sebi:Order/VV/AA/2020-21/11188-11196
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Facts / Headnote
Violations established; penalty imposed on the Noticees jointly and severally
Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 28A
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(a)
- Reg. 3(a)
Parties
- Rajesh Jayantilal Shah
- Nirmal Rohitbhai Shah
- Devang R. Shah
- Ritaben Rohitkumar Shah
- Binaben Shaileshkumar Shah
- Namitaben Sachinkumar Shah
- Sachin Jayantilal Shah
- Manishaben Rajeshkumar Shah
- Jinny Nirmal Shah
Holding
The Noticees, as part of the Shah Family associated with Nirmal Kotecha, violated Sections 12A(a), (b), (c) of the SEBI Act and Regulations 3(a)-(d), 4(1), 4(2)(a), (b) and (e) of the PFUTP Regulations, 2003 by creating artificial volume and manipulating the price of PSTL and are liable for penalty jointly and severally.
Full text
Page 2 of 26 scrip of Pyramid Saimira Theatre Limited (hereinafter referred to as “PSTL / the company”) during the period from June, 2008 to December, 2008 (hereinafter referred to as ‘investigation period’).
Page 3 of 26 4. The investigation by SEBI, prima facie, revealed that the forgery was done to manipulate the stock price of PSTL and that Mr. Nirmal Kotecha, one of the promoters and the then largest shareholder of PSTL, was one of the major beneficiaries of the said manipulation and appeared to have masterminded the forgery. It was further observed that several persons/ entities directly and indirectly related to Mr. Nirmal Kotecha had purchased shares of PSTL on BSE and NSE during December 15-19, 2008 and sold these shares on December 22, 2008, i.e., after the price rise in the PSTL shares on December 22, 2008 consequent to the publication of news about the forged SEBI letter. It was also found that some persons/ entities had sold PSTL shares on December 22, 2008 and bought back the shares at lower prices on the same day taking advantage of both the price rise which occurred due to publication of the forged SEBI letter as well as the price fall which occurred due to a clarification on media reports on Open Offer provided by Mr. P.S. Saminathan to the stock exchanges (BSE and NSE) that the company had not received any communication directing Mr. P. S. Saminathan to make open offer.
Page 4 of 26 6. Investigation revealed that there were several entities that were involved in the manipulation in the scrip of PSTL and associated with Mr. Nirmal Kotecha. It was observed that Rajesh Jayantilal Shah, Nirmal Rohitbhai Shah, Devang R. Shah, Ritaben Rohitkumar Shah, Binaben Shaileshkumar Shah, Namitaben Sachinkumar Shah, Sachin Jayantilal Shah, Manishaben Rajeshkumar Shah and Jinny Nirmal Shah (hereinafter collectively referred to as ‘Noticees’) along with Shailesh Jayantilal Shah and Jayantilal Ratilal Shah were among the said entities who were involved in the manipulation in the scrip of PSTL. The said 11 entities are part of the same family and are collectively referred to as Shah Family. In view of all of the above, Adjudication Proceedings were initiated against the Noticees and it was alleged that the Noticees had violated the provisions of Section 12A(a), 12A(b) and 12A(c) of SEBI Act and Regulation 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(a), 4(2)(b) and 4(2)(e) of PFUTP Regulations,
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Source: SecMarx — sebi:Order/VV/AA/2020-21/11188-11196. 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.