sebi:15131

SEBI · SEBI · 2002-11-27 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Show cause notice disposed of without imposing any penalty or direction on the Broker.

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 4(a)
• Reg. 6
• Reg. 4(b)

Parties

• Shri. Rajendra Kumar Chokhany

Holding

The Whole Time Member disposed of the show cause notice issued to Shri Rajendra Kumar Chokhany without imposing any penalty or direction, notwithstanding the Enquiry Officer's recommendation of four months' suspension of his registration.

Full text

{Under Regulation 13(4) SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 against Shri. Rajendra Kumar Chokhany, Broker, Calcutta Stock Exchange in the scrip of Ranbaxy Laboratories Limited} 1.0 BACKGROUND 1.1 Securities and Exchange Board of India (hereinafter referred to in short as “the Board”) ordered an investigation into the affairs relating to buying, selling and dealing of many entities in the shares of Ranbaxy Laboratories Ltd (hereinafter referred to in short as “Ranbaxy”) including Shri Rajendra Kumar Chokhany, (hereinafter referred to as “Broker”) member Calcutta Stock Exchange (hereinafter referred to as “CSE”) bearing SEBI Registration no. INB030035019. 1.2 The price of Ranbaxy scrip moved up significantly from Rs. 270/- in January 1999 to about Rs.1200/- in October 1999 accompanied with significant increase in volumes. The Board initiated preliminary investigation into the scrip in August 1999 considering the major spurt in price and volumes traded in the Exchanges particularly on the Stock Exchange, Mumbai (BSE), National Stock Exchange (NSE) and Calcutta Stock Exchange (CSE). 1.3 The Board after considering the Investigation Report, appointed an Enquiry Officer vide Order dated November 27, 2002 to enquire into the violations allegedly committed by the Broker under the provisions of Regulation 4(a), (b), (c) and (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regula

II of the Code of Conduct for Stock Brokers issued under SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992 (hereinafter referred to in short as “Stock Brokers Regulations”) and Rules, Regulations and Bye-laws of Stock Exchanges. 1.4 The Enquiry Officer, after conducting an enquiry in accordance with the provisions of Regulation 6 of the Securities and Exchange Board of India (Procedure for holding Enquiry by Enquiry Officer and imposing penalty) Regulations, 2002 (hereinafter referred to in short as “Enquiry Regulations”) submitted a report dated October 31, 2003 wherein he observed that the Broker had violated the provisions of SEBI circular No.SMDRP/POLICY/CIR-32/1999 dated September 14, 1999; Regulation 7 read with clause A(3) and (4) of Code of Conduct as specified in Schedule II of Stock Brokers Regulations and Regulation 4(b) & (c) of PFUTP Regulations. He recommended suspension of registration of the Broker for a period of four months. 2.0 SHOW CAUSE NOTICE & REPLY 2.1 Pursuant to the receipt of the said Enquiry Report, a Show Cause Notice dated December 05, 2003 was issued to the Broker, enclosing therewith a copy of the said Enquiry Report and advising him to show cause as to why the action as recommended by the Enquiry Officer or any other penalty deemed appropriate should not be imposed on them. 2.2 The Broker submitted their reply to the said show cause notice, vide letter dated December 24, 2003. In the said reply, Broker stated that he had not indulged in syn

2.3 In the above reply, the Broker submitted that their reply dated July 28, 2003 which was filed in the enquiry proceedings may be considered in this proceeding and also informed that he did not want any personal hearing in the matter. Nevertheless, as in other cases, an opportunity of personal hearing was granted to the Broker on September 13, 2006 at ERO. However, the Broker informed SEBI vide their letter sent by fax dated September 08, 2006 that they would not be attending the personal hearing. Therefore, I am proceeding in the matter on the basis of the materials on record before me. 3.0 CONSIDERATION OF ISSUES & FINDINGS 3.1 I have carefully examined the enquiry report, show cause notice, and reply of the Broker. I have carefully

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