PRESS RELEASE - SEBI

November 06, 2013
PR No. 104/2013

Action on Fraudulent Allotment of Preferential Equity Shares by SMS Techsoft (India) Ltd.

Shri Rajeev Kumar Agarwal, Whole Time Member, SEBI, passed an ad interim ex -parte order dated November 05, 2013 restraining Rajesh Mangilal Ranka, SMS Techsoft (India) Limited, its 3 promoters, viz. V Jagdish, Akash
Jagdish Vital, Anitha V Jagdish, 3 independent directors, viz. Dashrathkumar Khatri, Dilipbhai Gajjar and Devraj Pera Naidu, and 28 other entities, from accessing securities market and prohibiting them from buying, selling or dealing in securities in any manner whatsoever, till further directions in the matter of dealing in the scrip of SMS Techsoft (India) Limited (SMS Techsoft).
 
SEBI had, suo moto, carried out an examination in the scrip of SMS Techsoft in view of various SMSs circulating in the market mentioning therein buy recommendation for the scrip of SMS Techsoft.
 
During examination of the said scrip, it was observed that;

a)

The company issued 3,00,00,000 equity shares to 31 entities including 3 promoters of the company, who are related to Shri Rajesh Mangilal Ranka, who was restrained from buying, selling or dealing in securities market in any manner whatsoever for a period of 2 years vide SEBI order No. WTM/PS/28/IVD/ID-06/JULY/10 dated July 28, 2010.
 
b)

The preferential allotment was designed merely as a book entry wherein Shri Rajesh Ranka circulated `1,99,50,000/- back and forth between the company, other allottees in the purported preferential allotment by the company. The scheme/plan was a camouflage to give misleading impression that many people had subscribed to the shares of SMS Tech by paying the consideration to the company. In fact, the entire allotment money funded by Sri Rajesh Ranka had been returned to him in the whole plan without the company getting the proceeds of preferential allotment. Effectively, 3,00,00,000 new equity shares have been issued in the names of 31 allottees without receipt of any consideration for the shares allotted in the purported preferential allotment.
 
c)

The company had misrepresented annual reports for the financial years 2011-12 and 2012-13 that the proceeds of the purported preferential allotment has been utilised to purchase land worth ` 30,00,00,000/-.
 
d)

Once the lock in period for the shares allotted under purported preferential allotment expired on March 12, 2013, the entities related to Shri Rajesh Ranka started creating artificial volume in the scrip by trading amongst themselves and, thereafter, offloading these shares to common investors.

The above examination, prima facie, shows that the promoters/directors of the company were acting in concert with Shri Rajesh Ranka by issuing new equity shares of the company through preferential allotment to the aforesaid
connected entities without receipt of full consideration. These connected entities offloading these shares by indulging in trading in an artificial, manipulative and unfair manner. Thus, the aforesaid entities have, prima facie, violated section 12A of the Securities and Exchange Board of India Act, 1992 and regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of the Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.

 
Mumbai

November 06, 2013

For full copy of order against AKASH JAGADISH VITAL, click here.

For full copy of order against ALAKABEN KIRTIBHAI SHAH, click here.

For full copy of order against ANITA SRINIVASABHATT KADANTHALAI, click here.

For full copy of order against CHHAYA UMESHCHANDRA TRIVEDI, click here.

For full copy of order against DASHRATHKUMAR KESHAJI KHATRI, click here.

For full copy of order against DEVARAJ SIDDIAH PERA NAIDU, click here.

For full copy of order against DHARMENDRA RIKHAVCHAND SHAH (HUF), click here.

For full copy of order against DILIPBHAI JASWANTLAL GAJJAR, click here.

For full copy of order against HIMADRI KAMLESHBHAI SHAH, click here.

For full copy of order against HIMANSHU PRAFULCHANDRA SHAH, click here.

For full copy of order against JAGADISH VITAL, click here.

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

For full copy of order against KALIYABEN HIMANSU SHAH, click here.

For full copy of order against KANUBHAI NARANDAS THAKKAR, click here.

For full copy of order against KARAN KIRTIBHAI SHAH, click here.

For full copy of order against KEVAL KIRTIKUMAR SHAH, click here.

For full copy of order against KIRTIKUMAR RASIKLAL SHAH, click here.

For full copy of order against MAHAVIRSINGH N.CHAUHAN, click here.

For full copy of order against MAHESHCHANDRA CHUNILAL SHAH, click here.

For full copy of order against MANJULABEN MAHESHCHANDRA CHUNILAL SHAH, click here.

For full copy of order against MEENABEN NATUBHAI THAKKAR, click here.

For full copy of order against MINABEN PRAFULBHAI SHAH, click here.

For full copy of order against MITESH KANAIYALAL THAKKAR, click here.

For full copy of order against MUKESHBHAI SHANTILAL THAKKAR, click here.

For full copy of order against MULCHAND GANESHMAL JAIN, click here.

For full copy of order against NATUBHAI SHANTILAL THAKKAR, click here.

For full copy of order against NAVINCHANDRA KANUBHAI THAKKAR, click here.

For full copy of order against NILA RAJESHKUMAR SHAH, click here.

For full copy of order against PRUTHVI HIMANSHU SHAH, click here.

For full copy of order against RAJESH MANGILAL RANKA, click here.

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

For full copy of order against SIDDHRAJ BAFNA, click here.

For full copy of order against SMS TECHSOFT (INDIA) LTD., click here.

For full copy of order against SMS TECHSOFT (INDIA) LTD., click here.

For full copy of order against SURESH NENMALJI MALVI, click here.

For full copy of order against VAISHALI NATVARLAL THAKKAR, click here.

For full copy of order against VINIT KAMLESHKUMAR SHAH, click here.

For full copy of order against VINOD JAIN, click here.