sebi:WTM/VKC/ID7/31/07

SEBI · SEBI · 2001-12-31 · V. K. CHOPRA, WHOLE TIME MEMBER

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Facts / Headnote

Noticees restrained from buying, selling, dealing or accessing the securities market for a period of six months from the date of the order, with immediate effect.

Provisions invoked

Regulations

Parties

Holding

The eight Noticees were found to have violated Regulations 4(b), 4(c) and 4(d) of the PFUTP Regulations by engaging in circular/structured/matched trades in the scrip of M/s. Roofit Industries Ltd. to create artificial volumes and manipulate prices, and were restrained from accessing the securities market for six months.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER Under Section 11 (4) read with 11B of the Securities and Exchange Board of India Act, 1992 and Regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995 1.0  BACKGROUND 1.1 Securities and Exchange Board of India (hereinafter referred to in short as ‘SEBI’) initiated investigation in the scrip of M/s. Roofit Industries Ltd. on the basis of a sudden spurt in volume of th traded on National Stock Exchange (NSE) during the period October 6, 1999 to December 12, 1999. SEBI directed NSE and Stock Exchange, Mumbai (BSE) to conduct further investigation end. NSE submitted its investigation report for the period November 8, 2000 to February 6, 2001 vide its letter dated December 31, 2001 and for the period February 7, 2001 to May 8, 2 letter dated September 11, 2002. BSE submitted its report for the period January 22, 2001 to May 4, 2001 on September 26, 2001 and for the period October 10, 1999 to December 12, 1999 v dated May 24, 2002. Considering the above, SEBI conducted investigation for the period October 06, 1999 to December 12, 1999 and November 08, 2000 to May 08, 2001. 1.2 M/s. Roofit Industries Ltd. (hereinafter referred to as “Roofit”) was incorporated on February 18, 1982 as a Private Limited Company in the name and style of M/s. Ratnagiri Asbestos Priva subsequently changed its

were requested to show cause as to why appropriate action under Section 11(4) read with Section 11B of the Securities and Exchange Board of India Act, 1992 including restraining th accessing the securities market and prohibiting them to buy, sell or deal in securities for an appropriate period of time, should not be passed against them for the violations of the prov Regulations 4(b), 4(c) and 4(d) of PFUTP Regulations. 2.2 Separate show cause notices all dated August 16, 2005 were issued to the four of the Noticees viz M/s Akira, M/s Onlooker, M/s Habiscus and M/s Mayfair Realtors to show cause as to why ap action under Section 11(4) read with Section 11B of the Securities and Exchange Board of India Act, 1992 including restraining them from accessing the securities market and prohibiting them sell or deal in securities for an appropriate period of time, should not be passed against them for the violations of the provisions of Regulations 4(b), 4(c) and 4(d) of PFUTP Regulations. 3.0 REPLY OF THE ENTITIES TO SHOW CAUSE NOTICE 3.1 The Advocate, Shri Vishwas Pathak replied to the show cause notices on behalf of the Noticees namely M/s Akira, M/s Onlooker, M/s Habiscus, M/s Mayfair Realtors, M/s Mayfair Paper and M vide letters all dated October 08, 2005. The same Advocate also replied to the show cause notices on behalf of the Noticee M/s Alkan and M/s M’Belle vide letters dated June 24, 2004 and 2004 respectively. Further, the same advocate had submitted reply to the aforesaid

·        It is also found that on many occasions two of the Noticees placed combined buy order. ·        It is also clear from the demat analysis of the brokers that the shares sold by one of Noticee and delivery of the same came from the demat account of another Noticee and the said details under the paragraph “demat analysis”. 5.4 The Noticees filed their reply to the show cause notices through one common advocate namely Shri Vishwas Pathak. In the said replies, the Noticees have taken a common stand that the c relationships can not be established just by minor share holdings, introduction to brokers, directorship in companies and personal relationships of the individual. The Noticees had not off other criteria to be followed in establishing the relationship. Further, they have not denied the linkage shown in the show cause notices. In this regard, I find that the relationship of the No clearly established by way of common directorship, signatories and subscribers to Memorandum of Association of the companies, introduction of the brokers, statements of the director of the entities, inter demat account transfer of shares and common address etc. MODUS OPERANDI OF THE NOTICEES 5.5 The promoter entities were in need of funds and therefore they approached M/s Amgis, a member of NSE and M/s Pals, a member, BSE. Thereafter, Shri Deven Mehta who was the common di M/s Amgis and M/s Pals introduced the Noticees to other brokers viz. M/s. Goldcrest, a member of NSE as well as BSE, M/s

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Source: SecMarx — sebi:WTM/VKC/ID7/31/07. 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.