sebi:Order/VV/AK/PSS/2022-23/18247-18257

SEBI · SEBI · 2018-04-01 · Vijayant Kumar Verma, Adjudicating Officer

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Facts / Headnote

Show Cause Notice dated December 10, 2020 disposed of qua Noticees no. 1, 2 and 3 without imposition of penalty; Noticees no. 4 to 11 found liable for synchronized/circular trading creating artificial volumes (penalty quantum not fully specified in extracted text)

Provisions invoked

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

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Holding

The Adjudicating Officer held that Noticees no. 4 to 11 engaged in synchronized and circular trading among a closed group, creating artificial trading volumes in the scrip of Ejecta Marketing Limited in violation of the PFUTP Regulations, while Noticees no. 1, 2 and 3 were discharged without penalty as the allegations of synchronized trading against them were not established.

Full text

Adjudication order in the matter of Ejecta Marketing Limited. Page 2 of 25 A. BACKGROUND 1. Securities and Exchange Board of India (“SEBI”) conducted investigation into the Trading Activities of Certain Entities in the scrip of Ejecta Marketing Limited (herein after referred to as the Company/EML/Ejecta) in the wake of major spurt in trading volume around the dates of circulation of the SMSs (giving buy recommendation for the scrip of Ejecta) to ascertain any violation of the provisions of SEBI Act 1992 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”) by the suspected entities in trading in the scrip of EML, during the period April 1, 2018 to June 30, 2018 (“investigation period”). In the preliminary investigation/examination into the scrip, examination/investigation period was taken as April 1, 2018 to June 30, 2018. However, it was observed that 96.17% of the volume in the scrip occurred on two SMS days viz. May 14, 2018 to May 15, 2018. Hence, detailed investigation was undertaken for May 14, 2018 to May 15, 2018 (“sub-investigation period”).

Adjudication order in the matter of Ejecta Marketing Limited. Page 3 of 25 Trading by Group 1 Sl. No. Client Name Gross Buy Gross Sell Net Qty. % of Gross Buy to Mkt. Vol. % of Gross Sell to Mkt. Vol. 1 Naileshkumar Ganeshbhai Prajapati 80973 49595 31378 4.43 2.71 2 Kirtikumar Popatlal Rangee 65050 22050 43000 3.56 1.21 3 Arpan Darshakkumar Bhatt 63166 27575 35591 3.46 1.51 4 Preyashbhai Sathvara 55000 55000 0 3.01 3.01 5 Sanjaykumar Vinodbhai Rathod 55000 0 55000 3.01 0.00 6 Divyaben Hiteshbhai Gangani 55000 40000 15000 3.01 2.19 7 Hiteshbhai Mistri 55000 20000 35000 3.01 1.09 8 Jay Bhavsar 50075 30075 20000 2.74 1.65 9 Nimesh Ganpatbhai Parmar 50000 0 50000 2.74 0.00 10 Nikhil Kiritbhai Panchal 50000 25000 25000 2.74 1.37 11 Krunal Bhupendrabhai Makwana 40791 40791 0 2.23 2.23 12 Narendrabhai Jayantibhai Rupera 40196 40196 0 2.20 2.20 13 Manjulaben Bhaveshkumar Rangee 32734 27734 5000 1.79 1.52 14 Mukeshkumar Mavjibhai Parmar 28193 15709 12484 1.54 0.86 15 Dashrathbhai Maheshbhai Vada 25001 25001 0 1.37 1.37 16 Dasharatbhai Rangi 25000 25000 0 1.37 1.37 17 Akashkumar Dipakbhai Kachhiya 22718 22718 0 1.24 1.24 18 Rameshchandra Chhitubhai Patel 15000 5000 10000 0.82 0.27 19 Abhishek Kumar Jain 15000 0 15000 0.82 0.00 20 Mayur Maheshkumar Panchal 9800 10000 -200 0.54 0.55 21 Vikash Mercantile Pvt Ltd . 0 5800 -5800 0.00 0.32 22 Shree Securities Ltd 0 100000 -100000 0.00 5.47 23 Apsara Vincom Private Limited 0 2000 -2000 0.00 0.11 24 Lekha Roy 0 3000 -3000 0.00 0.16 25 Patel Ma

Adjudication order in the matter of Ejecta Marketing Limited. Page 4 of 25 contributed 21.85% to total market volume (details enclosed as Annexure - 5). The date wise trades of the Group is tabulated as below: Trading by Group 1 on May 14, 2018

Source: SecMarx — sebi:Order/VV/AK/PSS/2022-23/18247-18257. 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.