sebi:WTMN/201/IVD/8/04

SEBI · SEBI · 2001-05-04 · T M Nagarajan, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Ms. Aditi Dalal directed to disassociate herself from the securities market and not to deal in securities for a period of six months, effective immediately.

Provisions invoked

• s. 11
• s. 19

Regulations

• Reg. 4
• Reg. 11

Parties

• Ms. Aditi Dalal

Holding

Ms. Aditi Dalal was found to have violated Regulation 4(a), (c) and (d) of the FUTP Regulations, 1995 by executing matched/synchronized transactions in the scrip of Shrenuj & Co. Ltd. with Ms. Ashadevi Beriwala, creating an artificial market and manipulating the price of the scrip. She was directed to disassociate from the securities market and not deal in securities for six months.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER UNDER SECTION 11 AND 11 B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT 1992, READ WITH REGULATION 11 OF SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO THE SECURITIES MARKET) REGULATIONS, 2003

WTMN/201/IVD/8/04 1.0 BACKGROUND 1.1 Shrenuj & Co. Ltd. (SCL) is an importer of rough diamonds mainly from the Diamond Trading Company (DTC), London, and gets them cut, processed and polished in India and exports them to major international markets. The company exports diamonds and precious stones to many international markets, mainly Japan, the US, France, Belgium, Hong Kong, New Zealand and Germany. SCL is listed on the National Stock Exchange of India Ltd. (NSE). The Stock Exchange, Mumbai (BSE) and Ahmedabad Stock Exchange (ASE). 1.2 The price of the shares of SCL rose from Rs. 39 on May 04, 2001 to Rs. 43.70 on May 14, 2001. During the period May 02, 2001 to June 19, 2001, high volumes were observed especially on three days i.e. May 14, 2001, June 04, 2001 and June 15, 2001. It was observed that two brokers viz., CFL Securities Ltd. and DGP Securities Ltd. (both members of NSE) synchronised their orders by placing buy and sell orders in the scrip of SCL, with little time gap. 2.0 INVESTIGATION 2.1 The scrip was infrequently traded. Observing large volumes in the scrip during the above mentioned period, investigation was conducted and the brokers and the clients were called for ascertaining the reason of trading in comparatively large quantities. 2.2 It was observed that Ms. Aditi Dalal executed trades for 1,53,000 shares of SCL on NSE through CFL Securities Ltd DGP Securities Ltd. The counter party client in all these cases was one Ms. Ashadevi Beriwala who traded throug

on NSE during the period was 3,52,104. It is observed that the trades undertaken by them created a volume of 43.45% in the said scrip. 2.3 It is observed that Ms. Aditi Dalal is the wife of Shri Asim B Dalal, who is one of the directors of CFL Securities Ltd. Ms. Aditi Dalal bought 1,53,000 shares through CFL Securities Ltd. in three settlements , the details of which are hereunder: S.No. No. of shares sold % of shares bought to Mkt. Net 2001019 40000 90.47 2001022 61000 98.96 2001024 52000 97.52 The above trades were executed by her through matched transactions in 13 structured deals with Ms. Ashadevi Beriwala, involving 1,53,000 shares during the period. SN CFL Securities Ltd. DGP Securities Ltd. Client Name Buy Qty Sell Qty Client Net Qty Shares transferred to Client Name Buy Qty Sell Qty Client Net Qty Shares transferred from 2001019 CFL Sec. Own A/c 40000 0 40000 Entire 40,000 shares recd. As pay-out transferred to Aditi Dalal’s A/c Ashadevi Beriwala 0 40000 (40000) Entire 40,000 shares transferred from

Source: SecMarx — sebi:WTMN/201/IVD/8/04. 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.