TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1232
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.... Show Cause Notice issued against these 15 Noticees, who were divided into 3 broad categories, is as under: First category- Profit Makers: (Noticees No. 1-5) a) It was alleged that five entities namely, Nirmal Kumar Soni, Partha Sarathi Dhar, SAAR Commodities Private Limited, Manan Sharecom Private Limited and Kanhya Trading Company were the entities that made profit by executing trades which were allegedly executed based on advance information of stock recommendations given by guest experts and thus, these entities were referred to as "Profit Makers". Second category- Enablers: (Noticees No. 6-10) b) It was alleged that five entities namely, Nitin Chhalani, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, SAAR Securities India Private Limited and Ramawatar Lalchand Chotia aided/assisted Profit Makers in making profit based on advance information of stock recommendations of guest experts. This category of entities allegedly provided necessary support/credentials viz. trading accounts/ trading terminals, log-in IDs and passwords, etc., for aiding and abetting Nirmal Kumar Soni to execute trades in his account and in the accounts of SAAR Commodities Private Limited (hereinaf....
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....he advance possession of non-public information about the recommendations given by Guest Experts on the shows. The scheme involved Guest Experts to share, directly or indirectly, their recommendations with Nirmal Kumar Soni and Partha Sarathi Dhar, before the same were broadcasted on Zee Channel. The exact timings of the shows were also shared among the Guest Experts and Noticee Nos. 1 and 2. e) Based on the prior possession of this non-public information, Noticee No. 1 and 2 placed the first leg of orders in the same scrip/contract (first- leg of the trade) through the trading account of Noticee Nos. 1 to 5, before the telecast of the recommendations made by Guest Experts. Thereafter, the Noticees squared off the position (second leg of the trade) immediately around the time or after the recommendations were telecasted on the shows, thereby earning significant profits from the favourable movement in price and volume of the scrip/contract. f) The Enablers (Noticees Nos. 6 to 10) provided log-in credentials/ trading accounts/ client codes and passwords/ NEAT terminal details of broker etc. and enabled trades to be executed in the account of Noticees Nos. 3, 4 and 5 by the Notice....
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....e released without permission from SEBI. f) Banks, where the Noticees (1 to 5 and 11 to 15) are holding Bank accounts are directed to ensure that no debits shall be made, without the permission of SEBI, in respect of the bank accounts held jointly or severally by these Noticees, except for the purposes of transfer of funds to the Escrow Account. Further, the Depositories are also directed that no debit shall be made, without permission of SEBI, in respect of the demat accounts held by the aforesaid Noticees. However, credits, if any, into the accounts maybe allowed. Banks and the Depositories are also directed to ensure that all the aforesaid directions are strictly enforced. Further, debits in the bank accounts may also be allowed for amounts available in the account in excess of the amount to be impounded. Banks are allowed to debit the accounts for the purposes of complying with this Order. g) Registrar and Transfer Agents are directed to ensure that, they neither permit any transfer nor redemption of the securities, including Mutual Funds units, held by Noticees nos 1 to 5 and 11 to 15. 5. Vide the said Interim Order cum Show Cause Notice the Noticees were called upon to s....
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....passed in respect of these 10 entities and proceedings initiated against them vide the SCN dated February 08, 2024 were disposed of. Inspection and hearing 10. The Authorized Representative (AR) of Noticee No. 13 (Mr. Himanshu Gupta), vide letter dated February 26, 2024 sought inspection of a list of documents. The 1st inspection of documents was provided to the AR on March 20, 2024 wherein inspection of physical file containing the Investigation Report (IR) along with the relevant annexures was provided. Along with the physical inspection, a CD containing the copies of relevant documents was provided. Further, the AR vide letter April 18, 2024, reiterated the request for inspection of all the documents mentioned in the letter. Pursuant thereto, 2nd inspection of the documents was scheduled on June 26, 2024 wherein certain documents sought by the said Noticee were provided. Subsequently, Noticee No. 13 filed his reply vide letter dated July 26, 2024. Hearing in the matter was scheduled on September 10, 2024, which was attended by the AR of Noticee No. 13. During the hearing, the AR made submissions in line with the reply filed vide letter dated July 26, 2024. Subsequently, post-h....
