sebi:WTM/ASB/IVD/ID7/29835/2023-24

SEBI · SEBI · 2014-04-17 · Ashwani Bhatia, 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 restrained from accessing the securities market for eight years from the date of the order, with set-off for debarment period already undergone under the 2019 Order.

Provisions invoked

• s. 19

Regulations

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

Parties

• Maheshwari Financial Services Ltd.

Holding

The Noticee, Maheshwari Financial Services Ltd., was found to have violated Regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and (e) of the PFUTP Regulations, 2003, and was restrained from accessing the securities market for eight years from the date of the order, with the period of debarment already undergone under the 2019 Order set off against this period.

Full text

Order in respect of Maheshwari Financial Services Ltd. the matter of Aplaya Creations Ltd. Page 2 of 13 3. On the basis of a reference received from the Principal Director of Income Tax (Investigation), Kolkata, SEBI conducted an investigation in the trading in the scrip of ACL to ascertain whether there were any violations of the provisions of SEBI Act, 1992 and PFUTP Regulations, 2003 by certain entities in the scrip of ACL during the period April 17, 2014 to July 31, 2015 (hereinafter referred to as “Investigation Period”). As per the findings in the investigation report (herein after referred to as “IR”), prior to the investigation period, the scrip had traded only on three days during September 19, 2005 to April 16, 2014. However, duing the investigation period, the shares of ACL were traded for an average volume of 70,123 shares per trading day and the total volume was 2,17,38,040 shares in 23,088 trades for a total of 310 days. During the Investigation period, price of the scrip increased from Rs. 18/- (opening price) to Rs. 490/- (high price). However, there was no significant change in the fundamentals / financials of the Company.

Order in respect of Maheshwari Financial Services Ltd. the matter of Aplaya Creations Ltd. Page 3 of 13 Patches Period Particulars Open High Low Close Avg. Volume Pre – IP 17/03/2014 to 16/04/2014 No Trades Pre-Split – Low Volume IP*- Patch-1 17/04/2014 to 13/10/2014 Price 18 222.85 [13/10/2014] 18 [17/04/2014] 222.85 2 Volume 5 37 [13/10/2014] 1 [Multiple Dates] 37 Pre- Split IP – High Volume IP – Patch-2 14/10/2014 to 10/03/2015 Price 227.3 490.00 [05/03/15] 227.3 [14/10/2014] 478.30 42177 Volume 27502 108615 [08/12/14] 2 [17/10/2014] 45706 Post – Split IP- Patch-3 11/03/2015 to 31/07/2015 Price 50.10 51.00 [19/03/15] 42.5 [12/05/15] 43.30 179206 Volume 110005 840000 [18/03/15] 10000 [24/07/15] 37000 Post – IP 01/08/2015 to 26/08/2015** Price 43.25 45.45 [07/08/15] 39.20 [26/08/15] 39.20 55850 Volume 28540 178081 [26/08/15] 5000 [17/08/15] 178081 *IP – Investigation Period ** The scrip was suspended from August 27, 2015 to June 13, 2016. *** Prior to the IP, the scrip had traded only on three days during September 19, 2005 to April 16, 2014.

Order in respect of Maheshwari Financial Services Ltd. the matter of Aplaya Creations Ltd. Page 4 of 13 9. From the above table, it was observed that MFSL and VFPL had contributed to 99.10% of the positive LTP in 112 trades, all of which were first trades. Of these 112 trades, for 11 trades, sell orders were placed first and for the remaining 101 trades, sell orders were placed at the available buy order prices. Further, all the orders were placed for a quantity ranging from 1 to 5 shares. MFSL and VFPL had contributed positive LTP of ` 203.85/- by placing to sell orders in small quantity ranging from 1 to 5 shares through multiple trades in multiple days. The details are as under:

Source: SecMarx — sebi:WTM/ASB/IVD/ID7/29835/2023-24. 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.