sebi:11216
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Facts / Headnote
Direction restraining Mr. Prakash Pandya from associating with any corporate body in accessing the securities market and from buying, selling or dealing in securities for a period of five years
Provisions invoked
- s. 11B
- s. 11(4)
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 13
- Reg. 4(a)
Parties
- Prakash Pandya
Holding
Mr. Prakash Pandya was found guilty of violating Regulation 4(a), (b), (c), (d) and (e) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 for aiding and abetting price manipulation in the scrip of GTFL, and was restrained from associating with any corporate body in accessing the securities market and from buying, selling or dealing in securities for five years.
Full text
BACKGROUND The shares of M/s Greenfield Trading and Finance Ltd. (hereinafter referred to as "GTFL") were listed on The Stock Exchange, Mumbai. (hereinafter referred to a "BSE"). As per BSE, the capital of GTFL was Rs. 99.66 lacs, comprising 9.96 lac equity shares of Rs. 10 each. The price of the shares of GTFL, which was quoting at around Rs.52/- at BSE, as on 16.01.96, with a volume of 600 shares, moved up from this level and reached Rs.210/- as on 22.02.96, with a volume of 1,46,750 shares. On account of the sudden increase in volume and price, BSE had suspended trading in the scrip of GTFL on 24.01.96, 30.01.96 and 08.02.96. The share price came down to Rs.122/- by 15.03.96. However, the volumes were on the higher side, with the average daily volume being more than 1.50 lakh shares. The share price started moving up once again and reached to Rs.450/- by 16.05.96, with a volume of 18,600 shares. The last quotation was Rs. 420, on 06.06.96, after which the scrip was placed under indefinite suspension by BSE. The paid up equity capital of GTFL comprised only 9.96 lakh shares, with very low floating stock with the general public. Considering the low floating stock and the not-too- encouraging fundamentals of the company, it appeared that the increase in price and volumes in the scrip, observed during the aforesaid period, did not reflect genuine investment buying, but appeared to be intended to manipulate the market and to make abnormal gains. A letter dated 04.06.96 was rece
price movement of GTFL was not justified and did not serve any purpose of the general investor as the company was closely held with a very low equity base. BSE was of the view that although the company declared a 1:1 bonus in the month of April 1996, the general fundamentals of the company was not good for investors to make an investment in the scrip of GTFL. In view of the above, after a preliminary enquiry and based on the findings of BSE, SEBI initiated an investigation, vide
Appointment of the clients with these brokers/sub- brokers (connected/related to GTFL or the Directors). Arrangement for introduction of these clients to various brokers and sub brokers of BSE. Arrangement for putting orders (both buy and sell) in the name of the various clients through various brokers so as to create artificial volumes/liquidity in the counter. Rigging up the scrip price by giving quotes at higher prices. Arrangement by giving shares/ shares certificates towards the sale positions of the clients with various brokers. Arrangement of funds to meet the pay in obligations of the various clients with various brokers and sub brokers. Appointments of financiers like Mr. Sanjay Fathepuria to meet the pay in obligation of funds of the clients through spot sales. Shifting the positions through unauthorized badla transactions from one settlement to another settlement with the help of the financier Mr. Sanjay Fathepuria. Delivering the shares of GTFL in the auctions conducted by the stock exchange, when the general investors failed to meet the pay in obligation of shares. 3. 4. 5. 6. 7. 8. 9. 10. 11.
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Source: SecMarx — sebi:11216. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.