sebi:WTM/TCN/33/IVD1/AUG/2008
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Restrained the seven clients from accessing the securities market and from buying, selling or dealing in securities for a period of three months with immediate effect; no charge framed against Shree Yaax Pharma & Cosmetics Ltd.
Provisions invoked
- s. 11B
- s. 11
- s. 19
Regulations
- Reg. 4
- Reg. 11
Parties
- Kajol Impex Ltd.
- Trans Fiscal Pvt. Ltd.
- Gaurang G. Patel
- Samir D. Patel
- Paresh Champaklal Shah
- Umit Vinodbhai Patel
- Sudhirbhai Shah
Holding
The seven clients were found guilty of violating Regulation 4(a), (b), (c) and (d) of the PFUTP Regulations, 1995 by indulging in circular trading that created artificial volume and distorted market equilibrium in the scrip, and were restrained from accessing the securities market for three months. No charge was framed against Shree Yaax Pharma & Cosmetics Ltd. as there was no material evidence of the company's involvement in the manipulation.
Full text
2 had very small amount of total income of Rs. 10.9 lakh and earned a small net profit of Rs.1.55 lakh against high equity capital of Rs. 24.4 crore. As per unaudited results for the quarter ended June 30, 2002, the net profit of the company was to the tune of Rs. 4.5 lakh only and for the next quarter i.e. September 30, 2002, it was Rs.14.60 lakh only. It was observed that the rise in the price of the scrip was not backed by the fundamentals of the scrip or its financial performance.
3 2.1 In view of the findings of investigation, a show cause notice dated August 9, 2004 was issued to the company and above seven clients to show cause as to why action under Regulation 11 of SEBI (PFUTP) Regulations, 2003 read with Section 11, 11B and 11(4) (b) of SEBI Act, 1992 including restraining them from accessing the capital market and prohibiting from buying, selling or dealing in the securities in any manner whatsoever for a particular period should not be initiated. The above clients had been given 21 days to submit their replies, if any, failing which it would be presumed that they had no explanation / submission to offer. They were also requested to indicate whether they would prefer a personal hearing in this regard.
4 3.2 There was a rise in the price and volume of the scrip traded during the period under investigation. The performance of the company except the news of positive corporate development does not justify such rise in price. After the scrutiny of the trades in the scrip, it was observed that the trades were executed mainly by the five member brokers namely, Equisearch Broking Pvt. Ltd., Grishma Securities Pvt. Ltd., Ess Ess Intermediaries Pvt. Ltd., Share Aids, Bonanza Stock Brokers Pvt. Ltd. and Lagan Fincap Leasing Ltd (sub-broker of Bonanza Stock Broker Ltd) who created artificial volume in the scrip which distorted the market equilibrium of the shares. These brokers have mainly traded on behalf of seven clients. I note that separate action is being taken against the above entities.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:WTM/TCN/33/IVD1/AUG/2008. 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.