Order against Macy's Advisory Pvt. Ltd

01.        Securities and Exchange Board of India (SEBI) conducted investigation in to the trading in the shares of M.P. Investment & Financial Consultancy Services Ltd. (hereinafter referred to as “MPIS”)

02.        Pursuant to the aforesaid investigation, SEBI appointed, vide order dated August 21, 2003, Shri S V Krishna Mohan as the Adjudicating Officer under Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 read with Sec. 15 I of Securities and Exchange Board of India Act, 1992 to inquire into and adjudge the failure of Macy’s Advisory Pvt. Ltd., having  its registered office at Kolkata (hereinafter referred to as `the company’ to comply with the summons of SEBI in violation of Sec.11C (6) read with 15A (a) of Securities and Exchange Board of India Act, 1992.

03.        Accordingly, the aforesaid Adjudicating Officer issued notice dated September 30, 2003 under SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 to the company communicating the allegations levelled against it and calling up on it as to why an inquiry in terms of the  SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 should not be conducted against it. However, the said notice was returned undelivered by the postal authorities with an endorsement `no such company exists in this address’.

04.         In the above circumstances, the Adjudicating Officer got a notice published in the newspaper ‘The Statesman’ having circulation in Kolkata where the registered office of the company is situated. The said notice was published in the ‘The Statesman’ dated November 9, 2004. In response to the said notice, an authorised representative of the company visited the office of Securities and Exchange Board of India at Kolkata and collected the notice issued by the Adjudicating Officer. Vide letter dated November 25, 2004, the company replied to the show cause notice interalia submitting that the company incurred heavy loses during the past few years, therefore it had closed all business and since it was unable to pay the rent of the office premises, it had to vacate the office and due to this reason all the notices issued to its office address were returned. Vide the aforesaid letter, the company also requested the Adjudicating Officer to send all correspondence to one Shri Anand Kumar Tiwari, authorized representative of the company. Though the date of inquiry was fixed by the Adjudicating Officer as December 8, 2004, the same was adjourned by the Adjudicating Officer and the same was informed to the company vide letter dated December 2, 2004.

05.        Vide order dated December 7, 2004, the Chairman, SEBI appointed the undersigned as the Adjudicating Officer in the matter in the place of Shri S V Krishna Mohan. The said order states interalia, that the undersigned shall proceed to deal with the matter from the stage which was reached before appointing him as the Adjudicating Officer. Vide notice of inquiry dated December 10, 2004, the undersigned informed the company that the undersigned was of the opinion that it was a fit case to conduct inquiry and fixed January 3, 2005 as the date for appearance of the authorized representative or lawyer of the company.

06.        On January 3, 2005, Shri Anand Kumar Tiwari, authorized representative of the company appeared before the undersigned and made the following submissions :

a)      The company never received the summons issued by SEBI nor received the notice dated September 30, 2003. The company came to know about the summons only through the newspaper notice issued by SEBI.

b)     The company incurred heavy loses during the last few years, therefore it had to close all the business. Since the company was not in a position to pay the rent, the landlord asked the company to vacate the office and presently the company does not have any office address.

c)      In future, if SEBI requires, the company would try to furnish some of the documents which were advised to be furnished by the Investigating Officer.

07.        As per the records placed before the undersigned, the company was summoned to appear before the investigating officer on October 9, 2002 to February 24, 2003, April 21, 2003 and May 16, 2003. Vide the said summons, the company was directed to submit the information / documents indicated in the said summons. However, the investigating authority of SEBI did not receive any response from the company. The undersigned has been furnished a photocopy of the summons dated May 8, 2003 issued by the Investigating Officer from which it is seen that the said summons was received by a representative of the company. The undersigned also noticed that the rubberstamp of the company was affixed to the copy of the summons from which it is clear that the said summons was received by the company.

08.        Keeping in view of the above, the undersigned has reached to a conclusion that the company without sufficient cause  failed to comply with the summons issued by the investigating authority of SEBI and as such the company became liable for penalty under Sec,15A(a) of Securities and Exchange Board of India Act, 1992.

09.         In order to determine the quantum of penalty, the undersigned considered the following factors as provided in the Section 15J of Securities and Exchange Board of India Act, 1992 viz., (a)    the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default; (b)   the amount of loss caused to an investor or group of investors as a result of the default and; c)    the repetitive nature of the default.

10.         As regards the disproportionate gain or unfair advantage there are no quantifiable figures available on record with respect to the default of the company. There are also no figures or data on record to quantify the amount of loss caused to an investor or group of investors as a result of the default. Though the Investigating Authority reports that the summons were issued on different dates i.e. at least at five instances, the documentary evidence furnished to the undersigned shows that only the summons dated May 8, 2003 was received by the company. Therefore, the undersigned is of the opinion that there is no sufficient documentary evidence to prove that there was repetitive default on part of the company in honouring the summons.  

11.        Therefore, in exercise of the powers conferred under section 15-I (2) of the SEBI Act, 1992, read with Rule 5 of the Securities & Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules 1995, the undersigned hereby imposes a penalty of Rs.10,000/- (Rupees Ten Thousand Only) on Macy’s Advisory Pvt. Ltd. for the aforesaid violations. The company shall pay the said amount of penalty by way of demand draft 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 should be forwarded to Shri Jayanta Jash, Deputy General Manager, Securities and Exchange Board of India, Unit 301, L&T Chambers, 3^rd Floor, 16, Camac Street, Kolkata 700 017.

12.        In terms of Regulation 6 of the SEBI (Procedure for holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995, copies of this order are sent to the company and also to SEBI.