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....ng credited to the bank accounts of Noticee Nos. 1 to 5, SEBI enlarges its powers under Section 11(4)(d) to direct Mr. Himanshu Gupta to, inter alia, deposit the alleged gains. B. Violation of Principles of Natural Justice qua inspection of documents; i. Noticee No. 13 provided a list of documents which were sought by him and which were either not provided by SEBI or were partially provided. He sought to place reliance on the various judgments such as Judgments of Hon'ble Supreme Court in the matters of T. Takano v. SEBI (2022) 8 SCC 162 and Reliance Industries v. SEBI (2022) 10 SCC 181. Judgments of Hon'ble Guwahati High Court in the matter of Sunita Agarwal v. Securities and Exchange Board of India and Another 2022 SCC OnLine Gau 2325, Judgment of Bombay High Court in the matter of Ashok Dayabhai Shah And Ors v. SEBI, Judgments of Hon'ble SAT in the matters of Mukesh D. Ambani v. SEBI and National Stock Exchange of India Ltd. v. SEBI. C. No reason to continue ex-parte ad-interim order; i. In the present matter, SEBI has failed to establish any urgency to pass an interim order against Mr. Himanshu Gupta. He was not called upon to join the inquiry / investigation on the basis....
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....observed that the charge of fraud under the PFTUP requires higher threshold. In support, the Noticee relied on the order of SEBI in the matter Keynote Corporate Services Limited Order No. WTM/RKA/EFD / 46/2016 dated April 06, 2016. xi. Mr. Himanshu Gupta has not "dealt in securities" as he has not "knowingly" designed any scheme to influence the decision of the public or of profit makers. xii. SEBI (Investment Advisors) Regulations, 2013 exempts comments made in good faith with respect to any 'trends in the securities market'. xiii. Mr. Himanshu Gupta is not an 'insider' in terms of Regulation 2(1)(g) of the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations") who would be prohibited to communicate any information to a third person. Mr. Himanshu Gupta is not a SEBI registered intermediary and therefore even restrictions, if any, under any of such SEBI regulations i.e. SEBI (Investment Advisors) Regulations, 2013 or SEBI (Research Analysts) Regulations, 2014, would not apply to the Noticee thereby prohibiting communication of such information. E. No connection between Mr. Himanshu Gupta and the Profit Makers and the allegations of communication of recom....
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....ade got executed only on 2:29:51 PM which is after the recommendation was out in public. ix. There is no evidence with respect to Mr. Himanshu Gupta being in touch with Mr. Nirmal Soni or any other Profit Makers. Despite citing 208 instances of trades being undertaken by profit makers based on Mr. Himanshu Gupta's recommendation, SEBI has not provided even single instance where SEBI has any evidence for communication of recommendation by him. x. Liability of Mr. Ashish Kelkar, giving a third party the information of the scrips which Mr. Himanshu Gupta was going to recommend, cannot be foisted upon Mr. Himanshu Gupta since the said information was communicated to Mr. Ashish Kelkar on a bona-fide basis without there being any intention or involvement or knowledge about the entire scheme. F. Perusal of time period of appearance on Zee Business incorrect and enlarged; i. There have been discrepancies between: i. The timing of recommendations as recorded by SEBI and the actual timing in the video files when the scrip pop-up appears and ii. The timing of recommendations as recorded by SEBI and the actual timing in the video files when Mr. Himanshu Gupta begins his verbal recom....
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....ecuted any trades which either induced anyone to trade or even caused a loss to anyone. vii. The allegation of fraud cannot be based on allegations without any convincing evidence. In the present case, SEBI has not proved that the alleged advance stock recommendation given by the 'Guest Experts' were based on unpublished price sensitive information or material non-public information or SCPL and MSPL availed some benefits which other investors did not receive. Thus, only because SCPL and MSPL had traded during the investigation period, it cannot lead to the conclusion that SCPL and MSPL are guilty of any violation at all. viii. There was no element of inducement involved in the acts of SCPL and MSPL which is required for establishing charges under Section 12A(a) to (c) of SEBI Act read with PFUTP Regulations. In support various cases were relied upon. ix. The proposed direction of disgorgement is moot now as SEBI has already passed a settlement order in respect of some of the Noticees and as a part of settlement, the alleged amount has already been deposited with SEBI. Thus, the proposed direction of disgorgement qua SCPL and MSPL is not maintainable. Without prejudice to the ....
