sebi:WTM/KMA/IVD/247/03/2010
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Facts / Headnote
Directions issued against Mrs. Leela Surana R. and M/s Surana Capital Market vide Order dated December 1, 2009 confirmed; investigation to continue and role to be reviewed after conclusion of investigation.
Provisions invoked
- s. 19
Parties
- Mrs. Leela Surana R.
- M/s Surana Capital Market
Holding
The Whole Time Member confirmed the ad-interim ex-parte directions issued against Mrs. Leela Surana R. and M/s Surana Capital Market vide Order dated December 1, 2009 in the matter of alleged manipulative trading in the shares of Kwality Dairy India Limited.
Full text
Page 2 of 5 shares of the Company were negligible. Mrs. Leela Surana R. also stated, vide letter dated January 8, 2010, that she had traded for only 1,54,918 shares of the Company. Further submissions were also made by Mrs. Leela Surana R. and M/s. Surana Capital Market, vide separate letters dated February 9, 2010. Their
Page 3 of 5 were number of synchronized transactions in the shares of the Company during the relevant period, as mentioned in the Order. It was observed that during the first patch, the entities of Mrs. Leela Surana R. were routing orders through the trader id of one Mr. Dinesh Kumar Surana. It was further noted that Mr. Dinesh Kumar Surana with trade name M/s Surana Capital Market, is a member of Madras Stock Exchange Limited as well as sub-broker of MSE Financial Services Limited (subsidiary of Madras Stock Exchange Limited). Moreover, one of the addresses of Mrs. Leela Surana R is same as that of Surana Capital Markets. All the clients are also having their demat accounts with Madras Stock Exchange Limited, depository participant of Central Depository Services (India) Limited. It was further observed that the clients had placed orders through the three trader ids belonging to Mr. Dinesh Kumar Surana and had entered into synchronized trading with each other by placing the buy-sell orders simultaneaously wherein the buy order time and sell order time had very little difference. Further, the trades had occurred when the buy and sell orders were placed from the location ids belonging to the sub-broker (M/s Surana Capital Market) at his office. It was also mentioned in the
Page 4 of 5 3. Admittedly, the total traded volume of Mrs. Leela Surana R. was 1,54,918 shares. Approximately 1,35,888 shares were traded with the entities who had received shares in off-market transfer from her. Thus, approximately 87.70% of trading by Mrs. Leela Surana R was with related entities. Mrs. Leela Surana R and M/s Surana Capital Market have contended that the volume traded is negligible. I note that the percentage of her trading to total trading during each day of their trades were not negligible as contended by them. A perusal of their traded volume (as given in the Order) indicates that their contribution was approximately more than 5% at any point of time and was as high as 67.69%. Further, Mrs. Leena Surana R. had also transferred the shares of the Company in off market to the other entities in the group and then purchased the same again. Further, I also note that Mrs. Leela Surana R. and M/s Surana Capital Market was sharing the same address. The fact that the entities had entered into number of synchronized transactions which were consistent indicates a connection/nexus among them. Such activities may not be possible without a pre-determined plan.
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Source: SecMarx — sebi:WTM/KMA/IVD/247/03/2010. 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.