sebi:MO/60/IVD/2/04

SEBI · SEBI · 2003-07-22 · A.K. Batra, Whole Time Member

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Facts / Headnote

Found Shri Kamlesh J. Shroff and the investment companies where he was a director violated Regulation 4(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 and Maxworth violated Clauses A(3) and (4) of Code of Conduct; found no violation of SEBI (Prohibition of Insider Trading) Regulations, 1992; invoked Section 19 of SEBI Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations for directions

Provisions invoked

Regulations

Parties

Holding

Shri Kamlesh J. Shroff and the investment companies where he was a director violated Regulation 4(a) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, and Maxworth violated the broker Code of Conduct, while no violation of the SEBI (Prohibition of Insider Trading) Regulations, 1992 was made out.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER UNDER REGULATION 11 OF SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKETS) REGULATIONS, 2003 READ WITH SECTION 11 AND 11B OF THE SEBI ACT, 1992 IN THE MATTER OF V.B. DESAI FINANCIAL SERVICES LTD. AGAINST SHRI KAMLESH J. SHROFF AND CONNECTED ENTITIES.  1.0     Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted investigations into the affairs relating to buying, selling and dealing in the shares of M Desai Financial Services Ltd. (hereinafter referred to as “VB Desai”) for the period October 04, 1999 to May 31, 2000. 1.1              Investigations revealed that Shri Kamlesh Jitendra Shroff, son of Shri Jitendra Ratilal Shroff, promoter of VB Desai and nephew of Shri Pradip Ratilal Shroff, Managing Dir VB Desai was the main person behind the trading activity in the scrip throughout all the settlements during the investigation period.  He had used a number of brokers, sub (both registered and unregistered) as well as acquaintances to buy and sell the shares in the scrip of VB Desai in the market, thereby creating illusion of trading, artificial and price rise in the scrip.  SHOW CAUSE NOTICE FOR ALLEGED VIOLATION OF SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECU MARKET) REGULATIONS, 1995. 2.0       A show cause notice dated July 22, 2003 was issued to Shri Kamlesh J. Shroff, Shri Pradip R. Sh

(hereinafter referred to as “VB Desai”) for the period October 04, 1999 to May 31, 2000. 1.1 Investigations revealed that Shri Kamlesh Jitendra Shroff, son of Shri Jitendra Ratilal Shroff, promoter of VB Desai and nephew of Shri Pradip Ratilal Shroff, Managing Director of VB Desai was the main person behind the trading activity in the scrip throughout all the settlements during the investigation period. He had used a number of brokers, sub brokers (both registered and unregistered) as well as acquaintances to buy and sell the shares in the scrip of VB Desai in the market, thereby creating illusion of trading, artificial volume and price rise in the scrip. SHOW CAUSE NOTICE FOR ALLEGED VIOLATION OF SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) REGULATIONS, 1995. 2.0 A show cause notice dated July 22, 2003 was issued to Shri Kamlesh J. Shroff, Shri Pradip R. Shroff, Shri M.T. Shroff, M/s Marine Drive Investment & Trading Co. Pvt. Ltd. (hereinafter referred to as ‘Marine Drive Investment’), M/s Matunga Investment Trading Co. Pvt. Ltd.(hereinafter referred to as ‘Matunga Investment’), M/s Mahim Investment & Trading Co. Pvt. Ltd.(hereinafter referred to as ‘Mahim Investment’), M/s Cumulative Investment & Trading Co. Pvt. Ltd.(hereinafter referred to as ‘Cumulative Investment’), M/ s Desai Investment Pvt. Ltd.(hereinafter referred to as ‘Desai Investment’) and M/s Maxworth Finlease Pvt. Ltd. (hereinafter referred to as ‘Maxworth’). In the

Mumbai. Further, all the entities were asked to show cause as to why appropriate action under Regulation 11 and 12 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 read with Section 11B of SEBI Act, 1992 restraining them from accessing the Securities Market, and prohibiting them from buying, selling or dealing in the securities market in any manner should not be passed against them. SHOW CAUSE NOTICE FOR ALLEGED VIOLATION OF SEBI(PROHIBITION OF INSIDER TRADING) REGULATIONS), 1992 2.1 In the course of investigation, SEBI had also probed into possible violations of SEBI (Prohibition of Insider Trading) Regulations, 1992. Based on the findings, a show cause notice dated July 28, 2003 was issued to Shri Kamlesh J. Shroff, Shri Pradip R. Shroff, Shri M.T. Shroff, Marine Drive Investment, Matunga Investment, Mahim Investment, Cumulative Investment and Desai Investment whereby they were asked to show cause as to why appropriate action under Regulation 9 and 11 of the SEBI(Prohibition of Insider Trading) Regulations, 1992, restraining them from accessing the securities market and prohibiting them from buying, selling or dealing in the securities in any manner for a particular period should not be passed against them. The alleged violations indicated therein were Regulation 3(i) & 4 of SEBI (Prohibition of Insider Trading) Regulations,

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Source: SecMarx — sebi:MO/60/IVD/2/04. 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.