sebi:WTM/TCN/ERO/30/AUG//2008
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Facts / Headnote
Interim restraint orders dated 29-09-2005 and 30-11-2005 and confirmatory orders dated 12-01-2006 and 31-05-2006 vacated with immediate effect, without prejudice to further action on completion of enquiry proceedings.
Provisions invoked
- s. 19
Regulations
- Reg. 7
Holding
The Whole Time Member vacated the interim restraint orders dated 29-09-2005 and 30-11-2005 and the confirmatory orders dated 12-01-2006 and 31-05-2006 that had restrained nineteen CSE-affiliated stock brokers from buying, selling or dealing in securities, with immediate effect. The vacation is without prejudice to any action SEBI may take on completion of the pending enquiry proceedings.
Full text
Page 2 of 7 Investments Ltd., S. T. Services Ltd. and Amluckie Investment Co. revealed that the shares of the above said companies had witnessed a sharp price variation ranging from 200% to 1900% within a short period between March 2005 to September 2005 on the Calcutta Stock Exchange (CSE). It was found that a set of brokers had traded in the said scrips and had manipulated their prices. In order to prevent and prohibit further irregularities, it became necessary to pass suitable directions against those found to have dealt in the scrip so as to protect the interests of the investors and also the integrity of the securities market. Therefore, the SEBI vide an interim order dated 29-09-2005 issued under Sections 11 (4) and 11B, pending inquiry, had directed the eleven brokers, viz. Sanju Kabra, Shivam Stock Broking Pvt. Ltd., D B & Co., Rajendra Prasad Shah, Badri Prasad & Sons, M Bhiwaniwala & Co., Ram Mohan Sarda, A V Shares & Stock Brokers Pvt. Ltd., Shyam Lal Sultania, Ahilya Commercial Pvt. Ltd. and S Jhunjhunwala & Co. not to buy, sell or deal in securities, in any manner, either directly or indirectly, till further directions. The trading in the six scrips were also suspended till further directions. Vide an order dated 12-01-2006 passed by the Board in the matter, pending investigations, it was interalia directed that the ex-parte interim
Page 3 of 7 Nageshwar Investment Ltd., Adinath Bio-labs Ltd., Globe Stocks & Securities Ltd., Goenka Business & Finance Ltd. and Coronet Industries Ltd. The shares of the above mentioned companies had witnessed a sharp price variation ranging from 69% to 323% within a short period from April 2005 and November 2005. The preliminary investigations revealed that the above said five companies had poor fundamentals and therefore the price rise was not supported. It was also revealed that a set of brokers had traded in those scrips and had followed a common modus operandi of artificially inflating the price and creating false volumes through continuous self deals executed on the same terminal and cross deals amongst themselves, thereby not only enriching themselves but also aiding and abetting the process of legitimizing the gains. The findings of the
Page 4 of 7 till further directions to be issued to them. It was also directed that the trading of the shares of the above mentioned 5 companies shall remain suspended till further directions. Vide order dated 31-05-2006, the interim
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