Description

SEBI adjudication order against Omprakash A Khandelwal for alleged violations in preferential allotment without complying with ICDR Regulations.

Summary

SEBI has issued an adjudication order against Omprakash A Khandelwal (PAN: ABGPK4008D), Managing Director of Aadhaar Ventures India Limited (AVIL), for alleged violations related to preferential allotments made by the company. The investigation covered the period from January 15, 2013 to March 11, 2013, focusing on whether the company provided funding to preferential allottees in violation of regulatory requirements.

Key Points

  • Investigation into AVIL’s preferential allotments during 2009 and 2013
  • Three preferential allotments examined: two to 47 entities in 2009 and one to 31 entities in 2013
  • Focus on March 11, 2013 preferential allotment for potential funding violations
  • Alleged violations of SEBI Act Section 12A(a), (b), (c) and PFUTP Regulations 3(a), (b), (c), (d) and 4(1)
  • Non-compliance with ICDR Regulations Chapter VII, Regulation 77(1)
  • Adjudicating Officer appointed under Section 15-I of SEBI Act and Section 23-I of SCRA

Regulatory Changes

No new regulatory changes introduced. This order enforces existing provisions under:

  • SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
  • SEBI Act, 1992
  • Securities Contracts (Regulation) Act, 1956

Compliance Requirements

  • Companies must ensure preferential allotments comply with ICDR Regulations, particularly Regulation 77(1)
  • No funding should be provided by companies to preferential allottees
  • Proper disclosure and compliance with PFUTP Regulations required
  • Directors and key management personnel must ensure adherence to securities regulations

Important Dates

  • Investigation Period: January 15, 2013 to March 11, 2013
  • EGM approving preferential allotment: January 15, 2013
  • Board meeting for share allotment: March 11, 2013
  • Initial AO appointment: June 09, 2022
  • Communication date: June 15, 2022

Impact Assessment

This adjudication order serves as a regulatory precedent for companies and their management regarding preferential allotment compliance. While specific to AVIL and its Managing Director, it reinforces SEBI’s stance on preventing funding arrangements that circumvent securities regulations. The case highlights the importance of proper due diligence and compliance in capital raising activities through preferential allotments.

Impact Justification

Individual adjudication order with limited market-wide impact but establishes regulatory precedent for preferential allotment compliance