sebi:WTM/GA/25/IVD/10/05

SEBI · SEBI · 2002-08-09 · G. Anantharaman, Whole Time Member

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Facts / Headnote

Suspension of certificate of registration No. INB110973416 for a period of 18 months, effective 21 days after the date of the order

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 4
• Reg. 7
• Reg. 13(4)
• Reg. 11
• Reg. 4(a)
• Reg. 6(1)
• Reg. 28(1)

Parties

• M/s Amin Mulani, Member Pune Stock Exchange, SEBI Registration No. INB 110973416

Holding

The Whole Time Member suspended the certificate of registration bearing No. INB110973416 granted to M/s Amin Mulani for a period of 18 months for indulging in circular trading and manipulation of the price of the scrip of Home Trade Ltd.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER AGAINST M/s AMIN MULANI, MEMBER PUNE STOCK EXCHANGE, SEBI REGISTRATION NO. INB 110973416 UNDER REGULATION 13(4) SEBI (PROCEDURE FOR HOLDING ENQUIRY BY ENQUIRY OFFICER AND IMPOSING PENALTY) REGULATIONS, 2002 IN THE SCRIP OF HOME TRADE LTD. WTM/GA/25/IVD/10/05 1.0             Background 1.1             M/s Amin Mulani (hereinafter referred to as ‘the said broker’) is a member of Pune Stock Exchange (hereinafter referred to as ‘PSE’) and a Stock Broker registered Securities and Exchange Board of India (hereinafter referred to as “SEBI”) under certificate of registration No. INB 110973416. 1.2             Investigation An investigation was conducted into the offer for sale and subsequent trading in the shares of M/s Home Trade Limited (hereinafter referred to as “HTL”) by SEBI. T investigations inter alia revealed that:- (a)               HTL made an offer for sale for 59,90,250 shares @Rs.50/- each during the period October 27-30, 1999. Subsequent to the said open offer, the shares of HTL w Pune Stock Exchange (PSE) and Bangalore Stock Exchange (BgSE).

1.1 M/s Amin Mulani (hereinafter referred to as ‘the said broker’) is a member of Pune Stock Exchange (hereinafter referred to as ‘PSE’) and a Stock Broker registered with the Securities and Exchange Board of India (hereinafter referred to as “SEBI”) under certificate of registration No. INB 110973416. 1.2 Investigation An investigation was conducted into the offer for sale and subsequent trading in the shares of M/s Home Trade Limited (hereinafter referred to as “HTL”) by SEBI. The said investigations inter alia revealed that:- (a) HTL made an offer for sale for 59,90,250 shares @Rs.50/- each during the period October 27-30, 1999. Subsequent to the said open offer, the shares of HTL were listed on the Pune Stock Exchange (PSE) and Bangalore Stock Exchange (BgSE). (b) Shri Ketan Sheth, the promoter director of HTL and his associates who held large shareholding in HTL made applications for 24,30,000 shares (around 40.56% of the open offer) and were allotted 24,17,850 shares. The payment for these shares was made by Ketan Sheth and his associates out of the proceeds of the said open offer which they received through a circuitous route. (c) The allotment to Shri Ketan Sheth and his associates also led to a substantial part of the floating stock in the scrip of HTL being in the hands of the promoters/directors and associates of HTL. (d) After listing on the PSE, the price of the scrip showed a sharp increase from November 1999 to March 2000 rising from Rs.250/- to Rs.800/-. The

sharp rise in the price of the scrip was attributed to circular trading in the shares of HTL amongst members of PSE including the said broker. It was also observed that buy and sell orders were placed by the said broker and other members of PSE at a rate much higher than the prevailing market price or the last traded price at the instance of Mr. Veerkar and Mr Rajneesh, employees of HTL, who introduced majority of the clients to the said broker and other brokers and also placed orders. (e) It was observed that the gross purchases and sales by the said broker as a percentage of total purchases and sales in the scrip of HTL for the three financial years accounted for significant volumes in PSE as under : - Financial Year Gross Purchases (Broker) Gross Purchases in PSE % of Total Purchases Gross Sales (Broker) Gross Sales in PSE %

Source: SecMarx — sebi:WTM/GA/25/IVD/10/05. 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.