sebi:BM/AO-152/2011

SEBI · SEBI · 2010-03-17 · Barnali Mujherjee, Adjudicating Officer

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Facts / Headnote

Noticee held liable for violating Regulations 4(2)(a), 4(2)(b) and 4(2)(g) of PFUTP Regulations, 2003 and directed to pay penalty under Section 15HA of SEBI Act within 45 days

Provisions invoked

• s. 15
• s. 15H
• s. 15J

Regulations

• Reg. 4(2)
• Reg. 4(2)(a)
• Reg. 4(2)(g)
• Reg. 4(2)(b)

Parties

• Hemant Sheth

Holding

The Noticee was found to have violated Regulations 4(2)(a), 4(2)(b) and 4(2)(g) of the PFUTP Regulations, 2003 by executing reversal, synchronized and structured trades with connected entities, thereby creating artificial volume and influencing the price of the scrip of Gulshan Polyols Limited, and was held liable for penalty under Section 15HA of the SEBI Act.

Full text

_____________________________________________________________________________________ Hemant Sheth in the matter of Gulshan Polyols Limited                                                                                      Page 2 of 34  connected  entities  violated  Regulations  4(2)(a),  4(2)(b)  and  4(2)(g)  of  SEBI  (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets)  Regulations, 2003 (hereinafter referred to as ‘PFUTP’). Consequently, in respect of  the alleged charges, the Noticee would be liable for monetary penalty under section  15HA of SEBI Act.

_____________________________________________________________________________________ Hemant Sheth in the matter of Gulshan Polyols Limited                                                                                      Page 3 of 34  e) List of the names of the investor to whom codes (as mentioned in annexure 3 of  the SCN) belongs.

_____________________________________________________________________________________ Hemant Sheth in the matter of Gulshan Polyols Limited                                                                                      Page 4 of 34  b) That copy of investigation report, copy of complete trade and order log and copy  of order book is not provided with the SCN.  c) That I had started trading in the scrip only on April 18, 2006 when the price of the  scrip was Rs. 55 and my last trade in the scrip was on August 24, 2006 at the  price of Rs. 77.7 the total shares traded by me during the investigation period  were only 11,43,702.  d) That I am not aware as to how the trades executed by me have matched witht he  counterparties resulting in the alleged synchronized trades.  e) That with regard to connection with Bhavesh Pabari that he and I had common  introducer i.e. Bhupesh Rathod and the KYC was entered on the same date. As far  as  connection  with  Bhupesh  Rathod  is  concerned  he  merely  acted  as  an  introducer. I would like to state that I am not in any way connected with Bhupesh  Rathod  except  that  he  had  introduced  me  to  my  broker.  The  mere  fact  that  Bhavesh  and  I  had  a  common  introducer  cannot  be  held  against  me  in  the  matter.    f) That in order to execute a successful reversal trade it is important to know the  counter party. Not only knowing the counter party is the criteria but also having  a prior agreement as to the plan of acti

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