sebi:WTM/PS/14/IVD/ID-1/MAY/2010
Facts / Headnote
Show cause notices disposed of without imposing any penalty or direction
Provisions invoked
- s. 19
Regulations relied on
- SEBI (PFUTP) Regulations, 1995 — 3
- SEBI (PFUTP) Regulations, 2003 — 11
- SEBI (PFUTP) Regulations, 2003 — 3(a)
Parties
- Rajat Stock Invest Pvt. Ltd
- Flare Finance (I) Ltd
- Cosmo Corporate Services Ltd
Holding
The show cause notices dated February 05, 2009 issued to Rajat Stock Invest Pvt. Ltd, Flare Finance (I) Ltd and Cosmo Corporate Services Ltd were disposed of without imposing any penalty or direction as no violation of PFUTP Regulations was established.
Full text
Page 2 of 5 Madan, stated to be an employee of Vijay Jhindal. As per the terms of MoU, Vivek Gupta handed over slips of 20 lakh shares of GBL to Madan on July 4, 2001 and Vijay Jhindal handed him a cheque dated July 5, 2001 for Rs.5 lakh, Further as per the assurance, Vijay Jhindal was supposed to give Rs.20 lakh within 10 days of the transfer of the aforesaid shares i.e. on July 14,
Page 3 of 5 violation of the provisions of Regulation 3, 4(a), 4(b), 4(c), 4(d), 4(e), 5(a), 5(b) and 6 (a) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as ‘PFUTP Regulations’) read with corresponding provisions of Regulation 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(a), 4(2)(b), 4(2)(g), 4(2)(f), 4(2)(k) and 4(2)(r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.
Page 4 of 5 8. Whether the noticees were related/ connected to Vijay Jindal and created artificial volume in the market? a. I note from the findings of investigation that the owner of noticees was Mr. Vijay Jindal. This finding is based on the police complaint of Vivek Gupta dated November 07, 2001. Except this, I find no other independent evidence on record to show that Vijay Jindal was the owner of noticees. In absence of these, it is difficult to conclude that the noticees were related to Vijay Jindal. b. Further, the MoU said to have been entered by Vivek Gupta, do not find any mention of noticees, viz., Rajat Stock Invest Pvt. Ltd, Flare Finance (I) Ltd. and Cosmo Corporate Services Ltd. I have seen the demat account statements of noticees as received from National Securities Depository Ltd. (hereinafter referred to as ‘NSDL’) for the period from March 31, 2001 to March 31, 2002 and note that during the relevant period of time huge chunk of shares of GBL were transferred to noticees from the entities stated to be connected to Vivek Gupta. The flow of shares has been brought out in the table below for ready reference: Table A: Details from the demat statements of noticees
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Source: SecMarx — sebi:WTM/PS/14/IVD/ID-1/MAY/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.