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4. It was seen from the investigations that the public issue of IFSL did not genuinely receive minimum subscription of 90% of the issue size from the public and an illlusion of subscription to the public issue of IFSL was created by M/s. Viswapriya Financial Services and Securities Ltd (hereinafter referred as 'VFSSL'), apparently acting in concert with the promoters of IFSL.

5. Minimum subscription of 90% is mandatory for each issue of capital to public and if the company does not receive 90% of issued amount from public subscription before the closure of issue, as per the provision of Companies Act, SEBI Disclosure and Investor protection Guidelines and terms of prospectus, the company is under obligation to refund the subscription to the public unless underwriting obligations have been invoked.

33. As regards VFSSL's plea that they are a NBFC and were not connected or associated with the securities market, the same is not acceptable to me in the light of Hon'ble Gujrat Highcourt's decision in "Karnavati Fincap Ltd. Vs SEBI and M/s Alka Spinners Ltd. Vs SEBI." Both were decided on 6th May,1996 . [ 1996(10), SCL.5 GUJ.]

34. In the above said matters, their Lordship Mr. Justice R. Balia while deciding the cited matter inter alia has rightly pointed out that "In ordinary meaning, the persons associated with the securities market would include all and sundry who have something to do with the securities market. It is to be noted that the securities market in the sense is not confined to stock exchanges only. The words 'persons associated with the securities market' are of much wider import than intermediaries. 'Persons associated with' denotes a person having connection or having intercourse with the other." In the present case that "other" with whom a person is to have connection or intercourse is the securities market. In the instant case, the associate of Viswapriya (Prime Advance) applied in the public issue of IFSL, were allotted shares and these shares were sold back to promoters of IFSL and VFSSL was repaid out of the public issue proceeds from the public issue collection account with Canara Bank, Bhadra branch, Ahmedabad.

38. I, therefore, hold M/s. VFSSL guilty of the charges leveled against them and I conclude that their activities are detrimental to the interest of genuine investors and orderly development and integrity of the capital market and if left unchecked could undermine the faith of the investors in the securities market.

39. Therefore, in the interest of investors and healthy development of securities market, in exercise of the powers conferred on me under Section 4(3) read with Section 11B of Securities and Exchange Board of India Act, 1992, I, G N Bajpai, direct that M/s. Viswapriya Financial Services & Securities Ltd. with its registered office at "Vishwapriya", 2, First Cross Road, Kasturba Nagar, Adyar, Chennai 600 020 (Managing Director : R. Subramaniam) be hereby prohibited from accessing capital market and/ or dealing in securities market in any capacity for a period of five years with effect from 25th November, 2002.