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TMI Blog2019 (5) TMI 2003X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertain whether there were any violations of the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as "SEBI Act") and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as "PFUTP Regulations") by certain entities in the scrip of TEL during the period October 18, 2012 to January 07, 2015 (hereinafter referred to as "Investigation Period"). 3. During the investigation period, corporate announcements were in nature of announcements of financial results, book closure for Annual General Meeting, Annual General Meetings and shareholding pattern. Further, the company for FY 2013, FY 2014 and FY 2015 registered a loss of Rs. 0.04 crore, Rs. 0.10 crore and Rs. 0.13 crore respectively. 4. Based on the price volume chart, the investigation period has been divided into two patches as follows: Period Duration Opening Price/ vol on 1st day of period (`) Closing Price/ Vol on last day of period (`) Low Price/Vol during the Period (`) High Price/Vol during the Period (`) Avg no of shares traded daily during the period Pre IP 18/07/2012- 17/10/2012 There was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 53 2.66 5 Topwell Properties Private Limited 90.05 462993 454 175.60 77752 49 -85.55 92400 45 292841 360 3.51 6 South Asia Portfolios Private Limited 74.95 336590 316 121.60 82722 59 -46.65 45950 22 207918 235 2.43 Jayant Security & Finance ltd 74.80 74.80 149126 203 98.10 16202 21 -23.30 26901 29 106023 153 1.96 Rajesh Pravinkumar Jasani 55.50 250 21 55.50 205 11 0.00 0 0 45 10 1.11 Shankheshwar Metals Pvt.Ltd 52.05 499 11 52.05 212 5 0.00 0 0 287 6 1.04 7 Safed Sales Private Limited 46.65 8279 17 46.65 3659 10 0.00 0 0 4620 7 0.93 Total of Top 10 Entities 972.55 3517560 3790 1431.75 609600 458 -459.20 406342 237 2501618 3095 28.65 Total Of Mkt 464.90 11595228 11623 4996.30 2229668 1530 - 4531.40 2098037 1390 7267523 8703 100 * From the above table, it is observed that top 10 entities contributing to Net +ve LTP constituted 28.65% of market +ve LTP. Based on KYC details, off market transfers, Bank Statements (entities contributing more than 5% to market +ve LTP) and as per details from MCA website, six entities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clave Private Limited -55.50 886526 763 182.25 123145 73 -237.75 202812 101 560569 589 3.65 Total of 14 Connected Entities 655.60 6612898 6218 2023.40 1168960 761 - 1367.80 1011519 558 4432419 4899 40.49 Total Of Mkt 464.90 11595228 11623 4996.30 2229668 1530 - 4531.40 2098037 1390 7267523 8703 100 * From the above table, it is observed that 14 entities connected to the company contributed for 40.49% of market positive LTP. The positive LTP contributing trades of aforesaid connected entities were further analysed and it was observed that the counterparties to their trades were scattered. On analyzing counterparties of aforesaid connected entities having net positive LTP it was observed that some of the counterparty entities received shares in off-market in physical form from the entities connected to the company before the investigation period. On further analysis of off-market transfers in physical form, it was observed that 13 entities connected to the company transferred shares to 1,565 unique entities and some of the 1,565 entities were counterparties to the trades of 14 entities mentioned in the table above. The 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to the company who were issued convertible equity warrants except Ms. Sarala Shah and 1,565 unique entities who received shares in off-market from 13 entities connected to the company before the investigation period, are collectively hereinafter referred to as connected entities or the group. * From the positive LTP contributing trades of nine Noticees having net positive LTP, it was observed that 295 connected entities, to whom shares were transferred in off-market, were counterparties to the positive LTP contributing trades of the aforesaid nine connected Noticees (having net +ve LTP). The trade details of said nine connected Noticees with 295 connected entities as counterparties are tabulated below- Sr. No. Buyer Name Sum of LTP (in `) Sum of Trd. Qty No of trades 1 Radison Properties Private Limited 297.45 193872 135 2 Shivkhori Construction Private Limited 210.70 193341 97 3 Natural Housing Private Limited 195.65 108790 79 4 Topwell Properties Private Limited 154.35 68472 41 5 Kingfisher Propeties Private Limited 115.70 62099 37 6 South Asia Portfolios Private Limited 96.20 79124 48 7 Janvi Tanvi Share Traders P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of the Noticees, hearing notice could not be served. 