ADJUDICATION ORDER UNDER RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 IN THE MATTER OF ADJUDICATION PROCEEDINGS AGAINST M/S. SMART GROWTH SECURITIES
- Vide order dated September 30, 2004 issued by the Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), I was appointed as the Adjudicating Officer to inquire into and adjudge under Section 15I and Section 15 A of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the ‘SEBI Act’), the violation of Section 11 C of the SEBI Act alleged to have been committed by M/s.Smart Growth Securities (hereinafter referred to as the noticee) by not complying with the summons issued by SEBI seeking information regarding its dealings in the scrip of Sun Infoways Ltd. (hereinafter referred to as SIL).
- It is alleged that SEBI issued the following summons / letters dated December 20, 2001 and July 30, 2002 requiring the noticee to submit certain information in respect of its dealings in the scrip of SIL and also to personally appear before the Investigating Authority of SEBI. It is alleged that the noticee did not submit the information sought by SEBI. Further the noticee did not appear before the Investigating Authority as required by SEBI. In view of the alleged non compliance of summons issued by SEBI, adjudication proceedings were initiated against the noticee.
NOTICE AND REPLY
- A notice A&E/BS/46419/2005 dated May 6, 2005 was issued to the noticee in terms of Rule 4 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the “Rules”) seeking reply as to why an inquiry should not be held for the violation alleged to have been committed by the noticee.
- The noticee vide its reply dated August 22, 2005 submitted that the noticee is a proprietary firm of Shri Rahul Kalra. Adjudication order has already been passed against Shri Rahul Kalra vide order dated August 16, 2005 and the same was communicated to the noticee vide letter dated A&E/BS/47114/2005. Therefore no separate proceedings are required for the proprietary concern, M/s. Smart Growth Securities, which is owned by Shri Rahul Kalra.
- In this regard it is noted that order dated August 16, 2005 was passed against Shri Rahul Kalra for non compliance of summons issued to him and penalty of Rs.10,000/ was imposed on Shri Kalra in view of the facts and circumstances of the case. It was alleged in the matter that Shri Kalra did not comply with the summons dated December 20, 2001, July 30,2002.
- It is noted that M/s. Smart Growth Securities is alleged to have not complied with summons dated December 20, 2001 and July 30, 2002 issued by SEBI. On perusal of the said summonses it is noted that these summons were issued to Shri Rahul Kalra, C/o Smart Growth Securities, F 14/16, Model Town, 2nd Stop, Delhi -110 009. As discussed above, for non compliance of the summons dated December 20, 2001 and July 30, 2002, adjudication proceedings were conducted against Shri Rahul Kalra and penalty was imposed on him in terms of the provisions of Section 15 A(a) of the SEBI Act. As M/s. Smart Growth Securities is a proprietary concern of Shri Rahul Kalra and the subject matter of adjudication are relating to same summons dated December 20, 2001 and July 30, 2002 issued to Shri Rahul Kalra as proprietor of M/s.Smart Growth Securities, I am of the view that no separate penalty needs to be imposed on M/s Smart Growth Securities in terms of the provision of Section 15 A (a) of the SEBI Act.
- 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 M/s. Smart Growth Securities and to SEBI.
PLACE: MUMBAI BIJU S
SEPTEMBER 29, 2005 ADJUDICATING OFFICER