Sebi suspends registration certificate of Knack Corp

Nov 16 2012, 17:28 IST
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SummaryIn addition, Sebi alleged Knack Corporate Services of major non-compliances regarding the rights issue of Ram Kaashyap Investments Ltd.

Market regulator Sebi has suspended the registration certificate of Knack Corporate Services Pvt Ltd for a period of three months for alleged lapses in its functioning as a Registrar to an Issue (RTI) and Share Transfer Agent (STA).

In addition, Sebi alleged Knack Corporate Services of major non-compliances regarding the rights issue of Ram Kaashyap Investments Ltd.

RTI/STA work as documentation and payment processing agencies.

In its order dated November 8, Sebi said that it is suspending the certificate of registration "granted to Knack Corporate Services Private Limited, as a registrar to an issue and share transfer agent, for a period of three months".

Further Sebi directed Knack Corporate Services to write to all its clients to make alternate arrangements for their registry and share transfer work during the suspension period.

Moreover, the entity would have to hand over all the physical and the demat records of shareholders of its clients along with the database, after certifying their correctness, to the RTI and STA arranged by respective clients, under intimation to Sebi.

The entity has to notify the concerned depositories about the transfer of records, Sebi said.

A probe was conducted by Sebi into the account books of Knack Corporate Services during November 23-25, 2010.

The regulator observed that the company had opened its rights issue of 3.5 crore equity shares for subscription by its shareholders from November 18-December 16, 2010.

Sebi said that since the rights issue was open for subscription during the probe period, while examining the activities of Knack Corporate Services the regulator had also inspected its records pertaining to its role as a registrar to the said rights issue.

Thereafter, a designated authority of Sebi found the entity liable for violating the norms and recommended that it be suspended for a period of three months.

Sebi observed that apart from misrepresentation of the facts, the entity had "failed to exercise due diligence and proper care and to fulfil its obligations in a prompt, ethical and professional manner".

"The noticee (Knack Corporate Services) has also failed to co-operate with the inspection team and submit the documents and records, as found by the designated authority," it added.

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