TaxTMI 
TaxTMI 
2014 (3) TMI 1172
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.... and Imposing Penalties by Adjudicating Officer) Rules, 1995 for violation of Regulations 4(1) and 4(2)(e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (for short FUTP Regulations). 2. Brief facts leading to the present case are that SEBI found that the price of the scrip of Aditya International Ltd., hereinafter referred to as AIL, rose abnormally between December 2003 and June 2004. Accordingly, investigation was conducted by the competent authority and it was, interalia, found that the appellant, namely, Saumil Bhavnagari and VS Intermediaries, of which Saumil Bhavnagari is the proprietor, bought 2,05,051 shares and sold about 23,000 shares. During the investigation per....
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....the year ending in 2004, the appellant traded in the said scrip of AIL purely on business considerations. There was no malafide intention of manipulating the scrip and that it was the conscious decision of the appellant to invest in the scrip. The appellant further submitted that he not only placed orders above the LTP, but also on certain occasions placed orders below the last traded price. 5. After considering the material brought on record before the learned adjudicating officer as well as after affording due opportunity of hearing to the appellant, he came to the conclusion that the appellant was guilty of manipulating the price of the scrip and imposed a monetary penalty of Rs. 5 lac under Section 15HA of the SEBI Act for violation ....
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....ble at a lower price, the appellant bought them at a higher price only with a view to give false representation to the general public about the rise in price of the scrip of AIL. This was repeatedly done by the appellant by placing orders for nominal number of shares sometimes as the first trade order of the day. Such trades undoubtedly have a potential of raising the price of the scrip by sending a wrong signal to the gullible investors about the activity or price hike in the scrip of the company. It is relevant to note that out of 85 trades, most of the trades placed are above the LTP and some of the trades placed by appellant were below the LTP. This was done evidently with ulterior motives, because, if shares were available for a lesser....
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....before us that prior to the trades placed by appellant there were trades executed in the shares of AIL at a lower price and, thus, it is established that there were buyers and sellers of AIL shares in the market. Therefore, reliance placed on decision of this Tribunal in case of Rajesh Jhaveri (supra) is misplaced as the said decision does not support the case of the present appellant. 10. For ascertaining whether the scheme adopted by the appellant is legally permissible or not, it is necessary to analyze the trading data as set out in the trade and order logs. A perusal of pages 78, 79 and 80 of the paper book makes it evident that it is the appellant who has traded with Code No. 872 by placing repeated orders with a nominal increase o....
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....reas AIL's annual results came out only after March 2004, and the December 2003 quarterly results were published only on January 2004 as has been noticed by the adjudicating officer in paragraph 21 of the impugned order. From the nature of the trading, it is clear that the appellant has sought to create a misleading impression that a large number of persons were trading in the scrip. This lends support to the finding of the adjudicating officer in paragraph 20 of the impugned order. "... but by purchasing shares at the higher price in LTP in most of the trades, the noticee had given a wrong impression about the liquidity of the scrip in the market. It must not be forgotten that every trade establishes the price of the scrip and the noticee'....