8. On the day of scheduled hearing, none of the Noticees namely Spice Merchants Private Limited, Janvi Tanvi Share Traders Private Limited, South Asia Portfolios Private Limited and Safed Sales Private Limited, appeared for the hearing. Further, no request for adjournment of the hearing was received by them. Therefore hearing with respect to the aforesaid Noticees was concluded. The remaining five Noticees were granted an opportunity of hearing on April 11, 2019. The hearing notices with respect to the same was published in Sangbad Pratidin, Times of India and Sanmarg on March 23, 2019. However, on the day of scheduled hearing neither the said remaining five Noticees appeared for the hearing nor they made any adjournment request. Therefore, the hearing in the matter was concluded. FINDINGS & CONSIDERATIONS 9. Before delving into the merits of the case, I note that none of the Noticees have either replied to the SCN or have attended the hearing. Proof of service of SCN and hearing notices are on record. In this regard, the observations of Hon'ble Securities Appellate Tribunal (hereinafter referred to as 'SAT') i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tees connected to the company transferred 2,26,50,000 out of 2,27,30,000 (i.e. 99.65% of the shares allotted) to 1,565 unique entities (including joint transfers) during November 28, 2011 and January 01, 2013 via off-market transfer of shares in physical form. Thus, the 9 Noticees, 13 allottees and 1565 entities, who received shares in off-market are part of the group / connected to each other. The pictorial representation of the connection amongst Noticees, company and entities is reproduced below: 12. It is also noted from the IR that the nine Noticees have contribute to the positive LTP during patch-1 of the investigation period. The particulars of their LTP contribution is detailed as under:- Buyer Name All trades LTP Diff. >0 LTP Diff. < 0 LTP Diff. =0 % of +ve LTP to Total Market +ve LTP Sum of LTP diff Sum of QTY No of trades LTP impact QTY traded No of trade s LTP impact QTY traded No of trades QTY traded No of trades Radison Properties Private Limited 242.10 1456909 1629 395.75 221273 159 -153.65 81609 49 1154027 1421 7.92 Natural Housing Private Limited 139.15 766636 929 230.50 120299 91 -91.35 82130 58 564207 780 4.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scrip, have contributed Rs. 1161.70/- (23.24% of market positive LTP) to market positive LTP. Moreover they have executed 82.83% of their positive LTP contributing trades with the 295 connected entities. 15. On a sample basis, the positive LTP contributing trades of Kingfisher Properties Pvt. Ltd. (hereinafter referred to as "Kingfisher") was analysed with the 295 connected entities. But to have a better understanding of the Kingfisher's trades, overall trades in the scrip before Kingfisher started trading has to be taken into account. It is noted from the data available on BSE Ltd. website that 17 trades were executed in the scrip in the period from November 2, 1995 to October 17, 2012 with 1 trade on 16 instances. The last of the trade executed in the aforesaid period on November 28, 2011. From October 18, 2012, trading was again resumed in the scrip and till February 8, 2013 on an average 4 trades were executed in the scrip wherein the average number of shares traded was 117. The trading in the scrip increased from the next trading day i.e., February 11, 2013. 52 trades were executed for 22,136 shares and thereafter both volume and number of trades in the scrip were on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently at higher prices than its previous buy, over a period of four months. It is also noted from the order log trade log that during the entire investigation period of 27 months that Kingfisher had executed 1 sell trade in the scrip. This when seen in light of the fundamentals of the company, does not justify its buying pattern in the scrip. 17. I note that whether the Noticees have played a role in manipulating the price of the scrip or not has to be determined based on attending circumstances because direct evidence in such cases may not be available. The list of factors to be taken note of, in the very nature of things, cannot be exhaustive. Any one factor may or may not be decisive and it is from the cumulative effect of attending circumstances an inference will have to be drawn. 18. In this regard, the observations of Hon'ble Supreme Court of India in SEBI vs. Kishore R Ajmera et.al. decided on February 23, 2016 wherein the Hon'ble Court while deciding the matter under SEBI Act and PFUTP Regulations where there was no direct evidence forthcoming, observed as follows: "It is a fundamental principle of law that proof of an allegation levelled against a person may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uy, sell or otherwise deal in securities in a fraudulent manner; (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under; (c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange; (d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under. Regulation 4. Prohibition of manipulative, fraudulent and unfair trade practices (1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise of the powers conferred upon me in terms of Section 19 read with Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992, hereby restrain Radison Properties Private Limited (PAN: AAFCR2818B), Natural Housing Private Limited (PAN: AADCN6251G), Topwell Properties Private Limited (PAN: AADCT8403C), South Asia Portfolios Private Limited (PAN: AABCS5265M), Kingfisher Properties Private Limited (PAN: AAECK3394G), Janvi Tanvi Share Traders Private Limited (PAN: AACCJ0062C), Safed Sales Private Limited (PAN: AALCS7721G), Shivkhori Construction Private Limited (PAN: AAPCS7850L) and Spice Merchants Private Limited (PAN: AAPCS7492G) from accessing the securities market for a period of seven years from the date of this order and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of seven years, from the date of this order. Needless to say, in view of prohibition on sale of securities, it is clarified that during the period of restraint, the existing securities holding, including units of mutual funds, of the aforesaid en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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