| The Honorable C.J. Chandrasekhar Rao of the Bombay High Court today entered a final judgment against Khandappa Sangappa, who died on June 27, 1960, without admitting or denying the allegations in his wife's civil action. The court also issued an order suspending proceedings against two other defendants for violating Section 17(a) of the Indian Income Tax Act and Rule 17(b) thereunder. The court further ordered that all three defendants be barred from appearing before the court as part of a class action to determine the share of the deceased in the coparcenary property. According to the court's order, filed on March 19, 1975 in the Bombay High Court, Khandappa had effected a partition of the coparcenary property between himself and his two sons in December 1952 and December 1954. As alleged in the complaint, this partition took place immediately before his death and did not occur during his lifetime. The court ruled that Khandappa was entitled to a share in the coparcenary property if a partition had taken place immediately before his death. The court found that Khandappa violated Section 17(a)(1) of the Indian Income Tax Act and Rules 17a-3(a) and (c) thereunder. Without admitting or denying the allegations in the complaint, Khandappa consented to the entry of a final judgment that permanently enjoins him from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder, and orders him to pay disgorgement of ill-gotten gains plus prejudgment interest of $2,929.95. The court also granted the widow's request for a temporary restraining order preventing her from making any further statements regarding the matter. The court will determine the amount of disgorgement and prejudgment interest at a later date. The case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation. |