sebi:WTM/RKA/ISD/177/2016
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Interim directions confirmed against the two Noticees with certain relaxations/reliefs granted (permission to sell demat holdings into escrow, invest in NSE Nifty 500/S&P BSE 500 scrips, mutual funds, debt/government securities, ETFs, avail corporate actions, tender shares in open/delisting offers, and utilize up to 25% of portfolio value for business/exigencies); prayers for revocation rejected.
Provisions invoked
- s. 11
- s. 11(4)
- s. 19
- s. 11(1)
- s. 12A
- s. 11(2)
Regulations
- Reg. 2(1)(c)
- Reg. 3(a)
- Reg. 4(2)(r)
Parties
- Ankit Mahendrabhai Shah
- Jyotiben Mahendrabhai Shah
Holding
The WTM confirmed the ad interim ex parte order dated June 01, 2016 against Noticees Ankit Mahendrabhai Shah and Jyotiben Mahendrabhai Shah, rejecting their prayers for revocation or complete removal of restraint, while granting certain relaxations to address personal/business exigencies and liquidity problems.
Full text
______________________________________________________________________________ Order in the matter of Dhyana Finstock Ltd. Page 2 of 18 d) On June 13, 2014 this company 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 called 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 have in aggregate made profit of ₹.107.43crores. Of the shares sold by preferential allottees, 18,22,678 shares representing 57.54% shares were bought by Dhyana Group. Of the total purchase (23,03,449 shares) of
______________________________________________________________________________ Order in the matter of Dhyana Finstock Ltd. Page 3 of 18
______________________________________________________________________________ Order in the matter of Dhyana Finstock Ltd. Page 4 of 18 b. The rise in the volume of the scrip is just because the increase in free float of shares post locks in. They are not connected to the SMS provider and had no knowledge for the same. They are no way connected to SMS tips. Their wrong doing is nowhere explained or established in the Interim order. None of their trades are synchronized, structured, reversal, manipulative, off market, with meeting of minds with anyone, etc. SEBI does not have any evidence against them and even evidence provided by SEBI is irrelevant/ immaterial and establishes nothing against them. They cannot be held responsible if the price of the scrip do not match the fundamental.
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Source: SecMarx — sebi:WTM/RKA/ISD/177/2016. 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.