May 31, 2002
PR No. 107/2002

In the matter of SRG Infotec Ltd Cancellation of Registration

M/s VR Mathur Mass Communication Ltd.(hereinafter referred to as VMCL) made a public issue of equity shares from 11 to 14 Dec 1995. M/s SRG Financial and Management Consultants Ltd., now known as SRG Infotec Ltd. (hereinafter referred to as SRGlL) acted as the Registrar to the issue. Pursuant to the SEBI investigation, it was revealed that the Registrar had helped in manipulation of the public issue, especially the minimum subscription which was not received before the issue closure date. 

It was found that the promoters had entered into an understanding with certain persons to arrange funds for the issue since minimum subscription was not received. Two Mumbai based investors had made high value share applications but for which the issue would not have received the minimum subscription. It was found that a few other applications received from certain investors were also accompanied by stockinvests, which were procured much after the issue closure date. Thus SRGIL had received and processed these applications much after the issue closure and thereby helped to bail out the issue, which had not received the minimum subscription. 

It was also found that figures certified by SRGIL in the 3-day and 7-day reports submitted to SEBI including therein the particulars of the above applications, were incorrect. 

Similarly, in another case, an inspection was carried out by SEBI in 2000 into the affairs of SRGIL as registrar to an issue and share transfer agents. Numerous violations were noted, including that stockinvests were accepted in violation of the applicable regulations and circulars, that they had acted as RTI without having a memorandum of understanding in force with certain companies and that they had defaulted in maintenance of various records, documents and registers and thereby violated the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 and other SEBI circulars. 

In view of the serious nature of violations, enquiry proceedings were initiated by SEBI in both the cases. The enquiry officer found the entity, guilty of the above charges. Therefore, SEBI has passed an order on 16.05.2002 under regulation 26(3) of the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 canceling the Certificate of Registration of SRGIL as Category I Registrar to an Issue and Share Transfer Agent with immediate effect.