Violation of SEBI ACT and Rules in India:

A Study on ‘Other than Collective Investment Scheme’

Smitha, C
Graduate Student
[email protected]
Chendrayan Chendroyaperumal
Professor and Head
[email protected]
Department of Management Studies
Saveetha Engineering College
Anna University of Technology Chennai

Key words: SEBI, SEBI Act, SEBI rules, Indian Capital Market, Securities
market, violation of Act and rules, Scam, Scandals,

Abstract
Economy of any country largely depends on its capital market now more than ever before. A
capital market is a market for securities (debt or equity), where business enterprises
(companies) and governments can raise funds by selling securities to general public and other
financial institutions. The capital market includes the stock market (equity securities) and the
bond market (debt). Capital markets of India are monitored by financial regulator SEBI
(Securities Exchange Board of India). SEBI oversee the capital markets in their designated
jurisdictions to ensure that investors are protected against fraud, among other duties. The
need for a financial regulator for a country like India is due to the following reasons as India
is an `informationally ' weak market, to boost the confidence of lay investors who have been
beaten by repeated scams, to soften interest rates and to enhance investing skills in India. But
since the formation SEBI in the year 1992 every 2-3 years there has been a new ‘scam’. Each
scam has led to SEBI being conferred with greater powers. Scams are administered by SEBI
officials. Sentencing and prosecution is done by SEBI officials. Recent rise in scams and
scandals in Indian market have made investors to doubt on the efficiency of Indian Financial
regulator SEBI (Securities Exchange Board of India). Even though SEBI is confronted with
numerous powers it is still observed that SEBI is unable to minimize or curb the violations
which costs huge to investors and also to the whole economy. This study focuses on the
numerous cases filed with SEBI which prove that SEBI needs to maintain much closer watch
in the market. The main objectives of this work, taking 586 cases of SEBI rule violations for
analysis, are to study various cases of SEBI rule violations in other than collective investment
scheme, categorize these cases into six categories, to identify the most violated provision of
Act with SEBI and to attempt to provide suggestions to minimize violation of SEBI norms.
This study showed even though SEBI has numerous regulations and norms to monitor the
market activities loopholes still remain which are being exploited by swindlers rendering the
regulation of the capital market and protection of investor interests wanting.

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1 INDIAN CAPITAL MARKET REGULATION

Economy of any country largely depends on its capital market now more than ever before. A
capital market is a market for securities (debt or equity), where business enterprises
(companies) and governments can raise funds by selling securities to general public and other
financial institutions. The capital market includes the stock market (equity securities) and the
bond market (debt). Capital markets of India are monitored by financial regulator SEBI
(Securities Exchange Board of India). SEBI oversee the capital markets in their designated
jurisdictions to ensure that investors are protected against fraud, among other duties. The
need for a financial regulator for a country like India is due to the following reasons as India
is an `informationally ' weak market, to boost the confidence of lay investors who have been
beaten by repeated scams, to soften interest rates and to enhance investing skills in India. But
since the formation SEBI in the year 1992 every 2-3 years there has been a new ‘scam’. Each
scam has led to SEBI being conferred with greater powers. Scams are administered by SEBI
officials. Sentencing and prosecution is done by SEBI officials. Recent rise in scams and
scandals in Indian market have made investors to doubt on the efficiency of Indian Financial
regulator SEBI (Securities Exchange Board of India). Even though SEBI is confronted with
numerous powers it is still observed that SEBI is unable to minimize or curb the violations
which costs huge to investors and also to the whole economy. This study focuses on the
numerous cases filed with SEBI which prove that SEBI needs to maintain much closer watch
in the market. The main objectives of this work, taking 586 cases of SEBI rule violations for
analysis, are to study various cases of SEBI rule violations in other than collective investment
scheme, categorize these cases into six categories, to identify the most violated provision of
Act with SEBI and to attempt to provide suggestions to minimize violation of SEBI norms.
This study showed even though SEBI has numerous regulations and norms to monitor the
market activities loopholes still remain which are being exploited by swindlers rendering the
regulation of the capital market and protection of investor interests wanting. The Securities
and Exchange Board of India (SEBI) was set up by the Government of India in April,
1988.Initially it had no statutory power and its functions were (i) to collect information and
advise the Government on matters relating to stock and capital markets, (ii) to issue licences
to merchant banks and mutual funds, (iii) to prepare legal drafts for the developmental role of
SEBI etc. Subsequently in 1992, it attained legal status under SEBI Act passed by the
Parliament with a vision to make SEBI the most dynamic and respected regulator globally,
and with the mission to protecting the interests of investors in securities, promoting the

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development of securities market and matters connected therewith or incidental thereto by
regulating it.

