sebi:WTM/VKC/ID6/92/2007
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Facts / Headnote
Minor penalty of 'censure' imposed on Shailesh Shah Securities Pvt. Ltd., Dolat Capital Markets Pvt. Ltd. and Nirpan Securities Pvt. Ltd.; no penalty on Shri Pankaj D Shah
Provisions invoked
- s. 19
Regulations
- Reg. 13(4)
- Reg. 7
- Reg. 4(b)
- Reg. 25
Parties
- Shailesh Shah Securities Pvt. Ltd.
- Dolat Capital Markets Pvt. Ltd.
- Nirpan Securities Pvt. Ltd.
Holding
The Whole Time Member imposed a minor penalty of 'censure' on the three corporate entities of the Shailesh Shah Group for executing matched/negotiated trades that avoided delivery, contrary to SEBI circulars on negotiated deals, while finding no sustainable evidence of manipulation under the PFUTP Regulations and imposing no penalty on Shri Pankaj D Shah.
Full text
Page 2 of 14 Ltd. (OTCEI). While three of the broking entities are corporate entities viz. Shailesh Shah Securities Pvt. Ltd., Dolat Capital Market Pvt. Ltd. and Nirpan Securities Pvt. Ltd., the fourth one is an individual membership in the name of Shri Pankaj D Shah (INB 031068118), a broker of CSE. The group is commonly managed by four brothers namely Shri Pankaj D. Shah, Shri Shailesh D Shah, Shri Rajendra D Shah, Shri Harendra D Shah, sons of Shri Dolatrai Amritlal Shah, who act as directors of most of the entities of corporate group. The other directors in their companies are their family members. All the four entities are part of Shailesh Shah Group.
Page 3 of 14 trades involving large quantities of shares between its different cards at the same exchange. The group had large sales and carry forward positions in both NSE and BSE during the period till first week of March 2001. The sales and carry forward positions were concentrated in index scrips such as Reliance, ITC, Infosys, Hindustan Lever etc., during the above period. In view of above facts as also since the group operated through large number of broking concerns spread across various exchanges, Securities and Exchange Board of India (hereinafter referred to in short as “the Board”) conducted investigation into their dealings to ascertain as to whether any provisions of Securities and Exchange Board of India Act, 1992 or various rules and regulations framed there under have been violated.
Page 4 of 14 Enquiry Officer and Imposing penalty) Regulations, 2002 (hereinafter referred to as “the Enquiry Regulations”). He had served a show cause notice dated October 10, 2001 along with interim investigation report and advised all the entities to show cause as to why an action under Regulation 25 of Stock brokers Regulations should not be recommended to be imposed on them. The brokers vide their letter dated December 10, 2001 requested the Enquiry Officer to furnish a copy of the Enquiry Report as well as a complete set of all the documents relied upon by him to substantiate the allegations contained in the Show Cause Notice dated October 10, 2001. The Enquiry Officer vide letter dated January 4, 2002 forwarded a copy of the Enquiry Order to them. Further, an opportunity of personal verification of the documents was also given and this process was carried out by them on February 11, 2002.
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Source: SecMarx — sebi:WTM/VKC/ID6/92/2007. 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.