sebi:WTM/MSS/ISD/23/09
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Noticee found in violation of regulation 3(a) and (c) of PFUTP Regulations; gains of Rs.1,33,99,835.25 impounded and noticee restrained from securities market for 5 years
Provisions invoked
- s. 11(4)
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 3(a)
Parties
- Mr. Mahesh Kumar P. Gandhi
Holding
The noticee was found to be one of the connected buyers who arranged QIB subscription and provided an exit to the QIB on the date of listing of NCL shares, thereby violating regulation 3(a) and (c) of the PFUTP Regulations. His gains of Rs.1,33,99,835.25 were impounded and he was restrained from accessing the securities market for 5 years.
Full text
Page 2 of 9 the QIB category and received allotment of the entire QIB entitlement of 28.85 lakh shares. The SCN alleges that a set of connected buyers arranged QIB subscription with the assurance of an exit opportunity to the QIB so that the issue could go through. The connected buyers, which included the noticee, bought 97% of 28.85 lakh shares in a structured manner from the QIB on the day of listing and thereby cornered the NCL shares. Therefore, the connected buyers, including the noticee, violated the provisions of regulation 3 (a) and (c) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations). Accordingly, the SCN called upon the noticee to show cause as to why suitable directions under regulation 11 of the PFUTP Regulations read with Section 11(4) and 11B of the SEBI Act, 1992, including a direction to impound and retain the money already withheld, should not be passed against him.
Page 3 of 9 The only issue to be determined is: whether the noticee was one of the connected buyers who arranged QIB subscription and / or provided an exit to the QIB on the date of listing of NCL. This will be evident from the trading pattern (quantity, time and price of orders) of the QIB, the noticee and the other connected buyers.
Page 4 of 9 Original Order Last Modification Name of Buyer Time (AM) Price (Rs.) Time (AM) Price (Rs.) No. of Modifications 10:44:58 30.00 10:54:04 47.50 2 10:44:42 30.00 10:54:07 47.50 2 Noticee
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Source: SecMarx — sebi:WTM/MSS/ISD/23/09. 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.