sebi:WTM/GA/97/ISD/11/06
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Facts / Headnote
Show cause notice disposed of; no directions issued against Niskalp; benefit of doubt given
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 13
- Reg. 4(a)
- Reg. 3
- Reg. 2
Parties
- Niskalp Investments & Trading Company Limited
Holding
The Whole Time Member held that the evidence against Niskalp was insufficient to establish a violation of regulation 4(a) and (b) of the 1995 Regulations, and accordingly disposed of the show cause notice without issuing any directions, giving Niskalp the benefit of doubt.
Full text
Date of Hearing: March 16, 2006 Appearance : For Noticee: Shri. Jose Peter, Director Shri. Kamlesh Parekh, Constituted Attorney For Securities and Exchange Board of India: Shri. J. Ranganayakulu, Joint Legal Advisor
shares while the same had increased to more than 7,70,000 shares during the period October 25, 2000 to November 23, 2000 . The average daily volumes on NSE during the same periods were 4,20,000 shares and 12,96,000 shares respectively. 1.3 Securities and Exchange Board of India (hereinafter referred to as SEBI) conducted investigations into the buying, selling and dealings in the shares of GTB inter alia under the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the Act) read with Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (hereinafter referred to as the said Regulations). During the course of investigations, it was observed that there was significant concentration of trading in the shares of GTB among a few stock brokers and common clients associated with Shri. Ketan Parekh (hereinafter referred to as KP entities). It was further observed that KP entities had purchased shares from the promoter group of GTB in a synchronized manner and later parked the said shares with some Foreign Institutional Investors (FIIs) and Overseas Corporate Bodies (OCBs), thereby creating the artificial volumes in the said shares . The investigation conducted by SEBI further revealed that, certain entities including Niskalp Investments & Trading Company Limited (hereinafter referred to as Niskalp) were used by KP entities for circular trading, parking of shar
2.0 Show cause notice and Niskalp’s reply 2.1 A show cause notice dated August 13, 2004 was issued by SEBI to Niskalp under sections 11 and 11B of the Act read with regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (hereinafter referred to as the 2003 Regulations) asking it to show cause as to why suitable directions should not be issued against it for the alleged violation of regulation 4(a) and (b) of the 1995 Regulations. 2.2 Niskalp vide reply dated September 22, 2004 inter alia submitted that it had not violated the provisions of regulation 4(a) and 4(b) of the 1995 Regulations. It was further submitted that, GTB had allotted 58,82,350 of its equity shares to Niskalp on preferential basis on May 12, 2000, in terms of its request. It was further submitted that the aforesaid shares of GTB were sold by Niskalp in three lots, the last one being on October 30, 2000, amounting to 28,82,350 equity shares with a total value of Rs.22,61,10,463/-. The sale of the said equity shares of GTB was effected through a stock broker known as Triumph Securities Ltd, on BSE. Niskalp added that, it was not at all aware about the KP entities which were referred to in the show cause notice. It was contended that Niskalp was not aware about the alleged manipulation in the shares of GTB. Niskalp further added that it was not aware/concerned about the persons to whom the shares of GTB were sold. It was added that the manag
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Source: SecMarx — sebi:WTM/GA/97/ISD/11/06. 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.