sebi:8312

SEBI · SEBI · 2004-12-20 · 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

No penalty imposed; Noticee directed to be careful and cautious in future while dealing in securities market

Provisions invoked

• s. 19

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 4
• Reg. 4(a)
• Reg. 199
• Reg. 6(1)

Parties

• M/s Pioneer TCP Stock Brokers Limited

Holding

The Noticee, Pioneer TCP Stock Brokers Limited, was not penalized for alleged violations of PFUTP Regulations or Code of Conduct for stock brokers in connection with trading in SIL scrip; instead, a direction to be careful and cautious in future was issued.

Full text

1.0 BACKGROUND 1.1 Sun Infoways Limited (hereinafter referred to as “SIL”) promoted by Shri Shrikant Vasant Joglekar and Shri Sujit Shrikant Joglekar was incorporated on June 29, 1994 as Best Mulyankan Consultants Pvt. Ltd. The main object of the company was to render consultancy services for valuation of assets such as land, building, machinery, agricultural land etc. This company was subsequently converted into public company and its name was changed to Best Mulyankan Consultants Ltd. on June 21, 1995. The name Sun Infoways Ltd. was adopted by the company after it changed its name with effect from May 11, 2000 from Best Mulyankan Consultants Limited. 1.2 The company got listed on Bombay Stock Exchange Ltd (BSE) on May 16, 1996, after the

Brokers Limited (formerly called TCP Stock Brokers Limited and hereinafter referred to as ‘Noticee’) with SEBI registration number INB 010997832. 1.5 In the light of above facts, the trading details of the various entities who had traded in SIL scrip were collected and analyzed along with the data of the volumes contributed by these entities. It was observed that the transactions of the Noticee in SIL scrip during the investigation period contributed to the creation of a certain amount of trading activity in the said scrip and also influenced the price of the scrip. 2.0 ENQUIRY PROCEEDINGS. 2.1 After considering the Investigation Report, SEBI appointed an Enquiry Officer to enquire into the violations allegedly committed by the Noticee under the of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, (hereinafter referred to in short as “PFUTP Regulations”) and SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to in short as “Stock brokers Regulations”) and bye laws, rules and regulations of the exchange. 2.2 The Enquiry Officer issued a show cause notice dated December 20, 2004 to the Noticee under Regulation 6(1) of SEBI (Procedure for holding Enquiry by Enquiry Officer and imposing penalty) Regulations, 2002 (hereinafter referred to as “the Enquiry Regulations”) and advised to show cause, as to why enquiry proceedings should not be initiated against them for the violations of Regulation 4(a)

2.3.1 Aroma Securities Limited (ASL); their sub broker, had surrendered their SEBI registration as a sub broker in September 2003 and they had also applied for cancellation of the registration of ASL. 2.3.2 ASL was their registered sub broker and accepted their contract notes/ bills containing trades in the scrip of SIL which were duly accounted for in their ledger account at the relevant time. 2.3.3 They had issued consolidated scrip wise contract notes to ASL and in turn ASL had issued split confirmation memos to each of their clients. 2.3.4 They had maintained register of accounts of ASL and in turn ASL fulfilled their obligation regarding paying their dues and giving/ taking deliveries of shares. 2.3.5 The correct volume of the shares of SIL bought and sold by them was 49,400 and 29,300. 2.3.6 Date wise trade details and ultimate client details in SIL scrip had been provided by them on pages 8-10 of their reply dated August 16, 2006. These trades happened from April 2000 to September 2000. 2.3.7 The volume of shares of SIL bought and sold were insignificant. There was no speculation in such trades. 2.3.8 On a net basis, clients had purchased the shares during the relevant period. 2.3.9 They did not have any direct dealings with SKG Stock and Share Brokers Ltd and JV Portfolio Pvt Ltd (JVP). Their business relationship was with ASL. 2.3.10 SKG and JVP had followed all the routine procedures like maintaining database of clients, collection of margins etc. 2.3.11 SKG and JVP

Source: SecMarx — sebi:8312. 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.