Market manipulation requires specific evidence of collusion or orders above prevailing LTP; mere buying does not suffice, appeal allowed.

Whether trading in a listed scrip constituted market manipulation under Section 12A(a),(b),(c) of the SEBI Act read with Regulations 3 and 4 PFUTP: the Tribunal held that continuous buying, large public shareholding acquisition and contributing to positive last traded price do not alone establish fraudulent conduct; violation requires specific evidence such as buy orders placed above prevailing LTP, collusion or a meeting of minds, which were absent. Alleged connections and asserted motive to provide exit at inflated prices were unsupported by admissible evidence. Outcome: impugned order quashed and appeals allowed for the appellants.

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Issues: Whether the appellants, by their trading in the scrip of PMC Fincorp Ltd., violated Section 12A(a),(b),(c) of the SEBI Act, 1992 read with Regulation 3 and Regulation 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

Analysis: The Tribunal examined the material relied upon by the Adjudicating Officer including trading volumes, price rise, holdings, alleged fund transfers and the AO's findings on connection and motive. The Tribunal found that mere continuous buying on the exchange, acquisition of large public shareholding and accounting for a significant portion of buy quantity do not per se constitute fraudulent conduct under the PFUTP Regulations. The AO's findings that the appellants contributed to positive last traded price and new high price were held to be speculative in the absence of specific findings that buy orders were placed above the prevailing LTP or evidence of collusion or meeting of minds with exiting shareholders. The Tribunal also found that alleged connections to other entities relied upon by the AO were either irrelevant to the appellants or unsupported by findings, and that the asserted motive (to provide exit to large shareholders at inflated prices) was not established by admissible evidence.

Conclusion: The material on record does not establish violation of Section 12A(a),(b),(c) of the SEBI Act, 1992 read with Regulation 3 and Regulation 4 of the PFUTP Regulations by the appellants. The impugned order is quashed and the appeals are allowed; no order as to costs.

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