sebi:CO/124/MIRSD/01/2005

SEBI · SEBI · 2003-12-24 · G. N. Bajpai, Chairman, SEBI

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

Facts / Headnote

Certificate of registration suspended for a period of three months

Provisions invoked

• s. 4(3)

Regulations

• Reg. 4
• Reg. 6
• Reg. 5(1)
• Reg. 13
• Reg. 4(a)
• Reg. 25

Parties

• M/s. Niraj Kumar Balasaria Private Limited

Holding

The certificate of registration of M/s. Niraj Kumar Balasaria Private Limited, member CSE, SEBI Registration No. INB 030037115, is suspended for three months for circular/synchronized trading in DSQ Industries Ltd. in violation of FUTP Regulations.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ 2. SEBI initiated investigations to investigate the possible violation of the SEBI (Stock Brokers and Sub-brokers) Rules and Regula 1992 (hereinafter referred to as the Broker Regulations) and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Re to Securities Market) Regulations, 1995 (hereinafter referred to as the FUTP Regulations) by various persons while trading scrip of DSQ Industries Limited (DSQ). Investigations inter-alia revealed that although the shares of DSQ Industries Ltd. we frequently traded and that no major volumes were observed till December 2000 and that significant volumes were observed during December 6 – 18 and December 20 & 21, 2001, there was a spurt in the price of the said scrip in November 200 subsequently the price started moving up from December 19, 2000 onwards. However this price increase was on very low vo of 100-500 shares. It was also found that the price of the shares increased sharply from levels of Rs.350/- on January 1, 20 levels of Rs.450/- on January 8, 2001. Significantly, trading was observed only on 4 days during this period i.e. January 1, 2, 8, 2001. It was further noted that NKB along with another broker Harish Chandra Biyani had indulged in price manipul creation of artificial market, creation of artificial volumes as a result of synchronization/ prior intention to matching order price establishment by putting orders at successively hig

7. Thereafter, a notice dated April 29, 2004, was issued to NKB calling upon him to show cause in terms of Regulation 13 (2) Enquiry Regulations as to why the penalty as recommended by the enquiry officer should not be imposed upon him and to re the said notice within 15 days of the receipt of the notice failing with SEBI would proceed ex parte. NKB was also asked to in whether he desired a personal hearing. In reply to the same, NKB vide his letter dated May 25, 2004 reiterated his submis made earlier and stated that in terms of the enquiry report, allegedly only one instance of circular trading was found to have place and hence a lenient view be taken. Pursuant to the same, although NKB was granted an opportunity to appear before me personal hearing on August 11, 2004, he failed to do so and also failed to send any explanation for his absence. Subsequentl letter dated August 9, 2004 received on August 12, 2004, NKB submitted that he was not in a position to appear for th hearing due to his family problems as well as disturbed physical condition and hence requested that SEBI proceed further o basis of the available facts.

obviously with a prior intention to match the orders to ensure that the buyers got the desired sellers and vice versa. This is no but circular trading. Thus by squaring off the earlier open position with the same counter party broker through whom the e open position was created, NKB indulged in circular trading wherein he along with Harish Chandra Biyani, artificially raise price of scrip from Rs.342/- levels to Rs.363.80/- levels on a single day.

Source: SecMarx — sebi:CO/124/MIRSD/01/2005. 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.