Adjudication Order in respect of Shri Subash Menon and Kivar Holdings Private Ltd. in the matter of Subex Limited

BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. Order/SR/AS/2020-21/9295-9296/139-140]

UNDER SECTION 15-I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5 OF THE OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995

BACKGROUND

1. A department (in short OD) of Securities and Exchange Board of India (in short SEBI) conducted an investigation in the scrip of Subex Limited (herein after referred to as Subex / company) OD observed that Shri Subash Menon (herein after referred to as Noticee 1) and Kivar Hoding Private Ltd. (herein after referred to as Noticee 2) (collectively known as Noticees) made an off-market inter-se transfer in the scrip of Subex without obtaining pre-clearance from the designated compliance officer and also failed to make disclosure in this regard. OD observed that Noticee 1 and Noticee 2 violated the provision of clause 6 of Code of Conduct under Schedule B of regulation 9(1) SEBI (Provision of Insider Trading) Regulations, 2015 (in short PIT Regulations, 2015) and regulation 7(2)(a) of PIT Regulations, 2015. Further, OD observed that Noticee 1 made contra trades during the period August 08, 2018 to October 01, 2018 and hence violated the provision of clause 6 of the Code of Conduct under Schedule B of regulation 9(1) of PIT Regulations, 2015.

APPOINTMENT OF ADJUDICATING OFFICER

2. Based on the examination, OD initiated adjudication proceedings against the Noticees. The adjudication proceedings were approved by the Competent Authority and the undersigned has been appointed as Adjudicating Officer (in short AO), under section 15-I of The Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act, 1992) r/w rule 3 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as Adjudication Rules, 1995), to inquire into and adjudge, under sections 15A(b) and 15HB of the SEBI Act, 1992, the alleged violations of provisions of regulations 7(2)(a) of PIT Regulations, 2015 and clauses 6 and 10 of the Code of Conduct under Schedule B of regulation 9(1) of PIT Regulations, 2015 and the same was conveyed to me vide communique dated June 16, 2020.

SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

3. A common Show Cause Notice no. SEBI/HO/EAD-10/E&AO/SR/SM/OW/11050/1-2/2020 dated June 24, 2020 (hereinafter referred to as SCN) was issued to the Noticees in terms of rule 4 of the Adjudication Rules, 1995 requiring the Noticee to show cause as to why an inquiry should not be held against him for the alleged violations of provisions under regulations 7(2)(a) of PIT Regulations, 2015 and clauses 6 and 10 of the Code of Conduct under Schedule B of regulation 9(1) of PIT Regulations, 2015 and why penalty be not imposed on the Noticee under sections 15A(b) and 15HB of the SEBI Act, 1992 for the alleged violations as specified in the SCN. The SCNs were sent to the Noticees e-mail sent to email ids on record ie subash.menon@subexworld.com, subash.menon@Pelatro.com, rajini.dixit@gmail.com, rajini.dixit@kivar.com through digitally signed emails. Further, vide email dated August 12, 2020, Noticees were advised to reply to the said SCN by August 21, 2020. Shri Subash Menon i.e. Noticee 1 vide e-mail dated August 12, 2020 informed that the said SCN was not received and requested to provide the same. Accordingly, earlier e-mail dated June 24, 2020 was forwarded to the Noticees and same was acknowledged by Noticee 1. Noticee 1, vide e-mail dated August 19, 2020 replied to the SCN for and on behalf of the Noticees. Vide e-mail dated August 28, 2020, undersigned granted an opportunity of hearing to the Noticees scheduled on September 08, 2020 and the same was acknowledged by Noticee 1. On the same day, Noticee 1 requested the said hearing on September 11, 2020 and the same was acceded to. On the scheduled date of hearing i.e. September 11, 2020, Noticee 1 attended the hearing on behalf of the Noticees through webex, an online platform. Noticee 1 reiterated the submissions made vide e-mail dated August 19, 2020 and requested for time to submit additional information/documents. Acceding to the request, Noticees were given time till September 18, 2020. Hearing minutes are on record. Noticee 1 vide e-mail dated September 14 and 16, 2020 submitted reply to the SCN on behalf of the Noticees. Proof of delivery of all the outgoing e-mails mentioned herein from the Adjudicating Officer, is available on record.

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