Sebi drops charges on two persons in Bank of Rajasthan probe


Market regulator Sebi today disposed of cases against two individuals in relation to a probe into the affairs of erstwhile Bank of Rajasthan (BoR) for alleged irregularities on part of the company's former promoters.

In two separate orders, Sebi said allegations of breach of certain relevant regulations by Kailash Nath Bhandari and Azam Mohmmed Ahsan Shaikh do not stand established and therefore, they are being absolved of the charges.

While Bhandari served as director of Jaybharat Textiles and Real Estate Ltd and KSL and Industries, Shaikh was director of Hotline Textiles and Infrastructure. These firms were alleged to be a person acting in concert (PAC) entities of BoR's former promoters.

Sebi alleged that the two had violated various sections of the Sebi Act and the regulations for prohibition of fraudulent and unfair trade practices for which the regulator could impose monetary penalties.

However, the regulator in its orders noted that the incorrect disclosures were made by the promoters of BoR and their PACs for the period June 2007 to December 2009, before Bhandari and Shaikh were appointed as a Directors.

"Without going into the merits of the alleged manipulation in the matter, if any, evidence shows that the noticee (Bhandari) was not a director of Jaybharat Textiles and Real Estate Ltd and/ or KSL and Industries Ltd during the relevant period," Sebi said.

In a similar worded order against Shaikh, Sebi said that he was not a director of Hotline Textiles and Infrastructure during the relevant period.

A probe by Sebi had revealed that BoR's then promoters, led by Pravin Kumar Tayal, along with some companies that were connected to him and his relatives, by way of their continuous disclosure, publicly announced that their stake had come down from 44.2 per cent as on quarter ending June 2007 to 28.6 per cent as on quarter ending December 2009.

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