WTM/VKC/ID7/31/07
BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA
CORAM: V. K CHOPRA, WHOLE TIME MEMBER
In the matter of irregularities in the trading of the shares
of M/s. Roofit Industries Ltd against the following entities:
- M/s Akira Investments Pvt. Ltd.
104, Morgaonkar Market
589, Sadashiv Peth
Pune 411030
|
- M/s Habiscus Investments Pvt. Ltd.
405, Buildage House
146, V S Marg, Mahim
Mumbai 400 016
|
- M/s Onlooker Investment Pvt. Ltd.
405, Buildage House
146, V S Marg, Mahim,
Mumbai 400 016
|
- M/s M’Belle International Pvt. Ltd.
G/7, Sai Sangeet, 368 Linking Road, Khar,
Mumbai 400 052
|
- M/s Alkan Projects Pvt. Ltd.
A-15, Medhavi
Samarth Nagar Cross Road No. 2
Lokhandwala Complex
Andheri (W)
Mumbai 400 053
|
- M/s Mayfair Realtors Pvt. Ltd.
1, Rahimtulla Mansion, 5th Floor,
7, Homji Street
Fort
Mumbai 400 001
|
- M/s Mayfair Paper & Boards Pvt. Ltd.
501, Sangli Bank Building
296, Perin Nariman Street, Fort
Mumbai 400 001
|
- M/s. Vynex Chemical Engineering (Bombay) Pvt. Ltd
501, Sangli Bank Building
296, Perin Nariman Street, Fort
Mumbai 400 001
|
ORDER
Under Section 11 (4) read with 11B of the Securities and Exchange Board of India Act, 1992 and Regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995
1.0 BACKGROUND
1.1 Securities and Exchange Board of India (hereinafter referred to in short as ‘SEBI’) initiated investigation in the scrip of M/s. Roofit Industries Ltd. on the basis of a sudden spurt in volume of the shares traded on National Stock Exchange (NSE) during the period October 6, 1999 to December 12, 1999. SEBI directed NSE and Stock Exchange, Mumbai (BSE) to conduct further investigations at their end. NSE submitted its investigation report for the period November 8, 2000 to February 6, 2001 vide its letter dated December 31, 2001 and for the period February 7, 2001 to May 8, 2001 vide letter dated September 11, 2002. BSE submitted its report for the period January 22, 2001 to May 4, 2001 on September 26, 2001 and for the period October 10, 1999 to December 12, 1999 vide letter dated May 24, 2002. Considering the above, SEBI conducted investigation for the period October 06, 1999 to December 12, 1999 and November 08, 2000 to May 08, 2001.
1.2 M/s. Roofit Industries Ltd. (hereinafter referred to as “Roofit”) was incorporated on February 18, 1982 as a Private Limited Company in the name and style of M/s. Ratnagiri Asbestos Private Ltd. It subsequently changed its name to M/s. Ratnagiri Building Products Ltd. on October 21, 1987 and later to M/s. Roofit Industries Ltd. in 1996. The shares of Roofit were listed on NSE and BSE, Delhi Stock Exchange and Ahmedabad Stock Exchange.
1.3 The promoters of the company were Veegee Holdings and Finance Pvt. Limited, Suresh G. Motwani, Vinod G Motwani, Kishore G Motwani, Joy R Mangalani, Kamini G Motwani, Gurbux G Motwani, Anupama S Motwani, Sangeeta V Motwani, Rita K. Motwani, Meenu J Mangalani, Wada Arun Asbestos Cement Products Pvt. Limited, M/s Vynex Chemical Engg Pvt. Limited., Auto Investment Pvt. Limited, Scarlet Tiles Pvt. Ltd., Sunearth Ceramics Limited, M/s Mayfair Paper & Boards Pvt. Limited and Motwani Enterprises Pvt. Limited.(These entities are hereinafter referred to collectively as “promoter entities”).
1.4 The investigation revealed that a group of eight entities namely M/s. Onlooker Investments Pvt. Ltd.(M/s. Onlooker), M/s. Habiscus Investments Pvt. Ltd.(M/s. Habiscus), M/s. Alkan Projects Pvt. Ltd. (M/s. Alkan), M/s. Mayfair Realtors Pvt. Ltd. (M/s Mayfair Realtors), M/s. M’Belle International Pvt. Ltd. (M/s. M’Belle), M/s. Akira Investment Pvt. Ltd.(M/s. Akira), M/s. Mayfair Paper & Boards Pvt. Ltd. (M/s. Mayfair Paper) and M/s. Vynex Chemical Engg (B) Pvt. Ltd. (M/s. Vynex) (the said eight entities are hereinafter referred to in short as “Noticees”) were related to each other and to the promoters of the company M/s. Roofit and have been found to be trading in the scrip of M/s. Roofit during the time period of investigation, through the various broking entities of BSE and NSE.
1.5 The Noticees generated substantial volumes in the market and entered into circular trading by way of synchronised deals so as to create false and misleading appearance of market and thus violated the provisions of Regulation 4(b), 4(c) and 4(d) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the securities market) Regulations, 1995 (hereinafter referred to in short as “PFUTP Regulations”).
2.0 SHOW CAUSE NOTICES
2.1 A show cause notice dated May 19, 2004 and a supplementary show cause notice dated September 15, 2005 was issued to one of the Noticee M/s Alkan. Likewise, show cause notices dated June 29, 2004 and a supplementary show cause notices dated September 15, 2005 were issued to the Noticees M/s M’Belle, M/s Mayfair Paper and M/s Vynex. In the said show cause notices, the said Noticees were requested to show cause as to why appropriate action under Section 11(4) read with Section 11B of the Securities and Exchange Board of India Act, 1992 including restraining them from accessing the securities market and prohibiting them to buy, sell or deal in securities for an appropriate period of time, should not be passed against them for the violations of the provisions of Regulations 4(b), 4(c) and 4(d) of PFUTP Regulations.
2.2 Separate show cause notices all dated August 16, 2005 were issued to the four of the Noticees viz M/s Akira, M/s Onlooker, M/s Habiscus and M/s Mayfair Realtors to show cause as to why appropriate action under Section 11(4) read with Section 11B of the Securities and Exchange Board of India Act, 1992 including restraining them from accessing the securities market and prohibiting them to buy, sell or deal in securities for an appropriate period of time, should not be passed against them for the violations of the provisions of Regulations 4(b), 4(c) and 4(d) of PFUTP Regulations.
3.0 REPLY OF THE ENTITIES TO SHOW CAUSE NOTICE
3.1 The Advocate, Shri Vishwas Pathak replied to the show cause notices on behalf of the Noticees namely M/s Akira, M/s Onlooker, M/s Habiscus, M/s Mayfair Realtors, M/s Mayfair Paper and M/s Vynex vide letters all dated October 08, 2005. The same Advocate also replied to the show cause notices on behalf of the Noticee M/s Alkan and M/s M’Belle vide letters dated June 24, 2004 and July 12, 2004 respectively. Further, the same advocate had submitted reply to the aforesaid supplementary show cause notices on behalf of the Noticees viz M/s Alkan and M/s M’Belle vide two separate letters both dated October 10, 2005. I have examined reply of each of them and find that the averments and contentions are one and the same in all the reply. In the said replies, Shri. Pathak on behalf of the Noticees, inter alia submitted as hereunder:
· They stated that the criteria of relationship can not be established just by minor shareholding, introduction to brokers, directorship in companies and personal relationships of the entities.
· Noticees in their reply denied that they are related directly or indirectly to any of the companies mentioned in the show cause notices. Noticees further stated that the dealings during the period of investigation through various broking entities of BSE and NSE have been entered into in the normal course of business. Noticees denied that they have generated substantial volumes of trade in the scrip of Roofit and also denied that they have interchangeably moved securities in their demat account and made adjustments of securities among themselves. Noticees stated that they were not aware of counterparty brokers / clients operating from other end. Noticees also stated that they were not involved in any of the alleged matched trades through the brokers and not influenced the price to create volume.
