Order against Adam Comsof Limited

 SECURITIES AND EXCHANGE BOARD OF INDIA

ORDER

IN THE MATTER OF APPLICATION BY ADAM COMSOF LIMITED FOR RENEWAL OF CERTIFICATE OF REGISTRATION, AS A CATEGORY I REGISTRAR TO AN ISSUE AND SHARE TRANSFER AGENT.

WTMN/67/MIRSD/7/2004

 

1. Adam Comsof Ltd., a company having its registered office at Narayan Bldg., 23, Lakhamshi Napoo Road, Dadar (East), Mumbai – 400 014 (hereinafter referred to as ‘the applicant company’) submitted an application dated November 12, 2003 for renewal of registration under Securities and Exchange Board of India (Registrar to an Issue and Share Transfer Agents) Regulations, 1993 (hereinafter referred to as ‘the said regulations’) to Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) for the purpose of continuing to carry on the activities as Registrar to an Issue and Share Transfer Agent.

 

2. While considering the application, it was noted that the major shareholder of the applicant company Shri Rajkumar C Basantani who was its Chairman during the years 1999 to 2002 was debarred from dealing in securities market for a period of 3 years vide SEBI’s order dated September 16, 2002.

 

3. SEBI, therefore, formed a prima facie view that the applicant company cannot be deemed to be a fit and proper person in terms of regulation 6 (g) of the said regulations and that the certificate of registration granted to it cannot be renewed. The applicant company was advised of the above view and also advised that if it desired to have an opportunity of being heard it might intimate its intention to SEBI within 15 days of receipt of the letter.

4. It is noted that Shri Rajkumar C Basantani with 37.46% stake in equity is a dominant shareholder of the applicant company. Though he has ceased to be a director and Chairman of the applicant company he is still a major shareholder capable of influencing the activities of the company. It is observed that Shri Rajkumar C Basantani was debarred from dealing in securities for a period of 3 years i.e. till 15.09.2005 for regulatory violation in the case of Soundcraft Industries Limited which is sharing the same address as that of the applicant company. It is also seen that Soundcraft Industries Ltd. is one of the clients of the applicant company. Inter connection between the applicant company and Soundcraft Industries Ltd cannot be ruled out. Though an opportunity of being heard was granted before rejection of the renewal, the applicant company has chosen not to avail of the opportunity.

5. In my view, therefore, renewal of certificate of registration to the applicant company would not be in the interest of investors in securities market.

6. Therefore, pursuant to the powers conferred upon me under Regulation 10 of SEBI (Registrar to an Issue and Share Transfer Agents) Regulations, 1993, read with section 19 of Securities and Exchange Board of India Act 1992, I hereby reject the application for renewal of certificate of registration applied by Adam Comsof Ltd. as a Category I Registrar to an Issue and Share Transfer Agent.