Description

SEBI settlement order for Hetal Rajesh Patel regarding alleged violations in RTS Power Corporation Limited trades with ₹25 lakh penalty and 3-year debarment.

Summary

SEBI issued a settlement order for Hetal Rajesh Patel regarding alleged violations in RTS Power Corporation Limited trades on February 11, 2009. The applicant agreed to pay ₹25 lakh as settlement amount and undergo voluntary 3-year debarment from securities market activities. The settlement resolves proceedings under SEBI Act sections 11(4) and 11B and PFUTP Regulations violations.

Key Points

  • Settlement application filed on March 7, 2011 for alleged failure to fulfill pay-in obligations
  • Original payout of ₹3,44,62,569 was withheld by BSE since June 5, 2009
  • SEBI had imposed interim restraint on market access in June 2009
  • Alleged violations include transactions with related entities without intention to fulfill obligations
  • Settlement terms finalized after Internal Committee meeting on October 13, 2011
  • HPAC recommended acceptance of settlement terms on December 21, 2011

Regulatory Changes

No new regulatory changes introduced. This order applies existing PFUTP Regulations for settlement of enforcement proceedings.

Compliance Requirements

  • Payment of ₹25,00,000 as settlement amount
  • Voluntary debarment from buying, selling or dealing in securities for 3 years
  • Prohibition from accessing securities market directly or indirectly during debarment period
  • Release of withheld payout of ₹3,44,62,569 upon settlement order implementation

Important Dates

  • February 11, 2009: Alleged trading violations in RTS shares
  • June 5, 2009: Interim restraint order issued
  • October 26, 2009: Restraint directions confirmed
  • March 7, 2011: Settlement application filed
  • October 13, 2011: Internal Committee meeting
  • December 21, 2011: HPAC recommendation

Impact Assessment

Limited individual case impact with no broader market implications. Demonstrates SEBI’s settlement mechanism effectiveness for resolving enforcement proceedings. The substantial withheld amount and penalty indicate serious nature of alleged violations involving related party transactions and pay-in obligation failures.

Impact Justification

Individual settlement case with significant penalty and debarment but limited broader market impact