sebi:Settlement_Orders_217_Order_Against_CFL_Securties_Ltd

SEBI · SEBI · 1994-09-14 · G. N. Bajpai, Chairman

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Certificate of registration of M/s CFL Securities suspended for six months with effect from date of order; surrender of NSE membership not to be approved till suspension period completed

Regulations

• Reg. 7
• Reg. 4(b)
• Reg. 13

Parties

• CFL Securities Ltd.

Holding

CFL Securities was held guilty of executing structured deals with DGP Securities Ltd. creating artificial volumes in Ravalgaon Sugar Farms Ltd. and Shrenuj & Co. Ltd. in violation of FUTP Regulations and Stock Broker Regulations, and its certificate of registration was directed to be suspended for six months.

Full text

While requesting that their registration may not be cancelled as recommended by EO, they brought on record that there were certain contradictions between the show c and the letter summarizing the recommendations of EO.

Dalal’s a/c 2001024 15.6.01 790 CFL SEcs Own A/c. 790 104050810 UTI Bank Transfer to Aditi Dalal’s a/c 790 790 shares due to CFL Secs credited to Aditi Dalal’s a/c 6.5 I find that all the shares of Ravalgaon sold on behalf of the client of CFL, viz., Ashadevi Beriwala were transferred to the pool account of CFL from the beneficiary account of Ad who is the wife of one of the director of the CFL, Shri Asim B Dalal. Thus, it is observed that the shares were moving from the account of Aditi Dalal for pay-in to the ex During the same settlement, when pay-out was received from the exchange, the shares were moving back to the same account. I find that Shri Milan Dalal, Director of CFL in his statement dated October 21, 2003 before the investigating officer and his reply dated July 30, 2004  also has stated that the for the structured deals was to obtain funds to meet their NSE valan obligations and these transactions were part of their efforts to survive in the midst of hardships and ob The explanation of Milan Dalal is not acceptable. As observed earlier such structured deals tamper with free and transparent price discovery mechanism and same is proh view of Circular dated 14.9.99. Such deals cannot be allowed for raising funds or for any other purpose.

6. May 14, 2001 10:51:46 10:51:46 7. June 4, 2001 11:30:09 11:30:08 8. June 4, 2001 11:30:20 11:30:20 9. June 4, 2001 11:30:34 11:30:34 10. June 15, 2001 12:12:18 12:12:17

Source: SecMarx — sebi:Settlement_Orders_217_Order_Against_CFL_Securties_Ltd. 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.