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....if that information is obtained through deceit. iv. There is no evidence to show that he received profits, either in cash or in any manner or that he had any profit sharing arrangement. v. He cannot be held liable for disgorgement of gains on a joint and several basis. vi. He has already been restrained from trading in securities which is his only business, taking into account the factors that no investors have suffered any loss, no penalty should be imposed considering the factors under Section 15J of the SEBI Act. Kanhya Trading Company 15. KTC vide its written submissions dated January 04, 2025 made the following submissions. i. It had a share trading account with Motisons Shares Private Limited. Mr. Nirmal Soni was working with Motisons Shares Private Limited till July 2022. Mr. Nirmal Soni used to provide customer support to it and Mr. Nitin Chalani and always used to solve queries using trading software, share trading, etc. In this context, Mr. Nitin Chalani and Mr. Nirmal Kumar Soni had Whatsapp conversation. ii. The fund transfer between Mr. Nirmal Kumar Soni and Mr. Nitin Chalani was for an urgent personal requirement for short term basis. The same was partly r....
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....d in the SCN." 17. Thus, the scope of the present order is limited to the remaining 5 Noticees viz. Mr. Himanshu Gupta, Mr. Partha Sarathi Dhar, MSPL, KTC and SCPL. However, reference shall be made to any of the Noticees, if required for the purpose of dealing with the allegations levelled against the above named 5 Noticees. 18. I now proceed to deal with the allegations made against the said 5 Noticees in light of the submissions made by them. ROLE OF HIMANSHU GUPTA 19. At the outset, I find it relevant to deal with a preliminary objection raised by Mr. Himanshu Gupta relating to non-adherence to principles of natural justice in the context of inspection of documents sought by him. 20. Mr. Gupta has provided a list of documents which were sought by him, and submitted that the same were either not provided by SEBI or were partially provided. I have perused the list of documents sought by Mr. Gupta vis-a-vis list of documents provided for inspection by SEBI. In the first inspection, conducted on March 20, 2024, the investigation report and the annexures thereof, based on which the allegations were levelled on Mr. Gupta were provided. Pursuant thereto, Mr. Gupta reiterated the r....
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.... Search and Seizure operation was not conducted at his premises. The Panchnama of other entity is confidential material concerning a third party(ies). 6 Copy of Application filed by the Investigating Authority to the Magistrate or Judge of such designated court in Mumbai for an order for the seizure of such books, registers, other documents and record. Not provided Search and Seizure operation was not conducted at his premises. The Panchnama of other entity is confidential material concerning a third party(ies). 7 Copy of the prima facie opinion formed by SEBI with respect to pattern of correlation of trades of suspect entities with recommendations made by guest experts on Zee Business. The requested analysis was part of the Investigation Report and its accompanying Annexures, which were already provided. 8 Copy of data contained in electronic devices seized by SEBI Partly provided. All relevant documents/data pertaining to Mr. Gupta were already provided. Data pertaining to co-Noticees was not provided as it involves confidential material concerning third party(ies). 9 Copy of Statement recorded during search and seizure operation conducted by SEBI. Partly pro....
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....tion Report and its accompanying Annexures which were already provided. 21 Copy of analysis of recorded videos of shows provided by Zee Media Corporation Limited. The requested analysis was part of the Investigation Report and its accompanying Annexures, which were already provided. 22 Copy of analysis of Account Opening Forms (AOF) provided by banks The requested analysis was part of the Investigation Report and its accompanying Annexures, which were already provided. 23 Copy of analysis of relevant material available on Ministry of Corporate Affairs (MCA) website. The requested analysis was part of the Investigation Report and its accompanying Annexures, which were already provided. 24 Copy of order of the Whole Time Member approving initiation of proceedings under section 11(4A) and 11B(2). Provided. 25 Copy of the statement recordings of the Nirmal Kumar Soni, Kiran Jadhav, Ashish Kelkar, Himanshu Gupta and Mudit Goyal as conducted by SEBI. Partly Provided. Only relevant statement recordings wherein Mr. Gupta is specifically mentioned were provided. 26 Copy of information collected from MCA website, etc, AOF/ KYC details received from banks, etc to show connect....
