sebi:Order/AK/AS/2022-23/23970-23975

SEBI · SEBI · 2022-02-09 · Amit Kapoor, Adjudicating Officer

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Facts / Headnote

Violations established against all six Noticees; monetary penalties imposed under Section 15HA of the SEBI Act.

Provisions invoked

Regulations

Parties

Holding

The Adjudicating Officer held that Noticees 1, 2, 3 and 4 created artificial/fictitious volume in the scrip of NECC in violation of Section 12A(a), (b), (c) of the SEBI Act read with Regulations 3(a)-(d) and 4(1), 4(2)(a) of the PFUTP Regulations, and that Noticees 4, 5 and 6 created artificial volume through circular trades in violation of the same provisions read with Regulations 3(a)-(d) and 4(1), 4(2)(a), 4(2)(g) of the PFUTP Regulations, attracting monetary penalty under Section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of six entities in the matter of North Eastern Carrying Corporation Ltd Page 2 of 57 BACKGROUND OF THE CASE 1. SEBI carried out an investigation in the scrip of North Eastern Carrying Corporation Ltd (hereinafter referred to as “NECC or the Company”) for the period from December 27, 2016 to April 21, 2017 (hereinafter referred to as “Investigation Period or IP”). On the basis of said investigation, it was alleged that Utkarsh Jain (hereinafter referred to as “Noticee No: 1”), Vanya Jain (hereinafter referred to as “Noticee No: 2”), Charamshukh IT Marketing Pvt (hereinafter referred to as “Noticee No: 3”) and Realstep Agencies Pvt Ltd (hereinafter referred to as “Noticee No: 4”) violated provisions of Section 12A(a), (b) and (c) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) read with Regulation 3(a), 3(b), 3(c) and 3(d) and 4(1), 4(2)(a) of SEBI (Prohibition Of Fraudulent And Unfair Trade Practices Relating To Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”). Further, it was alleged that Noticee No: 4, Sairabanu Mohd Rafiq Fanaswala (hereinafter referred to as “Noticee No: 5”) and Malatiben Ashokbhai Darji (hereinafter referred to as “Noticee No: 6”) violated provisions of Section 12A(a), (b) and (c) of the SEBI Act read with Regulation 3(a), 3(b), 3(c) and 3(d) and 4(1), 4(2)(a) and 4(2)(g) of the PFUTP Regulations. Noticee Nos. 1 to 6 shall be, hereinafter, co

Adjudication Order in respect of six entities in the matter of North Eastern Carrying Corporation Ltd Page 3 of 57 SHOW CAUSE NOTICE AND PERSONAL HEARING

Adjudication Order in respect of six entities in the matter of North Eastern Carrying Corporation Ltd Page 4 of 57 opportunity of inspection of documents in the matter. Vide letter dated October 10, 2022, Noticee Nos. 1 and 2 reiterated the aforesaid request for inspection of documents. Vide email dated October 14, 2022, Noticee Nos. 1 and 2 were granted opportunity of inspection on October 20, 2022. Authorized Representative of Noticee Nos. 1 and 2 viz. CA Kushal Shah carried out inspection of documents on October 20, 2022. During the course of inspection, the following documents were inspected: i. Redacted copy of Investigation Report was provided in hard copy format. ii. Following contents were provided in a CD: a) Redacted portion of Investigation Report along with relevant Annexures therein b) The documents pertaining to the connection between Noticee Nos 1 and 2 and the counterparties to the alleged trades. Said documents included relevant Bank statements, Demat statements, UCC details, KYC documents and MCA documents.

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Source: SecMarx — sebi:Order/AK/AS/2022-23/23970-23975. 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.