sebi:EAD-9/VKV/GSS/2020-21/11079-11082

SEBI · SEBI · 2019-08-13 · Vijayant Kumar Verma, Adjudicating Officer

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Facts / Headnote

Noticees found to have violated Regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a),(b),(e),(g) of PFUTP Regulations and Section 12A(a),(b),(c) of the SEBI Act, 1992; penalty imposed under Sections 15HA and 15HB of the SEBI Act

Provisions invoked

• s. 12A
• s. 15H
• s. 15I
• s. 15J
• s. 15
• s. 15F
• s. 28A

Regulations

• Reg. 3

Parties

• Bhavesh Pabari
• Hemant Sheth
• Prem Mohanlal Parikh
• Ankit Sanchaniya

Holding

The Noticees (Bhavesh Pabari, Hemant Sheth, Prem Mohanlal Parikh, Ankit Sanchaniya) were held to have violated Regulations 3 and 4 of the PFUTP Regulations and Section 12A(a),(b),(c) of the SEBI Act, 1992, by using connected 'Jigar Group' entities as fronts to circumvent the SEBI order dated February 2, 2011, thereby creating artificial volume and manipulating prices in the scrips of PIL, KGN and Gemstone, with unlawful profit of ₹4.18 crores.

Full text

Adjudication Order in the matter of KGN, Ploytex and Gemstone Page 2 of 27 (a), (b) and (c) of the SEBI Act, 1992 for trading in the scrips of Gemstone Investments Ltd. (GIL), KGN Enterprise Ltd. (KGN) and Polytex India Ltd. (PIL). Consequent to transfer of proceedings, undersigned has been appointed as AO by SEBI, vide communication order dated August 13, 2019, to inquire into and adjudge the violations alleged to have been committed by the Noticees.

Adjudication Order in the matter of KGN, Ploytex and Gemstone Page 3 of 27  'Jigar Group' entities had traded substantially amongst themselves, created artificial volume in the market and also contributed to the positive LTP and thus they manipulated the price - volume in the scrip of PIL, KGN and Gemstone, making an unlawful profit amounting to ₹4.18 crores;

Adjudication Order in the matter of KGN, Ploytex and Gemstone Page 4 of 27 distinctive entities in the eyes of law. Thus, the allegations made against me are totally far-fetched and without any merit or substance.  The fund transferred to purported Jigar Group entities by SSFS and NCMPL had nothing to do with trades executed by purported Jigar Group entities in the 3 scrips. SEBI had not debarred SSFL and OFSPL w. e. f. 02-02-2011 for dealing in the securities market.  It is further submitted that SEBI has grossly failed to provide any evidence on record to substantiate the fact that I was indirectly dealing in the Securities Market and thereby circumventing the restraining order by providing funds through SSFS and NCMPL to purported Jigar Group entities for trading in the 3 scrips. I cannot be held responsible for the acts committed by somebody else.  It is a matter of record that the purported Jigar Group entities couldn’t return back the amount paid to them by the SSFS and NCMPL. It is also a matter of record that the purported Jigar Group entities by trading in the 3 scrips had suffered huge losses.  If I had not complied the order dated 02-02-2011 i.e. punishable under Section 15HB of the SEBI Act and not under the Section 15HA of the SEBI Act. Non-compliance of the SEBI Order doesn’t amount to violation of SEBI PFUTP Regulations.

Source: SecMarx — sebi:EAD-9/VKV/GSS/2020-21/11079-11082. 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.