Adjudication Order in the matter of Alang Industrial Gases Ltd.

BEFORE THE ADJUDICATING OFFICER SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER: EAD-9/VKV/GSS/2020-21/9244-9245]

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

In respect of:

In the matter of Alang Industrial Gases Ltd.

BACKGROUND OF THE CASE

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), conducted investigation in the scrip of Alang Industrial Gases Limited (hereinafter referred to as "Alang" or "the Target company"), a company listed on BSE limited (“BSE”) for the period July 09, 2012- May 23, 2014(“investigation period”), wherein disclosure violations were observed by the entities namely; Dilip Sheth (hereinafter referred to as Noticee no. 1 or by its individual name) and Alang Industrial Gases Limited (hereinafter referred to as Noticee no. 2 or "Alang" or "the Target company") jointly referred as Noticees, under Regulation 13(4) of SEBI (Prohibition of Insider Trading) Regulations 1992 (PIT Regulations) and Regulation 29(1) and 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations) against Noticee no. 1 and under Regulation 13(6) of SEBI (Prohibition of Insider Trading) Regulations 1992 (PIT Regulations) against Noticee no. 2.

2. During the period of investigation, following was observed;

a. Shareholding of Mr. Dilip Seth had increased from 2,45,200 shares at the end of Quarter ending March 31, 2012 to 6,95,200 shares at the end of Quarter ending June 30, 2012. However, no disclosures in this regard were made by Mr. Dilip Seth, which was in violation of regulation 13 (4) of SEBI (PIT) Regulations 1992 and regulation 29 (1) and (2) of SEBI (SAST) Regulations, 2011.

b. The Target company failed to file disclosure with respect to information received under regulation 13 (1) of SEBI (PIT) Regulations 1992 by Mr. Dilip Seth which was in violation of regulation 13 (6) of SEBI (PIT) Regulations 1992.

APPOINTMENT OF ADJUDICATING OFFICER

3. Subsequently, vide communication order dated July 17, 2020, the undersigned was appointed as Adjudicating Officer in the matter under Section 15 I (1) of Securities and Exchange Board of India Act, 1992 (“SEBI Act”) to inquire and adjudge the alleged violations and if satisfied that the Noticees are liable for imposition of penalty, may impose such penalty in terms of rule 5 of SEBI (Procedure for Holding Inquiry and imposing penalties) Rules, 1995 (hereinafter referred as ‘AO Rules’) and under the provisions of section 15A(b) of the SEBI Act.

SHOW CAUSE NOTICE, REPLY AND HEARING

4. Based on the findings of SEBI, a Show Cause Notice (SCN) dated August 07, 2020, was digitally issued to the Noticees on August 07, 2020, at the e-mail ID; dilips2004@yahoo.co.in to Noticee no. 1 and at nisargshah2015@gmail.com to Noticee no. 2, advising Noticees to file their reply within fourteen days of receipt of SCN. However, no reply was received by the Noticees till the issuance of Hearing Notice.

5. Subsequently, Hearing Notice (HN) dated August 21, 2020, was digitally issued to the Noticees on August 21, 2020 at the aforementioned email addresses, wherein the Noticees, in view of the ongoing COVID-19 situation, were advised to attend the virtual hearing through Webex on September 11, 2020. Subsequently, vide e-mail dated September 22, 2020 and September 10, 2020, Noticee no. 1 and vide e-mail dated August 29, 2020 and September 09, 2020, Noticee no.2, submitted their replies to the SCN.

6. The Noticees did not attend the hearing on September 11, 2020. However, in response to the HN dated August 21, 2020, the Noticee no. 1 submitted its reply vide email dated September 22, 2020, wherein the Noticee no. 1 reiterated its earlier submissions dated September 10, 2020. However, Noticee no. 2 did not attend the hearing scheduled on September 11, 2020.

7. Thereafter, in the interest of principles of natural justice, the Noticees were given another opportunity of virtual hearing through Webex on September 25, 2020. Neither Noticee no. 1 nor Noticee No.2 joined the Webex meet for the scheduled hearing. Thereafter, Noticee no. 1 was contacted at the mobile no. 9819832325 and Noticee no. 2 was contacted at the mobile no. 9879190003, which was available on record. On the phone Noticee no.1 requested to consider his earlier written submissions made vide emails dated September 22, 2020 and September 10, 2020 and Noticee no. 2 requested to consider their earlier written submissions made vide emails dated August 29, 2020 and September 09, 2020, under current proceedings. The same was also confirmed by the Noticees vide their emails dated September 25, 2020. Therefore, the current proceedings are proceeded further on the basis of written replies of the Noticees available on record.

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