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....vestigation Report and its accompanying Annexures, which were already provided. 35 Copy of WhatsApp chats between Ashish Kelkar and Nirmal soni; as well as chats purportedly between Ashish Kelkar and Himanshu Gupta, or any other chats referencing Himanshu Gupta, wherein the picutres of currency notes were shared. The requested extracts were part of the Investigation Report and its accompanying Annexures, which were already provided. 36 Copy of any other documents, chats, CDRs and Video Clipping pertaining to Himanshu Gupta as available with SEBI. All relevant documents/data pertaining to Mr. Gupta were already provided. Data pertaining to co-Noticees was not provided as it involves confidential material concerning third party(ies). 37 All the documents received, communications made by SEBI with any person in respect of the present proceedings, not provided along with the Interim Order, if any All relevant documents/data pertaining to Mr. Gupta were already provided. Data pertaining to co-Noticees was not provided as it involves confidential material concerning third party(ies). 38 Any other statement recorded by SEBI during the investigation / inspection. Partly provide....
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....ta were the same as informed by Ashish Kelkar in the Whatsapp chat dated June 30, 2022, prior to broadcast of the recommendations; d) Multiple chats of Ashish Kelkar sharing certain calculations with Kiran Jadhav, in which there was also a reference of HG (Himanshu Gupta); e) Recommendation given by Mr. Himanshu Gupta for the scrip PNB 42CE and the execution of trades by SCPL and MSPL in the scrip of PNB 42CE; f) Telegram chats between Ashish Kelkar and Kiran Jadhav (982XXXX880), wherein it was seen that they were sharing with each other calculations forwarded by Nirmal Kumar Soni to them. It was noticed that there was mention of HG (Himanshu Gupta) in such messages. g) WhatsApp chat between Ashish and "Lalu", wherein it was observed that image of one Rs.10 note was exchanged between them with a mention of name along with mobile number as "Gupta ji -844XXXX0469". The said number belonged to Himanshu Gupta. 25. Against the other guest experts viz. Kiran Jadhav, Ashish Kelkar, Mudit Goyal and Simi Bhaumik, the SCN has relied on direct evidence(s) including data contained in electronic devices seized during search and seizure operation, analysis of KYC details and bank accoun....
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....(Tata Motors and Indiacem) that HG was going to recommend on his show. It was further stated in the SCN that the timing of the appearances of Guest Experts viz., Mudit Goyal, Himanshu Gupta, and Ashish Kelkar was around the same time as informed by Ashish Kelkar to Nirmal Kumar Soni. Further, as per the SCN, the scrips/contracts recommended by the aforementioned Guest Experts i.e. Himanshu Gupta, Ashish Kelkar and Mudit Goyal, were also the same as informed by Ashish Kelkar in the Whatsapp chat. The screenshot of the aforesaid conversation dated June 30, 2022 is produced below: Screenshot 1 29. I note that Mr. Himanshu Gupta indeed appeared on Zee Business around the same time as informed by Ashish Kelkar to Nirmal Kumar Soni and also recommended the scrips of Tata Motors and Indiacem. However, it is pertinent to note that the profit makers did not trade in the scrips of (Tata Motors and Indiacem) on the date of the recommendation. It is contended by Mr. Gupta that even the record does not anywhere show that any of the Profit Makers traded on the basis of this recommendation. Further, as per the trade log of June 30, 2022, only two trades were executed by profit makers on that d....