2 POWERS AND FUNCTIONS OF SEBI

SEBI was established by the Government to promote orderly and healthy growth by the
securities market and for investor protection. SEBI shall be headed by a Chairman to be
appointed by the Central Government. The Chairman shall hold office till the Central
Government decides and shall be governed by such terms and conditions as may be
determined by the Government from time to time. Other members of the SEBI, not exceeding
four shall be nominated by the Central Government. These persons shall be persons having
experience and knowledge relevant to the security and investment industry. The Chairman of
SEBI shall have appropriate powers to discharge the functions of SEBI effectively. SEBI
shall: (a) Deal with all matters relating to development and regulation of securities market
and investor protection, and advise Government on these matters; (b) Prepare a
comprehensive legislation for the regulation and development of the securities market; (c)
Carry out such functions as may be delegated to the Board/Chairman by the Central
Government for the development and regulation of securities market. SEBI shall be free to
determine its own procedures and will have powers to call for records, returns, notes,
memoranda, data or any other material relevant to its working from official and non-official
bodies and also hold discussions with them. SEBI shall submit reports to the Government
periodically on various aspects of the securities market and on such other specific matters as
may be called for by the Government.

The following functions have been entrusted to the Board: (a) Regulating the business in
stock exchanges and any other securities market, (b)Registering and regulating the working
of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust
deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment
advisers and such other intermediaries who may be associated with securities market in any
manner, (c) Registering and regulating the working of collective investment schemes,
including mutual funds, (d) Promoting and regulating self-regulatory organizations, (e)
Prohibiting fraudulent and unfair trade practices in securities market, (f) Promoting investor
education and training of intermediaries in securities market, (g)Prohibiting insider trading in
securities, (h) Regulating substantial acquisition of shares and take-over of companies, (i)
Calling far information from, undertaking inspection, conducting inquiries and audits of the
stock exchanges and intermediaries and self-regulatory organizations in the securities market,
(j) Performing such functions and exercising such powers under the provisions of the capital
issues (Control) Act, 1947, (subsequently repealed) and the Securities Contracts
(Regulations) Act. 1956, as may be delegated to it by the Central Government, (k) Levying
fees or other charges for carrying out the purposes of Section 11 of the Act, (l) Conducting
research for the above purpose, and (m) Performing such other functions as may be
prescribed by the government.

3 MALPRACTICES DONE BY ENTITIES IN CAPITAL MARKET

ASSOCIATED WITH SEBI
The ever expanding investor’s population and market capitalization led to a variety of
malpractices on the part of companies, brokers, merchant bankers, investment consultants and
others involved in new issues and stock in India. The glaring examples of these malpractices
are as following: (a) Existence of self-styled merchant bankers, investment consultants
without sufficient expertise and infrastructure for proper services; (b) Unofficial private
placements; (c) Rigging of prices just before public issue to bolster the image of the company
in the eyes of prospective investors; (d) Unofficial premiums on new issues: (e)
Manipulations of prices even before listing; (f) Allotments with or without premium to the
favored persons; (g) Delays in finalizing the allotments and dispatch of allotment letters and
refund orders before the due date; (h) Non-adherence of provisions of the Companies Act and
other relevant Acts; (i) Violation of rules and regulations of the stock exchanges and listing
requirements. (j)Absence of fair practices in trading in the market such as rigging of shares,
manipulation of prices, insider trading and a large spread between the bid and offer prices; (k)
Delay in delivery of shares and in making payments for sales by the brokers to their
customers; (l) Problem of odd lots and poor liquidity of a number of shares in the secondary
market; (m)Diversion of funds of the mega issues for a purpose other than intended such as
takeover bids of other companies, acquisition of shares or investments of other companies
and for working capital.