4.0 HEARING
4.1 In the aforesaid replies to the show cause notices, the Noticees requested for a personal hearing. Accordingly, the Noticees were advised to attend the personal hearing at SEBI’s Head office at Mumbai on September 19, 2006 at 11.30 am. The letters intimating the date of hearing were first sent through registered post on August 31, 2006 which were returned undelivered with the remarks “Left”. The said letters were sent at the address provided by their counsel, Shri Vishwas Pathak, vide his letter dated June 17, 2006. Thereafter, hearing intimation letters were served on September 15, 2006 through hand delivery to the Advocate of Noticees, Shri Vishwas Pathak. The Noticees vide letters all dated September 18, 2006 requested for an adjournment of the hearing. The second opportunity of hearing to all the Noticees has been given on October 03, 2006. The hearing intimation of the same were issued to the Noticees vide letter dated September 22, 2006 at the address mentioned in their respective letters received in connection with adjournment of first hearing scheduled on September 19, 2006. M/s Mayfair Papers and M/s Vynex requested for adjournment on the ground that the intimation of hearing was received after the time fixed for hearing. However, in case of other entities, hearing intimation returned undelivered with remarks like “Left” or “Not known”. Third opportunity of hearing was granted to the entities M/s Mayfair Papers and M/s Vynex on October 26, 2006. The said hearing intimation was also handed over to them on October 23, 2006, but no one appeared on behalf of them on the said date. The said two entities vide respective letters dated October 26, 2006 again requested for an adjournment on the ground that their Authorised Representatives were on Diwali vacation. Sufficient opportunity has been granted to the Noticees and the notices were communicated to them as well as their Advocates. It is observed that the Noticees have been adopting delaying tactics to prolong these proceedings. Hence, it is felt that no purpose would be served by giving them any further opportunity of hearing and the matter is taken up to decide on its merits.
5.0 CONSIDERATION OF ISSUES
5.1 I have carefully examined the show cause notices, reply to the show cause notices and materials on record and observe as under:
5.2 The charges levelled against the Noticees are, (a) creation of false and misleading appearance of trading in the market (b) entered into transactions that are not genuine trade transactions and (c) entered into transactions that are not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate or cause fluctuations in the market price of the security. Thus, the Noticees have violated the provisions of regulation 4(b), (c) and (d) of PFUTP Regulations.
LINKAGES /RELATIONSHIP AMONG THE NOTICEES
5.3 I find that that the Noticees were related to each other and to the promoters / directors of Roofit. The relationship between the above mentioned entities inter-se and between the promoters is as under:
· M/s Alkan, M/s Habiscus and M/s Onlooker have a common director viz. Mr. Suresh Hemwani who was a promoter of the company Roofit.
· M/s Habiscus and M/s Onlooker have a common director viz. Ms. Meenal Chabaria
· Subscribers to Memorandum of Association (MOA) of M/s M’Belle are Ms. Rita Motwani, Ms. Sangeeta Motwani and Ms. Anupama Motwani. Ms. Rita Motwani is the wife of Mr. Kishore Motwani who is one of the directors of Roofit. Ms. Sangeeta Motwani is the wife of Mr. Vinod Motwani who is one of the directors of M/s Roofit. Ms. Anupama Motwani is the wife of Ms. Suresh Motwani who is one of the directors of Roofit. Thus M/s M’Belle is indirectly related to directors of the company.
· M/s Alkan, M/s Mayfair Paper and M/s Vynex are among the persons acting in concert (PACs) with Sunearth Ceramics Limited, one of the promoter entities of Roofit and having the same address as that of Roofit.
· M/s New Bharat Builders has introduced M/s Onlooker to M/s Goldcrest Capital Market Limited (M/s Goldcrest), member, NSE and BSE. Subscribers to the Memorandum of Association of M/s New Bharat Builders include Ms. Sangeeta Motwani and Mr. Kishore Motwani. Ms. Sangeeta Motwani is the wife of Mr. Vinod Motwani, Mr. Kishore Motwani and Mr. Vinod Motwani are the directors of Roofit.
· Further, Shri Deven Mehta, the director of broking firms M/s Amgis Holdings Pvt Ltd (M/s Amgis) and M/s. Pals Overseas Pvt. Ltd (M/s Pals) introduced the Noticees to other brokers viz. M/s. Goldcrest, M/s. Express Securities Ltd (M/s Express), M/s. Jayantilal Khandwala Finance Ltd.(M/s Jayantilal), M/s. Prashant J Patel.
· In the course of recording statement of Shri Devan Mehta, Director of M/s Amgis and M/s Pals on February 14, 2003, he admitted that he was aware about the relationship of Noticees viz. M/s Onlooker, M/s Habiscus, M/s Akira, M/s Alkan, M/s M’Belle and M/s Mayfair with M/s Roofit.
· Shri Tushar Tanna, Director of M/s Goldcrest admitted in his statement recorded by the investigating authority on January 27, 2003 that he came to know about the relationships among the Noticees after one of his executive visited their respective offices and immediately after that he stopped trading on behalf of them.
· It is also found that on many occasions two of the Noticees placed combined buy order.
· It is also clear from the demat analysis of the brokers that the shares sold by one of Noticee and delivery of the same came from the demat account of another Noticee and the said details are provided under the paragraph “demat analysis”.
5.4 The Noticees filed their reply to the show cause notices through one common advocate namely Shri Vishwas Pathak. In the said replies, the Noticees have taken a common stand that the criteria of relationships can not be established just by minor share holdings, introduction to brokers, directorship in companies and personal relationships of the individual. The Noticees had not offered any other criteria to be followed in establishing the relationship. Further, they have not denied the linkage shown in the show cause notices. In this regard, I find that the relationship of the Noticees is clearly established by way of common directorship, signatories and subscribers to Memorandum of Association of the companies, introduction of the brokers, statements of the director of the broking entities, inter demat account transfer of shares and common address etc.
MODUS OPERANDI OF THE NOTICEES
5.5 The promoter entities were in need of funds and therefore they approached M/s Amgis, a member of NSE and M/s Pals, a member, BSE. Thereafter, Shri Deven Mehta who was the common director of M/s Amgis and M/s Pals introduced the Noticees to other brokers viz. M/s. Goldcrest, a member of NSE as well as BSE, M/s. Prashant J Patel, a member of NSE, M/s. Bharat J Patel, a member, BSE and M/s. Express Securities, a member of BSE.
5.6 The Noticees sold the shares of Roofit on a spot basis to the above mentioned stock brokers who in turn immediately sold the shares in the market. The delivery for these sales came from the promoter entities in advance as also payments for sales were made by the broking entities much before the payout. The purchases for these sales, in almost all the settlements, during the period of investigation, were made by Noticees through the broking outfits of Shri Deven Mehta.
5.7 In effect, therefore, Noticees sold the shares of M/s. Roofit, received money immediately, entered into structural / matched deals through the broking entities of Shri Deven Mehta, took delivery and thus, the cycle of such transactions continued settlement after settlement, during the time period of investigation.
5.8 The broking entities who made these immediate payments to Noticees would safeguard their interests by immediately entering into sale transactions in the market and therefore, would get covered by the settlement guarantee fund of the Exchanges. The broking entities of Shri Deven Mehta, by entering into structural deals, with the broking entities who had made the payments, ensured that the Noticees did not lose control over their shares and that the cycle could be repeated.
5.9 During the time period of investigation, at both BSE and NSE, I find that the major concentration of trading was between M/s. Amgis (NSE) and M/s. Pals (BSE) (both acted as purchasers) on one side and M/s. Goldcrest (NSE and BSE) and acted as seller on the other side. These broking entities have continuously aided and abetted the Noticees in their activity and have further misutilised the system.
