sebi:WTM/RKA/EFD-DRA-I/132/2015
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Facts / Headnote
Warning issued to the Noticee to be careful and cautious in the conduct of its stock broking activity and to comply with statutory provisions; proceedings disposed of.
Provisions invoked
- s. 11B
- s. 11(4)
- s. 19
- s. 12A
- s. 11
- s. 372A
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(1)
Parties
- Robinson Worldwide Trade Limited (presently known as Sun and Shine Worldwide Ltd.)
Holding
The Noticee's corporate announcement dated September 30, 2004 was a premature and forward-looking announcement containing price sensitive information, and the failure to disclose the subsequent cancellation of the proposed acquisition constituted a violation of the securities laws. However, the allegations of artificial rise in price and volume during December 2004, January 2005, and June 2005 were not established, and the Noticee was only warned rather than penalized.
Full text
Order in respect of Robinson Worldwide Trade Limited Page 2 of 12 shares. The price and volume of the scrip during this period as alleged in the SCN was as under:-
Order in respect of Robinson Worldwide Trade Limited Page 3 of 12 No reference was made about the said proposal/acquisition in the annual reports of Robinson for the years 2004 -2005 and 2005-2006. (h) Robinson was proposing to acquire a company which is in irrigation sector and was vastly in different area business as compared to earlier business of Robinson in pharmaceuticals and chemicals. Robinson was asked to specify the reasons for acquiring the business of different sector, but the same was not replied by it. (i) From the above, it has been alleged that Robinson had made the corporate announcement repeatedly which were at the proposal stage and no material development took place thereafter. Further, there was no formal discussion and the proposal never went ahead. Robinson and its directors made pre-mature and forward looking announcement which led to the artificial rice in price and volume of the scrip and thereby defrauded the gullible investors to invest in the scrip. Robinson did not inform public about the withdrawal of the deal with Parixit. (j) It has been alleged in the SCN that all the above acts and conduct lead to fraudulent and manipulative actions of Robinson and by making such pre-mature news /announcement, Robinson lured the gullible investors to invest in the scrip and violated section 12A of the SEBI Act and regulation 4(1), 4(2)(e) and (r) of the PFUTP Regulations.
Order in respect of Robinson Worldwide Trade Limited Page 4 of 12 SCN. Further, till January 2015, no communication was received from SEBI after rejection of their consent application. The learned advocate of the Noticee also made oral submissions on merits of the case and inter alia contended that there was no spurt in the price or volume when the announcement was made on September 30, 2004 as is evident from the SCN itself. There was increase in the price from ₹120 to ₹169 in a long gap of 2 months and the same cannot be attributed to this corporate announcement alone. The learned advocate also requested for time to file written submissions in the matter. The hearing was concluded and request of the Noticee to file written submissions was acceded to. The Noticee, vide its letter dated July 14, 2015, filed its written submission. The replies/submissions of the Noticees, inter alia, are as under:
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Source: SecMarx — sebi:WTM/RKA/EFD-DRA-I/132/2015. 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.