sebi:8142

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

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Facts / Headnote

Minor penalty imposed: suspension of certificate of registration for 7 days

Provisions invoked

• s. 19

Regulations

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

Parties

• M/s Shree Harivansha Securities Pvt. Ltd.

Holding

The Broker, M/s Shree Harivansha Securities Pvt. Ltd., was found to have executed 40 synchronized trades in Ranbaxy shares in violation of Regulation 7 read with clause A(3) and (4) of the Code of Conduct under Schedule II of the Stock Brokers Regulations and Regulation 4(b) and (c) of the PFUTP Regulations, 1995, and a minor penalty of 7-day suspension of its certificate of registration was imposed.

Full text

DATE OF HEARING: 28.09.2006 APPEARANCES: FOR THE BROKER: M/s M. M. Patel & Co., Advocate FOR SEBI: 1. Mrs. Barnali Mukherjee, DGM, SEBI

(CSE). Securities and Exchange Board of India (hereinafter referred to as “the Board”) conducted an investigation into the dealings of several entities and brokers including M/s Shree Harivansha Securities Pvt. Ltd. (hereinafter referred to as “the Broker”) of Calcutta Stock Exchange(CSE) bearing SEBI Registration no. INB030757231, in the shares of Ranbaxy. 1.2 The Board after considering the Investigation Report, appointed an Enquiry Officer vide Order dated November 27, 2002 under Securities and Exchange Board of India (Procedure for holding Enquiry by Enquiry Officer and imposing penalty) Regulations, 2002 (hereinafter referred to as “Enquiry Regulations”) to enquire into the alleged violations of the provisions of Regulation 4(a), (b), (c) and (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 1995 (hereinafter referred to in short as “PFUTP Regulations”), Regulation 7 read with clause A(3) and (4) of the Code of Conduct for Stock Brokers as specified in Schedule II of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as “Stock Brokers Regulations”) and Rules, Regulations and Bye-laws of Stock Exchanges. 1.3 The Enquiry Officer, after conducting an enquiry in accordance with the provisions of Regulation 6 of the Enquiry Regulations submitted a report dated November 14, 2003 whereby he observed that the Broker violated the provisions of SEBI circular No.SMDRP/POLICY/CIR-32/1999 dated

2.0 SHOW CAUSE NOTICE 2.1 Pursuant to the receipt of the said Enquiry Report, a Show Cause Notice dated December 05, 2003 was issued to the Broker, along with a copy of the said Enquiry Report, advising it 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. The Broker submitted its reply to the said show cause notice, vide letter dated January 22, 2004. 3.0 REPLY OF THE BROKER TO THE SHOW CAUSE NOTICE 3.1 The Broker submitted that the settlement period for Ranbaxy during the time under consideration (i.e. 1999) was 7 days and there used to be substantial difference in the price of Ranbaxy scrip at NSE, BSE and CSE. Everybody as usual expects and wants to earn benefit out of such fluctuations in price at different exchanges. So, the Broker had dealt in Ranbaxy shares at NSE and BSE in their capacity as an investor apart from the transactions in Ranbaxy carried out at CSE in their capacity as a member of CSE. 3.2 The Broker submitted that the transaction of their buying of 557500 and selling of 202800 shares done by them in their capacity as a member are very low and negligible compared to total volume of transactions taken place in Ranbaxy at CSE. The said transactions were entered into at CSE through ‘C star” system in usual and ordinary course of business. Hence, all the transactions were bonafide and carried out with the sincere and honest intention in usual course of business with

Source: SecMarx — sebi:8142. 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.