sebi:EAD-12/AO/SM/172-176/2017-18

SEBI · SEBI · 1987-06-29 · Sahil Malik, Adjudicating Officer

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Facts / Headnote

Penalties imposed on some entities; charges of fraudulent/unfair trade practices under PFUTP Regulations not established against the Entities

Provisions invoked

• s. 20
• s. 15A
• s. 15
• s. 15J
• s. 15F
• s. 23A
• s. 21
• s. 23
• s. 23J

Regulations

• Reg. 199
• Reg. 3
• Reg. 13
• Reg. 9(f)
• Reg. 2
• Reg. 3(a)
• Reg. 9
• Reg. 12
• Reg. 31(1)
• Reg. 31(3)
• Reg. 134(A)

Parties

• M/s. 20 Microns Ltd (TML)
• Eriez Finance and Investment Limited (Eriez)
• Mr. Togadia Hareshbhai Madhabhai (Togadia)
• M/s. Viking Industries Pvt Ltd (Viking)
• M/s. Marfatia Stock Broking Private Ltd (Marfatia)

Holding

The AO held TML guilty of making wrong disclosures under Clause 35 of the Listing Agreement and Eriez guilty of violating Regulation 13(4A) read with 13(5) of PIT Regulations 1992 for delayed disclosures, while concluding that the charges of fraudulent and unfair trade practices under Regulations 3(a)(b)(c)(d), 4(1) & 4(2)(a) and 4(2)(g) of the PFUTP Regulations were not established against the Entities due to absence of fraudulent intention and miniscule volume of self-trades.

Full text

AO order against 5 entities in the matter of M/s. 20 Microns Ltd Page 2 of 23 b) M/s. 20 Microns Ltd (“the company”/ “TML”) had made incorrect disclosure with regard to the shares held under the promoter category in the shareholding pattern disclosed to the stock exchanges and thereby violated clause 35 of Listing Agreement read with Section 21 of SCRA; c) Mr. Togadia Hareshbhai Madhabhai (“Togadia”) and M/s. Viking Industries Pvt Ltd (“Viking”) had executed significant quantity of self-trades in the scrip of TML thereby violated Regulations 3(a),(b),(c),(d), 4(1), 4(2) (a) & (g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“FUTP Regulations”). d) M/s. Marfatia Stock Broking Private Ltd (“Marfatia”) had acted as broker to Togadia who had executed significant quantity of self-trades in the scrip of TML and thereby violated clause A(2) of the Code of Conduct for Stock Brokers as specified in Schedule II read with Regulation 9 of SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 (“Broker Regulations”);

AO order against 5 entities in the matter of M/s. 20 Microns Ltd Page 3 of 23 27/09/2011 89120 54.85 4888232 29/09/2011 42500 52.09 2213825

AO order against 5 entities in the matter of M/s. 20 Microns Ltd Page 4 of 23 Quarter Ended Increase in shareholding as per BSE website (%) Actuals as per acquisitions / sell and as per disclosures provided June 30, 2011 to September 30, 2011 301177 (2.10%) 330893 (2.31%) September 30, 2011 to December 31, 2011 216910 (1.51%) 286610 (2.00%) December 31, 2011 to March 31, 2012 1500198 (1.05%) No acquisition / sell during this quarter March 31, 2012 to June 30, 2012 No change in shareholding June 30, 2012 to September 30, 2012 323572 (2.26%) 411301 (2.87%) September 30, 2012 to December 31, 2012 1238729 (1.96%) 1151000 (1.40%)

Source: SecMarx — sebi:EAD-12/AO/SM/172-176/2017-18. 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.