PRESS RELEASE
PR-46/2006
Order in the matter of Galaxy Broking Limited, Member, BSE
(SEBI Registration No. INB010882739)
Securities and Exchange Board of India (SEBI) vide order dated January 24, 2006 has issued the following directions in the matter of Galaxy Broking Limited.
1. Suspended the certificate of registration of M/s. Galaxy Broking Limited, Member, BSE (SEBI Registration No. INB0108827390) and directed not to buy, sell or deal in securities, in any manner, either directly or indirectly, till further directions in this regard.
2. Clients of Galaxy, listed in the following table are directed not to buy, sell or deal in securities of companies indicated against their names in Table, directly or indirectly, till further directions in this regard.
|
S. No.
|
Name of the Client
|
Name of the company
|
-
|
Anil Gandhi Group (Anil Gandhi, Priti Anil Gandhi, Amrut Securities, Deepak Ashar, Manish Ashar, Chintamani Share and Broking Ltd., Sudha Amrutlal Gandhi, Pooja Anil Gandhi, Amrutlal Jivandas Gandhi,)
|
Baffin Engineering
|
-
|
Anil Gandhi Group
|
Global Boards Limited
|
-
|
Anil Gandhi Group
|
Shukun Construction
|
-
|
Anil Gandhi Group
|
Birla Power
|
|
Chirag Shah
|
-
|
Girdharbhai J Vagadia
|
Fast Track Entertainment
|
|
Rite deal Trading
|
-
|
Ganesh Raut
|
Mega Corporation
|
|
Anil Gandhi Group
|
|
Vintel Securities
|
-
|
Girdharbhai J. Vagadia
|
Prraneta Industries
|
-
|
Stardom Trading
|
Millennium Cybertech
|
|
Anil Gandhi Group
|
|
Vintel Securities
|
|
IFSL Group(IFSL, Cardiod Marketing,
|
-
|
Suresh Pukhraj Jain
|
Karuna Cables
|
|
IFSL Group
|
|
Vintel Securities
|
-
|
Anil Gandhi Group
|
Kirti Finvest
|
|
Darshit Patel
|
|
Chirag Shah
|
-
|
Chirag Shah
|
Dolphin
|
|
Anil Gandhi Group
|
-
|
Anil Gandhi Group
|
Swan Mills
|
|
Chirag Shah
|
-
|
DilipKumar Adukia
|
IFSL
|
|
Anil Gandhi Group
|
-
|
Chirag Shah
|
IQMS
|
|
Darshit Patel
|
|
Anil Gandhi Group
|
-
|
SureshKumar P.Jain
|
Robinson
|
|
IFSL Group
|
|
Anil Gandhi Group
|
-
|
Anil Gandhi Group
|
Wellworth overseas
|
|
Chirag Shah
|
|
Darshit Patel
|
-
|
Troop Track Electrodes
|
Gangotri
|
-
|
Chirag Shah
|
Intradeco
|
|
Anil Gandhi Group
|
|
Darshit Patel
|
-
|
Rational Finvest
|
Landmark Leisure
|
3. The Depositories shall not give effect to any transfer of shares of the companies listed as per Table above, lying in the beneficial owner accounts of clients mentioned in table
The order has been passed by Shri G.Anantharaman, Whole Time Member, SEBI in the following context:
Galaxy has played a major role in generating artificial volumes and rise in the prices of large number of penny stocks. The burgeoning volumes created through the artifice of a web of off market/market transfers and trading between a common set of inter-connected clients, some of whom have also been funded by allowing them to maintain a large debit balances, and the tell-tale strands of inter-locking deals intermediated by the broker speak volumes about the penny stock manipulation in the most brazen way, thereby vitiating the market. Generation of this large volume, through artificial demand and supply has also helped in ramping up prices of companies which otherwise had lackluster performance which did not justify the spurt in share prices. The promoters of these companies offloaded their shareholding at higher prices, a fact which has also been brought out in the order of SEBI in the cases of Mega Corporation and Karuna Cables. It was also seen that promoters /directors were closely associated with some of the companies in which Galaxy, its directors and other inter-connected clients traded. Most of the inter-connected clients were also appeared in the recent orders of SEBI.
The order set details which highlight the most unedifying role of Galaxy in creating false market in the shares of penny stocks and inveigling investors to trade in these stocks.
In doing so, Galaxy has prima-facie violated the following:-
a. Regulation 4 (2) (a) and (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.
b. Regulation 18B, A (2), (3), (4), and (5), B (6) of Code of conduct prescribed as per Regulation 7of SEBI (Stock Brokers and Sub Brokers) Regulations, 1992.
c. SEBI Circular No.SEBI/MRD/SE/Cir-15/2004 dated March 19, 2004 read with SEBI/MRD/SE/SU/Cir-16/04 dated March 31, 2004.
d. SEBI Circular No. SEBI/MRD/SE/Cir- 33/2003/27/08 dated August 27, 2003.
e. SEBI Circular SMDRP/POLICY/CIR-49/2001 dated October 22, 2001.
f. SEBI Circular SEBI/MIRSD/DPS-1/Cir-31/2004 dated August 26, 2004.
g. Clause 5 of SEBI (Securities Lending Scheme) 1997.
The full text of the Order is available on the website: www.sebi.gov.in
Mumbai
January 24, 2006
