sebi:VG/JD/2022-23/25281-25282
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Facts / Headnote
Show Cause Notice dated September 30, 2021 disposed of without imposing any penalty
Provisions invoked
- s. 12A
- s. 12
- s. 15G
- s. 15J
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 2(1)(g)
- Reg. 2(1)(d)(i)
- Reg. 3(1)
- Reg. 2(1)(g)(i)
Parties
- Mr. Jayeshbhai Chandubhai Patel (Noticee No. 1)
- Mr. Mukesh N. Patel (Noticee No. 2)
Holding
The Adjudicating Officer held that although the Noticees were insiders under the PIT Regulations, there was no cogent material on record to prove that they communicated unpublished price sensitive information (UPSI) to the alleged traders, and therefore the proceedings were disposed of without imposing any penalty.
Full text
Page 2 of 22 2. The investigation conducted by SEBI inter alia revealed that the Company was incurring financial losses during the year 2015 compared to the previous years and on August 27, 2015, it had announced the financial results for the quarter ended June 30, 2015. From the said financial results, it was observed that the standalone Net Profit after Tax of the Company had decreased from ₹16.51 lakhs in quarter ended March 31, 2015 to a net loss of ₹6205.20 lakhs in the quarter ended June 30, 2015 (Q-o-Q decrease of 37684%) and from a net profit of ₹572.24 lakhs in the quarter ended June 30, 2014 to a net loss of ₹6205.20 lakhs in the quarter ended June 30, 2015 (Y-o-Y decrease of 1184%). It was further observed that price of the scrip had fallen from opening price of ₹136.55 on July 1, 2015 to a close price of ₹80.65 on August 27, 2015.
Page 3 of 22 insider. Additionally, the Noticee No. 1 was also a director and part of the promoter group of Vimal Dairy Ltd. (hereinafter referred to as VDL) along with Ms. Kantaben Chandubhai Patel, who was also a promoter of the Company. It was observed from the Know Your Client (KYC) details that the Noticee No. 1 is the son of Ms. Kantaben Chandubhai Patel.
Page 4 of 22 8. It was observed that Mr. Narayanbhai M. Patel, the father of Noticee No. 2 had traded in the scrip of the Company during the Investigation Period. It was observed from the trading history of Mr. Narayanbhai M. Patel across the market, that he had not traded in any other scrip other than the Company during the period April 1, 2015 to November 27, 2015. On the basis of the same, it was alleged that the Noticee No. 2 had communicated the UPSI i.e., deteriorating financial position of the company to his father, Mr. Narayanbhai M. Patel, who had traded on the basis of the same during the Investigation Period. From the bank account of Mr. Narayanbhai M Patel (A/c no. 00011001009016) at the MUCB, it was observed that the sale proceeds were transferred to Ms. Kantaben Chandulal Patel immediately upon receipt of funds. Mr. Narayanbhai M Patel also had certain other transactions with the Company and Vimal Marketing during the Investigation Period.
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Source: SecMarx — sebi:VG/JD/2022-23/25281-25282. 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.