sebi:CO/06/ISD/06/2004
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Facts / Headnote
Direction that Manish Banthia disassociate himself from the securities market and not buy, sell or otherwise deal in securities for a period of 12 months w.e.f. 14.7.2003
Provisions invoked
- s. 4(3)
- s. 24
- s. 11(4)
Parties
- Manish Banthia
Holding
Manish Banthia, as Director of the said broker, is liable for all the irregularities/violations committed by the said broker and is directed to disassociate himself from the securities market and not buy, sell or otherwise deal in securities for 12 months w.e.f. 14.7.2003.
Full text
Page 2 of 9 Manish Banthia and persons associated with them held 8.41%, M/s. First Custodian Fund (India) Ltd. held 3.28% and Shrikant G. Mantri held 10.51% of the equity shareholding of NBL The Board of Directors of NBL in its meeting held on 26.9.1999 took the following decisions : (i) To allow purchase and sale of shares in various markets and stock exchanges. (ii) To vest to Chairman and General Manager (P&D), powers to the extent of Rs.5.00 crore and Rs.2.00 crore respectively to purchase and sell shares to the stock brokers namely First Custodian Fund (I) Ltd. Shrikant G. Mantri and the said broker and other recognized brokers and pay brokerage. (iii) To permit Chairman to ratify loss, if any, in any transactions upto a maximum of 5% of the price. (iv) To permit the bank to open DP accounts with Standard Chartered Bank and Global Trust Bank, Mumbai. Even prior to the aforesaid decision of the Board of NBL, the bank had allowed the said three stock brokers to undertake the following transactions: Date Purchase in Rs. Sales in Rs. Gross Income in Rs. 14.09.99 1,90,17,389 1,92,03,740 1,86,351 20.9.99 4,45,15,443 4,48,51,270 3,35,827 21.9.99 2,15,67,8665 2,17,94,508 2,26,643
Page 3 of 9 As per the decision taken by the Board of NBL in its meeting held on 26.9.1999, the following reporting system was decided to be followed in respect of the arbitrage transactions: Sr.No. Particulars By whom To whom Periodicity
Page 4 of 9 (i) Most of the transactions were not executed as arbitrage transactions i.e. purchases / sales of equal quantity of the particular shares were not executed simultaneously through different exchanges. (ii) The purchases and sales had been effected in different exchanges through these brokers’ mutual co-ordination. (iii) The bank had made purchases in shares of InfoTech companies such as HFCL, DSQ, Global Tele etc during first week of March, 2000 to an extent of Rs.84.9 crores through these brokers. But during this time the prices of shares of all these companies were at their highest levels. Further, the sales during the last week of March, 2000 mostly in the above scrips amounted to Rs.58.7 crores. The above purchases and sales were well in excess of the approved limits of the bank. (iv) It was observed from the statement of account of the dealings of the bank and the broker’s books of accounts with regard to their dealings with NBL that the three brokers including the said broker failed to make payments towards the sale of shares by the Bank in time on several instances. These three brokers withheld the payments due to the bank for considerable period of time and thereby delayed the payments to the clients. (v) There were some instances of delay in delivery of securities by the brokers to the bank towards their purchases. Similarly it was noticed that the bank had not delivered the shares of HFCL which were sold in March 2000 to the brokers in time. The reason f
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Source: SecMarx — sebi:CO/06/ISD/06/2004. 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.