sebi:8285

SEBI · SEBI · 2000-08-01 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Restraint imposed on all Noticees from buying, selling, dealing in or accessing the securities market for a period of two years.

Provisions invoked

Regulations

Parties

Holding

The Noticees artificially manipulated the price and volume of the MOH Ltd scrip through fictitious and circular trading in violation of Regulations 4(a) through 4(d) of the PFUTP Regulations, and are restrained from dealing in or accessing the securities market for two years. Shri Anil Mistry violated Regulation 4(a) by allowing Smt Alpa Shah to use his proprietary concern and demat account.

Full text

DATE OF HEARING: 22.08.2006, 27.10.2006, 29.11.2006 & 21.12.2006 APPEARANCES FOR NOTICEES: Shri Jitendra J Shah Smt Alpa Shah Shri Bijal Mehta Shri Piyush Jhaveri Shri Anil S. Mistry FOR SEBI: Mrs Barnali Mukherjee, DGM, SEBI Shri Krishna Sastry. K.V., Manager, SEBI Shri Mohamed Rahaz P.M., Legal Officer, SEBI

1.1 M/s MOH Ltd, an Ahmedabad based company was incorporated in February 1993 in the name of MOH Granites Ltd and was engaged in processing, mining and export of granites. The name of the company was changed to MOH Ltd. in the year 2000 when they entered into the information technology area. The company had earlier come out with public issue of 67,00,000 shares at par in August 1996 for Rs 8.70 crore to part finance granite project located at Mahesana in Gujarat. However, after the issue, information about the implementation of the project was not available. 1.2 The MOH shares are listed at Bombay Stock Exchange Ltd. (BSE) and Ahmedabad Stock Exchange (ASE). The price of MOH scrip started increasing from a level of Rs.240.50 on August 01, 2000 to a level of Rs.799/- on September 19, 2000 with trading volumes ranging between 100 to 10,000 shares. Prior to this, the price of the scrip had fallen to Rs 223/- from Rs 270 during June 01, 2000 to July 26, 2000 with daily trading volume ranging between 12,500 to1,23,000 shares. 1.3 After an internal investigation in the matter, BSE concluded that the price and volume of the scrip were manipulated by certain connected entities by entering into fictitious transactions in the nature of circular trading. It was also observed that there was no reason for the price of the scrip to go up considering the financial performance of the company. It was observed that BSE had imposed a special margin of 25% w.e.f. August 10, 2000 which was subseq

1.4 In view of the above developments, Securities and Exchange Board of India (hereinafter referred to in short as SEBI) conducted investigation in the scrip of MOH. Investigations inter alia revealed that entities viz Shri Jitendra Shah, Mahavir Investments & its Partners namely Ms Varshaben V Gandhi and Ms Falguniben N Shah, Tanaya Securities Ltd & its Directors namely Shri Gaurang Patel & Shri Parag Patel, Kajol Impex Ltd. & its Director, Shri HemrajsinhVaghela, Shri Piyush Jhaveri, Smt Alpa Shah, Smt Bijal Mehta and Shri Anil Suresh Mistry (All these entities are hereinafter referred to as “Noticees”) had placed orders in such a way that the buy orders of one of the Noticees was getting matched with the sell orders of another in view of very nominal volume in the scrip. The trading details of the Noticees indicate that they put in an order which was normally higher than 8% of the previous day’s closing price. Once the trade was executed at this rate, they then traded among themselves and maintained price level at that rate. In this way, they managed to take the price to a level of Rs 799/- within a short time. Investigation also revealed that the Noticees had sold shares of MOH without actually having them in their accounts. 1.5 It is further observed that the Noticees viz Shri Jitendra Shah along with Tanaya Securities, Kajol Impex (Shri Hemrajsinh Vaghela), Smt Alpa Shah. Smt Bijal Mehta, Shri Piyush Jhaveri and Mahavir Investments had artificially manipulated the price

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Source: SecMarx — sebi:8285. 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.