5 STUDIES ON VIOLATION OF SEBI RULES AND NORMS

There has been coverage of the violation of rules and norms of SEBI in various media in
India but a formal study report seem to be scarce. Anuj Sehgal studied the Insider Trading
and Securities Exchange Board of India taking a particular case in insider trading. The case
related to the allegation that M/s. Hindustan Lever Ltd. (HLL - Appellant 1 in Appeal no.1)
as an "insider" purchased the securities of Brook Bond Lipton India Ltd. (BBLIL) on the
basis of unpublished price sensitive information, thereby violating the provisions of the SEBI
(Insider Trading) Regulations, 1992 and the SEBI Act, 1992. With the announcement of the
merger of BBLIL with HLL to stock exchanges on 19.4.1996, there were allegations in the
market regarding the leakage of information and insider trading. When these came to the
notice of SEBI, SEBI decided to investigate the matter. From the investigations, SEBI
concluded that HLL, as an "insider" purchased eight lakh shares of M/s. BBLIL on the basis
of unpublished price sensitive information and had, therefore, violated Regulation 3(1) of the
SEBI (Insider Trading) Regulations, 1992. SEBI also held that, since information about
merger would have affected the price of securities and any reasonable investor would have
attached importance to such information. Non-disclosure of this information to UTI put UTI
to distinct disadvantage and prevented it from taking an informed decision. SEBI, thus passed
the order dated 11.3.1998 directing HLL to compensate UTI to the extent of Rs.3.04 crore
and also ordered prosecution to be launched by SEBI against HLL and the five directors Shri
S.M.Datta, Shri K.B. Dadiseth, Shri R. Gopalakrishnan, Shri A. Lahiri and Shri M.K.Sharma
of HLL. After hearing the arguments of both parties. , it was held that SEBI was not justified
in ordering prosecution of the Appellants. It will, however be open to SEBI to consider
invoking the adjudication mechanism prescribed under Section 15G read with Section 15-I
and15-J of the Act after following the prescribed procedure for purposes of determining the
desirability and legality of imposing a penalty on the Appellants. It was also held in that
SEBI's order to award compensation to UTI lacks in jurisdiction, therefore, it is not
considered necessary to pass a separate order on the Appeal filed by UTI. Both appeals were
so decided.

6 METHODOLOGY

This descriptive research work was based on the secondary data was collected through
internet mainly from the websites mentioned under ‘references’ through desk top research
method. Secondary Data for 586 cases of rule violations under ‘other than collective
investment scheme’ done by entities in Indian securities market were collected from 1992 to
July 2010, studied and categorised.
7 FINDINGS
On analysis of a total 586 cases of ‘other than collective investment scheme’, the following
findings could be made: (1) it was found that 314 cases were resolved, 42 cases were
remained unresolved, 5 cases were of vanishing company category as per the judgment
(hence these cases can also be classified as unresolved), 31 cases were reported as resolved
and they had gone for further appeal (and therefore they remained unresolved), 19 cases were
punished by delisting them and hence they fall under delisted companies category whereas
the case or proceedings details were not available for 175 cases and they were classified as
‘other category’ cases as in Table-1.

TABLE-1: TOTAL NUMBER OF THE ‘RESOLVED CATEGORY’ CASES

S NO CATEGORY NO OF CASES %
1 RESOLVED 314 53.58
2 RESOLVED BUT APPEALED 31 05.29
3 UNRESOLVED 42 07.17
4 VANISHING COMPANY 5 00.01
5 DELISTED COMPANIES 19 03.24
6 OTHER 175 29.86
TOTAL 586 100

(2) Certain cases were dismissed as no provisions are available to sue the accused; (3) the
most violated clause is Sec 24 of SEBI act which deals with price rigging and Fraudulent and
Unfair Trade Practices; (4) Proceedings of certain cases are not available on internet search.
(5) The big swindlers in the market according to the cases are Harshad Mehta with 4000Cr,
Ketan Parekh with 1500Cr, Dinesh Dalmia with 595Cr, Roopalben Panchal with 60.62 crore.
(6) Big swindlers often escape from severe punishment through further Appeals. (7) The
punishments given to the guilty were surprisingly either debarring them from buying, selling,
and dealing with shares or a trivial penalty is imposed upon them. (8) In resolved category
cases in which the guilty were imposed penalty nearly eighty one cases are still defaulters in
paying the penalty amount imposed upon them. Most of The insider trading cases were
dismissed due to lack of evidence. (9) Certain cases fell under two categories as certain
entities involved in the cases were punished while some other were not. (10) Huge penalty is
imposed on small swindlers while the big swindlers escape.
The tables in the annexure present the details on the violating party, rule violated, case
number, date of fining, judgment for some of the cases under each of the category as a
sample.1