TRADING OF THE NOTICEES
5.10 M/s. Amgis had traded on behalf of the M/s Onlooker, M/s M'Belle, M/s Mayfair Realtors, M/s Habiscus, M/s Alkan and M/s Akira. I find that all these Noticees purchased a total of 21,56,723 shares and sold 1,08,043 shares of Roofit. Further, I have pursued the trade log and order log analysis for the trade executed between M/s Amgis and M/s Goldcrest which is reproduced hereunder:
|
Date
|
Trade Time
|
Trade Qty
|
Trade Price
|
Buy Tm Name
|
Buy Client Name
|
Buy Order Entry Time
|
Sell Tm Name
|
Sell Client Name
|
Sell Order Entry Time
|
|
20-Nov-00
|
12:32:35
|
659
|
268
|
Amgis
|
Onlooker
|
12:32:31
|
Goldcrest
|
Ami Impex
|
12:32:35
|
|
20-Nov-00
|
12:32:45
|
4541
|
268
|
Amgis
|
Onlooker
|
12:32:45
|
Goldcrest
|
Ami Impex
|
12:32:35
|
|
20-Nov-00
|
12:32:45
|
46800
|
268
|
Amgis
|
Onlooker
|
12:32:45
|
Goldcrest
|
Ami Impex
|
12:32:35
|
|
27-Dec-00
|
10:41:07
|
25000
|
121
|
Amgis
|
H(Habiscus)
|
10:41:07
|
Goldcrest
|
Mayfair
|
10:41:03
|
|
27-Dec-00
|
10:41:47
|
25000
|
121.5
|
Amgis
|
H(Habiscus)
|
10:41:47
|
Goldcrest
|
Onlooker
|
10:41:45
|
|
27-Dec-00
|
11:06:40
|
25000
|
120.25
|
Amgis
|
H(Habiscus=6658& onlook=18342)
|
11:06:40
|
Goldcrest
|
Onlooker
|
11:06:28
|
|
27-Dec-00
|
11:07:13
|
25000
|
120.25
|
Amgis
|
H(onlooker)
|
11:07:13
|
Goldcrest
|
Onlooker
|
11:07:11
|
|
27-Dec-00
|
11:08:07
|
25000
|
120.1
|
Amgis
|
H(onlooker)
|
11:08:07
|
Goldcrest
|
Onlooker
|
11:08:04
|
|
08-Jan-01
|
10:38:37
|
25000
|
119.5
|
Amgis
|
H(Habiscus)
|
10:38:37
|
Goldcrest
|
Habiscus
|
10:38:25
|
|
08-Jan-01
|
10:39:12
|
25000
|
119
|
Amgis
|
H(Habiscus=8903& S J Impex 16093)
|
10:39:12
|
Goldcrest
|
Habiscus
|
10:38:57
|
|
11-Jan-01
|
10:25:18
|
50000
|
118.75
|
Amgis
|
O(Habiscus=48961& S J Impex=1039)
|
10:25:18
|
Goldcrest
|
Habiscus
|
10:25:06
|
|
11-Jan-01
|
10:26:14
|
50000
|
118.85
|
Amgis
|
O(Mayfair)
|
10:26:14
|
Goldcrest
|
Habiscus
|
10:25:44
|
|
17-Jan-01
|
10:15:56
|
25000
|
122
|
Amgis
|
M(Alkan Projects)
|
10:15:56
|
Goldcrest
|
Habiscus
|
10:15:39
|
|
17-Jan-01
|
10:16:08
|
25000
|
123
|
Amgis
|
M(Alkan Projects)
|
10:16:08
|
Goldcrest
|
Habiscus
|
10:16:06
|
|
17-Jan-01
|
10:16:26
|
25000
|
124
|
Amgis
|
M(Alkan Projects=15000 & M'Belle=10000)
|
10:16:26
|
Goldcrest
|
Habiscus
|
10:16:21
|
|
17-Jan-01
|
10:17:07
|
25000
|
123.75
|
Amgis
|
M(M'Belle=22236 & Alkan Proj 2764)
|
10:17:07
|
Goldcrest
|
Habiscus
|
10:16:50
|
|
18-Jan-01
|
13:48:57
|
36000
|
121.75
|
Amgis
|
M(M' belle)
|
13:48:57
|
Goldcrest
|
Habiscus
|
13:48:52
|
|
24-Jan-01
|
10:29:21
|
34800
|
124
|
Amgis
|
AMBEL(M'Belle=19910& Alkan=14890)
|
10:29:21
|
Goldcrest
|
Alkan Projects
|
10:29:07
|
|
24-Jan-01
|
10:29:34
|
200
|
124
|
Amgis
|
AMBEL(Alkan Proj)
|
10:29:34
|
Goldcrest
|
Alkan Projects
|
10:29:07
|
|
31-Jan-01
|
10:00:57
|
10000
|
131.5
|
Amgis
|
M(M'Belle=2675& Onlook=7325)
|
10:00:57
|
Goldcrest
|
Jyoti Mehta
|
10:00:56
|
|
31-Jan-01
|
10:11:34
|
89900
|
124
|
Amgis
|
M(Onlooker=89675 & S J Impex= 225)
|
10:11:34
|
Goldcrest
|
Onlooker
|
10:11:33
|
|
31-Jan-01
|
10:13:31
|
39800
|
124
|
Amgis
|
A(M'Belle)
|
10:13:31
|
Goldcrest
|
Habiscus
|
10:13:29
|
|
31-Jan-01
|
10:14:00
|
200
|
124
|
Amgis
|
A(Onlooker)
|
10:13:31
|
Goldcrest
|
Habiscus
|
10:14:00
|
|
31-Jan-01
|
10:14:01
|
49800
|
124
|
Amgis
|
A(M'Belle=37600 & Alkan 12200 )
|
10:14:01
|
Goldcrest
|
Habiscus
|
10:14:00
|
|
31-Jan-01
|
10:14:27
|
50000
|
124.25
|
Amgis
|
A(Onlooker)
|
10:14:27
|
Goldcrest
|
Habiscus
|
10:14:24
|
|
31-Jan-01
|
10:15:21
|
49800
|
124
|
Amgis
|
H(M'Belle =
|
10:15:21
|
Goldcrest
|
Ami Impex
|
10:15:20
|
|
31-Jan-01
|
11:00:49
|
50000
|
124.75
|
Amgis
|
M(M'Belle=40000 & Onlooker=10000)
|
11:00:49
|
Goldcrest
|
Ami Impex
|
11:00:42
|
|
7-Feb-01
|
10:10:10
|
20000
|
128.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:10:10
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:10:00
|
|
14-Feb-01
|
10:19:14
|
49500
|
127.65
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:14
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:09
|
|
14-Feb-01
|
10:19:24
|
500
|
127.65
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:24
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:09
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
| |
|
|
|
|
|
|
|
|
|
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
4300
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:45
|
3800
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:45
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:19:59
|
500
|
127.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:19:59
|
Goldcrest Capital Markets Ltd
|
Alkan Projects Pvt. Ltd.
|
10:19:42
|
|
14-Feb-01
|
10:21:18
|
50000
|
123.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:21:18
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:21:15
|
|
14-Feb-01
|
10:24:29
|
50000
|
122.00
|
Amgis Holdings Pvt Ltd
|
Alkan Project Pvt. Ltd.
|
10:24:29
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:24:10
|
|
14-Feb-01
|
10:25:09
|
57000
|
121.75
|
Amgis Holdings Pvt Ltd
|
Alkan Project Pvt. Ltd.
|
10:25:09
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:24:58
|
|
14-Feb-01
|
10:28:28
|
45000
|
122.75
|
Amgis Holdings Pvt Ltd
|
Alkan Project Pvt. Ltd.
|
10:28:28
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:28:23
|
|
28-Feb-01
|
10:00:03
|
34900
|
124.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:00:03
|
Goldcrest Capital Markets Ltd
|
Jyoti J. Mehta
|
9:59:56
|
|
28-Feb-01
|
10:00:13
|
100
|
124.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:00:11
|
Goldcrest Capital Markets Ltd
|
Jyoti J. Mehta
|
9:59:56
|
|
28-Feb-01
|
10:05:05
|
27200
|
121.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:05:05
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:05:02
|
|
28-Feb-01
|
10:05:41
|
25800
|
121.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:05:41
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:05:37
|
|
28-Feb-01
|
10:09:54
|
87200
|
120.00
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:09:54
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:09:49
|
|
28-Feb-01
|
10:11:23
|
48600
|
120.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:11:23
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:11:00
|
|
28-Feb-01
|
10:12:39
|
68400
|
121.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:12:39
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:12:32
|
|
28-Feb-01
|
10:13:19
|
32800
|
120.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd. (25000) Onlooker (7800)
|
10:13:19
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:13:12
|
|
14-Mar01
|
9:58:06
|
10000
|
115.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
9:58:06
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
9:57:58
|
|
14-Mar01
|
10:03:04
|
25000
|
115.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:03:04
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:03:01
|
|
14-Mar01
|
10:03:23
|
30000
|
114.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:03:23
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:03:20
|
|
14-Mar01
|
10:04:04
|
20000
|
114.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:04:04
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:03:47
|
|
14-Mar01
|
10:13:31
|
24930
|
112.25
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:13:31
|
Goldcrest Capital Markets Ltd
|
Jyoti J. Mehta
|
10:13:23
|
|
14-Mar01
|
10:13:40
|
70
|
112.25
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:13:40
|
Goldcrest Capital Markets Ltd
|
Jyoti J. Mehta
|
10:13:23
|
|
14-Mar01
|
10:14:09
|
15000
|
112.25
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:14:09
|
Goldcrest Capital Markets Ltd
|
Jyoti J. Mehta
|
10:14:04
|
|
14-Mar01
|
10:20:29
|
25000
|
110.00
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:20:29
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:20:22
|
|
14-Mar01
|
10:21:13
|
25000
|
113.00
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:21:13
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:21:08
|
|
14-Mar01
|
10:21:39
|
15000
|
112.00
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:21:39
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:21:34
|
|
14-Mar01
|
10:21:56
|
15000
|
112.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:21:55
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:21:56
|
|
14-Mar01
|
10:22:47
|
9000
|
113.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:22:47
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:22:42
|
|
14-Mar01
|
10:23:09
|
11000
|
112.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:23:04
|
Goldcrest Capital Markets Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:23:09
|
|
15-Mar01
|
10:01:19
|
25000
|
110.00
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:01:19
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:01:08
|
|
15-Mar01
|
10:01:50
|
14950
|
112.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International (14930), Onlooker Investments Pvt. Ltd. (20)
|
10:01:50
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:01:40
|
|
15-Mar01
|
10:01:59
|
50
|
112.00
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:01:59
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:01:40
|
|
15-Mar01
|
10:02:30
|
15000
|
112.25
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:02:30
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:02:28
|
|
15-Mar01
|
10:03:48
|
25000
|
111.50
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:03:48
|
Goldcrest Capital Markets Ltd
|
Habiscus Investments Pvt. Ltd.
