sebi:CO/209/MRD/03/2004

SEBI · SEBI · 1997-12-19 · G N Bajpai, Chairman

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

Regulations

• Reg. 7
• Reg. 13
• Reg. 28
• Reg. 29(3)

Holding

The enquiry could not establish that the broker violated BSE Bye Laws 356(ii), 356(iii), 356(x), 357(iii) and 357(v) for want of information required to be supplied by the complainants. The complainants were found to have defied SEBI's instructions in submitting required information and details.

Full text

2 Exchange. Thereafter, BSE advised the complainants vide its letter dated December 19, 1997 to file arbitration in the matter.

3 4. A joint meeting of the complainants and the said broker was called at SEBI office on February 26, 1998. Mr. Suresh Kabra representing himself and the other complainant and Mr. Mahavir Meghavat representing the said broker were present during the meeting. It was alleged, inter-alia, by the complainant that they had sold and delivered 5 lac shares of M/s Ruthu Bearings and Estates (India) Limited through the said broker and they had never issued any contract notes and the transactions were done on mutual trust. It was also alleged that they had delivered the said shares to the broker and the said broker had issued a delivery bill against one Shri. Mahesh Kothari, another broker member of the BSE. It was stated that this was the only transaction with the said broker. Mr. Suresh Kabra stated that the transaction was between Mr. Mahesh Kothari and the said broker and the same was not reported to the Exchange. It was submitted by the said broker that the complainant is a member of the National Stock Exchange and had been dealing with them in an account in the name of M/s Jaico Investments. Regarding alleged transactions, it was submitted by the said broker that the transaction was not done through it and as such it had not issued any contract note for the same. He stated that the complainant had not raised this issue even after 8 months and therefore the complaint is an after thought. He contended that it was a deal directly between the complainants and Shri Mahesh Kothari. He

4 get their payment from Shri Mahesh Kothari. He stated that this was done under a trust and the said broker never expected that the complainants would misuse the trust. It also submitted that as per his knowledge the transaction was a financial deal between the complainants and Shri. Mahesh Kothari under which the complainants were to deliver 37.5 lac shares of Ruthu Bearings. On failure of complainants to deliver remaining 32.5 lac shares to Shri. Mahesh Kothari, the deal failed.

Source: SecMarx — sebi:CO/209/MRD/03/2004. 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.