TMI Blog2012 (12) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities directly or indirectly or being associated with the securities market in any manner for a period of 18 months. The whole time member passed the impugned order in exercise of the powers conferred upon him by the provisions of Section 19 read with Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (the Act) and Regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (FUTP regulations). The Board detected synchronized trades while investigating the dealings in the scips of Temptation Foods Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in by the connected group who dealt in the same scrip. When the appellant traded in the scrips which were traded by a specific group of entities who indulged in creation of artificial volumes it was but natural that the appellant s trades also got matched though the appellant had no role in it. It is submitted that the appellant acted through her husband Shri C.J. Dalal, who happens to be a broker for the connected group of entities, and this cannot be taken as a ground for clubbing her with the connected entities. There is no allegation of benami trades on behalf of her husband and in such a scenario she cannot be held to have acted in collusion with the connected group involved in the dealings. The appellant is stated to be a regular trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of an additional affidavit during the hearing of the appeal. A reference was made to the case of Lalkar Securities P. Ltd. in which an order has been passed by the whole time member (WTM/RKA/ID-4/47/2012 dated October 9, 2012) in which the appellant was let off with a warning and it is argued that the appellant s case is also similar in nature. 4. The learned senior counsel appearing for the Board submitted that trades have taken place in the impugned scrips through a group of connected entities like Maruti Group and Maniar Group through reversal, self trades and off market transactions and the trades of the appellant also substantially fell in the same category and hence the theory of mere coincidence cannot be accepted. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration and the appellant has contributed to the manipulative activity of the group through her matched trades. 5. We have considered the rival submissions. The trades of the appellant in the scrips of Bang, Confidence and Cals remain undisputed. The appellant acted through Shri C.J. Dalal, her husband, who is a broker. The appellant is the director of Krishvi Securities Pvt. Ltd. Major counter party clients in the dealings in the scrip of Bang were Maruti and Maniar Group. They also traded through broker Shri C.J. Dalal, appellant s husband. The trades of the appellant convincingly demonstrate that the appellant has indulged herself in synchronized / reversal transactions. We cannot accept the theory of coincidence in the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found to be part of the group indulging in manipulative transactions when the initial interim order was passed in the group of cases. However, this cannot mitigate the gravity of the manipulation to which the appellant is found to be a party. The appellant s consistent participation in the synchronized trades along with the group entities has surely contributed to the creation of artificial volumes. The argument of the learned counsel that the appellant s role in the scheme of manipulation has to be viewed in the background of her overall trades does not merit consideration. The relationship of the parties, the continuous and consistent matching of trades and the transactions in the same scrips by all the group entities through a central br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuted self trades in the shares of Bang and Confidence. There has been no convincing explanation for the self trades in the reply to the show cause notice. However, during the hearing of the appeal, an affidavit was filed stating that the self trades were for shifting of position from one broker account to another broker account. Again we cannot accept this contention. The appellant has not clarified as to why this has been put through in the form of purchase and sale instead of through proper book entries. In the affidavit, while dealing with self trades of 28,968 shares the appellant would give credit for the so-called transfer entries to the impugned shares except 500 shares. This means that the self trades in respect of 500 shares remai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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