sebi:PKK/AO/15/2011
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Facts / Headnote
Penalty of Rs.3,00,000 imposed on the Noticee for violation of PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 4(1)
Parties
- Mr. Prasad Tandel
Holding
The Noticee violated Regulations 4(1), 4(2)(a), 4(2)(b), 4(2)(e) and 4(2)(g) of PFUTP Regulations by acting in tandem with connected entities to create artificial volume and price rise in KCL, and a penalty of Rs.3,00,000 under Section 15HA of the SEBI Act was imposed.
Full text
Page 2 of 10 connected entities used to complete many of the market obligations from the shares received through off market. The connected entities were involved in creation of artificial volume and liquidity which led to price increase to unrealistic levels as mentioned above. The investigations revealed that Mr. Prasad Tandel (hereinafter referred to as the ‘Noticee’) is one of the connected entities who had engaged in such activities.
Page 3 of 10 cause as to why an inquiry should not be held against him for the alleged violations. 6. It was alleged in the SCN that the Noticee was one of the 48 entities connected to each other and had acted in tandem in creation of artificial volume and liquidity thereby manipulating the price of KCL during the Investigation Period. The list of the connected entities was provided to the Noticee as an Annexure 1 to the SCN. The connection between the connected entities and their linkages were provided to the Noticee as an Annexure 2 to SCN. The Noticee alongwith the connected entities executed significant numbers of buy transactions in the market and some of the transactions were executed at a price difference of 0.5 % or more than the last traded price or last closing price. Noticee bought 2, 92,563 shares of KCL in market through his broker M/s. Action Financial Services Ltd. The Noticee had received 2, 50,000 shares of KCL in off market from Mr. Vijay B Shah and transferred in total 5, 42,563 shares to connected entities viz. Jayesh Shah, Sureshkumar P Jain and Vijay B Shah who are allegedly involved in manipulating the scrip of KCL. Noticee shares common telephone number with one of the connected entities viz. Mr. Ashok Bhagat and was an introducer to broker Action Financial Services Ltd for Mr. Shantilal Peety and Mr. Ravindra Peety who form part of connected entities.
Page 4 of 10 hearing to the Noticee by issuing hearing notice dated January 06, 2011. The Noticee was advised to appear before me on January 17, 2011 for the personal hearing. The notice of hearing was served on the Noticee by Hand Delivery and it was duly received by the Noticee The Noticee through his authorised representative appeared before me and submitted me that he did not have any papers and documents with him. He had no malafide intention while dealing in KCL and requested me to take a lenient view.
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Source: SecMarx — sebi:PKK/AO/15/2011. 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.