sebi:190-210_197

SEBI · SEBI · 2006-03-29 · V. K. CHOPRA, WHOLE TIME MEMBER

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Multiple orders: (1) Censure imposed on Bharat Bhushan & Co and Bharat Bhushan Equity Traders Ltd; (2) One-year suspension of registration imposed on Jhunjhunwala Stock Brokers Pvt. Ltd; (3) Show cause notice disposed of without penalty (benefit of doubt granted) in the matter of M/s Lalit Co.

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 6
• Reg. 4(a)
• Reg. 6(d)
• Reg. 4(b)
• Reg. 17(1)(j)

Parties

• M/s Bharat Bhushan & Co
• M/s Bharat Bhushan Equity Traders Ltd
• M/s Jhunjhunwala Stock Brokers Pvt. Ltd
• M/s Lalit Co. (Kishan Lal Pugalia)

Holding

The Broker (Bharat Bhushan & Co and BBETL) violated Regulation 6(d) of PFUTP Regulations, Regulation 17(1)(j) of SEBI Stock Brokers Regulations, and SEBI Circulars dated October 29, 1993 and September 14, 1999, and a penalty of 'censure' was imposed. Jhunjhunwala Stock Brokers Pvt. Ltd. was suspended for one year for trading on unpublished price sensitive information and backdated contract notes. The show cause notice against M/s Lalit Co. was disposed of without penalty as charges were not tenable.

Full text

Feb 12, 2007 | Orders : Orders of Chairman/Members BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: V. K. CHOPRA, WHOLE TIME MEMBER

What is more significant is the fact that the knowledge of all entities belonging to Usha Group in sought to be attributed to BB&Co. on the footing that the entities that transac “acted through common persons namely, Mr. V. K. Agarwal and Mr. P. R. Rao”. What however, is completely overlooked and ignored deliberately is the simple and uncontroverted Agarwal and Mr. P. R. Rao had never dealt with BB&Co. at the time of the public issues of the Usha Rectifier and Usha Ispat. BB&Co. had therefore no basis whatsoever to concl Agarwal and Mr. P. R. Rao were in anyway connected with the Usha Group. It is not even the case in the show cause notice that Mr. V. K. Agarwal and Mr. P. K. Rao had dealt w time of public issue of Usha Rectifier and Usha Ispat.

off the floor transactions and cross deals except on the screen of the stock exchanges which lends transparency and results in true and fair discovery of prices of securit an admitted fact that the transactions were carried out outside the trading system. 5.10 Having considered all aspects of the case, I find that the Broker has violated the provisions of Regulation 6(d) of PFUTP Regulations, Regulation 17(1)(j) of SEBI Stock Regulations, SEBI Circular no. SMD(B)104/22775/93 dated October 29, 1993 and SEBI Circular No SMDRP/Policy/CIR-32/99 dated September 14, 1999 and as such the be decided in this case is the quantum of penalty to be imposed against the Broker. 5.11 During the course of hearing, they have pleaded to take a lenient view in the matter and the same is also reiterated in its written submissions vide letter dated December 0 which are reproduced hereunder: “(i) Punishment already suffered ·        Pursuant to the arrest of our erstwhile director as a result of his dealing with Mr. Pendse, BSE deactivated out terminal on 11/12/03 and activated the same on as a result of action taken by BSE we have already suffered suspension for a period of 1 year and 6 months ·        Our erstwhile director was arrested by Economic office wing Delhi Police, on 5/12/03 and kept in Tihar Jail till 9/12/04. Thus, he has already suffered incarce 1 year. Further, it may be noted that the trial is yet to begin in the case

Source: SecMarx — sebi:190-210_197. 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.