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G. Anantharaman 1.0 Background 1.1 Jermyn Capital LLC (hereinafter referred to as 'Jermyn LLC'), having its office at 111, Oud Metha Offices, P.O Box No. 103709, Dubai, is a limited liability company incorporated in the Emirate of Dubai under the provisions of the United Arab Emirates Federal Law. Jermyn LLC is registered with SEBI under SEBI (Foreign Institutional Investors) Regulations, 1995 (hereinafter referred to as 'FII Regulations') as foreign corporate sub-account (bearing sub-account code No. 2004859) of SEBI registered Foreign Institutional Investor Taib Bank E.C. (bearing FII Registration No. IN-UE-FA-0119-93-hereinafter referred to as 'Taib Bank'). The above sub-account had been granted registration by SEBI on July 2, 2004 under the Foreign Corporate category.

a. Mr. H. H. Juma Maktoum Al Maktoum, (51 % share) b. Mr. Hugh Hamilton Andrews, (40 % share) c. Mr. Mihir Dhirajlal Kapadia, (09 % share) The capital contribution of the above shareholders is stated to be in kind. The management of company is entrusted to Mr. Hugh Hamilton Andrews who is the Chairman of Jermyn Capital LLC.

2.0 SEBI vide FII Division's communication dated November 30, 2005 addressed to Taib Bank had directed it to stop trading in the Indian securities market on behalf of its sub-account Jermyn LLC with immediate effect and until further notice. In the said communication, it was informed that SEBI was in receipt of credible information which indicated that Jermyn LLC did not meet the criteria for 'Fit and Proper person' which all registrants have to adhere to mandatorily through out the period of validity of their registration under the FII Regulations. Further, SEBI also sought certain information from Taib Bank as specified in the said communication. Taib Bank vide its letter dated December 6, 2005 and also Jermyn LLC vide its letter dated December 8, 2005 have furnished their reply to SEBI. Jermyn LLC in its said letter dated December 8, 2005 also requested SEBI to withdraw the 'stop trading order'. Simultaneously, Jermyn LLC also filed an appeal before the Hon'ble Securities Appellate Tribunal on December 13, 2005. The Hon'ble Securities Appellate tribunal vide order dated December 21, 2005 have directed SEBI to examine the material and information supplied by the appellant and pass a final order in the matter in accordance with law and place a copy of the said order on record on or before January 13, 2006.

6.17 It was contended by Jermyn LLC that the appointment of Mr. Dharmesh Doshi in Jermyn Plc was approved by FSA vide its certificates dated August 29, 2002 and July 1, 2004, after reference check being made by FSA to SEBI seeking information on Mr. Dharmesh Doshi. It was also contended that SEBI had information of Mr. Dharmesh Doshi and the association of Jermyn Plc with Jermyn LLC at the time of approval of Jermyn LLC as a sub-account. However, on verification of records, I find the above contentions of Jermyn LLC to be paltering with facts. It is seen from the records that SEBI vide its letter dated February 20, 2003 and July 30, 2004 had intimated FSA regarding role of Mr. Dharmesh Doshi in the market scam of 2001 and the various actions initiated against him including launching of prosecution by SEBI. However, SEBI's letter dated July 30, 2004 informing about prosecution launched by SEBI is subsequent to FSA issuing certificate dated July 1, 2004 in the case of Mr. Doshi and hence the facts contained in the above letter of SEBI might not have been taken into consideration by FSA while issuing the said certificate. Further, in the absence of any details with official proof as to what Jermyn Plc disclosed to FSA for getting the said approval, it would be difficult to conclude that FSA was kept informed of developments relating to Mr. Dharmesh Doshi and TIFIL in India by Jermyn Plc. In fact, the circumstances would indicate that full and complete disclosures were not made by Jermyn Plc to FSA in this regard. On the contrary, the 'suppressio veri, suggestio falsi' is evident from the clean chit given by Jermyn Plc in their clarification dated April 26, 2004 to FSA in connection with approval of their application for enhancing the role of Mr. Dharmesh Doshi in Jermyn Plc with a confirmation stating that they had carried out all necessary enquiries in India and were completely satisfied that Mr. Doshi was not subject to any pending investigations or proceedings by SEBI and that Jermyn Plc was completely satisfied as to the integrity and honesty of Mr. Doshi. Obviously, the tenor of such confirmation by Jermyn Plc to FSA smacks of a self-serving statement with an unconcealed intention to project Mr. Dharmesh Doshi as a person with impeccable record and the same gives short shrift to the adverse fallout in India on the role of Mr. Dharmesh Doshi in the course of multi-pronged enquiries by various agencies and emergent findings therefrom. Even after such developments in India in the last couple of years affecting the image and integrity of Mr. Dharmesh Doshi and TIFIL, Jermyn Plc in its letter addressed to FSA on November 29, 2005 has sought to dismiss such developments as a "mistake by Indian Authorities" which is highly objectionable besides seeking to mislead the FSA by dissembling the factual position as transpired in India. The above goes to show in no uncertain terms that Jermyn Plc is all out to defend Mr. Dharmesh Doshi despite the adverse developments staring in the face and such a conduct on the part of Jermyn Plc, wherein Mr. Dharmesh Doshi is not a stake-holder but an employee-Director, leads to the only inescapable conclusion that Jermyn Plc is moved by the invisible strings of Mr. Doshi. Besides, it is seen from the records that at the time of grant of sub-account registration to Jermyn LLC by SEBI, the connection between Jermyn LLC and Jermyn Plc and the involvement of Mr. Dharmesh Doshi was not disclosed by Jermyn LLC to SEBI. This information infact, was disclosed by Jermyn LLC only on December 8, 2005 in its reply to the communication from FII Division, SEBI raising specific query regarding existence of such relationship. It is pertinent to mention that the above relationship between Jermyn LLC and Jermyn Plc and the questionable role of Mr. Dharmesh Doshi came to the notice of SEBI only in November, 2005 in the context of the ongoing investigation by various agencies in India into the various aspects of the market scam of 2001 and the fallout thereof and involvement of Mr. Ketan Parekh and his related entities in the same. Immediately thereafter SEBI had issued the communication dated November 30, 2005 to Taib Bank seeking specific information on the above matter and directing it to stop trading on behalf of the above sub-account, Jermyn LLC.

6.19 It was found that there is prima facie violation of Regulation 13(bb) of the SEBI (FII) Regulations, 1995 which requires that the Sub Account as an applicant for registration is a fit and proper person according to Regulation 3 of the SEBI(Criteria for Fit and Proper Person) Regulations, 2004, which reads as under;

3. (1) For the purpose of determining as to whether an applicant or the intermediary seeking registration under any one or more of the relevant regulations is a 'fit and proper person', the Board may take account of any consideration as it deems fit, including but not limited to the following criteria -