sebi:PKK/AO/151/2010
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Facts / Headnote
Penalty of Rs.2,00,000 imposed on the Noticee under Section 15HA of SEBI Act, 1992 for violation of PFUTP Regulations
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 4(1)
Parties
- Mr. Girdharbhai J Vagadiya
Holding
The Noticee, as one of 48 connected entities acting in tandem, violated Regulations 4(1), 4(2)(a), 4(2)(b), 4(2)(e) and 4(2)(g) of PFUTP Regulations by aiding creation of artificial volume and unrealistic price rise in KCL, and is liable to a penalty of Rs.2,00,000 under Section 15HA of the SEBI Act.
Full text
Page 2 of 9 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. Girdharbhai J Vagadiya (hereinafter referred to as the ‘Noticee’) is one of the connected entities who has engaged in such activities.
Page 3 of 9 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 entities and their linkages were provided to the Noticee as an Annexure 2 to SCN. The Noticee along with the connected entities executed significant numbers of buy and sale transactions in the market. Noticee bought 90,021 shares of KCL in market on March 24, 2005 and 52,801 shares on March 28, 2005. Noticee transferred through off market 90,021 shares to Vijay B Shah on March 29, 2005 and 52,801 shares to Mr. Jayesh Shah on May 03, 2005 respectively representing the same quantity of shares he bought earlier. Mr. Vijay B Shah and Jayesh had allegedly manipulated the scrip of KCL. Noticee shares common address with other two connected entities viz. Mr. Kalpesh Babariya and Mr. Jagdish Pandya who were also involved in manipulating the scrip of KCL
Page 4 of 9 7(c) of the Adjudication Rules. The Noticee however, did not availed the opportunity of personal hearing granted to him. Therefore, I am proceeding with the inquiry taking into account of the facts and material as available on record.
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Source: SecMarx — sebi:PKK/AO/151/2010. 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.