sebi:MO/62/IVD/2/04

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

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Patel Investments and its proprietor Shri Mohit Patel prohibited from dealing in securities for a period of one year with immediate effect

Provisions invoked

• s. 11B
• s. 11
• s. 19
• s. 12

Regulations relied on

• SEBI (PFUTP) Regulations, 1995
• SEBI (Stock Brokers) Regulations, 1992

Parties

• M/s Patel Investments
• Shri Mohit Patel

Holding

Patel Investments and its proprietor Shri Mohit Patel were prohibited from dealing in securities for a period of one year for dealing for unregistered ultimate clients and aiding violation of registration requirements.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order against M/s Patel Investments Feb 11, 2004 | Orders : Orders of Chairman/Members MO/62/IVD/2/04 SECURITIES AND EXCHANGE BOARD OF INDIA

1.1 Based on this preliminary information, detailed investigation was conducted by SEBI into the affairs relating to buying, selling and dealing in the shares of M/s. V B Desai Financial Services Ltd. (hereinafter referred to as “VB Desai”) for the period October 04, 1999 to May 31, 2000. 1.2 Investigations revealed that Shri Kamlesh Jitendra Shroff (KJS), son of Shri Jitendra Ratilal Shroff of VB Desai and nephew of Shri Pradip Ratilal Shroff, promoter and Managing Director of VB Desai was the main person behind the trading activity in the scrip throughout all the settlements during the investigation period. I find that he had used a number of brokers, sub brokers (both registered and unregistered) as well as acquaintances to buy and sell the scrip of VB Desai in the market, thereby creating illusion of trading, artificial volume and price rise in the scrip. 1.3 M/s Patel Investments (hereinafter referred to as ‘Patel’), a registered sub broker, had dealt in the scrip on account of M/s Ace Finance and had purchased approximately 17,000 shares of ‘VB Desai’. He has also dealt in small quantities on behalf of other retail clients. SHOW CAUSE NOTICE . 2.0 A show cause notice dated July 22, 2003 was issued to Shri Mohit Patel of M/s Patel Investments whereby the findings of investigations and the alleged violation of Section 12 of SEBI Act read with Rule 3 of SEBI (Stock Broker and Sub Broker) Regulations, 1992 were communicated. Vide the aforesaid Show Cause Notice, M/s Patel I

3.0 A reply dated July 25, 2003 was received from M/s Patel Investments. In its reply, it was submitted that whatever earlier stated in the statement during the investigation that value of their transaction was within the normal trading range of ‘Suketu’ and all being delivery based, he did not enquire further. Patel Investments further submitted that when the broker was asked not to deal in the scrip, he stopped ‘Suketu’ from dealing with the scrip. He further submitted that he had no personal interest except for his brokerage, in so far as the scrip is concerned. HEARING AND WRITTEN SUBMISSIONS. 4.0 An opportunity of hearing was granted to M/s Patel Investments in adherence to principles of natural justice. The hearing was initially scheduled on October 01, 2003, which was communicated to him vide letter dated September 22, 2003. Since the other parties related to this case had sought for adjournment, the matter was heard on October 29, 2003 at 4.30 p.m. Shri Mohit Patel, proprietor, had represented Patel Investments. He had stated that there was nothing to submit further than whatever had been stated during the investigations.

Source: SecMarx — sebi:MO/62/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.