sebi:WTM/GA/91/ISD/09/06
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Facts / Headnote
Minor penalty of censure imposed on the certificate of registration of M/s Kanchan Investments
Provisions invoked
- s. 12
Regulations
- Reg. 13(4)
- Reg. 5(1)
- Reg. 13(2)
- Reg. 200
- Reg. 3
- Reg. 7
- Reg. 4(b)
- Reg. 199
Parties
- M/s Kanchan Investments (Member, Pune Stock Exchange Ltd., SEBI Registration No. INB110248714)
Holding
SEBI imposed a minor penalty of censure on the certificate of registration of M/s Kanchan Investments for irregular transactions in the scrip of Home Trade Ltd., finding that the Broker had violated the SEBI circular dated February 11, 1997 by failing to verify the details and antecedents of his client.
Full text
Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order against M/s Kanchan Investments Sep 19, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA
1.1 M/s Kanchan Investments (hereinafter referred to as the Broker) is a Member, of the Pune Stock Exchange Ltd. (hereinafter referred to as PSE) and is registered with the Securities and Exchange Board of India (hereinafter referred to as SEBI) as a stock broker under section 12 of Securities and Exchange Board of India Act, 1992 ( hereinafter referred to as the Act ) with registration number INB110248714 1.2 The scrip of Home Trade Ltd. (hereinafter referred to as HTL) was listed at PSE on November 15, 1999 at Rs 250/- and at Bangalore Stock Exchange Ltd. (hereinafter referred to as BgSE) on November 16, 1999 at Rs.275/-. There was a very sharp rise in the price of the scrip of HTL both at PSE and BgSE. The price of the scrip of HTL at PSE reached Rs.315/ -within two weeks of its listing i.e. by December 06, 1999. The subsequent rise in the price of the scrip of HTL is as detailed below: Date Price (Rs.) December 30, 1999 525.00 January 31, 2000 735.00 March 31, 2000 809.00 May 5, 2000 874.00
1.3 The maximum rise in the price of the scrip of HTL took place between November 16, 1999 and March 31, 2000, when it moved from Rs.275/- to Rs.815/-. 1.4 SEBI conducted an investigation under the provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (hereinafter referred to as FUTP Regulations) and SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as the Broker Regulations) into the buying, selling and dealings in the scrip of HTL inter alia by the members of PSE including the Broker for their involvement in the alleged circular trading, price manipulation etc. 1.5 Upon investigation, SEBI inter alia found that the Broker along with some other members of PSE had executed substantial trades in the scrip of HTL, wherein the shares were traded amongst themselves and thereby created artificial volume by executing trades which were not genuine. The said transactions had contributed for more than 90% of the volumes of trading in the said scrip at PSE. The transaction details of the Broker on behalf of his only client, Smt. Kanchan Devi Singh in the scrip of HTL at PSE are as follows: Period Gross purchase (shares) % to the total buy volume at PSE Gross Sales (shares) % to the total
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Source: SecMarx — sebi:WTM/GA/91/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.