sebi:PKK/AO/52/2011
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Facts / Headnote
Charges not established; matter disposed of with no penalty
Provisions invoked
- s. 15
- s. 15J
Regulations
- Reg. 3
- Reg. 7(1)
- Reg. 13(1)
- Reg. 3(a)
Parties
- Mr. Manoj Kumar
Holding
The charges against the Noticee under PFUTP Regulations, SAST Regulations and Insider Trading Regulations do not stand established and the matter is accordingly disposed of without penalty.
Full text
Page 2 of 10 also sold the shares when the prices were high following misleading announcement made by KEWL. Noticee therefore, alleged to have violated SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as PFUTP Regulations. The Noticee had not made any disclosures as required under SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (hereinafter referred to as ‘SAST Regulations) and SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as ‘Insider Trading Regulations’).
Page 3 of 10 5. The AO considered the facts of the case and other materials available on record and decided to conduct an inquiry in the matter. The AO granted an opportunity of personal hearing to the Noticee and accordingly he was advised to attend the hearing on March 19, 2010. The authorized representatives of the Noticee appeared before the AO and submitted that an application under consent scheme could be filed by April 10, 2010. The consent application filed by the Noticee had seems been rejected by the High Powered Advisory Committee and another opportunity of personal hearing was granted to the Noticee on September 27, 2010. The representatives of the Noticee appeared before me and submitted that he would submit revised consent terms. As the revised terms were not acceptable, another opportunity of personal hearing was granted to the Noticee on February 23, 2011. The representatives of the Noticee appeared before me and made oral submissions followed by written submissions. The Noticee inter-alia submitted that “Mr. Manoj Kumar is not a regular trader in shares and securities and hence, was not aware of the applicable regulations. The default of Mr. Manoj Kumar was bona fide and unintentional and was not prejudicial to the interests of any person or the general public. The default is in the nature of a technical breach of provision and is venial in nature. It is thus requested that the Hon’ble Adjudicating Officer may be kind to take a lenient view in regard to the a
Page 4 of 10 It is submitted that the carrying on of off-market transactions by Mr. Manoj Kumar with the promoters/ directors of KEWL cannot by itself be a charge. In this regard, reliance is placed on the observation of the Hon’ble Securities Appellate Tribunal, Mumbai, in the matter of Amrik Singh versus Securities and Exchange Board of India in Appeal No. 30 of 2010, wherein it has been stated that the transfer of shares in off market transactions to a person who in turn sold the same in the market cannot by itself be a charge. Further, it is submitted that It is only a quantity of 82,100 shares of KEWL that were sold after the date of announcement of quarterly results by KEWL, which shares were sold on January 18, 2005. The prices of the shares of KEWL remained in the range of Rs. 9.90 to Rs. 13.90 per share from January 1, 2005 to January 31, 2005. It is relevant to examine that, as alleged, the price of the shares of KEWL did not in any manner move abnormally from the date of the announcement of quarterly results by KEWL on January 11, 2005 upto January 18, 2005, as the price of shares of KWEL on the last said date was Rs. 13.40 per share. The price movement data of the shares of KEWL at Mumbai Stock Exchange during the period from January 1, 2005 to January 31, 2005 is set out in the attachment marked Annexure 2.
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Source: SecMarx — sebi:PKK/AO/52/2011. 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.