sebi:PM/NR/2020-21/9588-9590
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Facts / Headnote
Adjudication proceedings disposed of without any penalty
Provisions invoked
- s. 15
- s. 19
- s. 11(1)
- s. 15H
- s. 15I
Regulations
- Reg. 3
- Reg. 4
- Reg. 3(a)
Parties
- Nanji B Gala
- Gala Rajesh N (HUF)
- Gala Rajesh N
Holding
The Adjudication proceedings against Nanji B Gala, Rajesh N Gala (HUF) and Rajesh N Gala were disposed of without any penalty, as the allegation that the Noticees manipulated the price of the scrip of L N Industries Ltd. through their trades in violation of Regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and (e) of SEBI (PFUTP) Regulations, 2003 was not established.
Full text
Adjudication Order in respect of 3 entities in the matter of L N Industries Ltd., Page 2 of 14 3. The investigation inter-alia observed that during Patch-1 of the investigation period i.e., price rise, the price of the scrip opened at ₹10.00 on December 01, 2006 (previous day closing price ₹9.73) and closed at ₹7.00 on October 03, 2007 with a net LTP of ₹16.52 and a market positive LTP of ₹259.32. Period Dates
Adjudication Order in respect of 3 entities in the matter of L N Industries Ltd., Page 3 of 14 Accordingly, Last Traded Price (LTP) analysis was carried out for Patch-1 of the investigation period and the investigation revealed that Nanji B Gala (Noticee 1), Gala Rajesh N (HUF) (Noticee 2) and Gala Rajesh N (Noticee 3) (hereinafter referred to as “Noticees”) who are related to each other have in 153 out of a total of 157 positive LTP contributing trades, placed buy orders after the respective sell orders which were already available at prices higher than LTP, which contributed to positive LTP of ₹99.17. Similarly, sell orders for large quantity of shares were available before placing buy orders but the Noticees repeatedly placed buy orders for small quantities (single digits) in 136 instances and contributed to significant positive LTP of ₹94.35. The Noticees followed this trading pattern on 58 days, thereby contributing to significant positive LTP. Thus, the investigation found that the Noticee manipulated the scrip price and created misleading appearance of trading in the scrip of LN and thereby violated the provisions of Regulations 3(a), (b), (c), (d),4(1), 4(2)(a), and (e) of SEBI (PFUTP) Regulations.
Adjudication Order in respect of 3 entities in the matter of L N Industries Ltd., Page 4 of 14 Rules and penalty be not imposed under Section 15HA of the SEBI Act, 1992 for the violation alleged to have been committed by them. The Noticees vide common letter dated May 15, 2018 submitted that for the same set of alleged violations they received an SCN issued under Section 11(1), 11(4) and 11(B) of SEBI Act in the same matter and requested to take into account the submissions made by them vide letter dated April 20, 2018, as their reply for the SCN issued in the instant Adjudication proceedings.
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Source: SecMarx — sebi:PM/NR/2020-21/9588-9590. 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.