sebi:WTM/KMA/IVD/154/10/2009
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Facts / Headnote
confirmed
Provisions invoked
- s. 11(4)
- s. 19
Parties
- Mrs. Hetal Patel
- Mr. Rajesh Patel
Holding
The ad-interim ex-parte directions dated June 5, 2009 in the matter of RTS Power Corporation Limited against Mrs. Hetal Patel and Mr. Rajesh Patel are confirmed and continued till completion of investigation.
Full text
Page 2 of 6 a) the ex-parte order is in total disregard to the provisions of Section 11(4) of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the Act) and that she had not violated the provisions of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as the PFUTP Regulations). b) all the transactions on February 11, 2009 were done through screen based trading mechanism provided by the stock exchange and that all the orders were placed at the prevalent market prices. She had no connection/link/relation with the buyers as alleged. c) she had not given any phone number in her ‘Know Your Client’ (KYC) forms and that uploading of the details in Unique Client Code (UCC) is in the domain of the stock broker. Mrs. Hetal Patel further contended that she failed to understand that how come a number can be uploaded in UCC when the same was not provided. She claimed that Mr. Yashodeep Bhosale, the employee of the stock broker Way2Wealth, who filled up her KYC form, had inadvertently mentioned the number 99675-77028, instead of her number since she was not well versed in English. The only basis of drawing nexus between her and Mr. Yashodeep Bhosale is that her advocate had represented Mr. Yashodeep Bhosale in SEBI on his request. d) She has no link/connection/relation with Mr. Mukesh Konde, Mr. Ashok Waje and Mr. Nitesh Jadhav or Mr. Chetan Shah. e
Page 3 of 6 Patel on July 23, 2009 which was rescheduled to August 25, 2009 on her request. On August 25, 2009, Mr. Zal. Ahdhyarujina, Advocate appeared on behalf of Mrs. Hetal Patel and made submissions on the lines of the objections filed by Mrs. Hetal Patel, vide letter dated June 13, 2009. Mrs. Hetal Patel filed a copy of the Appeal Memorandum (No. 34 of 2009) filed by her before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as the Hon’ble Tribunal). During the course of hearing, the learned counsel inter alia requested for the inspection of documents. The said request was allowed and the party was advised to file written submission within ten days, after the inspection of documents was over. Further, SEBI had also provided copies of required documents and two compact discs containing trade and order log data to Mrs. Hetal Patel, vide letter dated September 2, 2009 and was directed to file the written submissions. However, no written submissions was filed by Mrs. Hetal Patel, so far. Mr. Rajesh Patel, the husband of Mrs. Hetal Patel, covered under the ex-parte order had neither filed objections nor appeared for hearing.
Page 4 of 6 4. The circumstances which led to the passing of the ex-parte order dated June 5, 2009 against various persons/entities including Mrs. Hetal Patel and Mr. Rajesh Patel and their prima facie role in the alleged market manipulation in the shares of the company on February 11, 2009, have been explained in detail in the said order. It is the case of the complainants (stock brokers) that clients namely, Mr. Mukesh G. Konde, Mr. Ashok Narayan Waje and Mr. Nitesh Ashok Jadhav after buying substantial number of shares of the company on February 11, 2009 failed to fulfill their respective pay-in obligations totaling Rs. 9,14,49,113/-. It goes without saying that such defaults pose serious threat to the functioning of the securities market and SEBI, as a market regulator, has to interfere and take appropriate measures/actions including issuing directions against the persons who were involved in such transactions. As mentioned in the ex-parte order, substantial number of shares of the company were traded in the month of February 2009, particularly on February 11. The same was not supported by any fundamentals of the company. The trades of Mrs. Hetal Patel in the shares of the company on February 11, 2009 are not disputed. Most of the shares (more than 95%) sold by her on the said date were bought by Mr. Mukesh G. Konde and Mr. Nitesh Ashok Jadhav. This is also an undisputed fact. The details of such trades were also provided in the ex-parte order. The preliminary investigati
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Source: SecMarx — sebi:WTM/KMA/IVD/154/10/2009. 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.