sebi:MO/58/IVD/08/04

SEBI · SEBI · 1999-06-08 · A K Batra, 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

SPMLIL held guilty of violating Regulation 4(b) of the FUTP Regulations; prohibited from accessing the securities market and dealing in securities for a period of two years

Provisions invoked

• s. 11B

Regulations

• Reg. 4
• Reg. 11
• Reg. 4(a)
• Reg. 4(b)

Parties

• M/s SPML India Ltd (SPMLIL)

Holding

SPMLIL was found guilty of creating artificial volumes in the shares of SPML, in violation of Regulation 4(b) of the FUTP Regulations, and was prohibited from accessing the securities market and dealing in securities for two years.

Full text

viii.  SPML had advanced certain sums of monies through various entities to an entity, M/s Raj Investments, for the purpose of creatin volumes and trading in the scrip of SPML with a view to ensure successful subscription to the rights issue.

‘false and misleading appearance of trading’ clearly conveyed an idea that there was in fact no actual trading, although in their case, th allegation in the show cause notice indicated that there was actual trading and it was in fact quantified as being 36.09% of the total gross q for the period under scrutiny. SPMLIL stated that no material apart from narrating certain so-called suspicious circumstances has been disc so as to establish that there was any false or misleading transaction or that anybody had calculated to create such false or misleading appea of trading or anybody was actually deceived by such calculation and by such allegedly false and misleading transactions. On the basis above, it was stated that there was no violation of Regulation 4(b) of the Regulations, and consequently the provisions of Section 11B of SE 1995 or Regulation 11 and 12 of the Regulations, would not apply.

Ø      SPMLIL (listed as one of the associates of SPML in the rights letter of offer); Ø      Neon Vinimay (P) Ltd. (an NSE member, having same address of SPML, fully owned by 20 Century Engineering Ltd. and Subhas Ltd., both associates of SPML. The directors of SPML viz. Shri Anil Sethi and Subhash Sethi are also directors of Neon Vinimay); Ø      Gladiator Suppliers (P) Ltd. (later amalgamated with SPML India Ltd.); Ø      Tohfa Vinimay (P) Ltd. and Jeco Commodities (later merged with Astral Traders Ltd., an associate of SPML)

Source: SecMarx — sebi:MO/58/IVD/08/04. 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.