8 CONCLUDING REMARKS
Securities Exchange Board of India is the financial regulator of Securities market, a critical
component of capital market. SEBI was formed under SEBI Act 1992. Now SEBI is
conferred with more powers and duties. But even though SEBI is administered with
enormous powers it is still found to be in a position struggling to curb the rising scams,
scandals and violations in the securities market. This weak position of SEBI proves to be a
great threat to investors especially small investors and provides great deal of opportunity to
swindlers who are cashing out huge money. Hence this project studied 586 cases of ‘other
than collective investment scheme’ and found that there has been rampant rule violations
over the years since the formation of SEBI. These cases of violation of SEBI rules and norms
were classified into six categories namely resolved, resolved but further appealed,
unresolved, vanishing companies, delisted companies, and others. In a nutshell it can be
inferred that 56.79% (333) cases were resolved, 12.47% (78) cases remained unresolved and
information for 29.86% (175) cases were not available in the internet; From the findings of
the study it could be obviously seen that though SEBI is empowered with powers to sting the
wrong-doers, the rule and norms violators seems to go scot free through legal or procedural
loop holes leaving the investors in soup!

The following are suggested from the point of view of this study: (1) The lack of provisions
are indeed providing loopholes for the accused to escape punishment SEBI must therefore
define their regulations and provisions more elaborately; (2) More severe punishment must be
imposed upon those who default themselves from paying the penalty amount and be banned
from stock trading; (3) A closer watch is needed for insider trading cases as most of these get
dismissed due to lack of evidence; (4) The amount of money involved in any scam always
belongs to the public often small investors hence SEBI must see to it that they are not cheated
of their money and savings; (5) SEBI must more elaborately create investor awareness. It
must not only educate its investors regarding the benefits, profits in stock trading but also on
the precautions to be taken and dangers involved in securities market; (6) the full details of all
SEBI rule or norm violations, proceedings, punishment, etc can be made available on internet
through the website of SEBI for investors’ education benefit; (7) The most violated clause is
Sec 24 of SEBI act which deals with price rigging and Fraudulent and Unfair Trade Practices.
This makes the SEBI fail as a protector of investor interests and thus it fails to that extent as a
regulator of the securities market in India. The implication is that SEBI may not be able to
prevent further scams and scandals in the Indian securities market.

Further research on the violation of SEBI rules and norms under ‘collective investment
scheme’ may be more enlightening to all!

NOTES
1 The source for the information for each of the cases presented in the tables in the
annexure is not presented in this paper. However the full details of all the cases are
available upon request to the authors.

REFERENCE
1. http://www.business-standard.com/
2. http://www.docshare.com/doc/118750/Insider-Trading-In-Stock-Markets-And-SEBI
3. http://indianblogger.com/top-10-financial-scams-in-india/
4. http://www.sebi.gov.in/cis/noncisdata.pdf
5. http://www.shvoong.com/business management/investing/2080417-sebi-india-needs-
protect-investors/
6. http://www.thehindubusinessline.com/
7. http://www.watchoutinvestors.com/default2a.asp
8. http://google.com
 ANNEXURE

