sebi:WTM/MPB/EFD1-DRA4/13/2019

SEBI · SEBI · 2017-07-28 · Madhabi Puri Buch, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Restrained the Noticees from accessing the securities market for four years and from buying, selling or otherwise dealing in securities for four years; existing holdings frozen.

Provisions invoked

• s. 11
• s. 19

Regulations relied on

• SEBI (PFUTP) Regulations, 2003 — 3(a)
• SEBI (PFUTP) Regulations, 2003 — 3(b)
• SEBI (PFUTP) Regulations, 2003 — 3(c)
• SEBI (PFUTP) Regulations, 2003 — 3(d)
• SEBI (PFUTP) Regulations, 2003 — 4(1)
• SEBI (PFUTP) Regulations, 2003 — 4(2)(a)
• SEBI (PFUTP) Regulations, 2003 — 4(2)(e)

Parties

• Mr. Jayeshkumar Narottamdas Gandhi
• Ms. Bharati Jayesh Gandhi
• Mr. Deval Jayesh Gandhi

Holding

The Noticees violated Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) and (e) of the PFUTP Regulations by executing manipulative sell trades in miniscule quantities over the LTP in the scrip of SSTL, and were restrained from accessing the securities market and dealing in securities for four years.

Full text

Order in the matter of Shree Shaleen Textiles Limited Page 2 of 16 entities in the scrip of SSTL during the period period November 01, 2011 to November 30, 2014 (hereinafter referred to as “Investigation Period”).

Order in the matter of Shree Shaleen Textiles Limited Page 3 of 16 referred to as “SCN”) was served on Mr. Jayeshkumar Narottamdas Gandhi (hereinafter referred to as “Noticee No. 1”), Ms. Bharati Jayesh Gandhi (hereinafter referred to as “Noticee No. 2”) and Mr. Deval Jayesh Gandhi (hereinafter referred to as “Noticee No. 3”) in the extant matter. The SCN inter alia alleged as follows: a) The LTP analysis of the 4 patches was done and the details of Patch 2 qua the Noticees is given below: LTP Analysis: Patch-2: Post Bonus – Price Rise Period – 30/03/2012 to 05/03/2013:  During this period, the price of the scrip rose from ` 4 (Opening Price) as on March 30, 2012 to ` 111.85 (High Price and Close Price) as on March 05, 2013. Further, with ex-date of March 06, 2013, SSTL sub-divided face value of shares from ` 10/- to ` 2/. The list of shareholders received from RTI (Purva Sharegistry (I) Pvt Ltd.) was analyzed and it was observed that as on March 31, 2012, 85.34% of the share capital (5,76,050 shares out of 6,75,000 shares) were held in physical form or with entities which had converted warrants (shares issued on conversion of warrants were under lock-in till November 14, 2012). The net top 10 sellers LTP analysis were carried out as under:

Order in the matter of Shree Shaleen Textiles Limited Page 4 of 16 contributed to 90.57% of market positive LTP. From the analysis of KYC / UCC received from BSE, off market transactions, bank account statements (for investigation period) linked to the trading accounts of the top net sell LTP entities contributing more than 5% of the positive LTP, following was observed: S. No Entity Name Basis of Connection 1 Jayeshkumar Narottamdas Gandhi  Jayeshkumar Narottamdas Gandhi and Bharati Jayesh Gandhi share common phone number (28332109) (Annexure 1.1).  Deval Jayesh Gandhi, Jayeshkumar Narottamdas Gandhi, Bharati Jayesh Gandhi share common address (B/403 7 Star Appts Jairaj Nagar Borivali W, Mumbai, Maharashtra - 400091).  Jayeshkumar Narottamdas Gandhi and Bharati Jayesh Gandhi were join holders in demat account No. IN300183 10278210.  Deval Jayesh Gandhi and Jayeshkumar Narottamdas Gandhi were joint holders in demat account no. 12029700 00011179.  Bharati Jayesh Gandhi and Deval Jayesh Gandhi were joint holders in demat account no. IN303382 10005442). 2 Bharati Jayesh Gandhi 3 Deval Jayesh Gandhi

Source: SecMarx — sebi:WTM/MPB/EFD1-DRA4/13/2019. 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.