sebi:WTM/KMA/IVD/298/09/2010
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Facts / Headnote
Show cause notices dated August 23, 2004 issued in the matter of Ceat Limited to RRB Securities Limited and Har Sai Investments Private Limited disposed of without any directions
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 9
- Reg. 4(b)
- Reg. 4(d)
Parties
- RRB Securities Limited
- Har Sai Investments Private Limited
Holding
The show cause notices dated August 23, 2004 issued to RRB Securities Limited and Har Sai Investments Private Limited in the matter of Ceat Limited were disposed of without any directions, with both entities given the benefit of doubt on alleged violations of Regulations 4(b), 4(d) and 9 of the PFUTP Regulations.
Full text
Page 2 of 12 as the SEBI Act) read with Regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, should not be taken against them. Hereinafter, RRB and HSIL would be collectively referred to as the entities and individually by their respective names. Thereafter, the entities had requested for various documents and subsequently, an opportunity of hearing was also afforded to the entities before my predecessor on July 10, 2006. The entities had again requested for the documents, vide letter dated July 6, 2006 and stated that they were not in position to deal with the issues raised in the show cause notice and respond to them adequately in the absence of such documents. Thereafter, another opportunity of hearing was granted to them on November 21, 2008 which was adjourned to December 11, 2008, on their request. Subsequently, another opportunity was given on January 30, 2009 pursuant to providing the documents. However, the entities requested for an adjournment of the said hearing and accordingly, the hearing was postponed to March 6, 2009. On the said date, Mr. H.S. Chandoke, advocate, as authorized by HSIL made elaborate submissions before me. Mr. Abdulla Hussain, Advocate was also present during the hearing. RRB was represented by its director, Mr. Anil Goyal who made submissions on its behalf. The representatives made their submissions on the lines of the respective repl
Page 3 of 12 Regulations, as alleged in the show cause notice, while dealing in the shares of the Company during the relevant period. As per the show cause notices, SEBI had investigated the matter on the basis of the investigation report submitted by NSE. The investigation period covered from January to March 2000 and from March to May 2001. In terms of the notice, NSE during the period from January to March 2000 had observed that: -
Page 4 of 12 with M/s. B.K. Khullar & Co., S Ramdas, CFL Securities Limited, Harbinger Trading Company Private Limited, Pursarth Trading Company Private Limited etc. According to RRB, the alleged linkages with Chinar Financial Services Private Limited and Alakananda Capital Services Private Limited were not brought out in the show cause notice and were only based on conjectures and surmises. Further, RRB stated that there was no material available on record to substantiate the allegations in the show cause notice that it was aiding the group for tiding over the financial commitment to the exchanges. With respect to the allegation of circulation of shares amongst the group, RRB contended that even as per the diagram mentioned in the show cause notice (at page 2) there was only one rotation. According to RRB, there was nothing in the show cause notice to show that HB Securities Limited was postponing the pay-out/pay-in obligations or to show that the shares were circulated settlement after settlement. RRB contended that there was no finding of any gain having accrued to it by the imputed trades in the shares of the Company and that there was no finding of collusion or game plan with the other entities and there is no allegation of any price manipulation. RRB also submitted that, if its intention was to carry out structured transactions, it would have executed trades for the entire 1,15,000 shares and not in parts. According to RRB, all its trades were backed by delivery of shar
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Source: SecMarx — sebi:WTM/KMA/IVD/298/09/2010. 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.