sebi:MO/66/IVD/2/04

SEBI · SEBI · 2003-03-24 · 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

Prohibition on dealing in securities for a period of two years with immediate effect

Provisions invoked

• s. 11
• s. 11(4)
• s. 19

Regulations

• Reg. 11
• Reg. 4(a)

Parties

• M/s Akash Fabrics Private Limited

Holding

SEBI prohibited M/s Akash Fabrics Private Limited from dealing in securities for a period of two years with immediate effect for engaging in manipulative trades in the scrip of KSL and Industries Limited.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER UNDER SECTION 11(4) (b) AND SECTION 19 OF SEBI ACT, 1992 READ WITH REGULATION 11 OF SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) REGULATIONS, 2003 IN THE MATTER OF M/s KSL AND INDUSTRIES LIMITED AGAINST M/s AKASH FABRICS PRIVATE LIMITED. 1.0 Investigation was conducted by SEBI in the trading in the scrip of M/s KSL and Industries Ltd [KSIL] (formerly known as Krishna Texport & Industries Limited) during the period February 15, 1999 to May 15, 1999 (hereinafter referred to as ‘relevant period). Investigations revealed that Akash Fabrics Private Ltd was one of the main selling clients who had traded in the scrip of KSIL through M/s. Renaissance Securities Ltd. (hereinafter referred to as RSL). 1.1 It was further revealed that the total volume during the relevant period was only 2500 shares and the price of scrip during the said period shot up from Rs. 120 to Rs. 195. Based on the fact that the scrip of KSIL was traded only on 18 days out of 58 days of the relevant period, it can be concluded that the scrip of KSIL was an infrequently traded scrip. The price of the scrip had also gone up substantially before the announcement of financial result for the year 1998-99 which was announced on April 23, 1999. SHOW CAUSE NOTICE

of KSIL through M/s. Renaissance Securities Ltd. (hereinafter referred to as RSL). 1.1 It was further revealed that the total volume during the relevant period was only 2500 shares and the price of scrip during the said period shot up from Rs. 120 to Rs. 195. Based on the fact that the scrip of KSIL was traded only on 18 days out of 58 days of the relevant period, it can be concluded that the scrip of KSIL was an infrequently traded scrip. The price of the scrip had also gone up substantially before the announcement of financial result for the year 1998-99 which was announced on April 23, 1999. SHOW CAUSE NOTICE 2.0 On the basis of the findings of the investigation, a show cause notice dated March 24, 2003 was issued to M/s Akash Fabrics Private Ltd. ( hereinafter referred to as "AFPL") whereby the

HEARING AND WRITTEN SUBMISSIONS. 3.0 An opportunity of hearing was granted to AFPL on November 12, 2003 before me, which was communicated vide letter dated November 04, 2003. On the said date, Shri S. Deepak, authorized representative for AFPL (the selling client), and DPL, (the buying client) and Shri A. Rao, its Advocate had appeared before me and made submissions. It was admitted that they have done some mischief, but for the purpose of getting the name of KSIL in the market quotation list of BSE and that the same was not done for the purpose of any manipulation.

Source: SecMarx — sebi:MO/66/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.