sebi:WTM/PS/IVD/ID-2/19/NOV/09
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Restrained the three noticees from buying, selling or dealing in the securities market and from accessing the securities market, directly or indirectly, for a period of six months from the date of the order.
Provisions invoked
- s. 11
Regulations
- Reg. 11
- Reg. 4
- Reg. 200
Parties
- Shri Manu N Sonate
- Shri P B Chandrasekhar
- Shri S Thirunavukarasu
Holding
The three noticees, along with other connected/related clients, indulged in circular trading that created a false and misleading appearance of trading, artificial volumes and unjustified price rise in the illiquid scrip of Database Finance Ltd., in violation of Regulation 4 of the 1995 Regulations (corresponding provisions of the 2003 Regulations). The noticees were restrained from buying, selling or dealing in the securities market for six months.
Full text
Page 2 of 6 bought/sold by one of them had been sold/bought by another entity in the group. These entities mostly entered into transactions which had resulted into nil delivery at the end of the settlements. It was, therefore, alleged that the aforesaid connected / related clients including the noticees had influenced the price of the scrip by creating artificial volumes in the market in violation of Regulation 4 (a), (b), (c) & (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995.
Page 3 of 6 7. I also note that the net profit of the company was the negligible amount of Rs.3.6 lac for the year ended July 2001 and Rs.3.7 lac for year ended July 2002. In subsequent two quarters ending October 31, 2002 and January 31, 2003, the company incurred losses of Rs.5.8 lac and Rs. 0.2 lac respectively. In the year ended July 2003, net profit of the company was only Rs.0.9 lac. Thus, the company has shown a profit of hardly a few lacs rupees over the years and was quoted 84 times of the face value which was unjustifiable.
Page 4 of 6 of significant price rise in the scrip. I further note that noticees traded only during the second period of investigation.
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Source: SecMarx — sebi:WTM/PS/IVD/ID-2/19/NOV/09. 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.