sebi:WTM/TCN/92/IVD3/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
Order passed finding noticees liable for circular trading and structured deals creating artificial price and volumes in SIL scrip; specific directions/penalty not stated in the excerpt
Provisions invoked
- s. 11B
- s. 11
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 4
- Reg. 4(a)
Parties
- Shri Rajkumar Chainrai Basantani
- Shri Bharat H Jain
- Jain Investment (Ramila Jain)
- Smt. Asmita R Shah
Holding
The noticees, including Bharat H Jain, Jain Investment, Asmita R Shah and Basantani, were found to have indulged in circular trading and structured deals creating artificial price and volumes in the SIL scrip at BSE and NSE. The order was passed under the 2003 Regulations following repeal of the 1995 Regulations.
Full text
2 1.2 Shri Rajkumar Chainrai Basantani (hereinafter referred to as “Shri Basantani”) is the Chairman of the company and is also an individual trading member of NSE. He is also one of the Directors of Kolar Sharex Pvt. Ltd., member, BSE.
3 2.1 In view of the findings of the investigation, a show cause notice dated August 31, 2005 was issued to the following entities advising them to show cause as to why suitable directions including restraining them from accessing the capital market and prohibiting them from buying, selling or dealing in securities for a specific period should not be issued against them under section 11 (4) and section 11B of the SEBI Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulation:
4 in as much as the trades were within the legal ambit as laid down by the authorities. iii. Shri Bharat Jain is no way concerned with the deals or trades carried on by other parties/ brokers/clients. All trades done by him were done with the sole motive of making profits/reducing losses in the normal course of trade. There was no meeting of minds with other trading entities as far as he is concerned. His trading volume in the scrip was abysmally low and in no way it could have created market interest in the scrip. SIL was on the only scrip he traded and the total volume of SIL entered into by him was only a fraction of the total transaction done by him in the other scrips.
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Source: SecMarx — sebi:WTM/TCN/92/IVD3/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.