TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal quashes order due to lack of evidence, finds appellant's trades genuine.</h1> <h3>M/s Rajesh N. Jhaveri Prop. Shri Gautam N. Jhaveri Versus Securities and Exchange Board of India</h3> The appeal was allowed, and the impugned order was quashed by the Tribunal due to inconsistencies and lack of concrete evidence in SEBI's investigation. ... - Issues Involved:1. Price manipulation in the scrip of Aditya International Ltd (AIL).2. Violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations).3. Violation of Code of Conduct prescribed for Sub Brokers under SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (Sub Broker Regulations).Summary:Issue 1: Price Manipulation in the Scrip of AILThe Bombay Stock Exchange Ltd. (BSE) investigated the scrip of Aditya International Ltd (AIL) due to unusual price movements between December 18, 2003, and February 13, 2004. The price of the scrip increased from Rs. 65 to Rs. 307 and then fell to Rs. 25.70 by June 1, 2004. During the investigation period, ASE Capital Markets Ltd., Galaxy Broking Ltd., and Grishma Securities (P) Ltd. had significant concentrations in gross and net purchases. SEBI ordered an investigation to determine the motive behind these concentrated purchases and any potential nexus between the buyers and the company/promoters.Issue 2: Violation of PFUTP RegulationsAn Adjudicating Officer (AO) was appointed to investigate violations of Regulations 4(1) and 4(2)(e) of PFUTP Regulations and Clauses A(1), A(2), D(1), D(4), D(5) of the Sub Broker Regulations by M/s. Rajesh N. Jhaveri. A Show Cause Notice (SCN) alleged that the appellant was involved in price manipulation by placing orders at prices higher than the Last Traded Price (LTP) and influencing the scrip price in multiple instances. Despite multiple opportunities for a hearing, the appellant either requested more time or did not attend. The appellant denied the charges, claiming that all transactions were at market rates, delivery-based, and within regulatory limits.Issue 3: Violation of Code of Conduct for Sub BrokersThe AO concluded that the appellant was involved in price manipulation, citing that 52.17% of the appellant's trades were higher than LTP. The AO referenced the Securities Appellate Tribunal's order in Shailesh Jain vs. SEBI, emphasizing the appellant's conscious manipulation. The appellant's arguments that small trades could not influence the market were dismissed due to the illiquid nature of the scrip. The AO found that the appellant's actions gave a false impression of liquidity and manipulated the scrip price, violating Regulations 4(1) and 4(2)(e) of PFUTP Regulations and the Code of Conduct for Sub Brokers.Conclusion:The appellant's appeal was allowed, and the impugned order was quashed. The Tribunal noted several inconsistencies and lack of concrete evidence in SEBI's investigation. It was highlighted that another entity, Jhaveri Trading & Investment Pvt. Ltd., involved in similar transactions, was let off with a caution, indicating potential discrimination. The Tribunal concluded that the appellant's trades were genuine, based on the belief in the company's strong fundamentals, and did not substantiate the allegations of market manipulation or violation of the Sub Broker Regulations.
TaxTMI 
TaxTMI 
