2025 (11) TMI 1037

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....tion of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. 2. We have heard Shri Sankalp A. Sharma, learned Advocate for appellant and Shri Vishal Kanade, learned Advocate for SEBI. 3. Brief facts of the case are, SEBI conducted an investigation from January 02, 2009 to September 09, 2009 in the scrip of Octant Interactive Technologies Limited (OITL). Investigation revealed that promoter group entities colluded with connected entities and executed circular/reversal of trades on the exchange platform and also off-market to create false, misleading appearance of trading to fluctuate the share prices of OITL, thereby violated PFUTP Regulations. SEBI issued show cause notice (SCN) dated August 23, 2013 and supplementary show cause notice (SSCN) dated October 29, 2014 to 35 entities alleging circular/reversal trades and violation of PFUTP Regulations wherein appellant was listed as Noticee No. 22. Appellant did not file any reply to SCN and SSCN and did not make any appearance before SEBI, and finally SEBI has passed the impugned order. SEBI has held that appellant, who was the proprietor of 'Amizara Securities and Finance' was involved in rece....

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....nt got issued a legal notice and initiated criminal action against Kamal Rathi as soon as he came to know about the fraudulent acts of Kamal Rathi against him. • Kamal Rathi is a repeat offender for the offence of forgery. Income Tax Appellate Tribunal, Mumbai in Appeal Nos. 7759 & 7760/Mum/2019 has held that Kamal Rathi forged the signatures of Mr. Ganesh Ghadge and operated two benami bank accounts in the name of one Mr. Ganesh Ghadge. Kamal Rathi has used the same modus operandi in the case of the appellant. • Appellant became aware of the impugned order on October 23, 2024, when appellant's son personally visited the Recovery Department at SEBI Bhavan, SEBI officials informed the appellant's son to download the impugned order from SEBI website. The present appeal is filed within 45 days from the date of receipt of the impugned order. 8. Shri Vishal Kanade, learned Advocate for SEBI submitted that: • The SCN dated August 23, 2023 was issued to the appellant as he is the proprietor of Amizara Securities and Finance. SEBI has received the acknowledgement card wherein SCN was sent through speed post with acknowledgement due. Several opportu....

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....I's common order against all noticees contending inter alia that he learnt about SEBI's proceedings in September 2024, when recovery proceedings were initiated. It was argued on behalf of the appellant that appellant was working as a field staff with M/s. Rathi K.K. & Co., a Chartered Accountant firm between 2004 and 2009. Admittedly, the impugned order is passed on August 2, 2019. It was urged on behalf of the appellant that appellant has studied upto class Xth and he has no knowledge about securities market. It was his employer Kamal Rathi who was transacting in appellant's name. The said Kamal Rathi has admitted that he was also operating bank accounts and demat accounts of various persons. 11. In substance, appellant's case is that he was working under Kamal Rathi who had misused his KYC documents. Appellant has no knowledge about any transactions. 12. SEBI has strongly contested the matter and argued that appellant has replied to the demand notice from the very same address to which the SCN and adjudication notices were sent. We have perused the said letter dated October 28, 2024. It is true that the address mentioned there is of Hiren Shopping Center, Goregaon West, Mum....

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.... 1. Koyal Commercial Pvt. Ltd. 2. Luxer properties Pvt. Ltd. 3. Elderado properties Pvt. Ltd. 4. Winfotech Systems Pvt. Ltd. 5. Suresh Rathod Consultants Pvt. Ltd. 6. Mature Holdings Pvt. Ltd. 7. Shree Nakod Terry towels Private Limited 8. Ecro Artisans Pvt. Ltd 9. Durga Prasad and Company 10. Govind Sharda and Company 11. Vijay Bhagwandas and Company 12. Adventure India. 13. Altra Clean Operat ons 14. Amizara Securities and Finance 15. Amizara Securities and Finance Pvt. Ltd And several bank accounts in the names of the above mentioned concerns. Persons, who want entries such as long term capital gains, short term capital gain/loss, share capital and commission etc, approach us through middlemen. The middlemen give cash to us which we give to cash handlers in the market who in turn will transfer funds in our accounts, which we will utilize for giving entries. Our income in the whole transactions is the commission which we charge on fixed rates for each service. ......" 15. Please provide the list of demat accounts used by you for th....