sebi:WTM/RKA/EFD-DRA-III/49/2016

SEBI · SEBI · 2013-11-05 · Rajeev Kumar Agarwal, Whole Time Member

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Facts / Headnote

Noticees found to have violated Section 12A(a),(b),(c) of SEBI Act and Regulations 3(a),(b),(c),(d), 4(1), 4(2)(a),(e) and for Purshottam Khandelwal and Cosmo also 4(2)(g) of PFUTP Regulations; restrained from accessing securities market and prohibited from buying, selling or otherwise dealing in securities directly or indirectly including Mr. Purshottam Khandelwal for 5 years, Ms. Sunita Gupta for 3 years, Vishvas Projects Ltd. for 1 year, with directions for Mr. Purshottam Khandelwal, Cosmo Corporate Services Ltd., Master Finlease Ltd. and Avisha Credit Capital Ltd. to run concurrently with prior restraint orders dated May 21, 2014, July 31, 2014 and June 29, 2015.

Provisions invoked

• s. 11B
• s. 11
• s. 19
• s. 12A

Regulations

• Reg. 11
• Reg. 3
• Reg. 200
• Reg. 3(a)
• Reg. 4(2)(g)
• Reg. 3(a)(b)
• Reg. 4(1)(2)

Parties

• Mr. Purshottam Khandelwal
• Ms. Sunita Gupta
• Cosmo Corporate Services Ltd.
• Master Finlease Ltd.
• Avisha Credit Capital Ltd.
• Vishvas Projects Ltd. (Formerly Known as Mefcom Agro Industries Ltd.)

Holding

The Noticees, acting in concert with Vishvas Group entities, indulged in synchronized, circular and self-trades creating artificial volume and manipulating price in Gangotri Textiles Limited, violating Section 12A(a),(b),(c) and PFUTP Regulations 3 and 4, and were restrained from the securities market for periods ranging from 1 to 5 years.

Full text

Order in the matter of Gangotri Textiles Limited Page 2 of 25 entities were collectively called as Vishvas Group in the observations of investigation.

Order in the matter of Gangotri Textiles Limited Page 3 of 25 Vishvas Group constituted more than 15% of the total traded volume. For example, on May 30, 2006, the total traded volume was 31,756 shares out of which 19,416 shares (61.14% shares) were synchronized by the eight connected entities of Vishvas Group. It was also observed that out of total 37 trading days during the investigation period, on 26 trading days, these entities indulged in synchronized trading. The details of 26 trading days at BSE are given in the following table:- Table 2 S N Date (A) Total mkt. Volume (B) Total Day Synchronised Volume (C) Synchronized trading by eight entities (D) Synch. Trade volume of eight entities vs. total synch. trade volume in % (D/C*100) (E) Synch. trade volume of eight entities vs. total market volume in % (D/B)*100 (F) 1 30-05-2006 31756 19416 19416 100.00 61.14 2 31-05-2006 48722 23824 23804 99.92 48.86 3 18-05-2006 337055 125725 124887 99.33 37.05 4 12-05-2006 349076 121904 118404 97.13 33.92 5 21-04-2006 276438 60799 60000 98.69 21.70 6 28-04-2006 363073 78521 74981 95.49 20.65 7 11-05-2006 409252 89785 83755 93.28 20.47 8 29-04-2006 168693 32510 32510 100.00 19.27 9 09-05-2006 494413 119125 85935 72.14 17.38 10 16-05-2006 342392 76559 57955 75.70 16.93 11 02-05-2006 473324 78888 77614 98.39 16.40 12 10-05-2006 488420 107963 77924 72.18 15.95 13 08-05-2006 113772 22115 17000 76.87 14.94 14 04-05-2006 642628 87974 86302 98.10 13.43 15 29-05-2006 58042 8485 7485 88.21 12.90

Order in the matter of Gangotri Textiles Limited Page 4 of 25 (d) On 25 days out of aforesaid 26 days, the synchronized trades of Vishvas Group were more than 50% of total market synchronized trades. Also the contribution of volumes through such synchronized trades by the above entities was more than 60% of total traded volume on May 30, 2006 and it was more than 48% on May 31, 2006. On 12 days out of total 26 days, the alleged synchronized trades of the group entities constituted more than 15% to the total market volume.

Source: SecMarx — sebi:WTM/RKA/EFD-DRA-III/49/2016. 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.