sebi:8137

SEBI · SEBI · 1983-05-23 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Minor penalty of 'censure' imposed on the Noticee.

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 4
• Reg. 13
• Reg. 5
• Reg. 200

Parties

• M/s Rolex Finvest Private Limited

Holding

SEBI imposed a minor penalty of 'censure' on M/s Rolex Finvest Private Limited for violating Clause (5) of the Code of Conduct under the Stock Brokers Regulations by failing to exercise due care and skill while continuing to trade in an illiquid scrip with weak fundamentals. The price manipulation charge was not sustained against the Noticee.

Full text

FOR SEBI: Shri. Vir Sahab Singh, Manager, SEBI ORDER Under Regulation 13(4) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 1.0 BACKGROUND 1.1 Warner Multimedia Ltd. was originally incorporated as Garima Commercial Company Limited, a Public Limited Company on May 23, 1983. Under a scheme of arrangement sanctioned by Hon’ble Calcutta High Court, Ambika Commercial Company Limited and Kennex Commercial Limited, both of which were mainly engaged in investment in shares and securities, were amalgamated with the company w.e.f. March 31, 1994. The name of the company was changed to Classic Global Credit & Securities Ltd. in June 1993. The name was further changed to Classic Global Securities Ltd. and fresh certificate of incorporation was received on July 05, 1994. The name of the company was changed to its present name i.e. Warner Multimedia Ltd. (hereinafter referred to in short as “WML”) from December 24, 1999. 1.2 Securities and Exchange Board of India (hereinafter referred to as “SEBI) received a complaint on January 24, 2001 alleging artificial shortage of shares in the market created by the management of WML to rig the price and volume of its scrip. Thereafter, SEBI conducted an investigation into the alleged price manipulation in the scrip of WML for the period from September 08, 2000 to December 13, 2000. 1.

1.3 Pursuant to initiation of investigation into the scrip, The Stock Exchange Bombay (BSE), Calcutta Stock Exchange (CSE), Madras Stock Exchange (MSE), Ahmedabad Stock Exchange (ASE), Jaipur Stock Exchange (JSE), Delhi Stock Exchange (DSE) and Madhya Pradesh Stock Exchange (MPSE) were asked to look into the trading in the scrip of WML for the period from June 01, 2000 to January 31, 2001 and submit their

Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) and the rules, Bye- Laws and Regulations of BSE. 2.2 The Enquiry Officer after conducting the Enquiry in terms of the Enquiry Regulations found that the Noticee violated Clauses (5) of Part A of Code of Conduct specified in Schedule II read with Regulation 7 of Stock Broker Regulations, Section 12 of the SEBI Act 1992, and Regulation 4 (a) and (b) of PFUTP Regulations and submitted his Enquiry Report dated July 30, 2004. He recommended a minor penalty of suspension of the Certificate of Registration of the Noticee for a period of one month. 3.0 SEBI & SAT ORDERS 3.1 The then Whole Time Member of SEBI, after considering the Enquiry Report, reply of the Noticee to the show cause notice and written submissions made after personal hearing, vide order dated February 01, 2006 suspended the certificate of registration of Noticee for a period of one month. 3.2 The Noticee filed an appeal before the Hon’ble Securities Appellate Tribunal (SAT) against the aforesaid order dated February 01, 2006 of SEBI. SAT after hearing the matter passed its final order on February 22, 2006 wherein SEBI’s

Source: SecMarx — sebi:8137. 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.