TMI Blog2020 (2) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... iction rather than normal business. Coupled with the finding that the appellant had other transactions off-market with Gromo as given in Table 2 page 13-14 of the impugned order is sufficient evidence to prove the connection between Gromo, the appellant and entities in the Kamalakshi Group, many of whom are inter connected in the matter as explained in the said table. Moreover, out of 1,050 shares of Gromo obtained off-market in an inexplicable way by the appellant more than half of it was sold in small tranches; most of the time placing sell order at far away prices than LTP. The said trading pattern and the other connections as explained above is sufficient enough to prove that the appellant was part of the group that created the artifice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober 30, 2018 whereby the appellant, among others, has been restrained from dealing in the securities market, directly or indirectly, for a period of five years from the date of the ad-interim ex-parte order issued on February 20, 2015. The said direction is following the finding in the impugned order that the appellant (and other noticees) has violated Regulations 3(a),(b),(c) and (d) and 4(1), 4(2)(a) and (e) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ( PFUTP Regulations for convenience). 2. The relevant background of the matter is as follows. The scrip of M/s Gromo Trade Consultancy Ltd. ( Gromo for convenience), a listed Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in price manipulation and thereby created false/misleading appearance of trading in the scrip at inflated prices. It was also revealed that there was no perceptible change in the fundamentals of the company which would support even a feeble rise in the price of the scrip. 4. Shri Saurabh Bachhawat, the learned counsel for the appellant submits that in January 2014 the appellant purchased 1,050 shares of Gromo off-market from one Mr. Ramnarayan who in turn got the same from one Mr. Kushal Jain. Since Mr. Ramnarayan is from the Appellants' native place and was in need of money he took the shares by paying the consideration of ₹ 10,500, though the shares were in the name of Mr. Kushal Jain. On March 20, 2014 the said shares were d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal in the matters of Ms. Smitaben N. Shah v. SEBI (Appeal No. 37 of 2010 decided on 30.07.2010, Jagruti Securities Ltd. v. SEBI (Appeal No. 102 of 2006 decided on 27.10.2008) and Nagad Sarvar v. SEBI (Appeal No. 336 of 2017 decided on 06.08.2019). 7. Shri Abhiraj Arora, the learned counsel for the respondent SEBI took us through the complete picture regarding the scheme or artifice employed by multiple entities which included the directors of Gromo and entities collectively called the Kamalakshi Group. The modus operendi, according to the learned counsel, is to revive, on paper, a dormant listed company with very little share capital; go for a preferential allotment and by trading in very small number of shares at inflated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is clouded in mystery as the appellant is not disclosing any facts relating to the same. The impugned order itself gives the connection between the appellant and Gromo in clear terms in Table 2 of paragraph 14. Moreover, appellants' explanation regarding receipt of 1,050 shares of Gromo off-market when Gromo itself has a limited floating stock of only about 1300 shares has no veracity. The submission that all the holdings of the appellant are in normal course of business has no merit as the entire issue in the matter is not normal course of business. An unknown company suspended from trading for long; off-market buying of 1,050 shares of the said company which constitutes more than 2% of its share capital and which is in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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