Order against Hitechi Jewellary Ltd

01.         Securities and Exchange Board of India (SEBI) conducted investigation in to the trading in the shares of Hitechi Jewellary Industries Limited, (hereinafter referred to as “the company”) having its registered office at Mumbai.  

02.         Pursuant to the aforesaid investigation, SEBI appointed, vide order dated March 31, 2004, the undersigned 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 the company to comply with the summons of SEBI in violation of Sec.11C (6) and 15A (a) of Securities and Exchange Board of India Act, 1992. The aforesaid appointment was communicated vide proceedings of the Whole Time Member, SEBI, dated April 27, 2004.

03.         The undersigned issued notice dated October 20,  2004 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, despite the receipt of the said notice by the company, the undersigned did not receive any reply from the company.

04.          In the above circumstances, the undersigned was of the view that an inquiry should be held in the matter and accordingly a notice of inquiry was issued to the company in terms of Rule 4(3) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. November 29, 2004 was fixed as the date of inquiry. Though the notice of inquiry was sent by hand delivery as well as under speed post - acknowledgement due, no authorised representative or lawyer of the company appeared before the undersigned on the aforesaid date. Therefore, the undersigned decided in terms of Rule 4 (7) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 to proceed with the inquiry as it appeared to him that the company deliberately failed to appear for the inquiry.

05.         As per the records placed before the undersigned, the company was issued summons dated November 21, 2003 by the investigating authority of SEBI for a personal appearance of the Chairman of the company on December 1, 2003. Vide the said summons, the company was directed to submit the information / documents indicated in the said summons. However, vide letter dated December 1, 2003, the company informed the investigating authority of SEBI to adjourn the hearing as the chairman of the company was out of station. In view of this, the company was again summoned vide summons dated December 12, 2003 for appearance on December 30, 2003. However, the investigating authority of SEBI did not receive any response from the company.

06.         Keeping in view of the above, the undersigned has reached to a conclusion that the company deliberately failed to comply with the summons issued by the investigating authority of SEBI and as such the company committed a violation of Sec,15A(a) of Securities and Exchange Board of India Act, 1992.

07.          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.

08.          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. However, the default of the company was repetitive in nature as twice the company failed to comply with the summons.  

09.         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, I hereby impose a penalty of Rs.200000/- (Rupees Two Lakhs Only) on the company 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 R. Ravichandran, Division Chief of SEBI, Investigations Department at SEBI, Mittal Court ‘B’ Wing, Nariman Point, Mumbai 400 021.

10.         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.