sebi:WTM/PS/135/IVD/JAN/2016
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Impound unlawful gains of ₹2,17,14,284 jointly and severally from the Sanghvi Group entities and ₹1,18,45,638 jointly and severally from Nilesh Kapadia and Kalpana Kapadia; freeze bank and demat accounts; direct inventory of assets; order to come into force with immediate effect.
Provisions invoked
- s. 11(4)
- s. 19
- s. 12A
Regulations
- Reg. 3
Parties
- Nilesh Kapadia
- Rajiv Sanghvi
- Rajiv Sanghvi-HUF
- Sanjay Sanghvi
- Sonal Sanghvi
- Dipti Mehta
- Kalpana Kapadia
Holding
The noticees, acting as groups (Sanghvi Group and Kalpana Group) with Nilesh Kapadia as the HDFC AMC equities dealer, front ran HDFC's trades in contravention of section 12A(a),(b),(c) of the SEBI Act read with regulations 3 and 4(1) of the PFUTP Regulations, 2003. As an interim measure, SEBI impounded the unlawful gains of ₹2,17,14,284 (Sanghvi Group) and ₹1,18,45,638 (Kalpana Group) jointly and severally, and froze their bank and demat accounts.
Full text
Page 2 of 18 Fund, HDFC Asset Management Company Limited and trades of HDFC AMC's portfolio management client (collectively referred as 'HDFC trades').
Page 3 of 18 4.4 From the above details, it is evident that Nilesh, Rajiv, Rajiv-HUF, Sonal, Sanjay and Dipti are connected. These entities are referred as ‘Sanghvi Group’.
Page 4 of 18 5.5 The details of the trades executed in the trading accounts of Rajiv, Rajiv-HUF, Sanjay, Sonal or Dipti viz., traded quantity in the respective scrip and average traded price were informed by Rajiv to Nilesh. 5.6 Sample analysis of front running of Sanghvi Group is given below: Front running of HDFC trades in the scrip of Punj Lloyd by Dipti (BSE) and Sanjay (NSE) on June 05, 2007: a) Nilesh had given instruction to trade in the shares of Punj Lloyd Limited on June 05, 2007. b) It was observed that Nilesh had, from the dealing room phone informed Rajiv (in his mobile phone 9322228959) on Jun 05, 2007 to buy 2 lakh shares of Punj Lloyd (Punj). The relevant extract of the audio conversation between Nilesh and Rajiv is given below: Start Time 14:35:33 – End Time 14:36:04 (Audio file no.:458732) Rajiv: Hello. Nilesh: What is Punj Lloyd? Rajiv: 232, 25.30 Nilesh: You buy 200,000 BSE mein. Rajiv: Okay. c) It was observed from the trade log of Punj Lloyd on BSE on June 05, 2007 that the shares were bought in the trading account of Dipti from 14:36:11 onwards. d) Further, shares were bought in the trading account of Sanjay from 14:36:18 onwards. e) It was observed that the purchase of Punj Lloyd shares in the both the trading accounts of Dipti and Sanjay at BSE and NSE respectively, commenced almost simultaneously and immediately after the instruction received from Nilesh. f) After shares were bought at both the stock exchanges, Rajiv had reported the status of such t
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Source: SecMarx — sebi:WTM/PS/135/IVD/JAN/2016. 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.