sebi:CO/185/MRD/12/2003

SEBI · SEBI · 2003-07-23 · G.N. Bajpai, Chairman

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Facts / Headnote

Confirmed the prohibition order dated 23.07.03 prohibiting the broking company and the broker from buying, selling or dealing in securities in the stock exchange or outside the stock exchange pending further proceedings and final orders.

Provisions invoked

• s. 11B
• s. 11
• s. 11(4)
• s. 11(1)
• s. 19
• s. 12
• s. 11A
• s. 11C

Regulations

• Reg. 21
• Reg. 19
• Reg. 20

Parties

• M/s. Bansal Sharevest Services Ltd
• Shri Pradeep Kumar Bansal

Holding

The interim prohibition imposed vide order dated 23.07.03 is confirmed and shall continue till completion of inspection or investigation ordered vide SEBI order dated 24.07.2003 or till the matter is determined.

Full text

2 4. As the transactions of aforesaid nature if allowed to continue could seriously disturb the integrity and equilibrium of the market and also prove detrimental to interest of investors, the broking company and broker and other associated entities namely M/s. Bansal Sharevest Services Ltd, Member, NSE (cash segment), INB 231064339, M/s. Bansal Sharevest Services Ltd, Member, NSE (derivative segment), INF 231064339, M/s. Bansal Sharevest Services Ltd, Member, UPSE, INB 101064336, Shri Pradeep Kumar Bansal , Member, UPSE, INB 100859813, Shri Pradeep Kumar Bansal , Member, CSE, INB 030859814, Shri Pradeep Kumar Bansal , Member, ICSE, INB 240859810, Shri Pradeep Kumar Bansal , sub-broker, NSE, INS 230664315 were prohibited from, buying, selling or dealing in securities in the stock exchanges or outside the stock exchanges, vide order dated 23.7.03, till the completion of inspection and determination of action on receipt of the report. It was stated in the order that the entities will be given a post decisional hearing on receipt of request.

3 contended that orders under Section 11(4) can be passed only when an investigation by an Investigating Authority appointed under Section 11C of the SEBI Act or an inquiry under SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 is pending or has been completed. It argued that according to SEBI’s own showing even the inspection has not been completed and the question of any inquiry under 2002 Regulations does not arise at all. Further that no investigation by any Investigating Authority is pending. The broking company stated that the

4 6.5 The broking company submitted that at the time of inspection at its Bhuj branch office, the sub broker Shimpy Garg was not present and the terminal of the said sub broker was manned by an employee of such sub broker and that it was not aware of the transactions entered into by the said sub broker and that the broking company cannot be made liable for any transaction entered into by any of its sub brokers. 6.6 The broking company denied that the inspection team found any evidence of unexplained trade and it did not carry any illegal transactions in violation of section 19 of SC (R) Act in any of its branches. 6.7 That trading in single share is permissible in law as even a single share constitutes a marketable lot. They contended that the inspection is carried out for the purposes of collecting information and thereafter a decision is to be taken by the Competent Authority as to whether the matter requires any further inquiry or investigation and that the power to pass interim orders of the nature like the present one can be derived only from Section 11(4) of the Act. The broking company stated that this power can be exercised while any investigation or inquiry is pending or on its completion and the power is not available to be exercised at any stage prior thereto i.e. at the stage of inspection. 6.8 The broking company vide letter dated 30.08.2003 challenged the order dated 23rd July 2003, inter-alia, on the following grounds – a. That the order was passed without givi

Source: SecMarx — sebi:CO/185/MRD/12/2003. 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.