sebi:WTM/RKA/EFD/19/2016
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Facts / Headnote
Noticees found in violation of regulation 4(b), (c) and (d) of PFUTP Regulations, 1995 read with regulation 13(2) of PFUTP Regulations, 2003; restrained from accessing the securities market for a period of three years from the date of the order. Proceedings against Himanshu Chawalla abated due to death.
Provisions invoked
- s. 11
- s. 11(4)
- s. 19
- s. 11(1)
- s. 11B
- s. 11(2)
Regulations
- Reg. 11
- Reg. 4
- Reg. 13
- Reg. 4(b)
- Reg. 13(2)
Parties
- Danhem Holdings & Investments Pvt. Ltd.
- Kalpesh K Chawalla
- Hemnag D Jangla
- Darshan P. Desai
- Goldsmith Equifin Pvt. Ltd.
- Himanshu Chawalla
- Harvic Management Services (I) Ltd.
- Havmore Financial Services (I) Ltd.
- Jignesh N. Shah
- Raj Investments
Holding
The Noticees were found to have violated regulation 4(b), (c) and (d) of the PFUTP Regulations, 1995 read with regulation 13(2) of the PFUTP Regulations, 2003 by executing pre-meditated reversal trades that created a misleading appearance of liquidity and inflated the price of IQMS Software Ltd scrip from Rs. 19 to Rs. 41.80 during November 14, 2000 to December 15, 2000. The Noticees were restrained from accessing the securities market for three years.
Full text
Order in respect of Kalpesh K Chawalla & Others in the matter of IQMS Software Ltd Page 2 of 20 conducted an investigation into the dealings in the scrip of IQMS for the period November 14, 2000 to December 15, 2000 (hereinafter referred to as “the investigation period”) to ascertain whether any provisions of the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and Rules and Regulations made there under have been violated. The investigation, inter alia, revealed as under:
Order in respect of Kalpesh K Chawalla & Others in the matter of IQMS Software Ltd Page 3 of 20 Vihar Road, Andheri (E), Mumbai. The investment/trading decisions on behalf of all the above entities were taken jointly by Kalpesh K Chawalla and Hemang Jangla. Thus, all the above named entities were a part of a Group (“the Harvic Group”). Funds were transferred frequently from one group Company to another. b) As per the Client Introduction form, Pankaj Desai had introduced Hemang Jangla as a client to Geojit Securities Ltd. c) Kalpesh K Chawalla and Ashish Ganatra, representative of Sai Investcorp are known to each other. Sai Investcorp/ Ashish Ganatra and Mayekar Investment Pvt. Ltd. / Pankaj Desai share a sub – broker – client relationship. d) Pankaj Desai group funded in the IPO of IQMS by way of its company Mayekar Investments Pvt. Ltd funding for 4,01,300 shares. Darshan P Desai is a nephew of Pankaj A. Desai. This group consists of Mayekar Investments Pvt. Ltd and Shagufta Investment Pvt. Ltd. Besides the members of family of Pankaj Desai. Pankaj Desai was a director along with his father Anantrai Desai in Mayekar Investments Pvt. Ltd and his wife Kirtida Desai in Shagufta Invesbrokerents Pvt. Ltd. Thus, these two entities are related to each other. e) Pankaj Desai is related to Hemang Jangla as brought out in the Client Introduction form given to Geojit Securities Ltd. Pankaj Desai introduced Hemang Jangla as a client. So, both the individuals are known to each other. f)
Order in respect of Kalpesh K Chawalla & Others in the matter of IQMS Software Ltd Page 4 of 20 acted in concert with each other to create a false market or misleading appearance of trading and that their transactions were not genuine but were done with the intention not to effect transfer of beneficial ownership and to operate as a device to inflate or cause fluctuation in the market price of the scrip. Such act of aforementioned clients along with their directors namely Kalpesh Chawallla, Hemang Jangala and Himanshu Chawalla were alleged to be in violation of regulation 4(b), 4(c) and 4(d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 1995 (“PFUTP Regulations, 1995”) read with regulation 13(2) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (“PFUTP Regulations, 2003”).
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Source: SecMarx — sebi:WTM/RKA/EFD/19/2016. 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.