|
10:03:38
|
|
15-Mar01
|
10:05:02
|
15000
|
111.75
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.(10000), Onlooker (5000)
|
10:05:02
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:04:49
|
|
15-Mar01
|
10:05:24
|
35000
|
111.90
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:05:24
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:05:20
|
|
15-Mar01
|
10:05:56
|
15000
|
112.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:05:56
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:05:44
|
|
15-Mar01
|
10:06:38
|
25000
|
112.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:06:38
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:06:26
|
|
15-Mar01
|
10:07:28
|
10000
|
111.00
|
Amgis Holdings Pvt Ltd
|
M'Belle International Pvt. Ltd.
|
10:07:28
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:07:18
|
|
15-Mar01
|
10:08:07
|
15000
|
111.50
|
Amgis Holdings Pvt Ltd
|
Onlooker Investments Pvt. Ltd.
|
10:08:07
|
Goldcrest Capital Markets Ltd
|
M'Belle International Pvt. Ltd.
|
10:07:55
|
5.11 I find from the above table that 76 structured deals were executed between said two brokers amounting to 18,47,000 shares. Both buy and sell orders have been placed at approximately same time and same price. Order was placed at a price higher than the previous traded price for some trades. The three among the Noticees viz. M/s Alkan, M/s Habiscus and M/s Onlooker who were related to each other as stated above, have been found trading through both these members. In 10 trades amounting to 2,97,000 shares, one of the Noticees M/s M’Belle was buying shares through M/s. Amgis and selling shares through M/s. Goldcrest at the same time. In 7 trades, one of the Noticee M/s Onlooker has bought shares through M/s. Amgis and sold shares through M/s. Goldcrest at the same time. 15 trades amounting to 1,32,910 shares have been executed on behalf of the one of the Noticee M/s M’Belle on the buy side and M/s Alkan on the sell side. Further, 3 structured deals amounting to 1,52,000 shares have been executed on behalf of M/s Alkan on the buy side and M/s M’Belle on the sell side. 11 trades amounting to 2,75,566 shares have been executed on behalf of M/s M’Belle on the buy side and M/s Habiscus on the sell side. 5 trades amounting to 88,000 shares have been executed on behalf of the client M/s M’Belle on the buy side and M/s Habiscus on the sell side. 4 structured deals amounting to 1,15,000 shares have been executed on behalf of M/s Onlooker on the buy side and M/s M’Belle on the sell side. As stated above, all these entities (Noticees) are directly or indirectly related to each other and the company M/s Roofit through M/s Pals.
5.12 I find that M/s Pals (Clearing no. 314) had traded on behalf of five of the Noticees namely M/s Alkan, M/s M’Belle, M/s Onlooker, M/s Akira & M/s Mayfair Realtors. I find that all these Noticees purchased a total of 1,70,052 shares and sold 23,100 shares of Roofit.
5.13 I find that M/s. Goldcrest had traded at NSE on behalf of five of the Noticees namely M/s Alkan, M/s M’Belle, M/s Onlooker, M/s Habiscus & M/s Mayfair Realtors and sold a total of 19,33,000 shares of Roofit. M/s. Goldcrest (Clg no. 326) had also traded at BSE on behalf of five of the Noticees namely M/s Alkan, M/s Vynex, M/s M’Belle, M/s Onlooker, M/s Habiscus, M/s Mayfair Paper & M/s Mayfair Realtors and sold a total of 16,30,600 shares of Roofit.
5.14 I observe that M/s Alkan has traded through both M/s. Goldcrest and M/s. Pals and executed several matched / structured deals. M/s. Goldcrest acted as a seller and M/s. Pals acted as a buyer at BSE through out the time period. The details are given below:
5.15 On 22/01/2001 in settlement No. 44, buying member M/s Pals and counter party selling member M/s Goldcrest executed several matched/synchronised trades on behalf of some of the Noticees which is evident from the table below:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
0857
|
Alkan Projects
|
10:18:41
|
122
|
9,000
|
10:18:47
|
326
|
10:18:46
|
4060
|
Alkan Projects
|
|
M’Belle Inter
|
21,000
|
|
314
|
0858
|
Alkan Projects
|
10:22:53
|
122
|
3,000
|
10:22:54
|
326
|
10:22:49
|
4062
|
Alkan Projects
|
|
M’Belle Inter
|
27,000
|
|
314
|
0860
|
Alkan Projects
|
10:23:43
|
122.1
|
15,000
|
10:23:43
|
326
|
10:23:32
|
4063
|
Alkan Projects
|
|
M’Belle Inter
|
15,000
|
|
314
|
0861
|
Alkan Projects
|
10:24:34
|
121.5
|
21,000
|
10:24:34
|
326
|
10:24:33
|
4064
|
Vynex Chemicals
|
|
M’Belle Inter
|
14,000
|
|
314
|
0862
0863
|
Alkan Projects
|
10:29:31
10:30:10
|
122
121.75
|
15,000
|
10:29:32
|
326
|
10:29:30
10:30:06
|
4067
4068
|
Mayfair Paper & Boards Pvt. Ltd.
|
|
M’Belle Inter
|
20,000
|
10:30:06
|
|
Alkan & M’Belle
|
500
|
10:30:10
|
|
M’Belle Inter
|
15,000
|
10:30:27
|
|
314
|
0865
|
Alkan Projects
|
10:31:50
|
122
|
2,500
|
10:31:51
|
326
|
10:31:46
|
4069
|
Mayfair Paper & Boards Pvt. Ltd.
|
|
M’Belle Inter
|
22,500
|
|
314
|
0866
|
Alkan Projects
|
10:32:29
|
122
|
18,000
|
10:32:29
|
326
|
10:32:29
|
4070
|
Mayfair Paper & Boards Pvt. Ltd.
|
|
M’Belle Inter
|
2,000
|
|
314
|
1237
|
Alkan Projects
|
13:01:05
|
122
|
7,000
|
13:01:05
|
326
|
13:00:37
|
4073
|
Mayfair Paper & Boards Pvt. Ltd.
|
|
M’Belle Inter
|
3,000
|
|
314
|
1238
|
Alkan Projects
|
13:01:53
|
122
|
25,000
|
13:01:54
|
326
|
13:01:47
|
4074
|
Mayfair Paper & Boards Pvt. Ltd.
|
|
314
|
1239
|
Alkan Projects
|
13:02:31
|
122
|
25,000
|
13:02:31
|
326
|
13:01:21
|
4075
|
Mayfair Paper & Boards Pvt. Ltd.
|
5.16 It is also found from the said table that two of the Noticees were putting combined buy orders. Similarly in settlement no 45 that is on 29/01/2001, the said two brokers executed several matched/synchronised trades on behalf of the some of the Noticees as evident from the table hereunder:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
1413
|
M’Belle Inter
|
10:03:41
|
132
|
42,000
|
10:03:41
|
326
|
10:03:39
|
4122
|
Jitendra Mehta
|
|
314
|
1416
|
M’Belle Inter
|
10:04:34
|
126
|
100
|
10:04:35
|
326
|
10:04:28
|
4123
|
Habiscus Invest
|
|
1417
|
10:04:58
|
126
|
49,500
|
10:04:59
|
|
1418
|
10:05:24
|
126
|
5,400
|
10:05:24
|
|
314
|
1421
|
M’Belle Inter
|
10:06:03
|
126
|
25,000
|
10:06:03
|
326
|
10:05:57
|
4124
|
Alkan Projects
|
5.17 I also find that the same pattern of matched/synchronised trades were followed by the said two brokers, M/s. Pals and M/s Goldcrest in settlement nos. 46, 47, 48, 49 and 50 on 05/02/2001, 12/02/2001, 26/02/2001 and 05/03/2001 respectively. The details of the said trades had already been furnished to the Noticees alongwith the show cause notices.
