sebi:NP/AS/AO-46/2017
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 132(1)
Regulations
- Reg. 4
- Reg. 2(c)
- Reg. 3
- Reg. 199
- Reg. 4(2)
- Reg. 2
- Reg. 47
- Reg. 3(a)
- Reg. 4(2)(a)
- Reg. 4(2)(b)
Parties
- Sudhir Jhunjhunwala
- Madhu Jhunjhunwala
- Ritika Jhunjhunwala
- G. Moorthi
Holding
The Adjudicating Officer considered all four noticees as part of the Jhunjhunwala group and proceeded on a common order for contravention of the PFUTP Regulations in the scrip of Gemini Communications Limited through synchronized trading.
Full text
2 on the Bombay Stock Exchange (hereinafter referred to as “BSE”) and National Stock Exchange (hereinafter referred to as “NSE”) since January 18, 2017.
3 instructions that they should be sold for a price between Rs. 250-275. Since company came with bonus issue, G. Moorthi informed Sudhir Jhunjhunwala and Madhu Jhunjhunwala to hold the shares until the bonus is credited and sell it only thereafter at the above mentioned price. Around month of July, the bonus shares were issued by Gemini and Mr. Sanjay, Sudhir Jhunjhunwala and Madhu Jhunjhunwala confirmed that bonus shares were credited into their account and 3 lakh shares became 6 lakh. G. Moorthi also transferred the sum of Rs. 5.87 crores to Mr. Sudhir Jhunjhunwla through various cheques in March 2007. However in March 2008 when G Moorthi contacted Sudhir Jhunjhunwala and Madhu Jhunjhunwala to ascertain status of money lent, however Sudhir Jhunjhunwala and Madhu Jhunjhunwala absconded. On enquiry with Gemini with regard to the status of 6 lakh shares, it was found that there are no shares in the name of Sudhir Jhunjhunwala and Madhu Jhunjhunwala and shares were sold Sudhir Jhunjhunwala and Madhu Jhunjhunwala without consent of G Moorthi. Thus G Moorthi has complained that Sudhir Jhunjhunwala and Madhu Jhunjhunwala have committed cheating and criminal misappropriation of his shares and money. The matter is subjudice.
4 period of time he would also speak to the brokers and back the trades. Simultaneously, I continued to do my trades in my scripts which not connected with his trade at all. He would trade in large quantities. v) I did not know his modus operandi. I later understood his trades were synchronized circular trades being conducted simultaneously with some other people thereby manipulating the price of shares. vi) In end July, 2007 Sanjay Talati requested me to allow him to trade under F & O and in cash scripts other than Gemini and Teledata. He impressed upon me that there was sufficient security from his side and therefore, any risk of his trading in these other scrip would be covered. When I showed resistance, as I had no incentive if he was allowed to deal in other scripts, he promised to pay to me 10% of the profits made by him net of tax. vii) When I agreed to this he traded in scripts like DLF, Reliance Capital, Reliance Energy, HDFC, Nifty, RPL, RNRL, Idea, IDFC, IDBI, SBI, Educomp, R-Com, Bharti, Essar Oil, ICICI, NTPC and HDIL from 17th July, 2007 to 27th July, 2007. He did heavy transactions in these scripts. He incurred huge losses in most of the scripts due to which the cash security given by him got wiped off. He told me that he would continue to do business as earlier and that the losses incurred by him would be adjusted by sale of shares of Gemini which were typing as security. Accordingly, he started selling of shares of Gemini for recovery of losses. Since it was
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Source: SecMarx — sebi:NP/AS/AO-46/2017. 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.