sebi:WTM/GA/44/ISD/12/07
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Facts / Headnote
Restrained from accessing the securities market and prohibited from buying, selling or dealing in securities either directly or indirectly for a period of twelve months
Regulations
- Reg. 4
- Reg. 11
Parties
- Shri Harish Kadam
Holding
Shri Harish Kadam, director of Harish Kadam Securities Pvt. Ltd. holding 99.88% of its capital, was held to have violated regulation 4(a) to (d) of the FUTP Regulations, 1995 for manipulative trading in HTL shares. He was restrained from accessing the securities market and prohibited from buying, selling or dealing in securities directly or indirectly for twelve months.
Full text
Page 2 of 12 1.2 The maximum rise in the price of the shares of HTL took place between November 16, 1999 and March 31, 2000, when it moved from Rs.275/- to Rs.815/-. In view of the unusual price movement noticed in the shares of HTL, SEBI conducted investigations to look into the possible violation of the provisions of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (hereinafter referred to as FUTP Regulations) and Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as the Broker Regulations). The findings of the investigation inter alia are as follows:
Page 3 of 12 Rs.250/- to Rs.800/-. The sharp rise in the price of the scrip was attributed to alleged circular trading in the shares of HTL amongst members of PSE including Harish Kadam Securities (hereinafter referred to as HKS), the certificate of registration was cancelled by SEBI, vide order dated August 31, 2002. HKS was declared defaulter by PSE with effect from August 7, 2000. As he had failed to fulfill one of the conditions of registration, SEBI vide order dated August 31, 2002 cancelled the certificate of registration of HKS. It was also observed that buy and sell orders were placed by HKS and other stock brokers viz. Shobha Investments, Shri. Amin Mulani, M/s Yatin D. Shah at a rate much higher than the prevailing market price or the last traded price at the instance of Shri. Veerkar, an employee of HTL, who introduced majority of the clients to aforesaid stock brokers.
Page 4 of 12 in HKS as mentioned above. Shri Harish Kadam vide letter dated February 23, 2004 inter alia stated that the transactions in the shares of HTL were routed through HKS. He further urged that he was not a member of PSE during the period in question. According to him, the scrip of HTL was traded between Rs.342/- to Rs.720/- till April 2001 i.e. for a period of almost 14 months after January 2000. He further stated that all the transactions of HKS were done on behalf of the clients in the normal course of business and there was no collusion as alleged by SEBI. Pursuant to the said reply, SEBI granted opportunities of hearing to Shri Harish Kadam on various dates including April 1, 2004. Shri Harish Kadam appeared on the said date and made his submissions. He was also granted a further opportunity on March 8, 2006. However, he failed to appear on the said date.
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Source: SecMarx — sebi:WTM/GA/44/ISD/12/07. 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.