9911796707
TMI Blog2004 (8) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... managed company headed by Shri H.N Shah, a qualified Chartered Accountant. 3. The respondent, SEBI, carried out an inspection of books of account of the appellant for the financial years 1999-2000 and 2000-2001 during January, 2001. During the inspection of the books of account, records and other documents of the appellant during January, 2001 under Regulation 19(1) of the, SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, certain violations were observed. Findings of inspections were forwarded to the appellant for its comments. 4. After considering the inspection reports and the comments of the appellant, the respondent conducted an enquiry into the contraventions by the appellant of the provisions of Rules 4(b) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat this has been done as authorized by the clients. A member is required to deliver the shares to beneficiaries account immediately after pay out and make the balance in the pool account nil within 15 days of pay out. The appellant has clarified that the 15 instances observed during the inspection pertains to four clients out of which the written authority by one client to keep the shares in pool account was found to be unsigned. Subsequently the said authority letter was signed. (ii) Non-segregation of clients account and own account and depositing of clients funds into the general accounts - During inspection it was found that the appellant has paid its own expenses from clients' accounts, e.g., the appellant had paid ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr. Hetal Shah is one of the Directors of the appellant. The transactions executed for Vora Consultancy included business of family members of Hetal Shah. Hence eventually Vora Consultancy was an in-house extended arm of the appellant and hence the appellant was primarily liable for business done by Vora Consultancy. Registration of the sub-brokership being a technical requirement which was complied with subsequently no harm, injury or loss was suffered to by anyone on account of delay in registration. The appellant further submitted that the delay in obtaining sub-brokership certificate should not attract any drastic and extreme consequences like suspension. 7. Heard both sides. The appellant submitted that suspension will resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI (Stock Brokers and Sub-brokers) Rules, 1992 is that the stock broker shall abide by the rules, regulations and bye-laws of the stock exchange of which he is a member. In this case the appellant has violated bye-laws 226(d) of ASE Bye-Laws read with Rule 4(b) of SEBI (Stock Brokers and Sub-brokers) Rules, 1992. Thus the appellant has violated conditions of registration and is liable for major penalty. 9. The appellant submitted a few cases as under, where the respondent had issued letter of warning although irregularities were found to be similar nature during inspection. Warning to brokers by SEBI - Inspection of books of account 10. We have perused all the facts and relevant documents placed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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