Addendum to orders dated 05.11.2019 & 09.12.2020 in the matter of KLG Capital Services Limited
- Order No.WTM/GM/EFD-I/DRA-I/43E&9769A/2020-21
Ratio decidendi
The rule this decision rests on
SEBI may grant limited relaxation from its restraint and prohibition directions to noticees who request it, where the relaxation is granted after considering the requests and is confined to the specific matters sought. Where a noticee's failure to complete the sale of shares for disgorgement within the prescribed time results from delay by her broker and depository participant, the time limit for that sale may be extended to a fixed date, and the relaxation is subject to the other directions in the earlier orders. Funds that a noticee is otherwise free to use under earlier orders of the Securities Appellate Tribunal must first be applied to the disgorgement amount and applicable interest, so that a relaxation does not defeat the payment of disgorgement.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
WTM/GM/EFD-I/ DRA-I/43E & 9769A/2020-21 SECURITIES AND EXCHANGE BOARD OF INDIA ADDENDUM IN THE MATTER OF KLG CAPITAL SERVICES LIMITED 1. Securities and Exchange Board of India (SEBI) had passed an order dated November 05, 2019, bearing reference number WTM/GM/EFD/DRA- I/43/2019-20 read with Addenda / Miscellaneous Order dated February 14, 2020 (ref. no. WTM/GM/EFD/DRA-I/43A/2019–20), June 02, 2020 (ref. no. WTM/GM/EFD/DRA-I/43B/2020–21), July 24, 2020 (ref. no. WTM/GM/EFD-1/DRA-I/43C/2020–21) and August 13, 2020 (ref. no. WTM/GM/EFD-I/DRA-I/43D/2020-21) in the matter of KLG Capital Services Limited. Subsequently, SEBI has also passed an order dated December 09, 2020 bearing reference number WTM/GM/EFD/DRA1/ISD/9769/2020-21 in the said matter.
2. SEBI is in receipt of emails dated August 08, 2020, September 11, 2020, September 23, 2020, December 02, 2020 and December 10, 2020 from certain Noticees, viz. N. Ravichandran, Anita Ravichandran and Hemant Patel, requesting for certain relaxations from the directions contained in the abovementioned orders. Such requests pertain to inter alia availing benefits of corporate actions during the restraint period, dematerialization of physical
Addendum to Orders dated 05.11.2019 & 09.12.2020 in the matter of KLG Capital Services Ltd.
shares and extension of timeline for selling shares lying in the demat accounts for paying the disgorgement amount to SEBI. Anita Ravichandran vide her email dated September 11, 2020 has inter alia submitted that selling of shares lying in her demat account to pay the disgorgement amount to SEBI, which was permitted by SEBI to be completed by September 12, 2020, could not be done by her within the prescribed timeframe due to the delay on part of her broker (HDFC Securities Ltd.) and DP (HDFC Bank Ltd.). After due consideration of their requests, I hereby grant the following limited relaxation to the Noticees, viz. Praveen Mohnot, N. Ravichandran, Priyanka Singhvi, Anita Ravichandran, Hemant Patel and Hemant Patel HUF, from the directions contained the abovementioned orders:
(a) The Noticees, during the period of restraint / prohibition, are permitted to avail the benefits of any corporate action like bonus issues, rights issue etc., that may arise in respect of securities held by them.
(b) The Noticees, during the period of restraint / prohibition, are permitted to dematerialize the securities held by them in physical form and get them credited into their demat account(s). The Noticees are also permitted to dematerialize and receive credit of those securities in their demat account(s) which they are entitled to inherit / receive upon transmission.
(c) As regards the Noticees, Mrs. Anita Ravichandran and Mrs. Priyanka Singhvi, the time limit provided to them for completion of sale / liquidation of securities and remitting the proceeds thereof to SEBI under para 2(b) of the Addendum dated August 13, 2020 (ref. no. WTM/GM/EFD-I/DRA- I/43D/2020-21) is extended to January 31, 2021.
(d) The Noticees, viz. Hemant Patel and Hemant Patel HUF, are permitted to square off any open position held by them in the derivative segment.
(e) The Noticees, viz. Hemant Patel and Hemant Patel HUF, are free to access and utilize the funds deposited in the bank account (Axis Bank A/c No. 909010042957248) in terms of orders dated 10.11.2009 (Misc. Appln. No. 94 of 2009), 21.12.2009 (Misc. Appln. No. 102 of 2009), 15.01.2010 (Misc. Appln. No. 4 of 2010) and 28.04.2010 (Misc. Appln. No. 37 of 2010) of the Hon’ble Securities Appellate Tribunal. However, the funds lying therein shall first be utilized for payment of the disgorgement amount and the applicable interest as directed in the SEBI order dated December 09, 2020.
(f) The above mentioned directions shall be read along with the other directions issued in the above mentioned earlier orders in the matter.
3. This order shall come into force with immediate effect.
4. The depositories, the exchanges and the RTAs are directed to take note of the limited relaxations granted above and take necessary action for giving effect to the same.
5. A copy of this order shall be served upon the depositories, the exchanges and the RTAs.
Place: Mumbai G. MAHALINGAM Date: December 22, 2020 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
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