TABLE-2: SOME OF THE CASES UNDER ‘RESOLVED’ CATEGORY

YEAR DATE OF
S.NO CASE VIOLATION CASE NO. JUDGEMENT
FILING

1996-97 1 Protochem ltd Sec.63 of Companies Act CC NO.451/S/97 27.03.1997 The offence was compounded on
payment of Rs.5000/- by each of the
accused.
1997-98 2 Xedd Telecom Ltd. & 73 & 113 of Companies Act (Non-refund of CC No.15/1998 1998 Accused were convicted on 20-01-00
4 of its directors, excess Application money and nontransfer/ Appeal with fine of Rs 53,150/- failing which 6
namely : despatch of shares within stipulated time) No.35/2000 months imprisonment Appeal filed by
accused has also
3 SEBI Vs Avinash Section 24 read with FUTP 159/M/98 - 31/3/1998 Debarred from accessing the securities
Magan ( in the matter Regulations (Price rigging and creating renumbered as market for months
of Napa Papers Ltd ) artificial market) 353/2000
4 M/s Tatia Finance & Section 24 of the SEBI Act, 1992 read with 71/1998 21/5/1998 Case dismissed as PFUTP regulations
Leasing Ltd.& Ors. Regulation 4 of the SEBI (Prohibition of were not in force on the date of offence
1998-99
Fraudulent and Unfair Trade
Practices relating to securities markets)
Regulations 1995 and Section 12 of the SEBI
Act.
5 Indo-American Credit Section 621 read with Section 113 and 207 899/1998 18/11/1998 All accused pleaded guilty and were
Corporation Ltd & 8 of of the Companies Act, 1956 and under convicted and sentenced to fine of Rs
its Directors namely ; Section 11(2)(i)(la) of the SEBI Act of 1992. 1000/-each and on default payment of
fine imprisonment for 30 days
2005-06 6 Sawaca 24(2) of SEBI Act 34/M/2006(new s 17-Feb-06 Settlement charges Rs 750000 SAT
Communication Ltd c no. 45/2006) appeal was dismissed

7 Heerachand Salecha ( 24(2) of SEBI Act 33/M/2006 (new 17-Feb-06 Debarred from accessing the securities
in the matter of Gujarat no. 44/2006) S C market for months
Fiscon Ltd.) No.24/2007
2006-07 8 Onlooker Investment Section 11 (3) of SEBI Act. 2302/W/03 (s c 05.09. 06 Parties were not found guilty in appeal
Pvt. Ltd no.64/2006)

9 M/s Friends Portfolio 24(2) of SEBI Act Mis.Case 17/04/06 Defaulter in payment of penalty
Ltd. & Ors. No.80/M/2006

10 Sure Capital Pvt.Ltd. & Sec.11(1) of the SEBI Act CC 20.06.06 Cancelling the certificate of registration
Ors. No.113/M/2006
(new s c
no.52/2006)
 TABLE-3: SOME OF THE CASES UNDER ‘RESOLVED BUT APPEALED’ CATEGORY

DATE OF
YEAR S.NO CASE VIOLATION CASE NO. JUDGEMENT
FILING

1994-95 1 West Coast Sec.73(2A) &113 of Companies Act. CC No 09.12.94 Compliant dismissed/appeal filed by
BreweriesDistilleries 2290/S/1995 SEBI before high court still pending
Ltd.
1996-97 2 Canara Steels Ltd. &11 113 (2) of the companies Act. C.C.No.2943/97 31/03/97 Case against accused no.1,2,6,7 split
directors up & still pending case against
accused no.5,8 to 12 quashed by
high court.A-4 deed hence
proceeding against A-4 abated.
3 Ravi Prakash Khemka 20 (2) and 22 of SEBI Act, (Takeover code) 167/S/97 03/01/97 Appeal before SAT
& ors Sec. 73 (2A) and 113 (1) and (2) of
Companies Act 1956.
2000-01 4 M/s Kakatiya Cements Under Section 24 of SEBI Act. R/W C.C No. 365/S/00 2504/2000 Appeal/ Revision filed by SEBI is
Takeover Regulations 1994 R/W 1997
Ltd. & six of its pending in the high court
Regulations.
Directors namely:
2001-02 5 BPL Limited Sec.24(1) and 27of Securities and Exchange Revision application filed by SEBI in
Board of India Act sessions court Mumbai
2002-03 6 First Custodian Fund Regulation 6 (a) to (d) of SEBI (PFUT 2577/S/3(newsc 31/03/03 Case dismissed holding that
India Ltd. & ors P)Regulations,1995 no. 84/ 2006) prosecution is not maintainable due to
absence of provision for criminal
action in the regulations. Revision is
filed by SEBI against the said order
which is pending before the Bombay
high court
2003-04 7 M/s Shubh Shanti Rule 3 of SEBI(Stock Brokers and Sub 2178/W/03 3/10/2002 Appeal being filied by SEBI in high
Investment Brokers) Rules 1992, Sec.12 of SEBI Act and court
Sec.23 of SCRA
8 SEBI vs. DSQ Software Reg. 4, 5 and 6ofSEBI (Prohibition of 2776/03 28/03/03 The final hearing before the SAT
Ltd. Fraudulent Trade Practices Relating to (crl.R.C.No.234/2 completed on 16.11.05 & order is yet
Securities Market) Regulations, 1995 006) to be passed
2004-05 9 Magan bhai Patel 24(2) of SEBI Act 67/M/2005 (35/sw/2006) 9-Feb-05 Appeal before SAT
(Growmore Solvents)

