sebi:WTM/GA/88/ISD/09/06

SEBI · SEBI · 2002-12-31 · G. Anantharaman, 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

Show cause notice disposed of; no directions issued against Phulchand; benefit of doubt given

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 4(b)
• Reg. 11
• Reg. 2

Parties

• M/s Phulchand Sons Investments Private Limited

Holding

The Whole Time Member held that there was no sufficient evidence on record to hold Phulchand guilty of violating the Regulations, and accordingly disposed of the show cause notice without issuing any directions against it.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ DIRECTIONS UNDER SECTION 11 AND 11B OF THE SEBI ACT, 1992 READ WITH REGULATION 11 OF SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO THE SECURITIES MARKET) REGULATIONS, 2003, AGAINST M/S PHULCHAND SONS INVESTMENTS PRIVATE LIMITED IN THE MATTER OF DEALINGS IN THE SCRIP OF GLOBAL TRUST BANK. WTM/GA/88/ISD/09/06 1.0 BACKGROUND 1.1 M/s Phulchand Sons Investments Private Limited (hereinafter referred to as Phulchand) is a company registered with Registrar of Comp Maharashtra. The scrip of Global Trust Bank (hereinafter referred to as GTB) was listed in Bombay Stock Exchange Ltd. (hereinafter referre BSE) and National Stock Exchange of India Ltd. (hereinafter referred to as NSE).The scrip of GTB had witnessed significant pric accompanied with rise in volumes at BSE and NSE during the financial year 2000-2001. Securities and Exchange Board of India (here referred to SEBI) conducted an investigation, inter alia under the provisions of the SEBI Act, 1992 read with SEBI (Prohibition of Fraudule Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (hereinafter referred to as the said Regulations) into the buying, and dealings in the scrip of GTB. 1.2             The investigation conducted by SEBI revealed that the price of the scrip of GTB at BSE had gone up from a low of Rs.57/- on October 11, 2 Rs.114.70/- on November 20, 2000, i.e. an increase of more than 100

1.1 M/s Phulchand Sons Investments Private Limited (hereinafter referred to as Phulchand) is a company registered with Registrar of Companies, Maharashtra. The scrip of Global Trust Bank (hereinafter referred to as GTB) was listed in Bombay Stock Exchange Ltd. (hereinafter referred to as BSE) and National Stock Exchange of India Ltd. (hereinafter referred to as NSE).The scrip of GTB had witnessed significant price rise accompanied with rise in volumes at BSE and NSE during the financial year 2000-2001. Securities and Exchange Board of India (hereinafter referred to SEBI) conducted an investigation, inter alia under the provisions of the SEBI Act, 1992 read with SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (hereinafter referred to as the said Regulations) into the buying, selling and dealings in the scrip of GTB. 1.2 The investigation conducted by SEBI revealed that the price of the scrip of GTB at BSE had gone up from a low of Rs.57/- on October 11, 2000 to Rs. 114.70/- on November 20, 2000, i.e. an increase of more than 100% in just 29 trading sessions. During the same period the price of the said scrip at NSE had gone up from a low of Rs.57.05/- to a high of Rs.114/-. It was observed that the average daily volumes in the scrip of GTB at BSE were below 38,000 during the period September 01, 2000 and October 10, 2000 and the same had increased to more than 7,70,000 during the period October 25, 2000 to November 2

1.4 In view of the above, SEBI vide an interim order dated December 31, 2002 directed 50 entities including Phulchand not to buy, sell or transfer, pledge or dispose off or deal in any other manner the shares of GTB till the completion of investigations. Subsequently, after affording a post decisional hearing, the above directions were revoked in respect of 14 entities including Phulchand, by SEBI vide order dated June 12, 2004. 2.0 SHOW CAUSE NOTICE AND THE PHULCHAND’S REPLY 2.1 A show cause notice dated June 30, 2004 was issued by SEBI to Phulchand under section 11 and 11B of SEBI Act, 1992 read with regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 asking it to show cause as to why suitable

Source: SecMarx — sebi:WTM/GA/88/ISD/09/06. 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.