sebi:MO/84/IVD/09/04

SEBI · SEBI · 1996-09-18 · G A K Batra, Whole Time Member

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Facts / Headnote

Ramesh Dadhia and Bhavesh Dadhia debarred from buying, selling or dealing in securities, directly or indirectly, for a period of eighteen months with immediate effect

Provisions invoked

• s. 11B

Regulations

• Reg. 11
• Reg. 4
• Reg. 4(a)
• Reg. 199

Parties

• Shri Bhavesh Dadhia
• Shri Ramesh Dadhia

Holding

SEBI held Shri Ramesh Dadhia and Shri Bhavesh Dadhia violated Regulations 4(a) to (d) by rigging and creating an artificial market in Synthiko Foils Ltd. shares and debarred them from buying, selling or dealing in securities for eighteen months.

Full text

7.                  In view of the findings of the investigation, SEBI issued a notice dated November 11, 2003 to Bhavesh Dadhia and Ramesh Dadhia, advising t show cause as to why appropriate directions under Regulations 11 and 12 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices rela the Securities Markets) Regulations, 2003, including restraining them from accessing the securities market and prohibiting/suspending them from b selling or dealing in the securities market in any manner whatsoever, for a particular period, should not be issued against them, in violation of Reg 4(a) to (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Markets) Regulations, 1995, as applicable at th when the act was committed and they was directed to reply to the said notice within 21 days of the receipt thereof and it was also indicated that i they failed to furnish their reply within the stipulated time, it would be presumed that they had nothing to say in the matter and SEBI would be free such action as deemed fit. They were also advised to indicate whether they preferred a personal hearing before me. Subsequently another notice November 14, 2003 was issued to them, conveying additional findings of investigation.

neither Bhavesh nor Ramesh lodged any police complaint. 12. I have noted Rahul’s submission that he had traded in the shares of Synthiko on behalf of Bhavesh and had accepted the pledge of shares for raising money for making margin payments with respect to his transactions in the shares of Syntiko. However, Bhavesh had, during the investigation proceedings, stated that he had signed on a blank pledge agreement and a power of Attorney (POA) and handed over about 46,700 shares to Rahul (and Abhay) to raise a loan of around Rs.50 lacs, which was however neither arranged nor were the said shares returned. He had also stated that despite giving Rahul, post dated cheques signed by himself as well as his brother Himesh for around Rs.43 lacs, for repayment of the said loan and another seven post dated cheques signed by his brother Himesh as a surety, the shares of Synthiko, were not returned by either Rahul or Abhay. Yet Bhavesh or Ramesh did not initiate any legal action allegedly on the ground that they were assured that the shares would be returned. Having perused the concerned documents, I have noted that the entire contents of the pledge agreement were typewritten and were signed by Bhavesh on

Name of the Entity Buy Sell Gross Net Manish M Shah, Prop. Great Rise 173900 92100 266000 81800 Rahul R Shah & Rajesh Finance 104100 28800 132900 75300 Vivek Boradia, Jain Securities 130700 117500 248200 13200  TOTAL 408700 238400 647100 170300

Source: SecMarx — sebi:MO/84/IVD/09/04. 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.