sebi:WTM/KMA/IVD/200/12/2009
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Facts / Headnote
Noticees restrained from accessing the securities market and prohibited from buying, selling or dealing in securities, directly or indirectly, for a period of one year
Regulations
- Reg. 4(a)
Parties
- Mr. Pawan Kumar Goyal
- M/s Goyal Investments
- M/s Goyal Brothers (Proprietor, Mr. Arun Goyal)
- M/s Goyal Securities (Proprietor, Mr. Vinod Goyal)
Holding
The noticees were held to have violated Regulations 4(a), 4(b) and 4(c) of the PFUTP Regulations, 1995 by executing structured deals and cross deals that artificially raised the price of the scrip and created a false or misleading appearance of trading. They were restrained from accessing the securities market and from buying, selling or dealing in securities for one year.
Full text
Page 2 of 8 as well as the number of trades during the period August 23-25, 2000, the price movement was not correspondingly significant. On September 19, 2000 highest quantity of 2,47,006 shares were traded and the price opened at Rs. 21.55 (highest price during the investigation period) but subsequently fell to Rs. 18.95 on the same day. Thereafter, the price of the scrip continued to fall, almost hitting the lower circuit everyday. The closing price on September 22, 2000 at NSE and BSE was Rs 36.75 and Rs 14.85, respectively. The quantities traded on NSE and BSE were 1 and 1,00,72 shares, respectively (difference of 10,07,100%). Further, it was observed from the Annual Reports of the company for the years 1999-2000 and 2000-01, that it was a sick industrial company and that rehabilitation proposals were under consideration of the operating agency, Industrial Development Bank of India. The total loss shown by the company as on July 31, 2000 was Rs. 83.69 crores. Thus, it was observed that there was no positive corporate development to justify the rise in the price of the scrip during the period under investigation. The investigation carried out by SEBI revealed that Mr. Pawan Kumar Goyal along with M/s Goyal Investments and Goyal Brothers (Proprietor, Mr. Arun Goyal, brother of Mr. Pawan Kumar Goyal) and M/s Goyal Securities (Proprietor, Mr. Vinod Goyal, brother of Mr. Pawan Kumar Goyal) executed number of structured deals in the shares of the company, which prima facie res
Page 3 of 8 by their respective names. In the view of the above, it was alleged that the noticees have contravened Regulations 4(a), 4(b) and 4(c) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as the PFUTP Regulations). Accordingly, SEBI issued a notice dated June 12, 2009 to the noticees advising them to show cause as to why appropriate directions including restraining them from accessing the securities market and prohibiting them from buying, selling or dealing in securities for an appropriate period should not be passed against them. Details of trades executed by the noticees in the shares of the company during the investigation period, copy of the statement of Mr. Arun Goyal, etc. were provided to the noticees with the show cause notice.
Page 4 of 8 registered as sub-brokers of ISJ Shares and Stock-Brokers Private Limited. According to Mr. Arun Goyal, Mr. Bandi (brother-in-law of Mr. I. S. Jain) was monitoring their activities as sub brokers. In respect of the trades executed in his accounts, Mr. Arun Goyal made similar submissions as that of Mr. Vinod Goyal. Mr. Pawan Kumar Goyal, vide letter dated October 6, 2009 made similar
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Source: SecMarx — sebi:WTM/KMA/IVD/200/12/2009. 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.