sebi:AO/BJD/MAS/EAD/104/2018
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Facts / Headnote
Noticee held liable for fraudulent and unfair trade practices and penalty of Rs.5,00,000 imposed under Section 15HA
Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 15I
- s. 15J
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(1)
- Reg. 3(a)
Parties
- Harsh Jayesh Gala
Holding
The Noticee Harsh Jayesh Gala violated Section 12A(a), (b), (c) of SEBI Act read with Regulation 3(a),(b),(c),(d) and Regulation 4(1), 4(2)(a) and (g) of PFUTP Regulations by executing reversal/circular trades creating artificial volume in Karma Industries Ltd. A monetary penalty of Rs.5,00,000 under Section 15HA was imposed.
Full text
Page 2 of 15 connected entity thereby creating artificial volume in the scrip of M/s. Karma Industries Ltd. (herein after called KIL/ Karma).
Page 3 of 15 like common telephone number, addresses, common introducer etc. The details of connection are shown in the table below:
Page 4 of 15 5.2. The noticee, Mr. Harsh Jayesh Gala, along with other 17 connected entities entered into reversal of trades among themselves. It was alleged that the noticee was connected to other members of the group by virtue of Mr. Kenil Savla being the common introducer in the KYC to the broker, Inventure Growth & Securities Ltd. Mr. Kenil Savla was also the introducer of certain other noticees viz. Mahendra C. Shah, Mrs. Kiran G. Joshi, Mr. Prakash G Joshi and Ramesh B. Chitaliya. It was alleged that the noticee entered into reversal of trades on 04.03.2011 with a connected group entity, Mr. Kumar D. Mewada. The noticee bought 25,000 shares from the connected entity and sold back 24,025 shares to the same entity thereby leading to a reversal of 24,025 shares. This reversal of trade was alleged to be in the nature of a circular trade where there is no change in the ownership of shares leading to artificial volume creation.
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Source: SecMarx — sebi:AO/BJD/MAS/EAD/104/2018. 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.