sebi:Order/EAD-1/SBM/JR/2020-21/11130

SEBI · SEBI · 2016-07-04 · Suresh B Menon, 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

Adjudication proceedings disposed of / dropped

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 248
• s. 560

Regulations

• Reg. 3(a)

Parties

• Lagan Dealtrade Private Limited

Holding

The Adjudicating Officer disposed of the adjudication proceedings initiated against Lagan Dealtrade Private Limited, holding that the proceedings cannot be proceeded with because the Noticee's name was struck off from the Register of Companies and it was dissolved as on June 9, 2017.

Full text

Page 2 of 7 In the matter of Mystic Electronics Limited India Act, 1992 (hereinafter referred to as “SEBI Act”) for the alleged violation of Regulations 3(a) (b), (c), (d), 4(1), 4(2)(a) and (e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”) by the Noticee. APPOINTMENT OF ADJUDICATING OFFICER

Page 3 of 7 In the matter of Mystic Electronics Limited price higher than the last traded price and also by absorbing the sell orders that were available in the market which were placed at a higher price than the Last Traded Price (LTP) in MEL. Once the scrip price of MEL reached the desired level, the preferential allottees exited and the preferential allottees have allegedly made a profit of Rs. 39 crore.  It is observed that MEL made a preferential allotment of 92,30,000 shares to 48 entities on June 7, 2013 to raise an amount of Rs. 56.06 crore and the shares were under lock-in for one year upto June 06, 2014. It is observed that the shares were allotted on preferential basis initially at Rs. 25 per share and subsequently, the same was revised to Rs. 60.74 (based on 26 week average price). Post lock-in period, it was observed that 14 allottees who were allotted shares in the preferential allotment have either fully or partly sold their holdings in MEL i.e. 86,71,828 shares were sold in patches (i.e these shares were sold after the stock split period and approximately 9.30% of the shares allotted through the preferential allotment were sold by the preferential allottees for a value of Rs. 39 crore). Once the preferential allottees have started to exit, the scrip price of MEL started to decline substantially.  During the investigation period, it is observed that a total of 1629 entities had traded in the scrip of MEL, out of which 60 entities were observed to be connected

Page 4 of 7 In the matter of Mystic Electronics Limited price of the scrip during the price rise patch.  It is alleged that the connected entities have contributed to the price rise of Rs. 1550.1 (net LTP) compared to the market Net LTP of Rs. 489.45. Further, it is observed that only 35 connected entities (of 60 entities) have contributed to positive LTP of Rs. 2777.80 which is 47% to market Positive LTP (Rs. 5875.95) in 2642 trades for a total volume of 11,44,294 shares. Further, the connected entities, bought 11.55 lac shares which is 40.79% of the market volume (price rise- Patch I) and contributed to 47% of market positive LTP.  It is observed that the Noticee is one of the top 10 connected entities who contributed to the Positive LTP. The details regarding the trades of the Noticee is as under: Client Name Operator Net LTP Positive LTP Negative LTP Zero LTP % of +ve LTP to total market +ve LTP Net LTP (in Rs.) Traded qnty No. of trades +ve LTP (in Rs.) Traded qnty No. of trades Negative LTP (in Rs.) Traded qnty No. of trades Zero LTP traded quantity No. of trades Lagan Dealtrade Pvt. Ltd. Devesh Upadhyay 45.4 82175 77 52.5 24822 9 -7.1 4283 5 53070 4 0.89

Source: SecMarx — sebi:Order/EAD-1/SBM/JR/2020-21/11130. 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.