sebi:PM/NR/2020-21/12711-12713

SEBI · SEBI · 2012-01-20 · Prasanta Mahapatra, Adjudicating Officer

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Facts / Headnote

Noticees held liable for violations; monetary penalty imposed under Sections 15HA and 15HB of the SEBI Act

Provisions invoked

Regulations

Parties

Holding

The Noticees were found to have violated the provisions of the SEBI Act, SEBI (PFUTP) Regulations, and SEBI (Stock Brokers) Regulations by placing buy orders that created a misleading appearance of orders in the RSIL scrip and artificial volume in the pre-open session, and were held liable for monetary penalty under Sections 15HA and 15HB of the SEBI Act.

Full text

Adjudication Order in the matter of Ruchi Soya Industries Ltd., Page 2 of 35 plan. Further, the Company has made an allotment of 29,25,00,000 equity shares pursuant to scheme of arrangement to new promoters of the Company as approved under the said resolution plan. It was also noted that after restructuring as per resolution plan, new Promoters were holding 98.87% shares which were under lock-in till February 15, 2021 and 100% of Promoter's holding is pledged. Thus, free float available for trading was only 1.13% of total issued equity capital i.e., 33,41,007 shares.

Adjudication Order in the matter of Ruchi Soya Industries Ltd., Page 3 of 35 5. The investigation, upon order book analysis, found that majority of the orders were placed by BP Equities Pvt., Ltd., (hereinafter referred to as “BP Equities” / “Noticee 1”) in its proprietary account and Shaunak Jagdish Shah (hereinafter referred to as “Shaunak” / “Noticee 2”) for Jagdish Amritlal Shah. The Noticees 1 and 2 have placed buy orders greater than the available market float on 3 trading days &14 trading days respectively. For these trading days, total buy order quantity added by the both the clients was 10.92 crores shares, whereas the free float available in the market was 0.33 crores shares. The investigation revealed that 96% & 42% of the orders entered by Shaunak and BP Equities respectively were cancelled by the exchanges’ system due to insufficient collateral and balance 4% & 56% have been deleted by Noticees themselves which clearly shows that they do not have 0 20000 40000 60000 80000 100000 120000 140000 0 100 200 300 400 500 600 700 800 27-Jan-20 03-Feb-20 10-Feb-20 17-Feb-20 24-Feb-20 02-Mar-20 09-Mar-20 16-Mar-20 23-Mar-20 30-Mar-20 06-Apr-20 13-Apr-20 20-Apr-20 27-Apr-20 04-May-20 11-May-20 18-May-20 25-May-20 Price-Volume Chart-BSE Close Price No.of Shares 0 10 20 30 40 50 60 70 80 0 500 1000 1500 2000 2500 07-Feb-20 08-Feb-20 09-Feb-20 10-Feb-20 11-Feb-20 12-Feb-20 13-Feb-20 14-Feb-20 15-Feb-20 16-Feb-20 17-Feb-20 18-Feb-20 19-Feb-20 20-Feb-20 21-Feb-20 22-Feb-20 23-Fe

Adjudication Order in the matter of Ruchi Soya Industries Ltd., Page 4 of 35 any intention of trading into the said securities. Further, the investigation found that 80% & 94% of the orders rejected by the system and placed by Shaunak and BP Equities respectively, were retained in the exchange in the system for more than 5 seconds. Further as per para 13 of SEBI Circular ref. no. CIR/MRD/DP/21/2010 dated July 15, 2010 on introduction of call auction in pre- open session, the said orders have also been disseminated to the market.

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Source: SecMarx — sebi:PM/NR/2020-21/12711-12713. 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.