sebi:WTM/AB/EFD-1/DRA-1/14/2019-20

SEBI · SEBI · 2017-12-08 · Ananta Barua, Whole Time Member

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

Facts / Headnote

Noticee Nos. 1 to 5 held guilty of violating Regulation 3(a),(b),(c),(d) and Regulation 4(1), 4(2)(a) and 4(2)(e) of SEBI (PFUTP) Regulations, 2003 for manipulation of price and creating misleading appearance of trading in the scrip of Lifeline Drugs and Pharma Limited.

Provisions invoked

• s. 19
• s. 11(1)

Regulations

• Reg. 4
• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Parties

• Mr. Anil Vishnu Bharti
• Mr. Pratik Jain
• Mr. Rajesh Jayantilal Savadia
• Ms. Akshata Majgoankar
• Mr. Narendra Kripashankar Mishra

Holding

Noticee Nos. 1 to 5, acting in concert, manipulated the price of Lifeline Drugs scrip and created a misleading appearance of trading through 89 single-share trades contributing Rs. 293.35 (50.93%) to total market positive LTP, thereby violating Regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a),(e) of the PFUTP Regulations, 2003.

Full text

Order in the matter of Lifeline Drugs and Pharma Limited Page 2 of 36 Show Cause Notice, Reply to Show Cause Notice and Personal Hearing:

Order in the matter of Lifeline Drugs and Pharma Limited Page 3 of 36 5. Noticee no. 2 i.e. Mr. Pratik Jain submitted two replies dated January 08, 2018 and January 14, 2019. Noticee no. 3. Mr. Rajesh Jayantilal Savadia submitted two replies dated February 01, 2018 and January 08, 2019. Noticee no. 4, Ms. Akshata Majgoankar also submitted two replies dated January 18, 2018 and January 14, 2019. Noticee no. 1 i.e. Mr. Anil Vishnu Bharti and Noticee no. 5 i.e. Mr. Narendra Krispashankar Mishra submitted one reply each dated January 03, 2019 and February 22, 2019, respectively.

Order in the matter of Lifeline Drugs and Pharma Limited Page 4 of 36 various letters the Noticees had requested for copies of the following documents: (a) Investigation Report, (b) entire trade logs and order logs for the investigation report and (c) any other document relied upon while issuing the SCN for the alleged violation. In response to the aforesaid requests, SEBI vide letter dated December 24, 2018 provided each Noticee with a Compact Disc (hereinafter referred to as “CD”) containing a copy of the complete order log and trade log pertaining to the orders and trades in the scrip of Lifeline Drugs. The said letter further stated that all documents relied upon in the SCN have already been provided to the Noticees along with the SCN. In their replies, Noticees nos. 1 to 5 have stated that they have not been supplied with a copy of the Investigation Report which forms the most essential document for any proceeding. The Noticees have also relied on the observations of the Hon’ble Supreme Court in SEBI v. Price Waterhouse (Civil Appeal No. 6003-6004 of 2012 decided on January 10, 2017) wherein SEBI was directed to furnish all statements recorded during the course of Satyam’s investigation and further directed SEBI to give inspection of all the documents collected during the investigation of Satyam. The Noticees have also relied para 13 in the order of the Hon’ble Securities Appellate Tribunal (hereinafter referred to as “SAT”) in Shri B. Ramalinga Raju v. SEBI (Appeal no.

Source: SecMarx — sebi:WTM/AB/EFD-1/DRA-1/14/2019-20. 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.