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Mumbai, Sept. 1 The Securities Appellate Tribunal (SAT) upheld SEBI’s order against Padmini Technologies Ltd (PTL) and its three directors — Praveen Kumar Jain, Vishnu Sarup Gupta and Vivek Nagpal in the case relating to preferential issue of shares to Delhi and Kolkata allottees without receiving application money, which were subsequently transferred to Ketan Parekh entities in off-market transfers for manipulating the market.

SEBI during the investigations found that PTL got the shares listed on different stock exchanges by presenting false certificate about the receipt of fund against the allotment to facilitate trading in those shares by KP entities.

It was also noticed that the funds received from Ketan Parekh entities and other buyers against sale of shares were channelised back to the original allottees for making payments towards application/payment of money.

SEBI barred all the four entities from accessing the capital markets for five years.

SAT, while deciding the appeal, observed that SEBI was right in holding that the allottees were mere name lenders.

Also, the SAT order mentions that having done the allotments, the company went out of the way to issue false certificates to the stock exchanges.

This clearly indicates its desire that the shares, for which no money was received, should be traded in the market.

Also SAT expressed its agreement with the findings recorded by the Board that the allotment made without receipt of money was a part of the larger game plan to enable the subsequent transferees such as Ketan Parekh and his entities to play with those shares in manipulating the market.

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