SEBI’s investigations had revealed that certain entities transacted in the shares of Adani Exports in a fraudulent manner that led to creation of artificial volume and price rise in the scrip. Saumil A Bhavnagari and his V&S Intermediaries was one such intermediary, the market regulator added
Mumbai: The Securities and Exchange Board of India (SEBI) has imposed a fine of Rs10 lakh on Saumil A Bhavnagari of V&S Intermediaries for indulging in fraudulent and unfair trade practices while dealing in the scrips of Adani Exports, reports PTI.
“After considering all the facts and circumstances of the case... hereby impose a monetary penalty of Rs10 lakh under Section 15 HA of the SEBI Act on the Noticee (Saumil A Bhavnagari),” SEBI said in an order.
The section deals with penalty for fraudulent and unfair trade practices.
SEBI had earlier conducted investigation regarding the buying, selling and dealing in the shares of Adani Exports (AEL) between 9 July 2004 and 14 January 2005 and again between 1 August 2005 and 5 September 2005.
The price of the scrip of AEL witnessed wide fluctuations during the two periods.
The role of the main brokers and clients who had traded heavily during the period under investigation in the scrip of AEL was scrutinised.
The investigations had revealed that certain entities transacted in the shares of the company in a fraudulent manner that led to creation of artificial volume and price rise in the scrip.
Mr Bhavnagari and his V&S Intermediaries was one such intermediary.
SEBI had in June 2008 issued a show cause notice to Mr Bhavnagari to which a reply was sent.
After considering all the facts, the regulator said that that the trades made by Mr Bhavnagari were fictitious.
It said the trading pattern of the noticee, by which he created a very large volume in the scrip with select counter-party clients, proves that Mr Bhavnagari had executed trades which did not result in transfer of beneficial ownership but merely created artificial volume in the scrip.
After considering all the facts of the case and going through the replies sent by the brokerages to the notices, SEBI said the exposure provided by them to their clients was as per the policy followed by them and no exceptions were seen to have been made
Mumbai: The Securities and Exchange Board of India (SEBI) on Tuesday disposed off proceedings against three brokerage firms, including Geojit BNP Paribas Financial Services, in a case relating to trading in the scrips of RTS Power Corporation, reports PTI.
In three separate orders, SEBI disposed of case relating to Geojit BNP Paribas Financial Services, Destomonies Security Pvt Ltd and Networth Stock Broking.
“Considering the facts and circumstances of the case...
do not find the instant matter fit for imposition of penalty in terms of Section 15 HB of SEBI Act and dispose of the proceedings accordingly,” SEBI said in identical orders.
Section 15 HB deals with penalty for contravention where no separate penalty has been provided in cases of failure to comply with any provisions of the SEBI Act.
SEBI had earlier conducted investigation in trading in the scrip of RTS Power Corporation at the BSE for the period 1 September 2008 and 11 February 2009.
It had received complaints that some individuals bought shares of RTS Power in February 2009 and failed to fulfil their respective pay-in-obligations.
On analysing the KYCs (know your customers) obtained from various trading members, it was observed that the three brokerage firms trading on behalf of some of the individual clients allowed huge positions within one month of registration with them even though the annual income was as below as Rs1 lakh.
“It was alleged that the exposure given to the newly registered clients considering their financial strength indicated a failure of risk management at the noticee’s end,” SEBI said, adding that the brokerage firms were alleged to have failed to exercise due care and abide by code of conduct under SEBI regulations.
In December 2010, the regulator issued separate show-cause notices to all the three firms.
After considering all the facts of the case and going through the replies sent by the brokerages to the notices, SEBI said the exposure provided by them to their clients was as per the policy followed by them and no exceptions were seen to have been made.
It also found that the noticees allowed the clients to trade only after the cheques got cleared and exposure was given after the clients had sufficient credit balance.
SEBI on Tuesday directed merchant bankers to disclose the track record of the performance of the public issues managed by them. The move will enable investors to take well-informed investment decision, the regulator added
Mumbai: With a view to enable investors to take well-informed investment decisions, the Securities and Exchange of India (SEBI) on Tuesday directed merchant bankers to disclose the track record of the performance of the public issues managed by them, reports PTI.
In a circular, SEBI of India said the decision has been taken after consultation with merchant banks.
“...it has now been decided in consultation with the merchant bankers that they shall disclose the track record of the performance of the public issues managed by them,” it said.
SEBI further added: “The track record shall be disclosed for a period of three financial years from the date of listing for each public issue managed by the merchant banker”.
It also said that the track record will have to be disclosed on the website of the merchant banker and a reference to this effect shall be made in the offer documents of public issues managed in the future.
“In case more than one merchant banker is associated with a public issue, all merchant bankers who have signed the due diligence certificate, as disclosed in the offer document, shall disclose the track record,” SEBI said.
According to the regulator, it is necessary for investors to evaluate the post-issue performance of the issuer in terms of disclosures made in the offer documents.
“This will also enable them to understand the level of due diligence exercised by the merchant bankers,” SEBI said.
It said the new rule will come into force with immediate effect.