PRESS RELEASE - SEBI
June 06, 2002
PR No. 108/2002

ORDER U/S 11 and 11B TO HITECH COMVISION LTD. AND ITS PROMOTER DIRECTORS AND OTHERS

Hitech Comvision Ltd. (HCL / Company) proposed to come out with a public issue of 26.85 lac equity shares of Rs 10/- each at a premium of Rs. 9/- aggregating to Rs 5.10 crores. Haryana State Industrial Development Corporation (HSIDC) was the Lead Manager. Shri K.P.S. Bal, Shri P. Bhatnagar, Shri Atul Garg, Shri S. K. Sethi and Ms. Simmi Gupta were the promoter directors of HCL 

In the draft prospectus filed for the said issue, certain material information were not disclosed and certain information were given in distorted and misleading manner. On this basis, SEBI issued Show Cause Notices to HCL, its promoter directors and associates and to Mr SK Gupta and his associates (alleged to be in control of HCL) as to why they should not be debarred from the Capital Market. The company withdrew the draft offer document on 04.01.2001 citing adverse market conditions. 

An opportunity for a personal hearing before Chairman, SEBI was given to the company, to promoter director and their associate, Shri S.K.Gupta and his associates on May 7, 2002. 

It was found that the promoter directors sought to furnish distorted and misleading information in the draft offer document in order to justify the trade record, premium of Rs. 19/- and also sought to show their operations as an infotech company in order to take advantage of investors fancy for infotech shares at that time and to lure the common investors to invest in shares of the company at a premium. The company omitted to give material information pertaining to the companies financial performance and gave wrong information to justify the issue price in the draft offer document. The company also failed to give the basis of valuation of acquisition of IMAGE and travelhindustan.com. The disclosure in the draft offer document shows the operations of unethical practices to show a high turnover etc. It was also found that actual control of HCL rests with Shri.S.K.Gupta who had been doing private placement of promoter quota shares, ahead of the company’s public issue. The registered office address given by the company was misleading The company had also given false information about sundry debtors. 

Taking into consideration the facts and circumstances of the case, SEBI, Chairman vide his order dated May 31, 2002, has debarred M/s Hitech Comvision Ltd., the companies in which Shri K. P. S. Bal, Shri Prabhash Bhatnagar, Shri Atul Garg, Shri S. K.Sethi, Ms. Simmi Gupta and Shri S. K. Gupta have and / or may have controlling or substantial interest, from accessing the capital market for a period of five years w.e.f. May 31, 2002.