sebi:WTM/SM/IVD/ID2/9475/2020-21
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Facts / Headnote
Charges established against Noticees; Noticees restrained from accessing securities market and prohibited from buying, selling or dealing in securities
Provisions invoked
- s. 11
- s. 15
- s. 19
Regulations
- Reg. 3
- Reg. 4
- Reg. 4(1)
- Reg. 3(a)
Parties
- Vishnudham Marketing Private Limited (Noticee No.1)
- Dharam Paul Singla (Noticee No.2)
- River High Right Share Brokers Private Limited (Noticee No.6)
Holding
Charges under Regulations 3(a)-(d) and 4(1), 4(2)(a),(e) of PFUTP Regulations, 2003 against Noticee Nos. 1-2 for SPOS manipulation and Noticee Nos. 2-14 for Patch-1 LTP manipulation in ALPS Motor Finance Ltd stand established, and the Noticees are restrained from accessing the securities market.
Full text
Order in the matter of ALPS Motor Finance Ltd Page 2 of 50 New Delhi informing that certain entities have manipulated the prices of various scrips and have generated bogus Long Term Capital Gains (LTCG) through stock exchange mechanism. ALPS Motor Finance Ltd (“Company / ALPS” for convenience) was one of such scrips mentioned in the aforesaid references whose market price was allegedly manipulated, hence, an investigation was conducted by SEBI into the trading in the scrip of ALPS, for the period of June 06, 2014 to July 31, 2015 (hereinafter referred to as “Investigation Period”) for possible violation, if any, of the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act, 1992”) and rules and regulations made thereunder.
Order in the matter of ALPS Motor Finance Ltd Page 3 of 50 price of ₹412 and ₹414 at 09:24:44 and 09:25:14 respectively, when the pending buy orders were in the range of ₹0.55 to ₹2.00. Investigation further noticed that Noticee no. 1 i.e. Vishnudham Marketing Private Limited had placed buy orders of 5000 shares at a price of ₹418 at 09:42:06, when the other pending buy orders were in the range of ₹0.05 to ₹11. The above buy order of Noticee no. 1 matched with the pending sell orders of Noticee no. 2 and the opening price of the scrip was discovered at ₹418 through SPOS. c) Investigation observed that the net profit of the Company in the financial years before listing at BSE was in the range of ₹0.08 lacs to ₹9.16 lacs during the financial year 2009-10 to 2013-14 and the net profit of the Company after listing at BSE was ₹6.79 lacs in the year 2014-15 and ₹3.50 lacs only in the year 2015- 16, which indicated that the financials were not at all strong and the price discovered through SPOS was not commensurate with the financials of the Company, meaning thereby, the financial performance of the Company could not justify or support the price discovered through SPOS in the scrip of the Company. Investigation also observed that that the price discovered through SPOS was also not supported by corporate announcements of the Company during the relevant period. d) It is further unearthed that Noticee no. 2 had received 1.1 lacs physical shares of the Company from one of the suspected
Order in the matter of ALPS Motor Finance Ltd Page 4 of 50 supporting such high opening price of the scrip of the Company, indicated that Noticee nos. 1 and 2 were acting in concert and by placing orders at a price much higher than the previously traded price, had caused establishment of high market price artificially apart from creating a misleading appearance of trading in the scrip, which resulted in discovery of such abnormally high opening price of the scrip. Patch-1 (June 06, 2014 to August 01, 2014) f) During Patch-1 (June 06, 2014 to August 01, 2014) of the Investigation Period, the price of the scrip moved from ₹418 to ₹428.05, witnessing an increase of ₹10.05 in the scrip. Investigation revealed that Noticee nos. 2 to 14 have executed 30 trades amongst them and with those 30 trades Noticee nos. 2 to 14 have contributed to ₹26.40 towards the positive Last Traded Price (hereinafter referred to as “(+) LTP / positive LTP”) which is 21.04% of the total market positive LTP in the scrip noticed during Patch-1 of the Investigation Period. Investigation also observed that in the aforementioned 30 trades that have led to contribution of positive LTP in the scrip of ALPS, Noticee nos. 6 to 14 (“9 Noticees” for convenience) were acting as buyers while Noticee nos. 2 to 5 (“4 Noticees” for convenience) were acting as their counterparties / sellers. g) Investigation further unearthed that the 4 Noticees i.e. Noticee nos. 2 to 5 had received physical shares from other suspected g
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Source: SecMarx — sebi:WTM/SM/IVD/ID2/9475/2020-21. 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.