sebi:WTM/AB/IVD/ID2/18248/2022-23
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 India Capital Markets Private Limited suspended for a period of six months with immediate effect
Provisions invoked
- s. 19
- s. 12
- s. 12(3)
- s. 2(27)
- s. 80J
- s. 10(27)
Regulations
- Reg. 7
- Reg. 3
- Reg. 25
- Reg. 26
- Reg. 27
- Reg. 3(a)
- Reg. 3(d)
- Reg. 28
- Reg. 28(1)
Parties
- India Capital Markets Private Limited
Holding
The Whole Time Member held India Capital Markets Private Limited liable for aiding Nirmal Kotecha to offload PSTL shareholding through synchronised/reversal trades, failing due diligence, allowing large exposure to low-income clients and intermingling client funds, and suspended its certificate of registration for six months.
Full text
Order in the matter of enquiry proceedings against India Capital Markets Pvt. Ltd. Page 1 of 37 WTM/AB/IVD/ID2/18248/2022-23
Order in the matter of enquiry proceedings against India Capital Markets Pvt. Ltd. Page 2 of 37 2. SEBI had conducted an investigation in the matter of Pyramid Saimira Theatre Ltd (hereinafter referred to as ‘PSTL/Company’) for the period from June 01, 2008 to December 19, 2008. The investigation inter alia revealed that the Noticee had traded in the shares of PSTL during the relevant period for its clients Nirmal Kotecha (director of PSTL), Mr Raju G Shah and Amol Kokane. The trading accounts of Raju G Shah, Amol Kokane and Nirmal Kotecha were opened at the same branch of the Noticee and around the same period. The client account in the name of Amol Kokane and Nirmal Kotecha was opened with the Noticee on September 12, 2008. It was observed that Amol Kokane, an engineering student and having no personal income, had opened an account with the Noticee on the recommendation of his late brother-in-law (Sandeep Gavhane), who was working for Kotecha Capital Services Private Ltd. It was observed from the KYC of Amol Kokane that his annual income was shown to be in the range of Rs. 1 to 5 lakhs. However, he was allowed to have a debit balance of Rs. 37,69,979/- as on October 03, 2008 and during the period October 27, 2008 to November 17, 2008, Amol Kokane purchased 4,19,084 shares and sold 4,21,974 shares on BSE. It was observed that Raju G. Shah traded in the scrip of PSTL through the Noticee on two trading days viz. December 19 and 22, 2008 on BSE. Raju G. Shah’s client account wa
Order in the matter of enquiry proceedings against India Capital Markets Pvt. Ltd. Page 3 of 37 that in such a scenario and considering the income vis-à-vis the turnover details of the clients, it was improper on the part of the stock broker to have traded for its clients in large quantities.
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Source: SecMarx — sebi:WTM/AB/IVD/ID2/18248/2022-23. 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.