2012 (12) TMI 1146 - AT - Companies Law

Summary

Issues involved: Alleged violation of Securities and Exchange Board of India regulations leading to market manipulation and imposition of penalty under Section 15HA of the Securities and Exchange Board of India Act, 1992.

Summary:
1. The appellant, an investor and trader in the share market, was found to have engaged in manipulative trades related to the scrip of a company, leading to artificial volume creation. The appellant was alleged to be part of a group involved in synchronized and structured trades affecting market prices.

2. The appellant denied the charges, claiming that others misused his name and account without authorization. Despite filing a FIR against the involved parties, the adjudicating officer found the appellant guilty of violating regulations and imposed a penalty of `8 lacs under Section 15HA of the Act.

3. The appellant challenged the adjudication process, arguing that the penalty was based on conjectures and lacked evidence. However, the respondent Board supported the adjudicating officer's decision, presenting documents showing the appellant's awareness of the trades conducted on his behalf.

4. The High Court dismissed the appellant's objection regarding the composition of the Appellate Tribunal, allowing the appeal to proceed. After considering arguments from both sides, the Tribunal upheld the adjudicating officer's order, rejecting the appellant's defense of not understanding English and finding the penalty proportionate to the established violation.

5. The Tribunal concluded that the adjudicating officer followed due procedure, provided detailed evidence of manipulative trades, and considered relevant factors in imposing the penalty. The appeal was dismissed, with no costs awarded.