sebi:Order/KS/AA/2019-20/3330

SEBI · SEBI · 2018-04-03 · K Saravan, Chief General Manager & Adjudicating Officer

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Facts / Headnote

Penalty imposed on the Noticee for violation of PFUTP Regulations

Provisions invoked

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

Regulations

• Reg. 3
• Reg. 3(a)

Parties

• Sanghi Steel Udyog Private Limited

Holding

The Adjudicating Officer held that Sanghi Steel Udyog Private Limited violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 207 non-genuine reversal trades in 25 stock option contracts on BSE, and imposed a penalty of Rs. 5,00,000 under Section 15HA of the SEBI Act.

Full text

Page 2 of 24 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Sanghi Steel Udyog Private Limited (hereinafter referred to as the “Noticee”) was one of the various entities which indulged in execution of reversal trades in stock options segment of BSE during the Investigation Period. Such trades were observed to be non-genuine in nature and created false or misleading appearance of trading in terms of artificial volumes in stock options and therefore alleged to be manipulative, deceptive in nature. In view of the same, SEBI initiated adjudication proceedings against the Noticee for violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).

Page 3 of 24 of the SEBI Act for the violations alleged to have been committed by the Noticee. 5. It was inter alia alleged in the SCN that the Noticee had executed 207 non genuine trades in 25 Stock Options contracts which resulted in artificial volume of total 63,84,000 units. The Noticee made a loss of approx. Rs. 3,25,90,700 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 25 Stock Options contracts, in which the Noticee allegedly executed non genuine trades during the I.P, is as follows: S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (No. of units) Avg. Sell Rate Total Sell Volume (No. of units) % of Non Genuine trades of Noticee in the contract to Noticee's Total trades in the Contract % of Non Genuine trades of Noticee in the contract to Total trades in the Contract % of Artificial Volume generated by Noticee in the contract to Noticee's Total Volume in the Contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract 1 ALBK15FEB120.00PE 13.51 132000 8.20 132000 100% 40% 100% 20% 2 ALBK15FEB125.00PEW3 22.60 120000 14.11 120000 100% 100% 100% 100% 3 ALBK15MAR85.00CEW1 23.49 200000 11.40 200000 100% 36% 100% 51% 4 AMTK15FEB150.00CEW2 7.85 130000 3.40 130000 100% 100% 100% 100% 5 ANBK15FEB75.00CE 15.71 80000 8.40 80000 100% 33% 100% 19% 6 ANBK15FEB80.00CE 12.40 64000 6.31 64000 100% 29% 100% 9% 7 APLT15FEB165.00CE 21.29 152000 10.80 152000 100% 71% 100% 43% 8 APLT15FEB170.00CE 18.50 100

Page 4 of 24 19 GAIL15FEB390.00CE 27.50 151000 12.82 151000 100% 50% 100% 43% 20 HAIL15FEB245.00CEW3 24.41 55000 13.50 55000 100% 100% 100% 100% 21 HAIL15FEB250.00CE 19.97 252000 12.14 252000 100% 100% 100% 100% 22 HAIL15FEB255.00CE 22.16 161000 10.80 161000 100% 100% 100% 100% 23 HAIL15FEB280.00PE 16.50 55000 7.20 55000 100% 50% 100% 92% 24 HAIL15FEB290.00PEW3 26.21 150000 13.60 150000 100% 100% 100% 100% 25 SYND15FEB90.00CEW2 35.00 120000 22.87 120000 100% 100% 100% 100%

Source: SecMarx — sebi:Order/KS/AA/2019-20/3330. 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.