sebi:EAD/KS/AA/AO/149-155/2018-19
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Facts / Headnote
Noticees 1 to 7 held liable for violations; penalties imposed under Section 15HA of the SEBI Act, 1992
Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 15J
- s. 15F
- s. 24
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Shri Sajjankumar Nanwal (Noticee 1)
- Ms Sunitadevi Sajjan Nanwal (Noticee 2)
- Shri Govind Kumar Varma (Noticee 3)
- M/s Dhirajlal Sanghvi HUF (Noticee 4)
- Shri Sagar D. Sanghvi (Noticee 5)
- Shri Ashik D. Sanghvi (Noticee 6)
- Shri Babubhai Desai (Noticee 7)
Holding
The Adjudicating Officer held that Noticees 1 to 7 (Sajjan, Sunita, Govind, Dhirajlal, Sagar, Ashik and Babubhai) violated Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a), (b), (e) and (g) of the PFUTP Regulations by engaging in synchronized and reversal trades among a connected group, creating artificial volume and contributing to artificial price rise in the scrip of Kavveri, and imposed penalties under Section 15HA of the SEBI Act, 1992.
Full text
Page 2 of 64 2. It was observed during investigation that a group of 9 connected entities namely Shri Sajjankumar Nanwal (hereinafter referred to as ‘Sajjan/ Noticee 1’’), Ms Sunitadevi Sajjan Nanwal (hereinafter referred to as ‘Sunita / Noticee 2’), Shri Govind Kumar Varma (hereinafter referred to as ‘Govind / Noticee 3’), M/s Dhirajlal Sanghvi HUF (hereinafter referred to as ‘Dhirajlal / Noticee 4’), Shri Sagar D. Sanghvi (hereinafter referred to as ‘Sagar / Noticee 5’), Shri Ashik D. Sanghvi (hereinafter referred to as ‘Ashik / Noticee 6’), Shri Babubhai Desai (hereinafter referred to as ‘Babubhai / Noticee 7’), M/s Antala Real Broking & Impex Private Ltd. (hereinafter referred to as ‘Antala’) and M/s Vishu Enterprises (hereinafter referred to as ‘Vishu’), were involved in trading among themselves in the scrip of Kavveri. The average volume of shares traded in the scrip of Kavveri during the IP increased to 1,13,833 shares from 76,302 shares in the immediate 3 – month period before the start of IP. The average volume of shares traded decreased to 1,00,062 in the immediate quarter after the IP.
Page 3 of 64 4. SEBI observed from investigation that the trades by the Noticees created artificial volume in the scrip of Kavveri leading to false and misleading appearance of trading in the said scrip and also contributed to artificial price rise in the said scrip, which were deemed to be fraudulent. In view of the same, SEBI initiated adjudication proceedings against the Noticees 1 to 7 (viz. Sajjan, Sunita, Govind, Dhirajlal, Sagar, Ashik and Babubhai) under Section 15HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) for the violation of Regulations 3 (a), (b), (c), (d), 4 (1), 4 (2) (a), (b), (e) and (g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’).
Page 4 of 64 Regulations by the Noticees. Pursuant to transfer of Ms. Anita Kenkare, Shri Prasad Jagadale was appointed as Adjudicating Officer by the Competent Authority vide appointment order dated December 09, 2014. Subsequently, upon transfer of Shri Prasad Jagadale, Ms. Rachna Anand was appointed as the Adjudicating Officer. Thereafter, the proceedings were transferred to Shri Jeevan Sonparote vide appointment order dated May 18, 2017. Later, the adjudication proceedings were transferred to the undersigned which was intimated vide communique dated January 19, 2018.
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Source: SecMarx — sebi:EAD/KS/AA/AO/149-155/2018-19. 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.