SEBI BARS FORMER TATA FINANCE MD FROM CAPITAL MARKETS FOR 2 YEARSThe
Securities and Exchange Board of India ( Sebi) on Monday barred Dilip
Pendse, former managing director of erstwhile Tata Finance, for two
years from the securities market on charges of involvement in fraudulent
and unfair trade practices in four firms, including Telco ( now Tata
Motors) and Infosys, more than 10 years
ago. In its order, Sebi said it
had restrained " Dilip S Pendse from accessing the capital market and
prohibit him from buying, selling or otherwise dealing in the securities
market, directly or indirectly, for a period of two years." The market
regulator had conducted a probe into the dealings of one Inshaallah
Investments in the scrips of Himachal Futuristic Corp ( HFCL), Tata
Engineering and Locomotive Company Ltd ( Telco), Infosys and Software
Solutions India Ltd ( SSI) following a complaint by Tata Finance in
2002. The complaint alleged that there were certain illegal carry
forward transactions in these scrips at the behest of Pendse in 2001.
Further, the transactions were executed on behalf of Inshaallah, in
which a Tata Finance subsidiary, Niskalp Investment and Trading Company
Ltd, had vital financial interest. It was stated in the complaint that
Pendse was the director in both Niskalp and Inshaallah. It was alleged
that Pendse, in association with two brokers — Jhunjhunwala Stockbrokers
and Pratik Stock Vision — executed the transactions. Sebi said
Inshaallah had agreed to buy a specific quantity of shares of HFCL,
TELCO, Infosys and SSI on ` Principal to Principal' basis at specified
prices on various dates. Interestingly, on the same day Anjudi Property
agreed to sell a similar quantity of shares of these companies on
`principal to principal basis' at price very close to the prices given
by Inshaallah. Later, it was found instead of settling these carry
forward positions on the market, the shares were sold by Anjudi Property
to the brokers on ` principal to principal' basis. Sebi said such
transaction could not be said to be valid, as under the normal
circumstances, the brokers should not have purchased shares not in
possession of Anjudi Property. It also said the brokers should not have
sold similar quantities of shares to Inshaallah as they were not in the
possession of such number of shares. Pendse had submitted before Sebi
there had been an inordinate delay in the proceedings, but the regulator
said " the proceedings have been prolonged as the investigation had to
deal with complex facts and records. "After the issuance of SCN ( show-
cause notice), the inspection of the documents also consumed time.
However, delay cannot be a ground for exoneration," Sebi's whole- time
member Prashant Saran said in his order. – www.business-standard.com