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....he INR 10 was used to share commission generated out of trades executed based on the recommendation of Guest Experts. However, the SCN does not adduce any direct evidence to prove any sharing of profits by Mr. Himanshu Gupta or receipt of any kickbacks from the alleged scheme. Rather, the SCN refers to a probability of sharing of profits. Thus, mere inclusion of Mr. Himanshu Gupta's number in the third party chat does not establish that he received money, particularly when the SCN has not adduced any direct evidence to support such a claim. This, the evidence is insufficient to establish Mr. Gupta's participation in any profit-sharing arrangement or his culpability in the alleged scheme. 33. Accordingly, I find that to support the allegation levelled against Mr. Himanshu Gupta, neither the evidence of execution of trades in the scrips of (Tata Motors and Indiacem) on the date of the recommendation, nor the evidence of communication regarding the scrip 'PNB 42 CE' from Mr. Himanshu Gupta to SCPL and MSPL is available. The SCN also does not bring forth any prior arrangement between Mr. Himanshu Gupta and other entities be it Profit Makers, Enablers or Guest Experts. Thus, co....
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....h were considered for arriving at the unlawful profits, etc. Since the amount of Rs.7,41,29,648 has already been disgorged as a part of the settlement proceedings, the issue of passing a direction of disgorgement of the unlawful profits has become infructuous. Consequently, any discussion on the submissions made by the said Noticees on calculation of the unlawful gains has also become academic. Accordingly, I would not delve into the submissions made by these entities on the methodology adopted for calculation of the unlawful gains, joint and several liability of the Noticees and other related submissions. 37. Taking note of the above, the following issues require consideration: a) Whether Partha Sarathi Dhar, SCPL, MSPL and KTC have violated the provisions of Sections 12A(a), 12A (b), 12A(c) and 12A(e) of SEBI Act and Regulations 3(a), 3(b), 3(c), 3(d), 4(1) and 4(2)(d) of SEBI (PFUTP) Regulations as alleged in the SCN? b) If the answer to the above question is in the affirmative, what directions are required to be issued and what quantum of monetary penalty should be imposed on Partha Sarathi Dhar, SCPL, MSPL and KTC? 38. Before dealing with the alleged violations of sectio....
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....wth of securities market and to promote investors protection. Securities market is based on free and open access to information, the integrity of the market is predicated on the quality and the manner on which it is made available to market. 'Market abuse' impairs economic growth and erodes investor's confidence. Market abuse refers to the use of manipulative and deceptive devices, giving out incorrect or misleading information, so as to encourage investors to jump into conclusions, on wrong premises, which is known to be wrong to the abusers. The statutory provisions mentioned earlier deal with the situations where a person, who deals in securities, takes advantage of the impact of an action, may be manipulative, on the anticipated impact on the market resulting in the "creation of artificiality'. 22. From the line of decisions cited herein above, it can be inferred that as a matter of principle, while interpreting this regulation, the court must weigh against an interpretation which will protect unjust claims over just, fraud over legality and expediency over principle. Once this rule is clearly established, individual cases should not pose any problem." 39. Thus, the purpose ....
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....pending recommendations in an unfair manner to the detriment of general investors. As stated in the SCN, they used this advance information to make profit by trading on the basis of such advance information knowing that investors would act on the recommendations, and the price and volume would move in the expected direction enabling them to make profit. The Noticees including the profit makers had a reasonable expectation of an increase in the price and volume traded in the scrip/contract following the broadcasting of the recommendations on the channel. The SCN also brought out how these recommendations had made impact on price and volume of the scrip/contract being recommended, creating opportunities for making unlawful gains on the basis of advance information. Some samples to illustrate how these recommendations of Guest Experts impacted the market price and volume are reproduced below: * August 25, 2022: Impact on the price and volume based on recommendations by Simi Bhaumik Chart 1 Chart 2 Table No. 3 Recommendation date August 25, 2022 Recommendation time (t) ~10:42 AM Scrip/Contract Recommended BALRAMPUR CHINI Recomm ended Levels (For Cash) Recommended Price (IN....
