February 02, 2006
PR No. 71/2006

Order in the matter of M/s. Bellary Steels and Alloys Ltd.

Securities and Exchange Board of India (SEBI) vide order dated February 1, 2006 has issued the following directions in the matter of M/s. Bellary Steels and Alloys Ltd. (BASL):

1. M/s. Bellary Steels & Alloys Ltd., and its directors � BSAL are directed not to issue any further shares or alter its share capital in any manner till further directions. The company and its directors, namely Mr. S Madhav, Mrs. S Parvati, Mr. Ram Nain Pandey and Mr. G J Prasad are prohibited from accessing the capital market or dealing in securities, in any manner, directly or indirectly, till further orders in this regard by SEBI.

2. M/s. S N Finance Ltd., M/s. Kodiganti Investments Ltd., and its directors and Mrs. K Meenakshi and M/s. Panchaloha Hotel P Ltd., and its Directors are prohibited from accessing capital market or dealing in securities, in any manner, directly or indirectly, till further orders in this regard by SEBI.

3. M/s. Karnataka State Financial Corporation, Bangalore (KSFC) is directed to retain all the original documents pertaining to the transaction including the share certificates and the debenture certificates in its possession, in a sealed and secure place. KSFC is directed not to tamper with or part with any of the aforesaid documents until further specific directions in writing in this regard by SEBI.

4. M/s. Karvy Computershare Private Ltd. is directed that it should keep in a safe and secure location all the documents pertaining to the transaction including the original defaced certificate received by it for dematerialization from M/s. Panchaloha Hotel P. Ltd., and all correspondence and documents received from the company regarding the allotment of shares to M/s S N Finance Ltd., M/s Kodiganti Investments Ltd., and Mrs. K Meenakshi. Karvy should not tamper with or part with any of the documents pertaining to the transaction until further specific directions in writing in this regard by SEBI.

5. NSDL/CDSL is directed not to effect any transfer of shares from/to the beneficial account of M/s Panchaloha Hotel P Ltd., until further orders.

All the above directions shall take effect immediately and shall be in force until further orders. 
 
SEBI received a complaint from M/s. Karnataka State Financial Corporation, Bangalore (KSFC) against M/s Bellary Steels and Alloys Ltd., Bangalore (BSAL). In its complaint, KSFC, inter alia, stated that they had subscribed to Rs. 150.00 lakhs redeemable non-convertible debentures of BSAL during May 1996 which were secured by the 21,50,000 shares of BSAL held by the pledger entities/persons related to the company. BSAL failed to redeem the non-convertible debentures and pay interest and consequently, KSFC was unable to recover the dues to the tune of Rs. 5,64,38,971.00. It is stated by KSFC that they had approached M/s Karvy Computershare Private Ltd., which is the share transfer agent for transfer of shares and dematerialization of the same in favour of KSFC . KARVY informed KSFC that the pledged shares have already been transferred in favour of M/s Panchaloha Hotel P Ltd. (Transferee), and the same were dematerialized. It is prima facie seen that the pledger entities/persons in connivance with BSAL and the transferee fraudulently transferred the shares with a malafide intention to cheat KSFC. 
 
It is prima facie found that BSAL has issued fake certificates of around 21,50,000 shares in connivance with the pledger entities/persons and transferee. This renders the Company, M/s. Bellary Steels & Alloys Ltd., its directors, the pledgers viz., M/s. S N Finance Ltd.., and its Directors, M/s. Kodiganti Investments Ltd., and its Directors, Mrs. K Meenakshi and also the transferee M/s. Panchaloha Hotel P. Ltd., and its Directors in violation of Regulation 3 and Regulation 4(h) of SEBI (Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.
 
In view of the aforesaid and with a view to protect the interest of investors, Shri G. Anantharaman, Whole Time Member, SEBI has passed the above order.
 
 
Mumbai

February 02, 2006

For full copy of order against BELLARY STEELS & ALLOYS LTD., click here.

For full copy of order against BELLARY STEELS & ALLOYS LTD., click here.

For full copy of order against BELLARY STEELS & ALLOYS LTD., click here.

For full copy of order against G.H.PATIL, click here.

For full copy of order against G.J.PRASAD, click here.

For full copy of order against K.C.KONDAIAH, click here.

For full copy of order against K.MEENAKSHI, click here.

For full copy of order against KODIGANTI INVESTMENTS LTD., click here.

For full copy of order against PANCHALOHA HOTEL PVT.LTD., click here.

For full copy of order against PARVATHI S.MADHAVA, click here.

For full copy of order against PARVATHI S.MADHAVA, click here.

For full copy of order against R.RANGANATHAN, click here.

For full copy of order against RAM NARAIN PANDEY, click here.

For full copy of order against S.HARIKRISHNA, click here.

For full copy of order against S.MADHAVA, click here.

For full copy of order against S.MADHAVA, click here.

For full copy of order against S.MADHAVA, click here.

For full copy of order against S.N.FINANCE LTD., click here.

For full copy of order against V.R.GUNDANNAVAR, click here.