Regulations
SEBI imposes Rs1.75 lakh fine on Galaxy Broking in T Spiritual World case

SEBI probe found that a group of entities connected to each other and to T Spiritual World had dealt in the stock in a fraudulent and manipulative manner

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs1.75 lakh on Galaxy Broking Ltd on charges of aiding and abetting its clients in fraudulent dealings in shares of T Spiritual World Ltd (TSWL), by seeking to create artificial volumes and influencing the stock price, reports PTI.

 

SEBI passed the order, dated 4th September, after a probe into the share dealings of TSWL for a period from 12 July 2004 to February 2005 -- during which its share price fell from Rs27.85 to Rs5.06.

 

A total of 2,07,94,921 shares got traded in 130 trading days with an average daily volume of 1,59,961 shares in this period.

 

The probe found that a group of entities connected to each other and to TSWL had dealt in the stock in a fraudulent and manipulative manner during the investigation period, by creating artificial volume, false and misleading appearance of trading and price manipulation.

 

It was further found that Galaxy Broking Ltd aided and abetted three of the entities in executing trades in the scrip as a broker and had allegedly failed to maintain complete and proper Know Your Client (KYC) forms of its clients.

 

SEBI further found that the broking firm had placed large orders in the scrip for a quantity during the investigation period. Out of the total 48 such large buy orders and 21 large sell orders placed in the scrip, Galaxy Broking accounted for 40 buy orders and 7 sell orders, respectively.

 

The said buy orders were placed at rates which were marginally lower than the prevailing market price.

 

Further, most of such large buy orders were deleted by the broker at a later stage and only two% of the total large orders placed by it got executed.

 

The broker deleted most of the large buy orders from the system after keeping them exposed for some time and the orders were generally placed at prices lower than prevailing market price, making it clear that the same was done to avoid buy orders getting executed, SEBI said.

 

The regulator said the entity had also influenced the price by placing buy orders at higher price in the scrip for its client, Vintel securities Pvt Ltd, while it also did not maintain proper KYC forms of its clients.

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SEBI passes final order on PG Electroplast case

SEBI barred Alfa Fiscal Services and its directors -- Hardik R Bagadia and Bhavesh Natwarlal Sheth from the securities market, except allowing Sheth to sell other securities held in his demat account

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has passed the final order in the matter of alleged irregularities committed by Alfa Fiscal Services and its two directors related to the initial public offering (IPO) of PG Electroplast, reports PTI.

 

SEBI's order comes a week after SAT directed the market regulator to expedite decision on the case.

 

The market regulator has barred Alfa Fiscal Services Private Ltd and its directors -- Hardik R Bagadia and Bhavesh Natwarlal Sheth from the securities market.

 

However, Sheth has been allowed to sell the securities other than shares of PGEL, held by him, if any, in his demat accounts, the final order said.

 

The Securities Appellate Tribunal (SAT) on 29th August had directed SEBI to pass final orders within two weeks in the case related to irregularities in the IPO and trading of the shares of PG Electroplast and another case.

 

In its final order, SEBI said it was upholding the interim order -- issued on 28 December 2011 -- that barred Alfa Fiscal Services and the two directors from the securities market.

 

SEBI said it was confirming the "directions issued vide the ad interim ex-parte order dated 28 December 2011 in matter of IPO of PG Electroplast Ltd against Alfa Fiscal Services Private Ltd and its director Hardik R Bagadia and modify the directions issued vide the said order against Bhavesh Natwarlal Sheth...".

 

The modification is only to the limited extent of allowing Sheth to sell the securities other than shares of PGEL.

 

According to the order, Sheth shall deposit sale proceeds, in case of any sale, in a bank fixed deposit earning interest and he shall not be allowed to withdraw monies from the said account including interest without the prior permission of SEBI.

 

During its probe into alleged irregularities in the IPO and trading of the PG Electroplast Ltd shares, SEBI prima facie found that investment company Alfa Fiscal Services and the two directors traded in that scrip with an intention to push the share price higher.

 

Alfa Fiscal Services and the directors -- Bagadia and Sheth -- approached SAT on the issue.

 

The appellants submitted to SAT that SEBI's action of not having passed a final order, despite a lapse of more than 7 months, is a major irregularity on the part of the regulator and calls for the order to be set aside.

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Sivakasi tragedy: Mourning at Diwali this year

Reports indicate that facilities at the government hospitals at Sivakasi are far from satisfactory and inadequate, besides being poorly equipped. It is important that the state takes adequate measures for management of healthcare in local hospitals to ensure speedy treatment in case of emergencies 

This Diwali will be a day of national mourning for the people who lost their lives in the unfortunate Sivakasi tragedy at the Om Sakthi Fireworks factory on Wednesday, due to poor safety measures.

 

Reports indicate that so far 39 people have lost their lives, many of whom were neighbours working in the surrounding areas, who came to the site on hearing the explosions, the first of which was heard at 12.20pm and followed by another some 40 minutes later.

 

The Department of Explosives had, in fact, cancelled the license of the firm only one day earlier, apparently after several warnings were issued to the owners for not adhering to the minimum safety standards. As many as 40 violations had been found before necessitating the licence cancellation. Murugesan, the owner, and other responsible people of the unit are reported to have fled the scene of this unfortunate tragedy.

 

Sivakasi, in Tamil Nadu, is the home of India’s largest fireworks production, employing more than 40,000 workers directly in some 450 factories with a very large number of other workers involved in related services.

 

The safety inspectors and Fire Service Officers are permitted to demand the factory owners to either comply with safety norms required or stop the operations until the required measures are in place. So, instead of simply issuing the order for cancellation of the licence, the safety authorities ought to have enforced the rule of locking out the factory premises. Such a move would have made the factory owners to comply with the safety standards and the loss of lives could have been avoided.  

 

Further reports in the press and the news channels indicate that facilities at the government hospitals at Sivakasi are far from satisfactory and inadequate, besides being poorly equipped, considering the huge working population in these fireworks factories, many of which are on a small scale. Literally, everyone in this town is some way or other involved in the fireworks industry. This is a cottage industry, both licensed and many illegal and even underage children are reportedly employed in these units.

 

The accident victims, due to poor medical facilities available locally, had to be taken to Madurai by motor vehicles and other nearby areas, many of whom died after being admitted in the hospitals. They may have died because of the transit delays.

 

As is usual with such tragedies, TN chief minister Jayalalithaa has announced various compensation packages for the victims, for loss of life, injury, etc. While this is an important and humanitarian act, what is more realistic, for the future, is to ensure that the existing facilities at the local hospitals are improved.

 

It appears that the district administrator had sent in a proposal to the state government last year, involving a capital expenditure of Rs4 crore, against which a sanction for Rs60 lakh has been received, as per media reports.

 

While the compensation package may give relief to the families of the victims, the fact remains that measures for the future, to prevent such incidents occurring in the place of work has not been put in place.

 

Equally important, therefore, is the immediate government measures to close all the unlicensed units; close those who do not have safety standards in place; ensure all the employees in such sites have proper insurance cover; increase the number of fire engines and related personnel in the areas of work and direct the police to locate the owners and bring them to justice.

 

No excuses and no leniency in safety measures should be tolerated.

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