sebi:Order/SM/RG/2022-23/25245-25256

SEBI · SEBI · 2022-05-17 · Sahil Malik, Adjudicating Officer

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

Provisions invoked

• s. 15
• s. 19
• s. 12A
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 6
• Reg. 9(f)
• Reg. 3
• Reg. 200
• Reg. 5
• Reg. 3(a)
• Reg. 8(1)
• Reg. 2(A)

Holding

The Adjudicating Officer found Noticee No. 1 (Beeline Broking Limited) and connected noticees liable for fraudulent and unfair trade practices in the scrip of Transwind Infrastructure Limited, including manipulative price pushing during Patch-1 to enable connected entities to exit at higher prices during Patch-2. Noticee No. 1 was found to have created a false market, acted manipulatively and fraudulently, and allowed employees to act as introducers to acquire clients for pre-arranged trades.

Full text

Adjudication order in the matter of Transwind Infrastructure Ltd. Page 2 of 45 Securities and Exchange Board of India (hereinafter referred to as “SEBI”) investigated in the matter of Transwind Infrastructure Limited (listed on NSE Emerge and had a market maker, Beeline Broking Limited, the SEBI Registered Stock Broker, till 12.07.2020), wherein certain “Unsolicited SMSs” were floating in Capital One Channel in messaging app “Telegram” giving buy recommendation for the scrip Transwind. Post circulation of messages, a substantial volume spurt was observed in the scrip and price rose from Rs.4.05 to Rs.12.30 from June 3, 2020 to July 9, 2020. Based on which, a detailed investigation was initiated in the scrip of Transwind for the period from May 1, 2020 to July 20, 2020 (hereinafter referred to as “Investigation Period”) to ascertain whether there was any violation of the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”), Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 (hereinafter referred to as “Stock Broker Regulations”) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”) by Noticee 1; SEBI Act and PFUTP Regulations by Noticees 2-14.

Adjudication order in the matter of Transwind Infrastructure Ltd. Page 3 of 45 4. The contents of SCN and the allegations levelled against the Noticees in the SCN are mentioned below:

Adjudication order in the matter of Transwind Infrastructure Ltd. Page 4 of 45 5.4 Brokers Concentration (NSE SME – Emerge) Details of Top 10 buy brokers and sell brokers concentration during the Investigation period is tabulated below: Buy Broker Name Gross Buy % of Gross Buy to Mkt Volume Sell Broker Name Gross Sell % of Gross Sell to Mkt Volume RKSV Securities India Private Limited 2,40,000 16.22% Beeline Broking Ltd 6,12,000 41.35% HDFC Securities Ltd. 2,24,000 15.14% Swastika Investmart Limited 1,72,000 11.62% Beeline Broking Ltd 1,92,000 12.97% ACML Capital Markets Limited 1,32,000 8.92% Zerodha Broking Limited 1,44,000 9.73% Zerodha Broking Limited 88,000 5.95% Kotak Securities Ltd. 76,000 5.14% Kotak Securities Ltd. 64,000 4.32% 5paisa Capital Limited 64,000 4.32% Balance Equity Broking (India) Pvt. Ltd. 40,000 2.70% Motilal Oswal Financial Services Limited 52,000 3.51% Edelweiss Broking Limited 40,000 2.70% Anand Rathi Share And Stock Brokers Limited 48,000 3.24% RKSV Securities India Private Limited 40,000 2.70% Balance Equity Broking (India) Pvt. Ltd. 36,000 2.43% Rajvi Stock Broking Private Limited 36,000 2.43% K Securities Ltd. 32,000 2.16% K Securities Ltd. 32,000 2.16% Top Buy Broker 11,08,000 74.86% Top Sell Brokers 12,56,000 84.86% Remaining Brokers 3,72,000 25.14% Remaining Brokers 2,24,000 15.14% Total Market 14,80,000 100.00% Total Market 14,80,000 100.00%

Source: SecMarx — sebi:Order/SM/RG/2022-23/25245-25256. 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.