TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 533
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....al & Co. ORDER Per: Ms. Meera Swarup, Technical Member Two appeals have been filed against order dated May 27, 2022 passed by the AO, SEBI Adjudicating Officer, Securities and Exchange Board of India for violation of Regulation 3(a), (b), (c) and (d), 4(1), 4(2)(a) and (e) of PFUTP Regulations SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. Appeal No. 621 of 2022 was filed by Pat Financial Consultants Pvt. Ltd. (Pat - Noticee No. 2) and Appeal No. 622 of 2022 was filed by Gandiv Investment Pvt. Ltd. (Gandiv - Noticee No. 1). As the impugned order is common to the appellants, both the appeals are being taken up together and disposed of by this common order. 2. The brief....
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....ted the respondent to consider the total number of trades executed by the appellants, which were below or equal to the LTP and consider the impacts of these trades while giving their findings. 4. Subsequently, on May 27, 2022 the respondent passed the impugned order wherein it was held that the appellants in the aforementioned appeals have significantly contributed to positive LTP and new high price (NHP) and had manipulated the scrip of Ponni Sugars. The appellants have therefore violated the provisions of Regulation 3(a), (b), (c) and (d), 4(1), 4(2)(a) and (e) of PFUTP Regulations. Thus, a penalty of Rs. 10 lakh was imposed on Pat and that of Rs. 15 lakh was imposed on Gandiv under Section 15HA of the SEBI Act. 5. We have heard Shr....
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....ontributed about 18.2% of the total market positive in LTP, however, the respondent has not considered that the balance 82% were contributed by the third parties and no action was taken against them. Shri Lashkari submitted that the 10 instances given in the impugned order (Table 22) showing Pat's high LTP trades in nearly all instances the unconnected third-party seller had placed the orders earlier in time at a price higher then the LTP which was merely accepted by the appellant as a buyer. The respondent's allegation that the 51 trades done by appellant at NHP is not tenable as no details have been given. Shri Lashkari stated that the respondent has not made allegation of any collusion whatsoever between the appellants and any of their s....
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.... shares at lower prices. 8. To sum up, as per both the appellants, the respondent's case of price manipulation is based on mere conjectures. There were no inter-se trades between the appellants and there is no allegation of pump and dump against the appellants. All the trades were admittedly with completely unconnected third parties. The appellants have no connection with the promoters or directors of Ponni Sugars. Even the impugned order notes that the appellants have made no disproportionate gain or derived unfair advantage. Majority of trades carried out by the appellants were at LTP or below LTP. The trades were only a rupee or so above LTP and not at Rs. 26/- as alleged by the respondent. All the trades can never be at LTP else ther....
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....34.57% of total market NHP at NSE and 23.35 of total market positive LTP and 37.35 of total market NHP at BSE. The net LTP contribution of Pat during Patch IV in NSE was Rs. 69.25 and in BSE Rs. 43.05. Out of 635 buy trades done by Pat, 216 trades led to positive LTP. During Patch IV of the investigation period, the appellant, while trading as buyer, made significant contribution of Rs. 51.30 to NHP through 19 trades at NSE and of Rs. 57.10 through 13 trades at BSE. These 32 trades contributed to 35% of total market NHP. Shri Rai submitted that the appellant contributed to the price rise in the scrip by repeatedly placing buy orders at price higher than LTP before sell orders were available in the system and by placing buy orders above prev....
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....nd on the basis of material before us, we are persuaded by the respondent's argument that the trading pattern of both the appellants indicate that their buy trades did lead to price manipulation. Pat contributed to 21% of total market positive LTP while Gandiv contributed more than 50% of total market positive LTP in Patch IV and II respectively. The appellants failed to give any reasons for placing the buy orders above LTP except to say that majority of their trades were at LTP or below LTP. In our view, placing substantial number of buy orders above LTP goes against the basic tenet of trading that the buyer would normally buy at the lowest price possible while sellers would sell at the highest price possible. No explanation was provided b....