5.18 Further, on 19/03/2001 in settlement no 52, M/s. Pals had put in buy orders on behalf of one the Noticee M/s Belle and the counter part broker M/s Express (Clg.No.192) put in sell order for another Noticee i.e M/s Onlooker. The details are hereunder:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
|
On 19/03/2001
|
|
314
|
2397
|
M’Belle Inter
|
10:01:29
|
111
|
20,000
|
10:01:29
|
192
|
10:01:16
10:01:28 (U)
|
76299
|
Onlookers Invest
|
|
|
314
|
2398
|
M’Belle Inter
|
10:02:16
|
112
|
20,000
|
10:02:17
|
192
|
10:02:07
|
76301
|
Onlookers Invest
|
|
|
314
|
2399
|
M’Belle Inter
|
10:02:51
|
112.5
|
25,000
|
10:02:51
|
192
|
10:02:45
|
76302
|
Onlookers Invest
|
|
|
314
|
2400
|
M’Belle Inter
|
10:03:30
|
112
|
25,000
|
10:03:30
|
192
|
10:03:25
|
76303
|
Onlookers Invest
|
|
|
On 21/03/2001
|
|
314
|
2478
|
M’Belle Inter
|
10:38:38
|
110
|
20,000
|
10:38:38
|
192
|
10:38:34
|
79081
|
Onlookers Invest
|
|
|
314
|
2479
|
M’Belle Inter
|
10:39:19
|
110.5
|
20,000
|
10:39:19
|
192
|
10:39:11
|
79082
|
Onlookers Invest
|
|
|
314
|
2480
|
M’Belle Inter
|
10:44:55
|
110
|
20,000
|
10:44:55
|
192
|
10:44:53
|
79083
|
Onlookers Invest
|
|
|
On 22/03/2001
|
|
314
|
2498
|
M’Belle Inter
|
10:14:26
|
110
|
20,000
|
10:14:26
|
192
|
10:14:23
|
80486
|
Onlookers Invest
|
|
|
314
|
2499
|
M’Belle Inter
|
10:14:50
|
110
|
20,000
|
10:14:50
|
192
|
10:14:50
|
80487
|
Onlookers Invest
|
|
|
314
|
2500
|
M’Belle Inter
|
10:15:22
|
111
|
20,000
|
10:15:22
|
192
|
10:15:15
|
80488
|
Onlookers Invest
|
|
|
314
|
2501
|
M’Belle Inter
|
10:16:11
|
110.95
|
20,000
|
10:16:11
|
192
|
10:15:48
10:16:00(U)
|
80489
|
Onlookers Invest
|
|
|
314
|
2502
|
M’Belle Inter
|
10:16:34
|
110.95
|
20,000
|
10:16:34
|
192
|
10:16:30
|
80491
|
Onlookers Invest
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
5.19 In Settlement No. 02 on 02/04/2001, M/s Pals tried to influence the closing price by putting buy orders at higher prices than the existing price. There was no other buyer at price higher than that of M/s Pals. These orders were executed against the pending sales order of the day. It has bought 3,180 shares for M/s. M’Belle. The price rise was as follows:
|
Date
|
Time of order
|
Qty.
|
OrderPrice (Rs.)
|
Time of order execution
|
Price of previous trade executed (Rs.)
|
Executed Price (Rs.)
|
|
|
02/04/01
|
15:14:24
|
55
|
108
|
15:14:24
|
106.75
|
107.5 to 107.8
|
|
|
|
|
|
15:20:46
|
1,000
|
109.5
|
15:20:46
|
108.9
|
108.9 to 109.4
|
|
|
|
15:22:55
|
10
|
114.5
|
15:22:55
|
109.4
|
114.5 (last trade)
|
|
5.20 I find from the trade and order log on 03/04/2001 in settlement. No. 02 that M/s M Belle as a buying client of M/s Pals executed matched trades for 80,000 shares with another Noticee M/s Onlooker, a client of M/s Express. The said Noticees placed their respective buy and sell orders about the same time.
5.21 I find from the trade and order log on 10/04/2001 in settlement. No. 03 that M/s. Pals has bought 785 shares for the Noticee M/s. Akira and on 12/04/2001 in settlement no. 03 till 15:15:00. M/s Pal bought 1,795 shares for M/s. Akira with price ranging between Rs.103-Rs.107. Then, at 15:15:59, it placed buy order of 27,000 shares for Rs.109 for M/s. Akira and the order for 2,000 shares got executed with other brokers at price rising from Rs.107.4 to Rs.109. The remaining 25,000 shares were executed against sell order for 25,000 shares at Rs.109 at 15:15:51 punched by M/s. Bharat. Thus, the two parties, M/s. Pals and M/s. Bharat have entered into matching trades. During the day both the brokers had matched 3 trades totalling to 75,000 shares. After the trades were matched M/s. Pals did not place any further order. The last trade was executed at 15:29:29 for 200 shares at Rs.106.65 between other brokers. Therefore M/s. Pals has influenced prices while matching the trades. The trades matched during the day were as follows:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3005
|
Akira Invest P.L.
|
15:15:59
|
109
|
25,000
|
15:16:00
|
763
|
15:15:51
|
9612
|
Pat Fin Con.
|
|
314
|
3006
|
Akira Invest P.L.
|
15:16:25
|
110
|
23,675
|
15:16:25
|
763
|
15:16:15
|
9613
|
Pat Fin Con.
|
|
3007
|
15:16:44
|
1,325
|
15:16:44
|
|
314
|
3008
|
Akira Invest P.L.
|
15:17:07
|
110
|
25,000
|
15:17:07
|
763
|
15:16:53
|
9614
|
Pat Fin Con.
|
5.22 On 17/04/2001 in settlement no. 04, the last trade executed prior to the self trade by M/s. Pals was at 13:23:30 for 50 shares at Rs.106.80. M/s. Pals entered into self trade of 15,020 shares which is fictitious in nature as M/s Akira was buying as well as counter party selling client. The details of the same are hereunder:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3040
|
Akira Invest P.L.
|
14:25:30
|
108
|
15,020
|
14:25:30
|
314
|
14:25:29
|
2100
|
Akira Invest P.L.
|
5.23 On 19/04/2001 in settlement no. 04, the last trade to be executed was at 12:04:57 for 2 shares at Rs.107.05 before M/s. Pals punched in buy order for 25,000 shares at 14:14:04 for Rs.108 and M/s. Bharat J Patel placed in sell order for 25,000 shares at 14:14:05 for Rs.108. It is therefore, established that both the brokers have entered into a matched trade. During the day, both the brokers had entered into 5 matched trades totaling 1,20,000 shares. M/s Pals dealt on behalf of one of the Noticee M/s Akira while M/s Bharat dealt for M/s Hinduja Fin Corp.
5.24 On 20/04/2001 in settlement no. 04 till 15:29:17 there was not much influence on the price. M/s Pal bought 405 shares for M/s. Akira in the price range Rs.106-Rs.107. Then when order was put in at 15:29:17 for 500 shares at Rs.108, the same got executed for 397 shares in the price range of Rs.106.95 to Rs.108 at 15:29:17 and the unexecuted order for 103 shares was deleted at 15:29:32. Similarly, order was put in at 15:29:57 for 10 shares at Rs.108.8. The same got executed at 15:29:58 with prices from Rs.108 to Rs.108.8. The last order was executed at 15:42:49 for Rs.107.55 for 2 shares amongst other members. Thus, I find from the above that M/s. Akira in concert with M/s Pal created artificial volume and tried to influence the price of the scrip.
