TaxTMI 
TaxTMI 
2021 (10) TMI 1481
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....rned Adjudicating officer (hereinafter referred to as 'AO') of Securities and Exchange Board of India (hereinafter referred to as 'SEBI') dated November 30, 2018 to pay a penalty of Rs. 10 lac under Section 15HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') for the violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) 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 appeal is preferred. 2. The respondent SEBI conducted investigation into the share price of the BGIL Films & Technologies Ltd. (hereinafter ref....
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....Kartik'). The investigation revealed that said Kartik had obtained loan of Rs. 15 lac in the month of June 2008 from one Chetan Dogra, another noticee. It had given 3,50,000 shares of the company as a security against the said loan. Said Kartik had also transferred 1,00,000 shares of the company to Chetan Dogra on the same day as security of the loan. Said Chetan Dogra however immediately transferred 1,80,000 shares to various entities including one Tarunkumar Brahmbhatt, Prarthana T. Brahmbhatt, etc. These people with the help of other entities as detailed in the table at paragraph no. 3 of the order, manipulated the price of the shares by vigorously trading at a higher price thereby raising the last traded price of the shares as detail....
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....he shares and, therefore, the appellant cannot be held guilty for conducting legal activity. He relied on the ratio of HB Stockholdings Ltd. vs. SEBI (Appeal No. 114 of 2012 decided on August 27, 2013) as well as DLF Ltd. vs. SEBI (Appeal No. 331 of 2014 decided on March 13, 2015). 8. On the other hand, Mr. Kumar Desai, the learned counsel for the respondent submitted that for the first time in the appeal only, the appellant has taken a stand that he was required to sell shares for the wedding of his daughter. Neither in reply to the show cause notice nor in the personal hearing before the AO, no such explanation was forwarded. He further submitted that the transaction between Kartik and Chetan Dogra of obtaining loan against the securit....
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....0. The connection of the appellant with Rajiv Agarwal, the authorised signatory of Kartik is writ large on the record of the case. Said Rajiv Kumar Agarwal was a key managerial personnel of this company of which the appellant admittedly was the promoter. Not only he himself, but other members of the promoter group including his real brother Rakesh Kumar Bhatia had offloaded 1,22,705 shares during the period the price had increased and made a profit of around Rs. 71 lac. The appellant thus is a beneficiary of the fraudulent manipulation of the share price. 11. In the case of HB Stockholdings Ltd. cited (supra), it was found that one or two factum of connection was not sufficient to bring home the charge against the appellant therein. In t....