sebi:CO/83/IES/07/2003
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Facts / Headnote
Direction barring Shri Munir Gazi, Gazi Associates and Gazi Securities from accessing the capital markets or dealing in securities for a period of two years with immediate effect.
Provisions invoked
- s. 4(3)
- s. 11
Regulations
- Reg. 11
- Reg. 4
Parties
- Shri Munir Gazi
- Gazi Associates
- Gazi Securities
Holding
Shri Munir Gazi, Gazi Associates and Gazi Securities were found to have violated Regulation 4(a), (c) and (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 by acting in connivance with Vinayak Investments and promoters of HJIL to manipulate the price of HJIL shares, and were directed not to access the capital markets or deal in securities for two years.
Full text
(Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995. 3.0 A letter dated October 14, 2002 was received from Dr. Munir Gazi on behalf of Gazi Securities and Gazi Associate concerns asking for further time to file the reply to the show cause notice. Thereafter, a letter dated February 24, 2003 was received from G-Tech Info Training Ltd., (formerly the Gazi Securities Ltd.) signed by Munir Gazi. In the said letter he had denied any involvement in the price manipulation in the scrip of HJIL. He submitted that the transactions in the scrip were made by Gazi Securities Ltd. on behalf of their clients. It was also submitted that Gray Sky Equifin Pvt. Ltd., Khazana Investrade Pvt. Ltd., Numero Holding & Estate, Seawind Holding Pvt. Ltd., Shreshtha Leafin and Priority Finance Pvt. were the clients of Gazi Securities Ltd. and the transactions have been made on their behalf.
4.1 Mr. Munir Gazi was found to be the Managing Director of Gazi Securities Ltd. - NSE Member and Gazi Financial Services & Investment Ltd. - BSE Member. Apart from this, Gazi Capital Services, Gazi Financial Services, Gazi Consultancy Pvt. Ltd., Prof. Gazi Education Academy and Gazi Classes are the other associate concerns of Mr. Munir Gazi.
4.3 Investigations revealed that the aforesaid clients had been introduced by Shailesh Shah, Joint Managing Director of Gazi Securities Ltd. who had left the organization after the default by Gazi Securities at NSE. It was further found that Mr. Munir Gazi, in his capacity as Proprietor of Gazi Classes had introduced the aforementioned clients while opening their Bank accounts at Development Credit Bank, Mumbai Main Branch. A scrutiny of accounts of these clients also showed that large number of credit/debit were from Gazi Securities Ltd. During the investigation the broker could not give any satisfactory reply to the queries raised by NSE as well as SEBI, especially the basic information regarding contact person on behalf of client, contract notes, client agreement, date of commencement of trading by the client, present status of the client, etc. Therefore, the aforesaid clients seems to be fictitious. Thus, the broker has been found to have traded on his own account in the names of aforementioned fictitious clients. The explanation given by Shri Gazi during the investigation that these clients were introduced by his erstwhile Joint Managing Director and him not knowing anything about them is not tenable.
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Source: SecMarx — sebi:CO/83/IES/07/2003. 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.