5.25 I find from the trade and order log on 27/04/2001 in settlement .No.05 that M/s Pals placed single order for more than one Noticee on many times as evident from the table given below:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate
Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3184
|
Akira Invest P.L.
|
13:52:19
|
108
|
12,000
|
13:52:20
|
763
|
13:52:14
|
9908
|
Pat Fin. Con.P.L.
|
|
Mayfair Realtors
|
13,000
|
|
314
|
3185
|
Akira Invest P.L.
|
13:52:41
|
108.25
|
15,000
|
13:52:41
|
763
|
13:52:40
|
9909
|
Pat Fin Con . P.L.
|
|
Mayfair Realtors
|
10,000
|
|
314
|
3186
|
Akira Invest P.L.
|
13:53:05
|
108.25
|
15,000
|
13:53:05
|
763
|
13:53:04
|
9910
|
Pat Fin Con. P.L.
|
|
Onlookers Invest
|
5,970
|
|
Mayfair Realtors
|
9,000
|
|
3187
|
Mayfair Realtors
|
13:53:20
|
30
|
13:53:20
|
|
314
|
3188
|
Akira Invest P.L.
|
13:55:36
|
108
|
1,250
|
13:55:42
|
763
|
13:55:41
|
9911
|
Pat Fin Con. P.L.
|
|
Mayfair Realtors
|
1,250
|
|
314
|
3189
|
Akira Invest P.L.
|
14:00:42
|
108
|
600
|
14:00:42
|
763
|
14:00:40
|
9912
|
Ami Impex
|
|
Mayfair Realtors
|
2,400
|
5.26 I also find from the above table that two of the Noticees placed combined buy orders. I also find that the above five trades for 85,500 shares were matched/synchronised in nature. Likewise, on 30/04/2001 in settlement no. 06 M/s Akira was involved in matched deals with the clients of M/s Bharat for 10,000 shares. Further, on 02/05/2001 in settlement no. 06, M/s. Pals and M/s. Bharat J Patel have entered into 2 matched trades totalling 60,000 shares. For the said matched deals, buying client was M/s Akira who was the client of M/s Pals.
5.27 I find even on 04/05/2001 in settlement no. 06 that the said two brokers were involved in 4 matched trades totalling 1,00,000 shares. For the said matched deals, buying client was M/s Akira a client of M/s Pals.
5.28 On 12/04/2001 in settlement no. 03, M/s Pals executed three matched trades with M/s Bharat totalling to 75,000 shares. In all three trades, M/s Akira was the ultimate buying client of M/s Pals.
5.29 On 19/04/2001 in settlement no. 04, M/s. Bharat entered into 5 matched trades totalling 120,000 shares with M/s. Pals. The trades matched during the day were as follows:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3074
|
Akira Invest P.L.
|
14:14:04
|
108
|
25,000
|
14:14:05
|
763
|
14:14:05
|
9739
|
Hinduja Fin Cor
|
|
314
|
3075
|
Akira Invest P.L.
|
14:14:26
|
108.2
|
25,000
|
14:14:26
|
763
|
14:14:21
|
9740
|
Hinduja Fin Cor
|
|
314
|
3076
|
Akira Invest P.L.
|
14:14:48
|
108
|
24,750
|
14:14:48
|
763
|
14:14:48
|
9741
|
Hinduja Fin Cor
|
|
307
|
14:15:02
|
250
|
14:15:02
|
|
314
|
3078
|
Akira Invest P.L.
|
14:15:19
|
108
|
25,000
|
14:15:20
|
763
|
14:15:18
|
9742
|
Hinduja Fin Cor
|
|
314
|
3080
|
Akira Invest P.L.
|
14:38:50
|
108.05
|
20,000
|
14:38:50
|
763
|
14:38:47
|
9743
|
Hinduja Fin Cor
|
5.30 On 26/04/2001 in settlement no. 05, M/s. Bharat entered into 6 matched trades totalling 96,000 shares, with M/s. Pals. The trades matched during the day were as follows:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3165
|
Akira Invest P.L.
|
14:26:43
|
108.4
|
10,000
|
14:26:43
|
763
|
14:26:43
|
9895
|
Pat Fin. Con.P.L.
|
|
Onlookers Invest
|
15,000
|
|
314
|
3166
|
Akira Invest P.L.
|
14:26:57
|
108.4
|
12,500
|
14:26:58
|
763
|
14:26:58
|
9896
|
Pat Fin Con.P.L
|
|
Onlookers Invest
|
5,000
|
|
Mayfair Realtors
|
7,500
|
|
314
|
3173
|
Akira Invest P.L.
|
14:52:26
|
108.4
|
25,000
|
14:52:26
|
763
|
14:52:24
|
9898
|
Pat Fin Con.
|
|
314
|
3174
|
Akira Invest P.L.
|
14:53:04
|
108.4
|
5,000
|
14:53:04
|
763
|
14:53:01
|
9899
|
Pat Fin Con. P.L.
|
|
Mayfair Realtors
|
5,000
|
|
314
|
3175
|
Akira Invest P.L.
|
14:54:33
|
108.4
|
2,800
|
14:53:04
|
763
|
14:54:31
|
9900
|
Pat Fin Con. P.L.
|
|
Mayfair Realtors
|
1,200
|
|
314
|
3176
|
Akira Invest P.L.
|
15:15:28
|
108
|
3,500
|
15:15:28
|
763
|
15:15:27
|
9901
|
Ami Impex
|
|
Mayfair Realtors
|
3,500
|
5.31 M/s. Bharat sold shares for its related client M/s. Pat Fin. M/s. Bharat matched its trades with M/s. Onlooker, M/s. Mayfair Realtors and M/s Akira who are related to the promoter / director of the company M/s. Roofit.
5.32 On 27/04/01 in settlement no. 05, M/s. Pals bought 722 shares during the day for Rs.104.25-Rs.107.9. The last executed trade price was Rs.104.25 for 107 shares at 13:15:59. Then, M/s. Bharat put in a sell order for 25,000 shares at 13:52:14 for Rs.108 and M/s. Pals put in a buy order for 25,200 shares at 13:52:19 for Rs.108. The order for 125 shares by M/s. Pals got executed at Rs.107-Rs.107.9 and order for 75 shares got executed at Rs.108 with other members. The order for 25,000 shares got executed with M/s. Bharat. During the day, both the brokers matched 5 trades totalling 85,500 shares. The trades matched during the day were as follows:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate
Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3184
|
Akira Invest P.L.
|
13:52:19
|
108
|
12,000
|
13:52:20
|
763
|
13:52:14
|
9908
|
Pat Fin. Con.P.L.
|
|
Mayfair Realtors
|
13,000
|
|
314
|
3185
|
Akira Invest P.L.
|
13:52:41
|
108.25
|
15,000
|
13:52:41
|
763
|
13:52:40
|
9909
|
Pat Fin Con . P.L.
|
|
Mayfair Realtors
|
10,000
|
|
314
|
3186
|
Akira Invest P.L.
|
13:53:05
|
108.25
|
15,000
|
13:53:05
|
763
|
13:53:04
|
9910
|
Pat Fin Con. P.L.
|
|
Onlookers Invest
|
5,970
|
|
Mayfair Realtors
|
9,000
|
|
3187
|
Mayfair Realtors
|
13:53:20
|
30
|
13:53:20
|
|
314
|
3188
|
Akira Invest P.L.
|
13:55:36
|
108
|
1,250
|
13:55:42
|
763
|
13:55:41
|
9911
|
Pat Fin Con. P.L.
|
|
Mayfair Realtors
|
1,250
|
|
314
|
3189
|
Akira Invest P.L.
|
14:00:42
|
108
|
600
|
14:00:42
|
763
|
14:00:40
|
9912
|
Ami Impex
|
|
Mayfair Realtors
|
2,400
|
5.33 On 30/04/2001 in settlement no. 06, total shares traded during the day were 10,105. Out of these, M/s. Pals and M/s. Bharat have entered into matching transactions for 10,000 shares. These were the last trades to be executed on the day. The trade executed prior to these trades was for 100 shares at Rs.110 at 10:33:08. The trades matched during the day were as follows:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3215
|
Akira Invest P.L.
|
14:08:53
|
107.5
|
5,000
|
14:08:54
|
763
|
14:08:50
|
9979
|
Ami Impex
|
|
314
|
3216
|
Akira Invest P.L.
|
14:09:30
|
107.5
|
5,000
|
14:09:31
|
763
|
14:09:16
|
9980
|
Ami Impex
|
5.34 On 04/05/2001 in settlement no. 06, M/s. Bharat matched 4 trades totalling 100,000 shares with M/s. Pals. The trades matched during the day were as follows:
|
BUYER MEMBER
|
Price (Rs.)
|
Qty
|
Executed Time
|
SELLER MEMBER
|
|
Clg. No.
|
Buy Order ID
|
Ultimate Clients
|
Order Time
|
Clg. No.
|
Order Time
|
Sell Order ID
|
Ultimate Clients
|
|
314
|
3265
|
Akira Invest P.L.
