sebi:WTM/PS/10/IVD/ID-03/Oct/09
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Facts / Headnote
Noticee held guilty of violating Regulation 3 of PFUTP Regulations, 1995 and Code of Conduct under Regulation 7 of Broker Regulations; certificate of registration suspended for two months effective 21 days from order; alleged violations of Regulations 4(a), (b) & (d) held not sustainable.
Regulations
- Reg. 7
- Reg. 3
- Reg. 5(1)
- Reg. 13
- Reg. 4(a)
- Reg. 28(2)
- Reg. 2
- Reg. 38(2)
- Reg. 2(1)(c)
Parties
- D.G. Goenka Equities Pvt. Ltd.
Holding
The Whole Time Member held D.G. Goenka Equities Pvt. Ltd. guilty of violating Regulation 3 of the PFUTP Regulations, 1995 and the Code of Conduct under Regulation 7 of the Broker Regulations for facilitating introduction of unlisted DASL shares, and suspended its certificate of registration for two months. The alleged violations of Regulations 4(a), (b) and (d) for synchronized trades and market manipulation were held not sustainable.
Full text
Page 2 of 23 consideration for this was another preferential allotment of 10 crore shares made by BBL to DASL on the same date which was about 5 times of the pre- issue paid up capital of BBL before allotment. No exchange of cash was found between the two companies. Pursuant to this, DASL first made an application for listing of the said shares allotted to BBL to MPSE and later on to BSE also. MPSE granted listing permission albeit with undue haste and without exercising due diligence. However, no trading permission was granted in respect of the said shares. The listing application which was made subsequently to BSE was kept pending, upon apprehension of commission of certain violations of law in the process by DASL. No such application for listing was made to ASE by DASL. On the basis of listing permission given by MPSE, the Central Depositories Services Ltd. (hereinafter referred to as ‘CDSL’), a registered depository, dematerialized the said shares of DASL and credited them to the beneficial owner account of BBL.
Page 3 of 23 A reconciliation of the transfer of 10 crore unlisted shares from BBL’s demat account was also worked out and the same stood as under:
Page 4 of 23 referred to as ‘VFPL’) and Murali Nair. It was observed that both VFPL and Murali Nair were related to/ associated with DASL.
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Source: SecMarx — sebi:WTM/PS/10/IVD/ID-03/Oct/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.