that majority of the complaints relate to non receipt of share certificates after transfer/ conversion/ transmission etc. In this regard, it is pertinent to note that transfer of share certificate does not involve outflow of funds of the company or cause any financial liability on the company and it is the investor who is at great disadvantage for non receipt of share certificates after transfer within the stipulated time frame as it deprives the ��investor of the opportunity of selling the shares at the opportune time. �In view of the same, the failure on the part of the company to redress the grievances of the investors have to be viewed seriously. 9. The company in its reply dated December 21, 2004 stated that it was not in a position to make regular payments to its R&T agent, however no further details or proof have been provided by the company to substantiate its contention regarding its poor financial state. Further it is pertinent to note that the company also did not attend the personal hearing despite being provided the opportunity of hearing on four occasions on the following dates i.e. January 17, 2005, January 28, 2005, March 16, 2005 and April 13, 2005. This clearly indicates that the company is not serious in resolving the complaints and has not taken any measures for redressing the complaints of the investors. Further, though the company �vide its letter dated December 21, 2004 submitted that it shall clear the issues within 3 to 4 weeks time, the company has not submitted any information regarding the measures taken by it to redress the grievances of the investors. Hence though the company was provided sufficient time and opportunity, the company failed to provide any details regarding the action taken by it to redress the grievances of the investors. In view of the same, it is concluded that the company failed to redress the grievances of the investors when called upon to do so by SEBI vide its letter ref: OIAE/SK/19721/2004 dated September 3, 2004 and hence the company is liable to the penalty prescribed under Section 15 C of the SEBI Act 1992.� 10. In this regard, the provisions of Section 15J of the SEBI Act, 1992 and Rule 5 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 require that while adjudging the quantum of penalty, the adjudicating officer shall have due regard to the following factors namely: a) The amount of disproportionate gain or unfair advantage wherever quantifiable, made as a result of default b) The amount of loss caused to an investor or group of investors as a result of the default c) The repetitive nature of default �� �� 11. In this regard it is noted that no data is available to assess the amount of disproportionate gain or unfair advantage made as a result of default or the amount of loss caused to the investors as a result of the default. However it can be concluded that the failure on the part of the company� to redress the grievances of the investors� caused loss to the investors. As it is contended by the company that the default had arisen on account of the financial difficulties faced by the company, it would be appropriate to refer to the order dated 9.8.2004 passed by the Hon�ble Securities Appellate Tribunal in Alkan Projects Pvt Ltd Vs SEBI (Appeal No.88/04) �wherein it has been held that the capacity to pay the penalty also has to be considered while imposing penalty.� In this regard, as mentioned earlier, the company has not submitted any details or proof regarding its financial state, and in the absence of such information, it is not possible to draw any conclusion as to the financial state of the company. �� ORDER�� 12. SEBI vide its letter OIAE/SK/19721/2004� dated September 3, 2004 required Motorol Enterprises Limited to redress the grievances of the investors.� The failure on the part of Motorol Enterprises Limited to redress the grievances of investors makes it liable to the penalty prescribed under Section 15 C of the SEBI Act 1992. 13. In exercise of the powers conferred under Section15 (ii) of the SEBI Act, 1992, and Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995� I hereby impose a penalty of Rupees Two Lakhs (Rs.2,00,000/-) �on Motorol Enterprises Ltd. in terms of the provisions of Section 15 C of SEBI Act, 1992. 14. The penalty shall be paid by way of demand draft drawn in favour of �SEBI � Penalties Remittable to Government of India� payable at Mumbai within 45 days of receipt of this order. The said demand draft� shall be forwarded to Deputy General Manager, Office of Investor Assistance and Education, Securities and Exchange Board of India, Exchange Plaza, NSE Building, 4^th Floor, Bandra Kurla Complex, Bandra (E), Mumbai � 400 051 15. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 copies of this order are sent to Motorol Enterprises Limited and to SEBI. PLACE:�� Mumbai�� Biju. S DATE� :�� May 9, 2005�� Adjudicating� Officer �