2005-06 10 SEBI Vs Ujjwal Shende 11 (c) 6 of SEBI Act 211/M/2005 14-Jun-05 Appeal is being filed by SEBI in the
(Design Auto) (NEW S C high court
NO.311)
 TABLE-4: SOME OF THE CASES UNDER UNRESOLVED CATEGORY

DATE OF
YEAR S.NO CASE VIOLATION CASE NO. JUDGEMENT
FILING

2002-03 1 Ketan Parekh (in the SEBI (Prohibition of Old CC 7-Mar-03 Based on the findings of investigations in the
matters of (1)Credit Fraudulent and Unfair Trade No.123/2003 case of HFCL,zee telefilms, Adani Exports Ltd&
Suisse First Boston (I) Practices relating to NewNo. Global telesystems Ltd a consolidate d show
Securities P.Ltd securities markets) 2574/S/2003 cause notice dated Jan 31 ,2005 has been
Regulations,1995 issued to Shri Ketan V parekh,Shri karthick
2. M/s Dresdner Parekh and 9 entities connected with them viz.,
Kleinwort Benson Panther Fincap & mgmt Services Ltd., Classic
Securities (I) Ltd. credit Ltd.,Pather Investrade Ltd., Classic Infin
Ltd.,Saimangal Investrade Ltd.,Chitrakut
3.Adani Exports Ltd. computers pvt Ltd., Luminant investment Pvt
ltd., Goldfish Computers Pvt Ltd.,& Nakshatra
4.Global Telesystems software Ltd.,.Reply for their trading in the scrip
Ltd. of Adani exports Ltd.was received on sep
19,2005.Further action is in progress.
5.Himachal Furistic 2.Supplementary show cause notice was issued
Communications Ltd. on sep 28,2005 to three KP entities viz., classic
credit Ltd.,panther Fincap & mgmt services M/s
Chitrakut computers Pvt Limited(CCPL) on the
basis of findings of investigation in the scrip of
SAB TV Ltd on Oct 21 2005.Further action is in
Progress.
2003-04 2 Cyberspace Provisions of SEBI (PFUTP) 2652/W/03 (s c 28/08/03 Warning Letters have been issued to broking
Regulation 1995, Regulation no.86/2006) entities.
7 of SEBI (stock broker &
subbroker) Regulations
1992 and Section 11(3) of
SEBI Act
2006-07 3 Luminant Investment 11(3) of SEBI Act CCNo.579/M/2007 23.11.2007 Prosecution Proceedings are under
Private Ltd. consideration
4 KNP Securities Private 11(3) of SEBI Act CC No.580/M/2007 23.11.2007 Prosecution Proceedings are under
Ltd. (Ranbaxy) consideration

5 Saimangal Investrade 11(3) of SEBI Act CC No. 20/12/2007 Prosecution Proceedings are under
Ltd. 616/M/2007 consideration
6 Upfront Investments 11(3) of SEBI Act CC No. 20/12/2007 Prosecution Proceedings are under
619/M/2007 consideration
7 Linear Investment 11(3) of SEBI Act CCNo.578/M/2007 23.11.2007 Prosecution Proceedings are under
(Partnership Firm) consideration
8 Luminant Investment 11(3) of SEBI Act CC No.579/M/2007 23.11.2007 Prosecution Proceedings are under
Privte Ltd. consideration
9 KNP Securities Private 11(3) of SEBI Act CC No.580/M/2007 23.11.2007 Prosecution Proceedings are under
Ltd. (Ranbaxy) consideration
10 Profile Investment 11(3) of SEBI Act CC No. 613/M/2007 19/12/2007 Prosecution Proceedings are under
(Ranbaxy) consideration
 TABLE-5: SOME OF THE CASES UNDER ‘VANISHING COMPANY’ CATEGORY

