sebi:VSS/AO-195/2009
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Facts / Headnote
Charges of violation of regulations 4(1), 4(2)(a), (b), (e) and (g) of PFUTP Regulations, 2003 held established; penalty of Rs. 10,000 imposed under section 15HA of SEBI Act
Provisions invoked
- s. 11B
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(2)(a)
- Reg. 4(2)(e)
- Reg. 4(2)(g)
- Reg. 4(2)(b)
Parties
- Vikas Bengani
Holding
The Noticee was held to have violated regulations 4(1), 4(2)(a), (b), (e) and (g) of the PFUTP Regulations, 2003 by trading in the scrip of Eltrol in a manner that created artificial volumes and contributed to market manipulation, and a penalty of Rs. 10,000 was imposed under section 15HA of the SEBI Act.
Full text
Page 2 of 11 only one share was traded and highest being on August 26, 2005 when 1,36,70,180 shares were traded. The role of the brokers and the entities that had traded in the scrip of EL was scrutinized. It was alleged that through collusion, shares of EL were transacted in such a manner that led to creation of excessive volumes in the scrip and increase in price of the shares of EL.
Page 3 of 11 SHOW CAUSE NOTICE, HEARING AND REPLY 7. Show Cause Notice No. EAD-5/VSS/JR/124077/2008 dated April 28, 2008 (hereinafter referred to as “SCN”) was issued to the Noticee under rule 4(1) of the Rules to show cause as to why an inquiry should not be held and penalty be not imposed under section 15HA of SEBI Act for the alleged violation specified in the said SCN.
Page 4 of 11 11B, 11D and 11(4) of SEBI Act and (b) Adjudication under the Adjudication Rules. It was explained that these two proceedings are independent. As against an ‘Intermediary’, wherever SEBI had initiated dual proceedings, viz., (a) Enquiry under the Enquiry Regulations and (b) Adjudication under the Adjudication Rules, SEBI had, in many cases, dropped one of the proceedings, i.e., enquiry. The Noticee made the following submissions: I have purchased shares of Eltrol only on 3 occasions. The details have been furnished by you along with the show cause notice. The total shares purchased by me was 3,41,520 shares. I had sold only 50 shares that too before making these purchases. I had transferred these shares to B.O A/c No. 10006603 – DP A/c No. 302483 of H. Nihalchand. I subsequently came to know that this B.O. A/c belonged to Vikram Singh Rajput. The transfer was effected in two instalments of 2,41,520 on April 20, 2005 and 1,00,000 on June 28, 2005 from my account No. 10148854 with Indus Portfolio Pvt. Ltd. I had purchased these shares on the advice of Mr. Basant Malpani. I had sold shares belonging to Mr. Malpani. The sale proceeds have been adjusted against the purchase of the shares of Eltrol. I also like to submit that on July 04, 2005, BSE issued a notice shifting the shares of Eltrol from T-2-T to B-2. A copy of the said notice is submitted. This shift indicates that there was no surveillance issue with regard to the trading of shares of Eltrol and that is why
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Source: SecMarx — sebi:VSS/AO-195/2009. 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.