sebi:WTM/PS/23/IVD/ID-10/DEC/2012
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Facts / Headnote
Restrained from accessing the capital market and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly, for a period of two years
Provisions invoked
- s. 13
- s. 16
- s. 23
- s. 16(1)
Regulations
- Reg. 11
- Reg. 3
- Reg. 6(d)
Parties
- Mr. Dilip S. Pendse
Holding
The transactions executed by Inshaallah in the scrips of HFCL, TELCO, Infosys and SSI were illegal carry forward transactions entered into by the noticee on behalf of Inshaallah in order to transfer losses of Anjudi Property, in violation of Regulation 3 and 6(a) of the PFUTP Regulations, and the noticee was restrained from accessing the capital market for two years.
Full text
Page 2 of 12 (hereinafter referred to as 'Niskalp'), a subsidiary of TFL, had vital financial interest. It was stated in the complaint that the noticee was the director in both Niskalp and Inshaallah. It was further alleged in the complaint that the noticee in complicity with two brokers, namely, Jhunjhunwala Stockbrokers Pvt. Limited (hereinafter referred to as 'Jhunjhunwala'), member, Bombay Stock Exchange (hereinafter referred to as 'BSE') and Pratik Stock Vision Pvt. Limited (hereinafter referred to as 'Pratik'), member, National Stock Exchange (hereinafter referred to as 'NSE'), executed the said transactions. The directors/ authorized signatories of Jhunjhunwala and Pratik (hereinafter collectively referred to as the 'brokers' and individually by their respective names) were the same.
Page 3 of 12 Property to Inshaallah. The SCN, therefore, alleged that the acts of the noticee were in violation of Section 16 of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as 'SCRA'), Regulations 3, 6(a) and 6(d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 1995 (hereinafter referred to as PFUTP Regulations) as applicable at the relevant period. Accordingly, it called upon the noticee to show cause as to why action under Section 23 of the SCRA read with Sections 11, 11B and 11(4) of the SEBI Act, including restraining him from accessing the capital market and prohibiting from buying, selling or dealing in the securities in any manner whatsoever for a particular period should not be initiated against him.
Page 4 of 12 against the noticee that he acted 'in complicity' with the brokers in the violation of Section 16 of SCRA. - He is not an associate of Dr. Anjali Beke and Mr. Dilip Beke. He is not involved in any manner in the operations of Anjudi Property and not aware of the transactions undertaken by Anjudi Property as he has no access to its records. He has been singled out as the SCN has only been issued to him. - The noticee denied permitting the transactions to be illegally carried forward. It is submitted that the carry over/ carry forward transactions were permitted in the case of principal to principal transactions and were covered by the bye laws of the BSE Rules and Regulations at the relevant time. Further, the transactions executed by Inshaallah fall under the categories permitted by the Government Notification dated June 17, 1969. - It is submitted that the bills submitted by Jhunjhunwala to Inshaallah shows that the purchase transactions have been carried over along with other purchase transactions till their squaring off/ delivery through the BSE carry over/ badla mechanism at the making-up prices fixed by BSE at the end of every settlement together with payment of margin on each scrip fixed by the BSE. Further, the transactions in the said scrips were on principal to principal basis and therefore these would not be reflected in the trade log details of the concerned stock exchange. - The stated transactions were relating to the transfer of a carry-over position
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Source: SecMarx — sebi:WTM/PS/23/IVD/ID-10/DEC/2012. 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.