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....+15) after the recommendation, the average trading volume remained elevated at 56,221 shares, 81,280 shares and 90,667 shares for BALRAMCHIN (EQ), BALRAMCHIN Sep Futures and BALRAMCHIN 360CE respectively. * September 02, 2022: Impact on the price and volume based on recommendation by Kiran Jadhav Chart 3 Table No. 4 Recommendation date September 02, 2022 Recommendation time (t) ~02:15 PM Scrip/Contract Recommended INDIAMART 4600 CE Recommended Levels Recommended Price (INR) 290 Target Price (INR) 580/600 Stop Loss (INR) 240 Price Impact Post Recommendation Average High/ Low Variation % in preceding 15 mins [t-15] 1.28 Average High/ Low Variation % during recommendation time and succeeding 2 mins [t and t+2] 12.64 Average High/ Low Variation % in succeeding 15 mins [t+15] 5.06 Volume Impact Post Avg Trading Vol in Preceding 15 mins [t-15] (number of shares/underlying shares) 2411 Recommendation Avg Trading Vol during recommendation time and succeeding 2 mins [t and t+2] (number of shares/underlying shares) 36,300 Avg Trading Vol for succeeding 15 mins [t+15] (number of shares/underlying shares) 14,540 Relevant Price Sensitive Corporate Announ....
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....6. The aforesaid four Noticees have also contended that the recommendations by guest experts were not fraudulent or were meant to deceive the other investors or they did not induce any one to trade in the securities. It is also argued that the SCN has ignored the definition of fraud under Regulation 2(1)(c) of the PFUTP regulations. I note that the definition of fraud given under Regulation 2(1)(c) of PFUTP Regulations is an 'inclusive' definition. It inter alia includes any act, expression, omission or concealment committed whether in a deceitful manner or not by a person or by any other person with his connivance or by his agent while dealing in securities in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance of any loss. In this regard, I refer to the following observations of Hon'ble Supreme Court in the Kanaiyalal Baldevbhai Patel (supra) matter: 5. "If Regulation 2(c) of the 2003 was to be dissected and analyzed it is clear that any act, expression, omission or concealment committed, whether in a deceitful manner or not, by any person while dealing in securities to induce another person to deal in securi....
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....ced would not have acted in the manner that he did but for the inducement is sufficient. No element of dishonesty or bad faith in the making of the inducement would be required." 47. The observations made by Hon'ble Supreme Court are applicable to the present case also. For any entity to be charged for fraud under the PFUTP regulations, the emphasis is on whether such act, expression, omission or concealment has/had the effect of inducing another person to deal in securities. In the present case, the SCN has clearly brought out the evidence of direct/indirect sharing of non-public information regarding recommendations, by Guest Experts to Profit Makers in advance and subsequent trading based on such information. Some of these instances are being reproduced below. * * Sharing of advance information between Simi Bhaumik and Partha Sarathi Dhar followed with trade by Partha Sarathi Dhar and Manan Sharecom Private Limited 48. Simi Bhaumik recommended 'Buy' for BALRAMPUR CHINI' on Zee Business on August 25, 2022 at around 10:42 AM. The screenshot below depicts such recommendation. Screenshot No. 2 49. On analysis of the Whatsapp chats shared between Simi Bhaumik (974XXXX790) an....
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.... Buy orders at 10:35:24 Hrs and 10:39:47 Hrs, respectively, just before the broadcast of the recommendation on Zee Business at around 10:42 AM. Further, the limit sell orders were placed by Partha Sarathi Dhar at 10:41:56 Hrs and by MSPL between 10:41:35 Hrs and 10:44:13 Hrs i.e. around the time when the relevant recommendation was being aired on the news channel. Thus, they knew about the impending recommendation and also knew that once recommendation is made, share price would go up. Hence, limit sell order(s) was strategically placed at higher price which were executed after the recommendation was telecast and price rose following the recommendation. 54. The SCN documented multiple instances demonstrating the proximity of trades executed in the accounts of Noticees Nos. 2 to 5 to recommendations made by Guest Experts. These Guest Experts shared their recommendations, directly or indirectly, with Nirmal Kumar Soni and Partha Sarathi Dhar prior to broadcast on Zee Channel. Based on the prior possession of this non-public information, Nirmal Kumar Soni and Partha Sarathi Dhar placed the first leg of orders in the relevant scrip/contract (first- leg of the trade) through the tradin....
