sebi:WTM/TCN/78/IVD4/Dec/08
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Restrained M/s Apex Enterprises (India) Limited from dealing in securities directly and indirectly for a period of 1 month; found violation of Regulation 4(b) of PFUTP Regulations, 1995
Provisions invoked
- s. 11B
- s. 11
- s. 19
- s. 11(4)
Regulations
- Reg. 11
- Reg. 4
- Reg. 4(b)
- Reg. 13(2)
- Reg. 11(1)
Parties
- M/s Apex Enterprises (India) Limited
- M/s Vinsen Trade & Commerce Private Limited
- M/s Sungrace Merchandise Private Limited
Holding
Apex, Vinsen and Sungrace were found to have violated Regulation 4(b) of the PFUTP Regulations, 1995 by entering into synchronized/matched trades in SAB TV shares through broker TIFIL, and Apex was restrained from dealing in securities for 1 month.
Full text
Page 2 of 18 (hereinafter referred as ‘Vinsen’) and M/s Sungrace Merchandise Private Limited (hereinafter referred as ‘Sungrace’) were connected to each other and had entered into transactions that were not genuine and were not intended to transfer beneficial ownership in
Page 3 of 18 C. Decisions to buy and hold SAB TV was taken by the three companies after analysing the market data which showed that: i. During the period from November 22, 1999, to February 24, 2000 the price of the SAB TV scrip rose from Rs. 428.65 to Rs.2,290 on the NSE and on BSE its rose from Rs. 467 to Rs. 2,350 i.e. the share price appreciated by more than 400% in both the exchanges. ii. Subsequently, the market price of the shares of SAB TV had started falling since February 24, 2000. iii. From February 24, 2000 to March 13, 2000 the share price had fallen by almost 46%. Further, during the above period, the market indices at BSE and NSE also fell by 11% and 10% respectively. Thus it seems that it was a correction phase. On March 14, 2000 the market price of SAB TV fell to a low of Rs. 1237.75. Further, when the three companies felt that the price had fallen substantially, they placed the order with Triumph International Finance India Limited (hereinafter referred to as ‘TIFIL’) to buy the shares. D. TIFIL bought the shares of SAB TV from the normal market (in a screen based trading) at an average cost of Rs.1249.50 in the price range of Rs. 1245-1252. The three companies did not know the identity of the counter-party as the trade was executed in the normal market segment of the NSE. E. If the intention of the three companies was to manipulate the price, then on March 15, 2000, the market price on the NSE should have risen, but the results were totally contrary and eve
Page 4 of 18 2000 fell by 7.44% and 4.5% respectively from the previous day’s closing price. F. Explaining decision of the three companies to sell the shares of SAB TV, it was submitted that on March 27, 2000, when the prices were still falling and there was a lower circuit on both the stock exchanges, the three companies approached TIFIL and requested TIFIL to sell the bulk quantity of 4,00,000 shares of SAB TV. Towards the close of the day, TIFIL managed to sell the shares at Rs. 937.50 per shares. G. The above transactions were reported to NSE. This can be substantiated by referring to the Order Nos and the Trade Nos, which appear on the contract notes. Copy of the contract notes had already been submitted to SEBI by the three companies. Therefore, it was contended by the three companies that their intention was not to indulge in any unfair trade practice or to disturb the price and order matching mechanism of market. H. From March 28, 2000 to March 31, 2000 the share price had appreciated by 22.24% on the NSE and 25.97% on the BSE. Hence, even after the sale by the three companies the price did not fall on both the exchanges.
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/78/IVD4/Dec/08. 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.