sebi:WTM/GA/68/ISD/05/06

SEBI · SEBI · 2006-04-27 · G. Anantharaman, Whole Time Member

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Facts / Headnote

Interim direction against JSPL as broking entity (para 17.2) vacated; directions against JSPL as DP including bar on opening fresh demat accounts (para 17.9) continued till completion of enquiry and final order

Provisions invoked

• s. 19

Parties

• Jhaveri Securities Private Limited

Holding

SEBI vacated the April 27, 2006 interim restraint on JSPL as broker from buying, selling or dealing in securities, but continued the restraint on JSPL as DP from opening fresh demat accounts till completion of enquiry and passing of final order.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ In the Matter of IPO Investigations Jhaveri Securities Private Limited May 26, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: G. ANANTHARAMAN, WHOLE TIME MEMBER IN THE MATTER OF IPO INVESTIGATIONS 15259 24 9 1. 2. 3. 4. 5. 6. 7. 1

IPOs, directly or indirectly, till further directions. Further since more that 500 afferent accounts were held with the JSPL, JSPL was directed not to open fresh demat accounts till further directions. 2.0 Findings regarding JSPL in SEBI’s Ex Parte Interim Order 2.1 The focus of the SEBI investigations has been on entities indulging in off-market transactions prior to listing and commencement of trading on the stock exchanges. 2.2 At paragraph 5.7 of the order, the IPOs in which the dematerialized account-holders received credit of IPO shares from 500 or more dematerialized accounts were identified. It was prima facie found that in the case of NSDL there were 21 IPOs in which 23 dematerialized account-holders received off-market credit of shares from 500 or more dematerialized account-holders having certain commonalities. As regards JSPL, the facts are that it had received 27667 shares of Suzlon Energy Limited from 1009 demat transferors in its demat account ID 10010005806(DP-JSPL) during the relevant period. Hence, JSPL was identified as one of the key operators. 2.3 At paragraph 8.3 of the order, it was mentioned that out of 37240 afferent accounts in NSDL as many as 598 afferent accounts were held with the Depository Participant JSPL. 2.4 Further, at Para 9.11 of the order, it was mentioned that in respect of DP JSPL as many as 686 demat account holders were sharing common addresses. 2.5 In view of the above findings in the order, directions as mentioned as Para 1.2 above

4.0 Consideration of the issues 4.1 Pursuant to the receipt of above submissions from JSPL, SEBI forwarded JSPL’s replies to BSE and NSE seeking verification. In reply thereto NSE vide letter dated May15, 2006 has informed that in respect of the 21 IPOs identified in the order , proprietary trading by JSPL was observed in NTPC IPO only. Further, NSE has provided the client details in respect of JSPL’s transactions in the shares of Suzlon Energy Ltd thereby indicating that these transactions in Suzlon shares by JSPL were not proprietary trades. BSE vide letter dated May, 22, 2006 has also informed that JSPL had no proprietary dealings in the shares of Suzlon Energy Limited during the relevant period.

Source: SecMarx — sebi:WTM/GA/68/ISD/05/06. 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.