BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI
CONSENT ORDER
ON THE APPLICATION SUBMITTED BY
MR.APOORVA H. SHAH
IN THE MATTER OF
M/S MIDPOINT SOFTWARE & ELECTRO SYSTEMS LIMITED
CO/CFD-DCR/1483/AO/VSS/22/2008
1. Mr.Apoorva Shah (hereinafter referred to as “Noticee”) filed a report dated September 22, 2004 under regulation 3(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as “SAST Regulations”) to Securities and Exchange Board of India (hereinafter referred to as “SEBI”) in respect of acquisition of 2,60,800 shares of M/s Midpoint Software & Electro Systems Limited (hereinafter referred to as “MSESL/ Company”) on September 7, 2004. With the said acquisition, the shareholding of Mr.Apoorva Shah increased from 1.34% to 10.03%. Upon examination of the said report, it was found that the acquirer had not complied with the provisions of regulations 3(3) and 7(1) and (2) of SAST Regulations.
2. Adjudication proceedings were initiated against Mr.Apoorva Shah to inquire and adjudge under section 15A (b) read with section 15I of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”). Show Cause Notice No.EAD-5/VSS/SS/109588/2007 dated November 29,2007 was issued under rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as “Rules”) to Mr.Apoorva Shah.
3. The Noticee made an application dated January 23, 2008 and an affidavit of “undertakings and waivers” in terms of SEBI Circular No.EFD/Cir.-1/2007 dated April 20, 2007 for Consent Order in respect of the aforesaid pending adjudication proceedings. Subsequently, the Noticee vide letter dated May 12, 2008 proposed revised terms of consent, without admitting or denying the guilt, and subject to clauses of the undertakings and waivers, and offered a sum of Rs.75,000/- (Rupees seventy five thousands only) towards settlement charges. The terms, as proposed by the Noticee, were placed before the High Powered Advisory Committee (hereinafter referred to as “HPAC”) on June 24, 2008. The HPAC considered the facts and circumstances of the case, consent terms offered by the Noticee and the material brought before the committee by SEBI and recommended that the case may be settled on payment of Rs.75,000/- (Rupees Seventy Five Thousand only). The recommendations of the committee were placed before the Panel of Chairman and Whole Time Member the Board who have agreed to the terms of consent as recommended by HPAC.
4. In pursuance of the aforesaid consent terms, the Noticee has remitted a sum of Rs.75,000/- (Rupees Seventy Five Thousand only) vide Demand Draft No.140923 dated July 15, 2008 drawn on Union Bank Of India, Bhat Bazar Branch, Mumbai, towards the terms of consent in the matter.
5. In view of above, it is hereby ordered that
i) this consent order disposes of the said proceedings pending against the Noticee under SEBI Act, 1992 in the matter of MSESL ;
ii) passing of this order is without prejudice to the right of SEBI to take enforcement actions including commencing / reopening of the pending proceedings against the Noticee, if SEBI finds that
a. any representation made by the Noticee in the consent proceedings is subsequently discovered to be untrue.
b. the Noticee have breached any of the clauses / conditions of undertakings / waivers filed during the current consent proceedings.
6. This consent order is passed on August 07, 2008 and shall come into force with immediate effect. In terms of rule 6 of the Adjudication Rules, copies of this order are sent to the Noticee and also to SEBI.
V S Sundaresan
Adjudicating Officer