sebi:Order/SBM/VS/2022-23/16307

SEBI · SEBI · 2017-07-17 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Penalty imposed on the Noticee for violations of sections 12A(a), (b) and (c) of the SEBI Act read with regulations 3(a), (b), (c), (d) and 4(1) of the PFUTP Regulations

Provisions invoked

• s. 15
• s. 12A
• s. 15H
• s. 15I
• s. 15J
• s. 15F
• s. 28A

Regulations

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

Parties

• Mr. Bhavesh Gadhavi

Holding

The Noticee, Bhavesh Gadhavi, violated sections 12A(a), (b) and (c) of the SEBI Act read with regulations 3(a), (b), (c), (d) and 4(1) of the PFUTP Regulations by allowing his trading account to be used for front-running the trades of the Sterling Group, and a penalty of ₹8,00,000 was imposed under section 15HA of the SEBI Act.

Full text

___________________________________________________________________________ Adjudication Order in respect of Mr. Bhavesh Gadhvi in the matter of Front–Running by Manish Chaturvedi & Others Page 2 of 19 a. 9 entities viz. Mr. Bhavesh Gadhavi (‘Bhavesh’/’Noticee’), E Ally Consulting India Pvt. Ltd. (‘E-Ally’), Josh Trading Pvt. Ltd. (‘Josh’), Ms. Laxmi Chaturvedi (‘Laxmi’), Pinky Auto Finance Ltd. (‘Pinky’), Shree Jaisal Electronics & Industries Ltd. (Jaisal’), Viraj Mercantile Pvt. Ltd. (‘Viraj’), Mr. Anandilal Chanda (‘Anandilal’) and Anandilal Chanda HUF (‘Chanda HUF’) were, prima facie, observed to be front running the trades of the Sterling Group/ its clients during the period under investigation,

___________________________________________________________________________ Adjudication Order in respect of Mr. Bhavesh Gadhvi in the matter of Front–Running by Manish Chaturvedi & Others Page 3 of 19 on the Noticee, as deemed fit, in terms of Rule 5 of the Adjudication Rules and in terms of Section 15HA of the SEBI Act. Pursuant to transfer of Ms. Rachna Anand, the undersigned was appointed as the Adjudicating Officer in the matter vide order dated May 10, 2018. Upon the receipt of the matter/file from the concerned department, certain clarifications were sought from the concerned department of SEBI w.r.t the communique/appointment of the AO order. The concerned department vide order dated October 03, 2018 modified the communication order w.r.t appointment of AO. Thereafter, pursuant to the transfer of the undersigned to another department of SEBI, Dr. Anitha Anoop was appointed as the Adjudicating Officer in the matter vide order dated March 18, 2019. Subsequently, due to the transfer of Dr. Anitha Anoop, the undersigned was again appointed as the Adjudicating Officer in the matter vide communique dated November 3, 2020. SHOW CAUSE NOTICE, REPLY AND HEARING

___________________________________________________________________________ Adjudication Order in respect of Mr. Bhavesh Gadhvi in the matter of Front–Running by Manish Chaturvedi & Others Page 4 of 19 e. Mr. Bhavesh Gadhavi (Bhavesh): Front-running was observed in his account besides multiple banking transactions with Praveen’s companies/ other companies in diamond trade. Bhavesh submitted that his account was misused without his knowledge. f. Mr. Sandeep Maloo (Sandep): Sandeep is a Chartered Accountant by profession and was authorised to place orders in the accounts of E Ally Consulting India Pvt. Ltd. (E Ally) and Pinky Auto Finance Ltd. (PAFL). g. Mrs. Neeta Maloo (Neeta): Neeta is Sandeep's wife, was authorized to trade in Shree Jaisal Electronics & Industries Ltd. (Jaisal) account. h. Mr. Abhinandan Ranka (Abhinandan): Abhinandan was a director and authorized to place orders in the account of Josh and Viraj. He is also a cousin of Praveen. i. Pinky Auto, E Ally, Jaisal Electronics, Viraj Mercantile, Josh Trading: Front running was observed in these accounts apart from multiple banking transactions with companies related to Praveen. j. Mrs. Madhu Chanda (Madhu): Madhu was a dealer of Sharekhan Limited (hereinafter referred to as ‘Sharekhan’) and submitted that she was heading the branch at second floor at the Lower Parel and was also handling all the accounts of 7 of the front-runners such as Laxmi, Viraj, Josh, PAFL, E Ally, Jaisal and Bhavesh Gadhavi at Sharekhan. k.

Source: SecMarx — sebi:Order/SBM/VS/2022-23/16307. 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.