sebi:15381

SEBI · SEBI · Madhukar, Whole Time Member

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Facts / Headnote

Restrained from accessing the securities market and prohibited from buying, selling or dealing in securities for a period of six months

Provisions invoked

• s. 11B
• s. 11

Regulations

• Reg. 4
• Reg. 11

Parties

• Ivory Securities Ltd

Holding

ISL was found guilty of indulging in irregular market practices in violation of regulation 4(a) to 4(d) of FUTP Regulations, 1995, by engaging in synchronised and structured trades with DAPL in the scrip of APIL. ISL was restrained from accessing the securities market and prohibited from buying, selling or dealing in securities for six months.

Full text

UNDER SECTIONS 11 AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH REGULATIONS 11 AND 13 OF SEBI (FUTP) REGULATIONS, 2003 AGAINST IVORY SECURITIES LTD, IN THE MATTER OF TRADING IN THE SCRIP OF ASTRASENECA PHARMA INDIA LTD. 1.0 Investigation 1.1 Investigation conducted by the Securities and Exchange Board of India (hereinafter referred to as "SEBI") into the trading of the scrip of Astraseneca Pharma India Ltd. (formally known as Astra IDI Ltd. and hereinafter referred to as "APIL") revealed that Ivory Securities Ltd. (hereinafter referred to as "ISL"), had traded through N J Shares & Securities Pvt. Ltd. (hereinafter referred to as "NJSSPL") to the tune of 8,950 shares. The orders placed by ISL substantially matched with that of Dinils Adhesives Pvt. Ltd. (hereinafter referred to as "DAPL") in terms of time, price of the share and quantity.

1.2 ISL had dealt through a Trading Member of National Stock Exchange (hereinafter referred to as "NSE"), NJSSPL on two days i.e. 6th August, 2001 and 7th August, 2001. The total quantity dealt by ISL was 8,950 shares. ISL held 9.25% of the share capital of a Trading Member of NSE, Fincap Portfolio Ltd. (hereinafter referred to as "FPL"). The counter party broker to the transactions made by NJSSPL for ISL was FPL which traded for its client DAPL. 1.3 Investigations also revealed that ISL’s director Vishal Suneja, is also a director of FPL. One of the subscribers to the Memorandum of Association of ISL, Bharti Suneja happens to be wife of Vishal Suneja. The other subscriber to the Memorandum of Association is Romesh Chandra Suneja, who is father of Vishal Suneja. Also Bharti Suneja and Romesh Chandra Suneja are the first directors of ISL. 1.4 It was alleged that the trading done by ISL was irregular market practice in violation of regulation 4 (a) to (d) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as "FUTP Regulations, 1995"). 2.0 Show cause notice and reply

2.1 ISL was issued a show cause notice (hereinafter referred to as "SCN") dated 30th April, 2004 intimating the findings of investigation and to show cause as to why directions under section 11B read with section 11 of the SEBI Act, 1992 read with regulations 11 and 13 of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as "FUTP Regulations, 2003") should not be issued for violating regulation 4 (a) to (d) of FUTP Regulations. Along with the SCN, four annexures containing the details of trading, trade log/ order log, details of price volume etc. done by ISL were also forwarded. ISL was also asked to indicate in its reply whether it would prefer personal hearing before SEBI. 2.2 ISL vide letter dated 25th May, 2004 responded to the SCN dated 30th April, 2004 stating that it does not wish to make any additional submissions to its earlier letter dated 6th February, 2004 whereby it had made detailed submissions. ISL had not pressed for personal hearing and left it to the discretion of SEBI. ISL by letter dated 6th February, 2004, inter alia, had made following submissions: 2.3 ISL submitted that there was no way to know to what percentage its trading in APIL was amounting to and denied having any relationship with FPL by way of holding any shareholding in FPL.

Source: SecMarx — sebi:15381. 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.