It was argued by the appellants that the covenants in the non-compete agreement provide for both non-compete obligations as well as an obligation to maintain confidentiality. According to them, it is necessary and advisable to do so as a non-compete obligation without a corresponding obligation to maintain confidentiality, would render any non-compete agreement ineffective
It has been specifically pleaded by the appellant that during the investigation period, i.e. in the year 2002, there was no software available for carrying out long or real time surveillance and it was not possible to carry out surveillance of thousands of transactions of all clients on a daily basis. It has also been pleaded by the appellant that the impugned trades in the scrip of the company were done on behalf of its clients and the intra day trading was the normal/usual pattern of the trading adopted by the said client. The appellant had not entered into any proprietory trades in the scrip.
The first allegation relates to transfer of funds in the bank account of the appellant. It is alleged that the appellant has transferred funds from its bank account earmarked in clients trading transactions to the bank account earmarked for its own business operations. In other words, there was no proper segregation of the funds relating to the broker and the client.
When a company having contracts worth Rs.1000 crores pending with it for execution bags a few new projects through the tendering process such information need not necessarily be price sensitive.
Regulation 4 appears under Chapter II providing common conditions for public issues and rights issues. It prescribes general conditions meaning thereby that unless the requirements laid down in these general conditions are satisfied, the Board will not proceed with granting its clearance for the issue of capital. These conditions must be satisfied not only at the time of filing of draft offer document with the Board but also at the time of registering or filing the final offer document with the Registrar of Companies or designated stock exchange, as the case may be.
Any act, omission or concealment to be a fraud within the meaning of the Regulations need not be committed in a deceitful manner; intention to deceive is not an essential requirement of the definition of fraud as given in the Regulations; even making a false statement without believing it to be true is by itself an act of fraud.
We have carefully perused the show cause notice which was common to all the six entities including the appellant who were alleged to have acted in concert with each other in the acquisition of the shares of the target company. Apart from making a bald assertion in para S of that notice that all the notices were acting in concert, there is nothing else in the show cause notice to suggest that the appellant was acting in concert with the other notices.
No acquirer shall acquire shares or voting rights which (taken together with shares or voting rights, if any, held by him or by persons acting in concert with him), entitle such acquirer to exercise fifteen per cent or more of the voting rights in a company, unless such acquirer makes a public announcement to acquire shares of such company in accordance with the regulations.
