sebi:WTM/VKC/ID6/86/2007

SEBI · SEBI · 2003-07-24 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Suspension of certificate of registration for a period of one month

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 13(4)
• Reg. 15
• Reg. 15(1)(b)

Parties

• M/s Abhilashaa Securities Pvt. Ltd.

Holding

The Whole Time Member imposed a minor penalty of suspension of certificate of registration of sub-broker M/s Abhilashaa Securities Pvt. Ltd. (SEBI Registration no. INS011209934) for a period of one month for violation of Code of Conduct in dealing in the scrip of MOH Ltd.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER [Under Regulation 13(4) of SEBI (Procedure for Holding Enquiry by  Enquiry Officer and Imposing Penalty) Regulations, 2002] 1.0 BACKGROUND 1.1              MOH Ltd, an Ahmedabad based company was incorporated in February 1993 in the name of MOH Granites Ltd and it was engaged in business of granites processing, mining and expor name of the company was changed to MOH Ltd. in the year 2000 when they ventured into the information technology area. The company had earlier come out with public issue of 67,00,000 par in August 1996 to part finance granite project located at Mahesana in Gujarat. However, after the issue no information about the implementation of the project was available. 1.2              MOH shares were listed at Bombay Stock Exchange Ltd. (BSE) and Ahmedabad Stock Exchange (ASE). The price of MOH scrip started increasing from a level of Rs.240.50 on August 01, 2 level of Rs.799/- on September 19, 2000 with daily trading volumes ranging between 100 to 10,000 shares. Prior to this, the price of the scrip had fallen to Rs 223/- from Rs 270 between 2000 to July 26, 2000 when daily trading volume were between 12,500 to 1,23,000 shares. 1.3              After an internal investigation in the matter, BSE concluded that the price and volume of the scrip were manipulated by certain connected entities by entering into artificial transactions in the circular trading. It was observed that t

4.1.6 Regarding placing of the order at 8% above the previous closing, they have submitted that it is their duty to execute the trades for them at the rate instructed by them. Secondly the was going up at that time and as such they had no reason to doubt the authenticity of their clients trades since they were executing trades in accordance with market trend. 5.0 HEARING 5.1 The Noticee had asked for a personal hearing in their above reply to show cause notice. Accordingly, an opportunity of personal hearing was granted to the Noticee and they were advised to a personal hearing before me at SEBI’s Head Office at Mumbai on April 24, 2007. Shri Vinod Parekh, Advocate attended the hearing on behalf of the Noticee. Pursuant to the hearing, the submitted its written submissions vide their letter dated May 4, 2007 on the following lines: 5.1.1 That there was no violation of the provisions of the SEBI Act, 1992 and the SEBI (Stock Brokers & Sub Brokers) Regulations, 1992. 5.1.2 That they carried out the instructions of the clients to execute trades in the scrip of MOH. They are not investment advisors so as to advise their client to trade or not to trade in an Their role is restricted to execute trades on the instructions of the clients and to ensure that the trades are carried out in the permissible and legal manner and that the payment/deliver the stock exchanges are met with within prescribed time period. Further they did not have any reason to doubt the integrity of their client

deliveries etc. on behalf of Tanaya Securities. No acknowledgement was taken by Noticee from Shri Hiten Mehta for receipt of contract notes. Noticee however submitted that they h acknowledgement of Shri Hiten Mehta in their 'Shares Delivery Book/Register' for delivery of shares on behalf of Tanaya Securities. 6.6 From the party ledger of Tanaya Securities maintained with Noticee, it was found that on October 04, .2000 there was a Journal Voucher of Rs.1,20,900/-, details whereof on the voucher state amount paid to AM Investment on behalf of Tanaya Securities". In response to this, Noticee submitted that they had made this payment to AM Investments on the instructions of their clien Securities. However, Noticee could not produce any written instructions from their client about the payment. I find that the client of the Noticee had deliverable position of 164 shares in Se No. 21 of 2000 and these shares were actually delivered from the account of one Shri Anil Mistry which was also used by AM Investment to whom Noticee had made payment of Rs 1,20,900 6.7 Shri Gaurang Patel, Director of Tanaya Securities in his statement dated April 15, 2002 submitted that the orders on behalf of them were placed by their other Director Shri Parag Patel and the No not send them any contract notes/bills. He further stated that they had received a payment of Rs.2.5 lakhs and an amount of Rs.1,10,000/- was payable by Noticee to Tanaya Securities. R payment to A M. Investments, Shri Patel submitted

Source: SecMarx — sebi:WTM/VKC/ID6/86/2007. 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.