sebi:WTM/SKM/EFD1-DRAIII/8/2018-19

SEBI · SEBI · 2014-01-01 · S K Mohanty, 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

Noticee restrained from accessing the securities market and prohibited from buying, selling or otherwise dealing in securities for a period of two years from the date of the order; existing holdings including mutual fund units frozen during the period of restraint.

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 3
• Reg. 4(1)
• Reg. 3(a)

Parties

• Ms. Rashmi Kothari

Holding

The Noticee's trading in the scrip of Rajlaxmi Industries Ltd. was found to be manipulative, fraudulent and an unfair trade practice in violation of Regulations 3(a),(b),(c),(d) and 4(1),4(2)(a),(e) of the PFUTP Regulations, and she was restrained from accessing the securities market for two years.

Full text

Order in respect of Ms. Rashmi Kothari in Rajlaxmi Industries Ltd. Page 2 of 26 2. The scrip of the Company witnessed unusual fluctuation in price and volume from January 01, 2014 to July 31, 2015 (hereafter referred to as “Investigation Period”), although there was prima facie, no change in the fundamentals of the Company. The price of the scrip rose from Rs.20.25 on January 15, 2014 to Rs.193.2 on July 01, 2014 and reached a further high of Rs.323.8 on September 02, 2014 and thereafter, the price of the scrip started declining and closed at Rs.3.9 on July 31,

Order in respect of Ms. Rashmi Kothari in Rajlaxmi Industries Ltd. Page 3 of 26 Table 1 Period Dates Open (Rs) Close (Rs.) Low (Date) (Rs.) High (Date) (Rs.) Avg. no. of (shares) traded daily during the period.

Order in respect of Ms. Rashmi Kothari in Rajlaxmi Industries Ltd. Page 4 of 26 stood at Rs.1003.78 crore. It was observed that the financial performance of the Company during the Investigation Period did not support the rapid increase in the price of the scrip of the Company. The Company had revenue of only Rs.15.18 crore and Rs.13.39 crore and corresponding net profits of Rs.0.42 crore and Rs.0.11 crore in FY 2013-14 and 2014-15 respectively. The financials of the Company during the relevant period are further presented in detail as under:

Source: SecMarx — sebi:WTM/SKM/EFD1-DRAIII/8/2018-19. 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.