sebi:WTM/PS/IVD/ID-1/32/09/DEC
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Facts / Headnote
M/s. V. B. Investments and M/s. Ketan Investment were restrained from buying, selling or dealing in securities, or accessing the securities market, directly or indirectly, for three years from the date of the order. No order was passed against Shri Chander Singh at that time because his consent application was pending; SEBI reserved the right to pass an appropriate order against him later.
Provisions invoked
- s. 11
- s. 11(4)
Regulations
- Reg. 11
- Reg. 3
- Reg. 4
- Reg. 13
- Reg. 4(a)
- Reg. 4(b)
- Reg. 199
- Reg. 200
Parties
- M/s. V. B. Investments (Proprietor: Vikas Bengani)
- M/s. Ketan Investment (Proprietor: Mahendra Agarwal)
- Shri Chander Singh
Holding
SEBI found that V. B. Investments and Ketan Investment had violated Regulations 4(b) and 4(c) of the PFUTP Regulations, 1995 through repeated circular and reversal trades that created a false or misleading appearance of trading and reflected prices based on non-genuine transactions. It restrained both entities from the securities market for three years, while keeping proceedings against Chander Singh on hold pending his consent application.
Full text
Page 2 of 25 2. Accordingly, vide notice dated September 23, 2005, M/s. V.B Investments, M/s. Ketan Investment and Shri Chander Singh were called upon to show cause as to why appropriate recommendation should not be made against them under section 11(4) (b) and 11B of SEBI Act, 1992 read with regulation 11 and 13(3) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations 2003 (hereinafter referred to as PFUTP Regulations 2003). The show cause notice (SCN) after repeated attempts was served to M/s V B Investments on March 7, 2006 through the trading member Sanchay Fincom Ltd. 3. M/s. V B Investments replied to the SCN vide letter dated 26th November, 2006. Later, it applied for consent on November 22, 2008. However, the terms of consent were rejected.
Page 3 of 25 7. Shri Vikas Bengani appeared before me on July 09, 2009 and made his submissions vide letter dated July 20, 2009. He through his reply dated November 26, 2006 and letter dated July 20, 2009 has inter alia submitted as under:
Page 4 of 25 SEBI (PFUTP), 1995. xi. Regulation 11 and 13(3) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 came into force on July 17, 2003 where as the investigation period is from January 01, 2003 to July 11, 2003, so it should not be applied on him. In this regard, he has quoted Article 20(1) in the Constitution of India that ‘No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence. xii. He was not provided copy of the statement, which was recorded by SEBI official on dated 13/04/2005 which is also against natural justice. xiii. The price of the scrip was stable from the period of July 2002 (before investigation period) and in the range of Rs.175-185 (during the investigation period) i.e. from January 2003 to July 2003. The price of the scrip fell in the month of August 2003 after the investigation period and due to corporate action (stock split). xiv. Many other entities were active during the period of investigation i.e. Sahara, HFCL, Basant Marketing and others. The trades belonging to HFCL group and Sahara group was also under investigation and their volume was also high but SEBI has not mentioned their names anywhere in the SCN. xv. The price of the scrip was normal in the period of investigation because other entities i.e. Sahara, HFCL and Basant Marketing had done 3-4 block deals of 1,60,000 shares (approx) in the
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Source: SecMarx — sebi:WTM/PS/IVD/ID-1/32/09/DEC. 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.