Order against Khandwala Integrated Financial Services Pvt Ltd in the scrip of Ranbaxy Laboratories Ltd

• 
• 
• 
• 
• 
• 
• 

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

CORAM : V.K CHOPRA, WHOLE TIME MEMBER

ORDER

Under regulation 13(4) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 against Khandwala Integrated Financial Services Pvt Ltd, Member, NSE, for the dealings in the scrip of Ranbaxy Laboratories Ltd.

1. Securities and Exchange Board of India (hereinafter referred to in short as “SEBI”) conducted investigation into the affairs relating to buying, selling and dealing in the shares of Ranbaxy Laboratories Ltd.

2. SEBI, after considering the investigation report, appointed an Enquiry Officer vide Order dated November 29, 2002 to enquire into the violations allegedly committed by the broker Khandwala Integrated Financial Services Pvt Ltd (hereinafter referred to in short as “the Broker”) under the provisions of Regulation 4(a), (b) (c) & (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, Regulation 7 read with schedule II, clause A(3) and (4) of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 and Rules, Regulations and Bye-laws of Stock Exchange.

3.                  The Enquiry Officer submitted a report dated March 26, 2004. I have perused the said report and the other material documents relied upon by him to arrive at a conclusion in the proceedings against the Broker in the matter of Ranbaxy Laboratories Ltd. It is observed from the said report that the Enquiry Officer has observed/recommended as under:

 “It is difficult to conclude that such trades of the member broker which have been considered as synchronised deals would have been done with the intention of creating artificial market or these disturbed the market equilibrium on those dates. There is no other material available on record indicating that the member broker violated the regulations as alleged. In view of the above no action is recommended against the member broker”.

4. Taking into consideration the totality of the facts and circumstances of the case and the findings/recommendations of the Enquiry Officer mentioned in the report and the relevant provisions of law governing the case, I have come to the conclusion that the instant matter is not a fit case to levy any penalty as the charges against the Broker have not been established with reasonably good evidence. Further, viewed from the relevant legal position, I feel that there is no evidence on record to prove that the said stock broker failed to exercise due skill, care and diligence in the conduct of its business.

5. Therefore, I find no reason to differ with the above recommendations of the Enquiry Officer. Accordingly, in exercise of the powers conferred upon me in terms of Section 19 of the Securities and Exchange Board of India Act, 1992 read with Regulation 13(4) of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, I hereby dispose of the enquiry proceedings as above against the broker M/s Khandwala Integrated Financial Services Pvt Ltd.