sebi:CO/105/ISD/08/2003

SEBI · SEBI · G.N. Bajpai, Chairman, Securities and Exchange Board of India

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Prohibited M/s Vivenasri Financial Services Ltd. from buying, selling and dealing in securities, in any manner, directly or indirectly, for a period of five years

Provisions invoked

• s. 4(3)
• s. 11(4)

Regulations

• Reg. 11
• Reg. 4

Parties

• M/s Vivenasri Financial Services Ltd.

Holding

M/s Vivenasri Financial Services Ltd. was prohibited from buying, selling and dealing in securities, directly or indirectly, for five years for creating a false and misleading appearance of trading in Zodiac Clothing Company Ltd. in violation of Regulation 4(a), (b), (c) and (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market) Regulations, 1995.

Full text

3.4 As per the findings of the investigations conducted by SEBI, VFSL had entered in to following Off Market Deals with its group companies NFSPL and HPSPL : 10J.G.A. Shah Share Brokers Pvt. Ltd. BSE 53700 2900 56600 50800 11Rijan Securities Pvt. Ltd. NSE 25000 25000 50000 0 12Merc Stock & Securities Pvt. Ltd. BSE 42500 6000 48500 36500 13Keynote Capitals Ltd. NSE 39670 0 39670 39670 Keynote Capitals Ltd. BSE 7000 0 7000 7000 14Shreepathi Holdings Pvt. Ltd. NSE 0 42300 42300 -42300 15Ruchiraj Shares & Stock Brokers Pvt. Ltd. BSE 32000 0 32000 32000 16Kantilal Chhaganlal Securities Pvt. Ltd. BSE 26400 0 26400 26400 17Angel Capital and Debt Market Ltd. NSE 24050 1820 25870 22230 Angel Capital and Debt Market Ltd. BSE 0 50 50 -50 18Ghalla Bhansali Stock Brokers (P) Ltd. NSE 13000 9200 22200 3800 19Aum Shivahari Securities Pvt. Ltd. NSE 15200 0 15200 15200 20Creative Global Stock Broking Ltd. BSE 4875 10000 14875 -5125 21Mahavir Investment & Consultancy BSE 14300 0 14300 14300 22Karnavati Securities Pvt. Ltd. BSE 8400 0 8400 8400 23Adi K. Motafram NSE 7000 0 7000 7000 24Soni Securities Ltd. NSE 4000 0 4000 4000 Total BSE 189175 206550 395725 -17375 Total NSE 411120 1327907 1739027 -916787 Grand Total BSE + NSE 600295 1534457 2134752 -934162 Sr. No Date Name of the Company Rate (Rs.) Purchase Qty Sale Qty 1 3/7/2000 Newfin Financial Services P Ltd. 72.10

3.5 From the above, it is observed during the relevant period VFSL bought 1,89,175 shares and 4,11,120 shares of zodiac on BSE and NSE respectively & sold 2,06,550 shares and 13,27,907 shares of zodiac on BSE and NSE respectively. As a result of these transactions, VFSL was a net market seller of 9,74,542 shares of zodiac. Apart form this, VFSL had net purchase position of 9,14,092 in off market deals with NFSL and HPSPL. This indicates that, considering the market and off market transactions, VFSL was a net buyer of 60,450 shares. 3.6 From the details gathered during the investigations, it was found that VFSL, along with NFSPL and HPSPL had common directors and are thus associate entities and therefore stated hereinabove as one group. 3.7 The details of the trades entered in to by VFSL, NFSPL and HPSPL as a group, are as under : 12 11/10/2000 Harsh Pranav Securities P Ltd.

3.8 It was observed that the total market volume traded on NSE and BSE in the scrip during the relevant period was 18,60,702 shares (4,05,551 shares on BSE and 14,55,151 shares on NSE). It was further found that VFSL along with NFSPL and HPSPL had purchased on BSE and NSE a total number of 17,96,093 shares which account for 96.53% of shares traded on BSE and NSE and sold 17,00,507 shares of the said scrip which account for 91.39% shares traded on BSE and NSE. 3.9 From the order log-trade log details in the scrip of Zodiac, it is observed that VFSL had executed structured deals on NSE and BSE and cross deal on NSE where the counter party client was always one of your group company namely NFSPL or HPSPL. It was further observed that on July 11, 2000 on BSE, VFSL had purchased 12,000 shares @ Rs.75.54 of Zodiac by way of structured deal. The counter party was NFSPL who had sold through Integrated Master Securities Ltd. (Member BSE) as under :

Source: SecMarx — sebi:CO/105/ISD/08/2003. 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.