U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Before the

Securities Exchange Act of 1934
Release No. 34-47947 / May 30, 2003

Accounting and Auditing Enforcement
Release No. 1790 / May 30, 2003

Administrative Proceeding
File No. 3-11139

In the Matter of
Chartered Accountant,




The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Umesh Malhotra ("Respondent" or "Malhotra") pursuant to Rule 102(e)(3)(i) of the Commission's Rules of Practice.1


In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.3 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.


On the basis of this Order and Respondent's Offer, the Commission finds that:

1. Umesh Malhotra, age 43, was a Chartered Accountant in England and Wales from 1984 through 1998. Malhotra served as Chief Financial Officer and assistant secretary for COHR, Inc. ("COHR") from 1995 through 1998 and Treasurer of COHR from 1996 to 1998. Malhotra was placed on paid leave by COHR in January of 1998 and ceased employment with COHR on February 20, 1998.

2. COHR was at all relevant times a Delaware corporation with its principal place of business in Chatsworth, California. COHR purchased and serviced medical equipment for hospitals and clinics nationwide. It also provided security and consulting services to hospitals. At all relevant times, COHR's common stock was registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934 ("Exchange Act"), and traded on the NASDAQ National Market.

3. On February 10, 2003, the Commission filed a complaint against Malhotra in Securities and Exchange Commission v. Umesh Malhotra, et al. (Civil Action No. 1:03CV00211). On May 20, 2003, the court entered an order which permanently enjoins Malhotra, by consent, from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. Malhotra was also ordered to pay a civil penalty of $32,500 and was prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act.

4. The Commission's Complaint alleged, among other things, that Malhotra, engaged in a fraudulent scheme which resulted in COHR filing materially false and misleading financial statements in the company's annual report on Form 10-K for the fiscal year ended March 31, 1997, and in the company's quarterly reports on Form 10-Q for the two quarters of fiscal year 1998. The Complaint alleged that Malhotra engaged in a number of improper accounting practices that materially increased COHR's annual and quarterly revenue and net income in a departure from generally accepted accounting principles. These practices included, among other things, improperly capitalizing expenses, prematurely recognizing revenue from sales, and improperly reducing reserve accounts. In addition, the Complaint alleged that Malhotra provided false information to COHR's independent auditors.


In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Malhotra's Offer.

Accordingly, IT IS HEREBY ORDERED, effective immediately, that:

Malhotra is suspended from appearing or practicing before the Commission as an accountant.

By the Commission.


Jonathan G. Katz



1 Rule 102(e)(3)(i) provides, in relevant part, that: The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.


Modified: 05/30/2003