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....y, sell or subscribe to any issue of any security or otherwise transacting in any way in any security. The specific inclusion of the phrase "otherwise transacting" demonstrates the legislative intent to cast a wide definitional net that would encompass diverse forms of securities transactions, including the activities undertaken by the four Noticees in the present case. 57. I find it pertinent to address specific submissions made by the Noticees. SCPL contends that even assuming that it possessed information from 'Guest Experts', such information was neither obtained in bad faith nor did it induce any investor to trade in the scrips where SCPL had traded. Similarly, Partha Sarthi Dhar argues that he got the information about the impending recommendation from his wife (a registered Research Analyst) and was not procured through deceit. 58. In this context, I draw reference to the discussion in earlier paragraphs wherein the element of 'inducement' has been comprehensively addressed. As regards the argument regarding absence of deceit and bad faith, it is noted that entire arrangement amongst all the constituents of the scheme-Guest Experts, enablers, and profit-makers- was ab init....
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....gal provisions which inter alia includes: a) Sharing of advance information by Guest Experts other than Himanshu Gupta with the profit makers as illustrated above at Screenshot 3. b) Nirmal Kumar Soni was designated as the Authorized Signatory and Director of Manan Sharecom Private Limited as per the Account Opening Form of MSPL with HDFC. Further, the mobile number registered in the HDFC bank account of MSPL was registered in the name of Nirmal Kumar Soni. c) SAAR Securities India Private Limited and SCPL were having common directors. d) SAAR Securities India Private Limited was serving as the trading member of SCPL. As brought out in the SCN, Ramawatar Lalchand Chotia (a Director and Authorized Signatory of SAAR Securities India Private Limited) was directly and frequently in connection with Nirmal Kumar Soni. Based on a particular Whatsapp chat, it has been demonstrated in the SCN that Ramawatar Lalchand Chotia requested Nirmal kumar Soni to square off open positions in the Client code SC100, which belonged to SCPL. Ramawatar Lalchand Chotia also instructed Nirmal Kumar Soni to transfer a specific sum to the bank account of SCPL to address margin- related issues. e) Th....
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.... 4(1) of the SEBI (PFUTP) Regulations are couched in general terms to cover diverse situations and possibilities. Once a conclusion, that fraud has been committed while dealing in securities, is arrived at, all these provisions get attracted in a situation like the one under consideration". In view of the above, since the acts of the Noticees concerned fall within the definition of "fraud", I find that the same are in violation of the provisions of regulations 3 (a), (b), (c), (d) and 4(1) of the PFUTP Regulations read with section 12 A(a), (b) and (c) of the SEBI Act. 65. In terms of Regulation 4(2)(d) of the SEBI (PFUTP) Regulations inducing any person for dealing in any securities for artificially inflating, depressing, maintaining or causing fluctuation in the price of securities through any means including by paying, offering or agreeing to pay or offer any money or money's worth, directly or indirectly, to any person is deemed to be fraudulent or an unfair trade practice. 66. Thus, the necessary ingredients to attract the rigour of said regulation are inducement, dealing in securities and artificially interfering in the price/volume of the securities through any means. ....
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....ul gains as follows: * * Partha Sarathi Dhar: Rs.53,84,661 * SAAR Commodities Pvt Ltd.: Rs.4,37,57,697 * Manan Sharecom Pvt Ltd.: Rs.1,35,01,336 * Kanhya Trading Company: Rs.1,10,41,979 The quantum of unlawful gains realized by these Noticees demonstrates the extensive deployment of the fraudulent scheme. The violations of the provisions of the SEBI Act and the PFUTP Regulations have already been established in the present case, and therefore, these Noticees are liable for issuance of appropriate directions and imposition of appropriate monetary penalty. The unlawful gains made by each Noticee constitute a relevant factor in determining suitable directions and monetary penalties. Section 15J of the SEBI Act specifically identifies "amount of disproportionate gain" as a factor to be considered when determining penalty quantum. 71. Having said that, I also note the following mitigating factors as contended by these entities (Partha Sarathi Dhar, SCPL, MSPL and KTC): * * The ill-gotten gains of Rs. 7,41,29,648 have already been disgorged pursuant to the settlement order. * * The authorized signatory(ies) of MSPL, SCPL and KTC have already settl....