December 04, 1998
PR No. 332/1998

Debarring M/s. Yogi Pharmacy Ltd. And its 
Directors from accessing the capital market

Investigation, Enforcement & Surveillance Dept.

M/s. Yogi Pharmacy Limited came out with a public issue of 39,30,000 equity shares of Rs.10 each at par. The public issue opened on September 27, 1993 and closed on October 4, 1993. SEBI investigated into the allegations of fraudulent pledge of promoter�s shares which was subject to mandatory lock-in by the promoters of M/s. Yogi Pharmacy Ltd. Investigation conducted by SEBI revealed that the act of pledging the promoters quota share which were subject to mandatory lock-in period. Such acts are detrimental to the interest of investors and orderly development of securities market. The said Act of pledging the locked in shares is a violation of SEBI Guidelines dated June 11, 1992 for Disclosure and Investor Protection, which clearly states that the Promoters� contribution shall not be diluted for a period of 5 years from the date of commencement of production or date of allotment whichever is later. Further as per clarification VI, dated December 23, 1992, locked in shares can only be pledged with Banks & Financial Institutions. In this case the shares were pledged to a company which was neither a bank, nor a Financial Institution. Thus the company committed a fraud as defined under Regulation 2 (c) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995. After considering the submission made during personal hearing and documents on record, SEBI has passed the orders under Section 11 B read with Section 4(3) of SEBI Act, 1992 debarring the following entities namely M/s. Yogi Pharmacy Limited, Shri Avinash Magan, Shri Atul Magan and Shri K. K. Dawan the directors of the Company from accessing the capital market for a period of 5 years with effect from December 1, 1998.