9911796707
TMI Blog2007 (4) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 1994 and the prospectus issued contained, among others, the following statement- Notes: (i) .. (ii) The details of Lock-in period in respect of promoters holding is as under: No. of Shares %of the paid up Capital after issue Allotted on Lock-in Period Commencing from 290500 6.46 16.5.1992 5 years From the date of allotment in this issue or commencement of commercial production whichever is later 3 years from the date of allotment 140000 3.11 25.3.1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 1992 on private placement basis. The learned counsel for the respondent informs us that this allotment was made to non-promoters and it appears to us to be so because in the reply filed by the appellant it has been stated that such allotments are generally made to financial institutions, mutual funds and others. It is not the case of the appellant that the allotment was made to the promoters. It is also not in dispute before us that these shares were held by the shareholders in physical form and that they had a lock-in period of five years. It is further admitted by the learned counsel for the parties that the shares in the physical form did not carry on their fact the stamp of being non-transferable for five years which is man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and had been vigilant in the performance of its duties as a merchant banker the default committed by the company would have been discovered at an earlier stage and the innocent investors could have been saved from being put a loss. It is, thus, clear that the appellant was guilty of lack due diligence which resulted in loss being caused to some of the innocent investors who had purchased the shares from those to whom they had been allotted on private placement basis in the year, 1992. The question that now arises is what penalty should be imposed on the appellant? The Securities and Exchange Board of India has debarred the appellant from dealing in securities or associating with any of the activities in the capital market for a peri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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