DATE OF
YEAR S.NO CASE VIOLATION CASE NO. JUDGEMENT
FILING

1994-95 1 Ready Foods Ltd. Sec. 113 (1) (2),(3) Companies Act. Cc No 644/04-559/S/95 1995 Vanishing Company
1999-00 2 Mihir Ghelani (Kamakshi Section 24 with FUTP Regulations C.C.NO.352/S/00 2000 Vanishing Company
Housing Finance Ltd.- (Price rigging)
3 Kalayani Finance Sec.63 and 68 of Companies Act 1956 154/2000 24/03/00 Vanishing Company
2002-03 4 Suryadeep Salt, Refinery & SEBI (Prohibition of Fraudulent and 2182/W/03 8/10/2002 Vanishing Company
Chemicals Ltd. & anr. ( In Unfair Trade Practices relating to
the matter of Suryadeep securities markets) Regulations, 1995
Salt Refinery &
Chemical Works Ltd)

TABLE-6: SOME OF THE CASES UNDER DELISTED COMPANY CATEGORY

DATE OF
S.NO CASE VIOLATION CASE NO. JUDGEMENT
YEAR FILING
1995-96 1 Balwant Textile Mills Ltd. & ors. 63 and 68 of the Companies Act, C.C.No.1251/S/96 16/11/95 Compulsory Delisting
1956
1997-98 2 Mithila Steels & 6 of its 113 of Companies Act (Nontransfer/ 455/98 02/01/98 Compulsory Delisting
directors despatch of shares after allotment within
stipulated time)
3 Rushabh Securities & 24 of SEBI Act (Violation of C.C. 31-Mar-98 Compulsory Delisting
3 of its directors Takeover Code) No.1260/S/98
2003-04 4 Anik Ship Breaking Violation of SEBI (DIP) Guidelines and 799/W/03 (new s c 29/8/2003 Compulsory Delisting
Industries Ltd. Section 11 of no.12/2006)
SEBI Act
5 Mandu Industries Ltd Provisions of SEBI (PFUTP) 794/W/03 ( NEW 12/9/2003 Compulsory Delisting
Regulations 1995 NO.10/2006)
2004-05 6 Gujarat Fun 'N' Water Park Ltd 24(2) of SEBI Act 245/M/04 05.08.2004 Compulsory Delisting
85/SW/2004 (S C
NO.281/06)
7 KARISHMA PFUTP 564/2005 29-Jul-05 Compulsory Delisting
FLORICULTURE LTD.
8 Websity Infosys Ltd. Section 113 of Companies Act CC No.286/2008 08.12.2008 Compulsory Delisting
 TABLE-7: SOME OF THE CASES UNDER OTHER CATEGORY
YEAR DATE OF
S.NO CASE VIOLATION CASE NO. JUDGEMENT
FILING
1995-96 1 Omega Seeds Ltd. & ors Sec 63 of the Companies Act 1956 C.C. No.764/S/00 22/3/1996 Proceeding are not
available
1997-98 2 Punjvani Packing Ltd. & ors. 73(2A) and Sec. 113 (1) of the C.C.No.608/S/97 29/11/97 Proceedings are not
Companies Act,1956. available
2004-05 3 Bhutra Financial Services Ltd. SEBI Act (broker) (571/2004) 28/05/04 Proceedings are not
available
4 K. S. Aghoram (SSI Ltd.) Section 23-1(b) of Securities Contract 227/M/04 (new s c no.5) 20.07.04 Proceedings are not
(Regulations) Act 1956 (SCRA) available
5 Nokia Finance (in the matter Sec 11C(6) of SEBI Act 226/M/2004 (new 21.07.04 Proceedings are not
of Avinash Tech.) s c no.4) available
6 Shri Mahendra S. Varma Sec 11C(6) of SEBI Act 80/SW/2004 ( S 29.07.04 Proceedings are not
(Kedia Distilleries Ltd.) CNO.279/06) available
7 Hitachi Jewellery Industries Regulaiton 4(a) & (b) of SEBI 396/M/2004 (NEW 21-Oct-04 Proceedings are not
Ltd. & Ors (PFUTP) Regulations, 1995 S C NO.15) available
8 Sanidhya Holiday Resort & Section 11 C (6) of SEBI Act 417/M/2004 (NEW 29-Oct-04 Proceedings are not
Estate Development S C NO.17) available
Ltd (In the matter of
Accurate Exports Ltd)
9 Y P SINGH 499 of IPC CC No.51/M/2008 28/01/2008 Proceedings are not
(NEW NO.3202/SS/2008) available
10 G S Organics Limited 24(1) of SEBI Act CC No.104/M/2008 17.07.2008 Proceedings are not
available