sebi:ORDER/GR/KG/2019-20/3594

SEBI · SEBI · 2019-05-22 · G. Ramar, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Penalty imposed on the Noticee

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15J
• s. 15F
• s. 28A
• s. 2(1)

Regulations

• Reg. 4
• Reg. 3
• Reg. 2(1)(c)
• Reg. 4(1)
• Reg. 2(1)
• Reg. 2
• Reg. 3(a)
• Reg. 2(1)(c)(8)

Parties

• Ganpati Multi Commodity Business India Private Limited

Holding

The Noticee violated Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades in illiquid stock options at BSE that created artificial volume and a false or misleading appearance of trading, and a penalty of Rs. 5,00,000/- was imposed under Section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of Ganpati Multi Commodity Business India Pvt Ltd Page 2 of 19 3. In view of the large scale reversal of trades that were observed in the illiquid stock options segment at BSE, it is alleged that these trades were non-genuine in nature. It was observed that Ganpati Multi Commodity Business India Private Limited (herein after referred to as “Noticee”) was one of the various entities which indulged in execution of the non-genuine trades in the stock options Segment at BSE during the above referred investigation period. It was observed that Noticee had entered into reversal trades with its counterparties which involved squaring off transactions with significant difference in sell value and buy value of the transactions.

Adjudication Order in respect of Ganpati Multi Commodity Business India Pvt Ltd Page 3 of 19 on July 06, 2018, in the place of Shri Biju. S. Thereafter, the undersigned was appointed the AO in the instant matter, communicated vide order dated May 22, 2019. These proceedings are therefore been carried forward where they had been left off by the previous AO, and an opportunity of personal hearing was granted as detailed hereinafter.

Adjudication Order in respect of Ganpati Multi Commodity Business India Pvt Ltd Page 4 of 19 S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volum e (no. of units) Avg. Sell Rate (Rs.) Total Sell Volum e (no. of units) % of Non Genuin e trades of Notice e in the contrac t to Notice e’s Total trades in the Contra ct % of Non Genuin e trades of Entity in the contrac t to Total trades in the Contra ct % of Artificial Volume generate d by Noticee in the contract to Noticee’ s Total Volume in the Contract % of Artifici al Volum e generat ed by Notice e in the contrac t to Total Volum e in the Contra ct 1 BOBL15M AR190.00C E 1.70 666250 0.20 666250 100% 7% 100% 21% 2 RELI15M AR860.00C E 11.05 450000 1.00 450000 100% 5% 100% 50% 3 STAC15M AR1100.00 CE 32.00 229000 1.44 229000 100% 27% 100% 42% 4 STAC15M AY1060.00 PE 65.00 40000 22.50 40000 100% 50% 100% 73%

Source: SecMarx — sebi:ORDER/GR/KG/2019-20/3594. 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.