Case: 1. SEBI, 2. In Re: Sru Share Brokers Limited Vs Ravi Gupta and Co.. Securities and Exchange Board of India

Party Name:1. SEBI, 2. In Re: Sru Share Brokers Limited Vs Ravi Gupta and Co.
Judges:K.M. Abraham, Member
Issue:Company Law
Judgement Date:December 29, 2009
Court:Securities and Exchange Board of India
 
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Order:

K.M. Abraham, Member

  1. Pursuant to the unusual price variations in share price of SRU Share Brokers Limited (hereinafter referred to as the company) at the Ludhiana Stock Exchange Limited (hereinafter referred to as LSE) during the period between November 1995 and June 1996, Securities and Exchange Board of India (hereinafter referred to as SEBI) had examined the buying, selling and dealing in the shares of the company. During the examination, it was prima facie noticed that the stock broker namely, M/s Ravi Gupta & Co. (hereinafter referred to as the stock broker), Member, LSE had indulged in unauthorized 'carry forward trading' while dealing in the shares of the company during the relevant period. Thereafter, SEBI appointed an Enquiry Officer to enquire into the allegations leveled against the stock broker. The Enquiry Officer, while recommending the suspension of the certificate of registration of the stock broker for a period of six months found that the stock broker had violated Clause A(5) of the Code of Conduct for stock brokers specified in the provisions of Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 and Rule 4(b) of the then existing Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Rules, 1992. Subsequently, a show cause notice was issued to the stock broker along with the copy of the Enquiry Report. The stock broker, vide letter dated January 29, 2004 inter alia stated that due to non availability of records, it was not in a position to comment on the observations of the Enquiry Officer. According to the stock broker, it had not violated any of the provisions of law and that it had dealt on behalf of its clients. It further requested to drop the penalty recommended by the Enquiry Officer and to take a lenient view in the matter. Thereafter, SEBI had provided various opportunities of personal hearing to the stock broker. Subsequently, a consent application dated July 23, 2008, under Circular No. EFD/ED/Cir-1/2007 dated April 20, 2007, was received from the stock broker. Pursuant to the rejection of its consent application, another opportunity of hearing was granted to the stock broker on December 18, 2009. Mr. Ravi Nandan Gupta, proprietor of the stock broker appeared before me and requested not to suspend the certificate of registration of the stock broker, as recommended by the Enquiry Officer. He further submitted to take a lenient view in the matter...

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