Capital market regulator Sebi today rejected a plea to unfreeze securities demat accounts of two individuals in a case related to preferential allotment of shares of Moryo Industries.
In December last, suspecting money laundering and tax evasion, the Securities and Exchange Board of India (Sebi) had barred Moryo Industries and 90 other connected entities from accessing the securities market, till further directions.
One of the entities restricted by the Sebi in the case was Neeli Agrawal, whose daughters Sachi Agrawal and Sneha Agrawal had later filed a request with the regulator to allow operation in their beneficiary demat accounts which stand frozen on account of restraint imposed upon their mother.
In an order today, Sebi has disposed of the request made by Sachi Agrawal and Sneha Agrawal saying they had failed to establish that they are exclusive beneficial owners of the securities lying in the demat accounts, among others.
"Sachi Agrawal and Sneha Agrawal have failed to establish that they are exclusive beneficial owners of the securities lying in the...Beneficiary demat accounts or that those beneficiary demat accounts cannot be used by Neeli Agarwal," Sebi said.
"...If the request of Sachi Agrawal and Sneha Agrawal is acceded to, it is likely that the aforesaid beneficiary demat accounts would be used by Neeli Agarwal for sale or purchase of securities thereby defeating the purpose of the interim order and ongoing investigation," it added.
Preliminary probe by Sebi found that certain entities connected to Moryo had substantially traded amongst themselves in shares of the company and created artificial volume price rise in the scrip. These entities have been referred by Sebi as 'Moryo Group'.
The matter is related to preferential allotment of 63.50 lakh shares of Moryo to 42 persons in November 2012 and Neeli Agarwal was one of the preferential allottess.
According to Sebi, the preferential allottees acting in concert with Moryo Group had misused the stock exchange system "to generate fictitious Long Term Capital Gains so as to convert their unaccounted income into accounted one with no payment of taxes". Long Term Capital Gains are tax exempted.
Noting that the case requires further detailed probe, the market regulator in an interim order had restrained Moryo, company's two promoters, four directors, 42 preferential allottees and 42 Moryo Group entities from dealing in the markets.
In a separate matter, Sebi today disposed of the case against Rajoo Engineers promoter Devyani Chandrakant Doshi that alleged her of failure to make disclosures about her shareholding in the company .
"...The charges leveled against the noticee viz Devyani Chandrakant Doshi do not stand established and the matter is, accordingly, disposed of," Sebi said.