|
11:08:08
|
107
|
24,500
|
11:08:08
|
763
|
11:07:49
|
10153
|
Pat Fin Con. P.L.
|
|
3266
|
11:08:54
|
500
|
11:08:55
|
|
314
|
3266
|
Akira Invest P.L.
|
11:08:54
|
107
|
25,000
|
11:08:55
|
763
|
11:08:52
|
10154
|
Pat Fin Con
|
|
314
|
3267
|
Akira Invest P.L.
|
11:09:23
|
107.25
|
25,000
|
11:09:23
|
763
|
11:09:22
|
10155
|
Pat Fin Con
|
|
314
|
3268
|
Akira Invest P.L.
|
11:09:43
|
107.4
|
25,000
|
11:09:43
|
763
|
11:09:41
|
10156
|
Pat Fin Con
|
5.35 M/s. Jayantilal (Clearing No. 329) had executed trades on behalf of its clients M/s Habiscus and M/s Onlooker. These trades were also influenced the price and volume in the scrip of Roofit. The said trading and price movement in settlement no. 34 (November 07, 1999 to November 12, 1999) is as under:
Date
|
Open (Rs.)
|
High (Rs.)
|
Low (Rs.)
|
Close (Rs.)
|
Trades
|
Volume
|
Turnover (Rs.)
|
|
07/11/1999
|
160.00
|
167.65
|
159.80
|
167.65
|
21
|
3000
|
496275
|
|
09/11/1999
|
175.00
|
181.05
|
162.05
|
181.00
|
59
|
9760
|
1713024
|
|
11/11/1999
|
195.45
|
195.45
|
191.10
|
194.10
|
123
|
20660
|
4014485
|
|
12/12/1999
|
187.00
|
196.00
|
182.55
|
194.80
|
93
|
16500
|
3126732
|
DEMAT ANALYSIS OF THE BROKERS VIS-À-VIS THE NOTICEES
5.36 Demat statement of the above mentioned brokers who had dealt for the Noticees were analysed and observed that some of the brokers were making adjustment for their clients (Noticees) as far as delivery of securities was concerned, which also highlights the close relationship / association between the Noticee and the brokers.
5.37 Further, the transfer of large quantity of shares belonging to clients of one broker to other brokers / clients only reflects that these brokers were aware that the related clients were dealing through other brokers also and they were ready to accommodate the net settlement obligations arising at other trading members. To make it clear, demat analysis of 3 major members is given below. I observe that that similar findings were also observed in case of other brokers also.
a. Demat analysis of M/s Amgis
i) In settlement no. 02, the brokers bought 53,288 shares for M/s. Mayfair Realtor and 51,076 shares for M/s. Habiscus. The brokers credited only 34,788 shares into M/s. Mayfair Realtor’s a/c. and 47,576 shares into M/s. Habiscus’s a/c. The remaining 22,000 shares (1,04,364 – 82,364 = 22,000) remained in the broker’s a/c.
ii) M/s. Amgis had purchased 2,32,520 shares for M/s. M’Belle in settlement no. 2001009. As per the NSE investigation report, M/s. Amgis transferred only 1,92,470 shares into M/s. M’Belles a/c. and 40,000 shares to beneficiary account of another broker, M/s. Goldcrest.
iii) M/s. Amgis had purchased 2,02,100 shares for M/s. M’Belle in settlement no. 2001011. As per the NSE report, M/s. Amgis transferred 46,000 shares into the account of another trading member, M/s Express.
iv) Therefore, it appears that M/s. Amgis was making adjustment for its clients as far as delivery of shares was concerned, which also highlights the close relationship / association between the said clients and the broker. Further, the transfer of large quantity of shares belonging to clients by the broker to other brokers only reflects that the broker was also aware that the client was dealing through other brokers and was ready to accommodate the net settlement obligations arising at other broker.
b) Demat analysis of M/s Goldcrest
i) In settlement no. 2000053 of NSE, the broker had sold 1,50,000 shares for M/s. Onlooker and 25,000 shares for M/s. Mayfair Realtor. The broker’s Pool demat statement shows that the broker had received 65,000 shares from M/s. Onlooker’s A/c. and 1,20,000 shares from M/s. Habiscus’s A/c to meet the pay-in obligation of settlement no. 2000053.
ii) In settlement no. 2001002 of NSE, the broker had sold 2,00,000 shares for M/s. Habiscus at NSE. Broker had received these shares from M/s. Alkan, M/s. Vynex and M/s. Mayfair Paper’s account. Member had executed purchase transactions for these clients at BSE. Thus, shares were received from BSE pool a/c. to meet the pay-in obligation at NSE.
iii) In settlement no. 2001003 of NSE, member had sold 1,36,000 shares for M/s. Habiscus. Member had received 42,000 shares from M/s. Mayfair Realtor’s a/c and 39,000 shares were received through pledge closure.
iv) In settlement no. 2001007 of NSE, M/s. Goldcrest had sold 93,000 shares for M/s. Alkan and 2,02,000 shares for M/s. M’Belle, amounting for 2,95,000 shares. Demat statement of the broker reveals that the broker received 3,05,000 shares from M/s. M’Belle on 23.02.2001. These shares were pledged with Bank of Punjab on 27.02.2001. The pledge was revoked on the same day and 2,95,000 shares out of 3,05,000 shares were used to make the pay-in. Therefore, the trading member used shares received from M/s. M’Belle to make pay-in even for M/s. Alkan.
v) In settlement no. 2001009 of NSE, M/s. Goldcrest sold 53,000 shares for M/s. Onlooker and 2,37,000 shares for M/s. M’Belle. Demat account of the broker reveals that the broker had received 2,55,000 shares from M/s. Onlooker and 80,000 shares from M/s. Mayfair Realtors amounting to 3,35,000 shares. Out of these, 3,25,000 shares were used for making pay-in.
vi) In settlement no. 11 of NSE, M/s. Goldcrest had sold 1,00,000 shares for M/s. Onlooker, 1,25,000 shares for M/s. M’Belle and 1,55,000 shares for M/s. Habiscus. Demat statement of the broker shows that to meet the pay-in obligation of the above mentioned clients, 40,000 shares were received from the broker BSE beneficiary a/c. which in turn were received from the demat a/c. of M/s. Amgis. The remaining 3,80,000 shares were received by the broker through pledge closures. The shares pledged were received from different related clients / entities. Similar pattern was observed in other settlements.
c) Demat analysis of M/s Pals
i) In settlement no. 45 (29.01.2001 – 02.02.2001), M/s. Pals – broker of BSE - had purchased 30,000 shares for M/s. M'Belle. M/s. Pals transferred these shares to M/s. Goldcrest’s BSE beneficiary A/c. instead of M/s. M'Belle A/c. These 30,000 shares were pledged with Bank of Punjab on 12.02.2001. On 15.02.2001, pledge closure request was made for 20,000 shares by M/s. Goldcrest which were transferred to NSE Pool A/c. of M/s. Goldcrest to meet the pay-in obligation of settlement no. 06. M/s. Goldcrest’s trading details show that the broker had sold 20,000 shares for M/s. Alkan during settlement no. 06.
ii) In settlement no. 47, M/s. Pals had purchased 2,03,415 shares for M/s. M'Belle but payout was made for 2,01,850 shares out of which 1,66,850 shares were transferred into M/s. M’Belle’s a/c. and 30,000 shares were delivered to Canara Bank (Inhouse a/c.) / 10026439 – the demat account of the group/ associated entity of M/s. Pals.
iii) In settlement no. 49, M/s. Pals had purchased 80,000 shares for M/s. Onlooker but made the delivery of the shares to Canara Bank (Inhouse a/c. 10026439).
iv) In settlement no. 52, M/s. Pals had purchased 67,800 shares for M/s. M'Belle but made the deliveries to Pat Financial Cons. Pvt. Ltd. (50,000 shares).
v) In settlement no. 01, M/s. Pals had purchased 2,76,036 shares for M/s. M’Belle. Payout was made for 2,68,151 shares. Out of 2,68,151 shares, 351 shares were delivered to M/s. M'Belle. 1,20,000 shares were delivered to Superior Fin. Cons. Ser. P. Ltd., 67,800 shares were delivered to Sigma Credit & Cap. Ser. P. Ltd. and 80,000 shares were delivered to Canara Bank Inhouse a/c.10026439.
