Sebi bars Sawaca Communications from securities market for 1 year

Regulator Sebi today barred Sawaca Communications Limited from the securities market for one year for allegedly violating capital markets norm.The Securities and Exchange Board of India (Sebi), in its order, restrained "Sawaca Communications Limited from accessing the securities market and prohibit it from buying, selling or otherwise dealing in securities, directly or indirectly, in any manner, whatsoever, for a period of one year from the date of this order."In the show cause notice, it was alleged that Sawaca and its directors knowingly allowed the manipulation in the company's scrip thereby violating the provisions of Sebi's PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) regulations."Rajesh N Jhaveri, being one of the preferential allottees connected with management of Sawaca, he placing orders for Managing Director of Sawaca and entities connected with him and Sawaca in same trading pattern, clearly indicate that manipulation in this case was orchestrated and effected with the connivance of Sawaca, its management, Mahendra A Shah , Rajesh Jhaveri, Harvic Management Services and Mayekar Investment," Sebi said in its order."I, therefore, find that Sawaca also contravened the provisions of the PFUTP Regulations," Sebi Whole Time Member Rajeev Kumar Agarwal said in an order.According to Sebi, proceedings commenced against the directors of Sawaca had been settled by respective consent orders during the year 2008-09."Further, in separate proceedings against Mahendra A Shah, he had already been debarred through vide order dated January 13, 2009.On January 5, 2000, Sawaca had made preferential allotment of 5000000 shares of Rs 10 each,- at par amounting to a total of Rs 50000000.However, only Rs 4.760000000 were credited in the bank account of Sawaca as against total receivable consideration of Rs 50000000. Further, on the same date, about Rs 4.710000000 was debited from the bank account of Sawaca.Thus, Sawaca did not receive actual consideration for shares allotted to the allottees in the preferential allotment.