sebi:MO/14/MIRSD/05/06

SEBI · SEBI · 2002-08-09 · T.C. Nair, Whole Time Member

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

Facts / Headnote

Suspension of certificate of registration for a period of six months

Provisions invoked

• s. 19
• s. 12

Regulations

• Reg. 7
• Reg. 13(4)
• Reg. 5(1)
• Reg. 13(2)
• Reg. 200
• Reg. 6
• Reg. 17(1)
• Reg. 21
• Reg. 10
• Reg. 17(1)(k)

Parties

• C.P. Sikaria & Co., Member, Calcutta Stock Exchange (INB031037915)

Holding

In exercise of powers under Section 19 of SEBI Act, 1992 read with Regulation 13(4) of the Enquiry and Penalty Regulations, the certificate of registration of C.P. Sikaria & Co., member Calcutta Stock Exchange (INB031037915) is suspended for six months, effective on expiry of 21 days from the date of the order.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER AGAINST C.P. SIKARIA & CO., MEMBER, CALCUTTA STOCK EXCHANGE, SEBI REGISTRATION NO. INB031037915 UNDER REGULATION 13(4) SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002

2.1 On completion of inspection, the Inspection Report was forwarded to the broker vide letter dated July 26, 2002. However, instead of replying to the findings of inspection, the broker moved the Hon’ble Calcutta High Court and sought a stay. The broker vide letter dated 09.8.2002, requested for a copy of the statement of its authorized representative Shri Ravi Shankar Sikaria recorded on July 11, 2002 i.e. after the inspection. Accordingly, Eastern Regional Office, SEBI, vide letter dated August 16, 2002 furnished a copy of the same to the broker. An Enquiry Officer (hereinafter referred to as "EO") was appointed vide order dated March 15, 2004 under Regulation 5(1) of SEBI (Procedure for Holding enquiry by enquiry officer and imposing penalty) Regulations, 2002 (hereinafter referred as the ‘said regulations’) to enquire into the alleged irregularities committed by the broker which were observed during the inspection. 2.2 A Show Cause Notice dated April 29, 2004 was issued to the broker under Regulation 6 (1) of the said regulations. The broker submitted its reply dated June 10, 2004. The enquiry officer conducted the enquiry in terms of the said Regulations and the broker was given a fair and reasonable opportunity to make its submissions. 2.3 After considering the reply, the Enquiry officer submitted his report dated 30.9.04 recommending suspension of registration of the broker for a period of 3 years. 3.0 SHOW CAUSE NOTICE AND THE BROKER’S SUBMISSIONS 3.1 A copy of the E

4.1 I have carefully considered the findings of Inspection, Enquiry Report and the 3. Mahendra Kumar Nahata 4. Premlata Nahata 5. Madhulika Nahata i) The EO found that in the case of M/s Subh Shree Commercial Co. Ltd. and M/s MKN Investment Ltd., the said clients had invested Rs. 10 lakhs and Rs. 5 lakhs in vyaj badla which the broker had refused to refund on the grounds that these clients had incurred a loss in speculative transactions executed with it. It was observed from the client ledgers of M/s. Subh Shree Commercial Co. Ltd. and M/s. MKN Investment Pvt. Ltd. that the broker transferred Rs. 10 lacs and Rs. 5 lacs from the vyaj badla account to the share transaction account on 2.4.2000 and 22.4.2000 respectively. The broker could not produce any written authorization from these clients for transferring the aforesaid amounts from their vyaj badla account to their share transaction account. Further, no documentary evidence was shown by the broker whereby these clients had authorized the broker to buy and sell securities on their behalf. ii) The investors Mahendra Kumar Nahata, Madhulika Nahata and Premlata Nahata had allegedly given advance loans of Rs. 13 lakhs, Rs. 5 lakhs and Rs. 5 lakhs respectively to the broker which it had refused to return back on account of loss in speculative transactions which the aforesaid clients had executed with it. The broker could not show any documentary evidence whereby these clients had instructed the broker to buy and sell securities o

Source: SecMarx — sebi:MO/14/MIRSD/05/06. 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.