sebi:WTM/PS/23/IVD/ID-4/JULY/2010
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Eltrol Ltd. restrained from buying, selling or dealing in securities and from associating in securities market for five years with set-off of interim prohibition already undergone; Mr. Sanjay Tripathi, Mr. Niraj Sanghvi and Mr. Deepak Rathod restrained from buying, selling or dealing in securities and from associating in securities market for six months.
Provisions invoked
- s. 11
- s. 78(2)
Regulations
- Reg. 11
- Reg. 13
- Reg. 4(1)
- Reg. 3(b)
Parties
- Eltrol Ltd.
- Mr. Sanjay Tripathi
- Mr. Niraj Sanghvi
- Mr. Deepak Rathod
Holding
Charges of violation of Regulation 4(1), 4(2)(a), (e), (g) and (n) of PFUTP Regulations read with Regulation 13 stands established against the noticees. Eltrol and its three directors were restrained from the securities market for five years and six months respectively.
Full text
Page 2 of 15 2. SEBI vide an ad interim ex-parte order dated October 05, 2005 issued under Sections 11B, 11D and 11(4), pending inquiry, directed Eltrol not to issue any equity shares or any other instrument convertible into equity shares or alter its capital structure in any manner till further directions in this regard. Eltrol was also directed to cease dealings in the securities market in any manner, directly or indirectly, till further directions. Further, the directors of Eltrol namely, Mr. Sanjay Tripathi, Mr. Deepak Rathod and Mr. Niraj Sanghvi were directed not to buy, sell, pledge or deal in securities of Eltrol, directly or indirectly, till further directions in this regard. Suitable directions were also passed against 7 brokers of National Stock Exchange (hereinafter referred to as ‘NSE’), 11 brokers of BSE, 10 trading clients at BSE and 25 clients who were apparently connected with/ related to each other. In the meantime, SEBI had also initiated formal investigation into the matter for the period of January 05, 2005 to September 30, 2005. The said interim order also provided the entities/ persons to whom directions were issued to file objections, if any, to the order within 15 days from the date of order and, if they so desire, avail themselves of an opportunity of personal hearing.
Page 3 of 15 had issued favorable announcements, with regard to the financial performance of the company, with an aim to inflate the prices of the scrip and when the price of the scrip started moving upward, the shares acquired by the entities in off-market deals were offloaded in the market at higher prices. It was also alleged in the SCN that Mr. Niraj Sanghvi and Mr. Deepak Rathod were benefited from the price manipulation in the scrip of Eltrol. The SCN therefore alleged that the acts of the noticee were in violation of Regulations 3(b),(c),(d) and 4(1),(2), (a), (d), (f), (r) of PFUTP Regulations. Accordingly, it called upon the noticees to show cause as to why suitable directions under Section 11, 11B and 11(4) of SEBI Act read with Regulation 11 of PFUTP Regulations including directions to restrain from accessing the capital market and prohibiting from buying, selling or dealing in securities, in any manner for a particular period should not be issued against them.
Page 4 of 15 requested for another opportunity of personal hearing. In view of this, I am compelled to proceed with the matter ex-parte, on the basis of material available on record, as against these two persons, having complied with the principles of natural justice.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:WTM/PS/23/IVD/ID-4/JULY/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.