sebi:RA/JP/250-254/2017
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Facts / Headnote
Violations established; monetary penalty of ₹20,00,000 imposed on each of the five Noticees under section 15HA of the SEBI Act for violation of regulations 3(a) to (d), 4(1) and 4(2)(a), (e) & (g) of the PFUTP Regulations.
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Mr. Dhananjay Kumar (Noticee No. 1)
- Mr. Amratbhai Chaturdas Patel (Noticee No. 2)
- Mr. Narendrabhai Shivabhai Parmar (Noticee No. 3)
- Mr. Sandip Kumar Prakashbhai Prajapati (Noticee No. 4)
- Mr. Savan Keshavlal Prajapati (Noticee No. 5)
Holding
The Noticees were found to have indulged in fraudulent/manipulative trade practices through synchronized trades among themselves causing artificial volume rise, and artificial price rise in the scrip of KTL through LTP contribution, New High Price contribution, and First Trade contribution, in violation of regulations 3(a)-(d), 4(1) and 4(2)(a), (e) & (g) of the PFUTP Regulations. A penalty of ₹20,00,000 was imposed on each of the five Noticees under section 15HA of the SEBI Act.
Full text
Page 2 of 29 2. SEBI had initiated adjudication proceedings and appointed the undersigned as Adjudicating Officer vide order dated January 27, 2017 to inquire into and adjudge under section 15 HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') read with rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) the aforesaid violations of PFUTP Regulations alleged to have been committed by the Noticees. Proceeding of appointment of undersigned as Adjudicating Officer was communicated vide communiqué dated April 26, 2017. SHOW CAUSE NOTICE, REPLY AND HEARING
Page 3 of 29 Period 31.07.2014 During Investigation Period 01.08.2014 to 11.03.2015 Price 22.95 153.00 18.60 (Aug 1, 2014) 153.00 (Mar 11, 2015) 31,896 Vol 40,000 20,000 4,000 (on multiple days) 1,76,000 (Dec 30, 2014) After Investigation Period 12.03.2015 to 11.06.2015 Price 152.00 153.00 152.00 158.80 16,857 Vol 8000 4000 2000 64,000
Page 4 of 29 IV. It was alleged that repetitive synchronized trades were executed by the Noticees among themselves and due to such trades they deliberately created artificially volume rise in the scrip to the extent of 3,24,000 shares through 72 trades over several number of days (2 days to 18 days). The detailed analysis of synchronized trades of the Noticees, is given in table shown at page 6 of the SCN and the order/trade logs for alleged synchronized trades of the Noticees is shown in annexure 6 of the Investigation Report which was attached in the DVD along with SCN. Therefore, it was alleged that the Noticees had deliberately created artificially volume rise in the scrip and thereby had violated regulations 3 (a), (b), (c), (d), 4 (1), 4 (2) (a) & (g) of the PFUTP Regulations.
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Source: SecMarx — sebi:RA/JP/250-254/2017. 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.