TaxTMI 
TaxTMI 
2019 (10) TMI 1051
X X X X Extracts X X X X
X X X X Extracts X X X X
....ER Per : Justice M.T. Joshi 1. Aggrieved by the order of the Adjudicating Officer of Securities and Exchange Board of India (hereinafter referred to as 'SEBI') dated 16th June, 2017 imposing penalty in the amount of Rs. 15 lakhs so far as appellant Ms. Ritika Jhunjhunwala is concerned and Rs. 25 lakhs so far as appellant Mr. G. Moorthy is concerned under Section 15HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') for violation of the provisions of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as 'PFUTP Regulations'), the present appeals have been preferred against the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rades amongst the group. There were also sychronised deals and self trades between the groups on various occasions as noted in the order from para 12 to 21 of the impugned order. 3. The defense of Mr. Sudhir Jhunjhunwala and Mrs. Madhu Jhunjhunwala was that one Mr. Sanjay Talati was the key person who had transferred money and shares to his and his wife's demat account only for collateral and margin purposes for the shares to be purchased from the market. They were only financiers to the entire deal in which they had incurred huge losses and, therefore, a suit is filed in the Hon'ble Bombay High Court against the recovery of losses. The couple further informed SEBI that Mr. Sanjay Talati and appellant Mr. G. Moorthi were interested in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 15 percent commission on sale consideration. However, neither the money was returned nor any sale proceeds of the shares were given to him. Thereafter, after much persuasion Mr. Sudhir and Mrs. Madhu Jhunjhunwala entered into an MOU on 6th February, 2008 for the repayment. However, as no money was paid he filed a complaint and the case was pending in the Hon'ble Madras High Court during that period. He therefore pleaded that he was not part of any Jhunjhunwala group. He transferred the funds and shares to Mr. Sudhir and Mrs. Madhu Jhunjhunwala in good faith which was held by him for the period of more than one year earlier. He denied entering into any synchronized trading and as such he also wanted to be exonerated. 4. The Adjudicating ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ically submitted that the appellant was wrongly described as daughter of Mr. Sudhir and Mrs. Jhunjhunwala and, thus, on this wrong footing the whole proceedings continued. Upon pointed query, the learned counsel made a statement at the bar that the appellant Ritika is the niece of Mr. Sudhir jhunjhunwala. He however submitted that some documents sought by the present appellant were never produced. Investigation report was never supplied to the appellant though the proceedings were initiated after ten years. The record Annexure 'A' to the appeal would show that during the period the appellant had traded in various scrips and Annexure 'B' would show that in GCL trading she had actually suffered loss. In the circumstance, he submitted that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the platform of BSE and NSE and thereafter the same were sold in different quantities. More notably the percentage of trading of this group would show that they have contributed substantially in the buying and selling during that period i.e.8,34,472. Similarly, the sale was also of the substantive proportion i.e. 14,55,160. b. Most important factor is the intra group transfers between appellant Ritika and Mr. Sudhir and Mrs. Madhu Jhunjhunwala on BSE platform, which occurred within less than a minute which has been highlighted by the Adjudicating Officer as under: Buyer Seller Moorthi Madhu Ritika Sudhir Total Madhu 24999 52226 77....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1,46,437 29.97% 59.33% d. Similar is the case regarding similar trading on the NSE platform which are detailed as under:- Buyer Seller Sudhir Ritika Total Sudhir 5,000 5,000 Madhu 57,785 25,000 82,785 Ritika 14,500 14,500 GrandTotal 72,285 30,000 1,02,285 Further, synchronized trades were observed on the following dates: Date NSE Jhunjhunwala group Sync trades as % of daily traded qty at NSE Sync trades as % of clients Buy + Sell Total no. of trades Total traded quantity Day's Buy + Sell No. of Sync trades Sync trades (No. of shares) 20-Mar-07 55 19,641 36,202 5 5,00....