TRANSFER OD SHARES
5.38 It is observed that for meeting settlement obligations, shares received in the BSE Pool a/c. of the broker were transferred from NSE Pool a/c. instead of clients’ a/c. and vice versa and also shares received in NSE Pool a/c. of the trading member were transferred to NSE Beneficiary a/c and thereafter to BSE Pool a/c. The details of the same are as under:
i) Shares transferred from NSE Pool A/c. to BSE Pool A/c.:
In BSE – settlement no. 44 (22.01.2001 – 25.01.2001) - M/s. Goldcrest sold 90,000 shares for M/s. Alkan, 35,000 shares for M/s. Vynex and 1,55,000 shares for M/s. Mayfair Paper & Board. These clients had to give the delivery on the pay-in day i.e. on 01.02.2001. Demat statement of M/s. Goldcrest shows that these shares were received from its NSE Pool A/c instead of clients’ A/c.
The NSE Pool A/c. statement of M/s. Goldcrest shows that in settlement no. 04 (24.01.2001 – 30.01.2001) on 27.01.2001, 55,000 shares were received from M/s. Habiscus and 42,000 shares were received from M/s. Mayfair Realtor. 97,000 shares were transferred to NSE Clearing Corporation on 29.01.2001 (for Pay in of settlement no. 03). On 30.01.2001, member received 1,00,000 shares from M/s. Onlooker, 1,00,000 shares from M/s. Alkan and 1,40,000 shares from M/s. Habiscus. Out of these 3,40,000 shares 60,000 shares were transferred to its NSE Beneficiary A/c. for pledging with Bank of Punjab on 31.01.2001 and balance 2,80,000 shares were transferred to BSE Pool A/c. to meet the pay-in obligation for settlement no. 44 at BSE.
Thus, the member has interchangeably used the shares received from one set of related clients to meet the pay in obligation of another set of related clients at both the exchanges. Some shares were pledged with the Bank of Punjab for a day or so and later these shares were used to fulfil the pay-in obligations by closing the pledge request. In some cases reverse transfer of shares was also observed.
Similar adjustments were made in settlement no. 46, 47 and 48 by M/s. Goldcrest to meet its pay in obligation at BSE by transferring shares from NSE Pool a/c.
ii) Shares transferred from NSE Beneficiary A/c. to BSE Pool A/c.
In BSE - Settlement No. 45 (29.01.2001 – 02.02.2001) - M/s. Goldcrest sold 25,000 shares for M/s. Alkan, 55,000 shares for M/s. Habiscus and 42,000 shares for M/s. Jitendra Mehta. The pay-in day for the delivery of these shares was on 08.02.2001. Demat statement shows that these shares were received from NSE Beneficiary A/c.
From NSE Pool A/c. it was observed that in settlement no. 05 (31.01.2001 – 06.02.2001) on 02.02.2001, 1,13,000 shares were received from M/s. Alkan and 70,000 shares were received from M/s. M'Belle. Out of these 1,83,000 shares, 1,48,000 shares were transferred to its NSE Beneficiary A/c on 03.02.2001 and the remaining 35,000 shares were used to meet the pay-in obligation of settlement no. 04.
On 08.02.2001, 1,22,000 shares were transferred from NSE Beneficiary A/c. to BSE Pool A/c. to meet the pay-in obligation of shares at BSE for settlement no. 45.
Similar adjustment was made by M/s. Goldcrest to meet its pay-in obligation at BSE by transfer of shares from NSE Beneficiary A/c. in settlement no. 49, 50 and 51.
STATEMENT OF THE PARTIES
5.39 I observe that statements of the major parties were recorded to ascertain the nature and purpose of the trading pattern which are given hereunder:.
i) During the course of his deposition on 14.02.2003, Shri Deven Mehta, director of the brokers M/s. Pals and M/s. Amgis, was asked by Investigating Authority whether he was aware that the clients for whom he had executed trades are directly / indirectly related to each other and to the company M/s. Roofit. Shri Deven Mehta admitted “that the clients M/s. Onlooker, M/s. Habiscus, M/s. Akira, M/s. Alkan, M/s. M’Belle and M/s. Mayfair Realtors are / were directly / indirectly related to each other” as well as to “M/s. Roofit”.
ii) In the course of his deposition, he also accepted that he had introduced the said clients to various brokers who acted as financiers for these related clients. He submitted that “The clients M/s Onlooker, M/s Habiscus, M/s Akira, M/s Alkan, M/s M’Belle, M/s. Mayfair Realtors were in need of funds and as they were known to us, on some occasions, we did introduce them to other brokers viz. M/s. Goldcrest, M/s. Prashant J Patel, M/s. Express Securities and M/s. Bharat J Patel”.
iii) The statement of Shri Tushar Tanna, Director M/s Goldcrest was recorded on 27.01.2003 and 10.02.2003. Shri Tanna accepted before the IA that the related clients for whom M/s Goldcrest had executed trades were introduced by Shri Deven Mehta.
iv) He also submitted that M/s Goldcrest acted as a financier to these clients. He submitted that “We were also to make spot payment to the clients though we were to receive the money later from either the NSE or the BSE on pay-out date. We were charging these clients a certain amount of pre-payment charges and brokerage for making these payments in advance. The pre-payment charges were the same for all these ten clients and was levied for approx. one settlement period which at that time was for one week. The pre-payment charge was approx. 1% of the transaction value. On pay-out dates, the money for the sales for these ten clients would remain with us rather than going to the clients, since we had already paid them off”.
v) It was also found that M/s Goldcrest received shares in advance in its NSE Pool a/c. or in its BSE Pool a/c. before placing sell order for these related clients and would transfer the shares as per the requirement of pay-in in either of the exchanges. When confronted in this regard, Shri Tanna replied that “We received these shares either in the NSE or the BSE pool account. However, the sale may not necessarily have taken place at BSE or NSE. We would transfer the shares from the NSE to the BSE pool account or vice versa, as per the requirement of shares for pay-in. If we already had shares, in this account, we would not transfer additional shares to save on demat charges”.
vi) Statements of other members viz. M/s Bharat, M/s Prashant and M/s Express were also recorded and all of them directly or indirectly admitted that these related clients were introduced by Shri Deven Mehta as they were in need of funds.
5.40 At this juncture I note that the transactions of the Noticees in the scrip of Roofit are a kind of structured deals. In the instant case, I find that the Noticee among themselves carried out the structured trades in Roofit with a view to create artificial volumes. The Noticee never disputed the said transactions. They have stated in their replies that the said trades were executed in their normal course of business. The said explanation of the Noticees are not acceptable in view of the clear findings of manipulation.. I find that large volumes had been created by the Noticees by way of the above structured deals and creation of false market from which undue benefit of the Noticees are certain. The said transactions cannot be termed as genuine transactions in view of its manipulative intent to influence the market.
5.41 Apart from the above, I find that all the Noticees neither cooperated nor furnished requisite information during the process of investigation in this matter. Accordingly, SEBI has launched adjudication as well as prosecution proceedings under the appropriate provisions of SEBI Act, 1992 against all the eight Noticees. Four out of the said eight Noticees viz. M/s Alkan, M/s Mayfair Paper, M/s Vynex and M/s M’Belle appealed to Hon’ble Securities Appellate Tribunal (SAT) against the impugned order of Adjudicating Officer. SAT has reduced the penalty in case of first three Noticees while fully upheld the impugned order in the case of M/s M’Belle.
5.42 Having considered all the above aspects of the matter, I find that Noticees are related to the promoter/director of the company Roofit and were traded through many brokers by executing structured/matched trades with a view to create artificial volumes and manipulating/maintaining the price. Thus, the cycle of such transactions continued settlement after settlement by entering into structured deals with the broking entities who had made the payments and ensured that Noticees did not lose control over their shares and that the cycle could be repeated. The said transactions are not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate or cause fluctuation in the market price of the security. Thus, it is found that Noticees are responsible for creating false or misleading appearance of trading in the market and also entering into trades which are not genuine trade transactions. Hence I find that Noticee had violated provisions of Regulation 4 (b), 4 (c) and 4 (d) of PFUTP Regulations.
6.0 ORDER
6.1 Therefore, taking into consideration facts and circumstances of the case, I, in exercise of the powers conferred upon me under Sections 19 of the SEBI Act read with Sections 11(4) and 11B of SEBI Act, 1992 and Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, do hereby restrain the Noticees from buying, selling and dealing or accessing the securities market in any manner for a period of six months from the date of this order.
6.2 This order shall come into force with immediate effect.
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Mumbai
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V. K. CHOPRA
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January 09, 2007
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WHOLE TIME MEMBER
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SECURITIES AND EXCHANGE BOARD OF INDIA
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