Rs 4.25-crore fine: SEBI tribunal refuses to stay order against Parsoli
The Securities Appellate Tribunal (SAT) of the Securities and Exchange Board of India (SEBI) has rejected an appeal of Ahmedabad-based Parsoli Corporation Limited seeking a stay on its order upholding a penalty of Rs 4.250000000 on its promoters,till it approached the Supreme Court. SAT had in its impugned order termed the the case fraud of the worst kind on shareholders. In its order of January 25,SAT has also refused to allow any concession in the amount of penalty imposed. On January 12,SAT had dismissed Parsolis appeal (No 146 of 2010) against a ruling by SEBI that the company and its promoters/directors violated several provisions of the regulations,and when caught,they compensated the shareholders by crediting shares in their demat accounts through off-market transactions. The directors and promoters in question are two main promoters and joint-managing directors,who are also brothers Zafar and Uves Sareshwala. In the judgment,which was challenged in the form of present appeal,presiding officers justices N K Sodhi and P K Malhotra stressed that since all the allegations against the appellants... stand established,the adjudicating officer was justified in imposing the penalties. The Tribunal ruled that the only argument of the appellants is that the amounts of penalties imposed are highly excessive in the circumstances of this case,which it refused to consider. We do not agree... Having regard to the heinousness of the conduct of the appellants,which has adversely affected the interest of the investors/shareholders and the integrity of the securities market,we do not think that any amount of penalty could be excessive. We are not inclined to reduce the amounts. For the reasons recorded above,all the appeals fail and they stand dismissed with no order as to costs. SEBI had imposed exemplary fines on Parsoli,its directors and their front entities. These include a consolidated penalty of Rs 2500000 on Parsoli Corporation Limited Zafar Sareshwala and Uves Sareshwala; a consolidates penalty of Rs 30000000 on the promoters family of Sareshwalas; a consolidated penalty of Rs 7000000 on the Kothawala family who were partners with Zafar Sareshwala and his family in Parsoli; a penalty of Rs 1000000 each on Gulam Rasool Mohiuddin Bombaywala,Iftekar Mohammed Yusuf Mansoori,Aslamkhan Rehmatkhan Pathan,Abdul Hameed Abdul Gaffer Memon and Adulsamad Abdul Gaffer Memon. SEBI has also ruled,for the benefit of the victims,that Parsoli should make a public offer for the rest of the shares at a price set by a BSE mechanism. Reacting to the development,Zafar said over the phone from Mumbai,We will definitely go to the Supreme Court. It is our fundamental right to go to a higher forum. Modus operandi The Parsoli promoters verified signatures of shareholders themselves instead of giving the signature cards to the registrar and transfer agent (RTA) Pinnacle in this case. They then forged signatures of the shareholders on share transfer forms. They were caught when one shareholder,Dipak Shah,applied for de-materialisation of his shares,which he had purchased from joint holders Indulal and Shashank Shah in October 1995 in physical form. They were transferred in his name in December 1995.