sebi:WTM/RKA/ISD/149/2016

SEBI · SEBI · 2014-11-30 · Rajeev Kumar Agarwal, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Interim reliefs granted to noticees permitting limited trading, mutual fund investments, and sale of securities into escrow account pending completion of investigation; proceedings against Jayprakash Maneklal Patel to be concluded after personal hearing.

Provisions invoked

• s. 19
• s. 12A

Regulations

• Reg. 2(1)(c)
• Reg. 3(a)

Parties

• Jayprakash Maneklal Patel
• Manharbhai Vallabhbhai Vaghani
• Sanjay Bhikhabhai Vaghani
• Mahesh Vallabhbhai Vaghani
• Haresh Bhikhabhai Vaghani

Holding

SEBI granted interim reliefs to the noticees, permitting them to undertake limited delivery-based trading in index scrips, mutual fund investments, debt/government securities, ETF investments, corporate actions, and orderly sale of demat holdings into an escrow account, while maintaining the underlying restraint pending completion of investigation. Proceedings against Jayprakash Maneklal Patel to be concluded only after grant of personal hearing.

Full text

Order in the matter of Dhyana Finstock Limited Page 2 of 11 Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. Thus, the shares held by 49 entities who were allotted shares in the preferential allotment were not tradable till November 30, 2014. d) On June 13, 2014, Dhyana with poor fundamentals (no income, no fixed assets) and no trading history was listed on BSE. Company connected entity was instrumental in establishing equilibrium price at BSE on June 13, 2014 in the Special Pre Open Session (SPOS). e) Between June 13, 2014 and November 28, 2014, ("Patch 1") the price of the scrip opened at ₹ 251 and closed at ₹ 355. During this period, the scrip was traded with an average volume of 5277 shares per day and total volume of 5,75,235 shares in 109 trading days. f) Thereafter, between December 01, 2014 and July 27, 2015 ("Patch 2"), the price of the scrip opened at ₹ 351 and closed at ₹ 405.7. During this period, the scrip was traded with an average volume of 24,376 shares per day and total volume of 39,97,754 shares in 164 trading days and the entities connected / related, directly or indirectly, to Dhyana (forming part of a group named 'Dhyana Group' and also named as 'exit providers'), started providing hugely profitable exit to the preferential allottees. g) During Patch 2, out of the 49 preferential allottees, 39 allottees exited and sold 31,67,410 shares and in aggregate made profit of ₹ 107.43 crores. Of the shares sold by preferential allot

Order in the matter of Dhyana Finstock Limited Page 3 of 11 Regulations 3(a), (b), (c) and (d) and 4(1), 4(2)(a), (b), (e), (g) and (r) thereof and section 12A (a), (b) and (c) of the Securities and Exchange Board of India Act, 1992. The allegations are made, inter alia, on the basis of following:

Order in the matter of Dhyana Finstock Limited Page 4 of 11 the Hon'ble Securities Appellate Tribunal ("Hon'ble SAT") one by Shri Jayprakash Maneklal Patel and the other by Manharbhai Vallabhbhai Vaghani and others (i.e. Sanjay Bhikhabhai Vaghani, Mahesh Vallabhbhai Vaghani and Haresh Bhikhabhai Vaghani).

Source: SecMarx — sebi:WTM/RKA/ISD/149/2016. 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.