sebi:EAD/SR/VV/AO/26/2018-19

SEBI · SEBI · 2016-07-26 · Sangeeta Rathod, Adjudicating Officer

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

Facts / Headnote

Violation found; penalty of Rs. 3,00,000 imposed under Section 15HA

Provisions invoked

• s. 15
• s. 15H
• s. 15J

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 4(a)
• Reg. 3(a)
• Reg. 4(2)(a)
• Reg. 4(2)(e)

Parties

• Puran Chand Choudhary

Holding

The Noticee violated regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(a) and 4(2)(e) of the PFUTP Regulations, 2003 by trading with Brahmbhatt group entities to create a misleading appearance of trading and manipulate the price of BFTL. A monetary penalty of Rs. 3,00,000 under section 15HA of the SEBI Act, 1992 was imposed on the Noticee.

Full text

Adjudication Order against Puran Chand Choudhary in the matter of BGIL Films and Technologies Limited Page 2 of 11 connected through common address(es), telephone number(s), off-market transfer(s) of shares and family ties. The IA observed that the Noticee was involved in the manipulation of the price of the scrip by transferring shares of BFTL to theentities in the Brahmbhatt group which had manipulated the price of the scrip and contributed significant amount of positive Last trade price (LTP) while trading in the scrip and thereby made gain by off-loading the shares of the scrip at an increased price. IA observed that therefore Noticee has allegedly violated of provisions of regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(a) and 4(2)(e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as PFUTP Regulations, 2003) and thereby adjudication proceedings were initiated in the matter against the Noticee for the alleged violations.

Adjudication Order against Puran Chand Choudhary in the matter of BGIL Films and Technologies Limited Page 3 of 11 amount of positive LTP while trading in the scrip of BGIL. The allegations that were levelled against the Noticee in the SCN are briefly given below:  It was noted that during the Investigation period, BFTL made three corporate announcements on February 04, 2009, February 12, 2009 and February 24, 2009 respectively on proposal of the merger of certain divisions of Bhartiya Global Infomedia Ltd., (BGIL), a company under the same management with BFTL. BFTL informed BSE that the Board of Directors had considered and approved the merger of certain divisions of BGIL during the month of February, 2009. Thereafter, it was stated in the Annual Report of BGIL for the year 2009-2010 that the merger of digital post production division from its group company BGIL could not take place due to disagreement on the pricing and equity ratio. However, the said development was not intimated to the Stock Exchange.  IA identified 22 entities (Brahmbhatt Group) which traded in the scrip of BFTL during investigation period and were connected to each other through common address, telephone number, off-market transfers of shares and family members. The connection chart is given below:

Adjudication Order against Puran Chand Choudhary in the matter of BGIL Films and Technologies Limited Page 4 of 11 S. N. Client Name Gross Buy Gross Sell Net (=Buy- Sell) Gross Buy % to Market Buy volume Gross Sell % to Market Sell volume Net Trade % to Market trade volume

Source: SecMarx — sebi:EAD/SR/VV/AO/26/2018-19. 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.