Case: 1.SEBI, 2.In Re: Ranbaxy Laboratories Limited Vs 1.Dalmia Securities (P) Ltd.. Securities and Exchange Board of India
| Judges | V.K. Chopra, Member |
| Issue | Company Law |
| Judgement Date | January 11, 2007 |
| Court | Securities and Exchange Board of India |
Order:
V.K. Chopra, Member
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BACKGROUND
1.1 Securities and Exchange Board of India (hereinafter referred to in short as "the Board") had ordered an investigation into the dealings of M/s Dalmia securities Private Ltd, a member (hereinafter referred to as "the Broker") of National Stock Exchange (NSE) (SEBI Registration No. INB230645339), Stock Exchange, Mumbai (BSE) (SEBI Registration No. INB010684638) and Calcutta Stock Exchange (CSE) (SEBI Registration No. INB030684635) in the shares of Ranbaxy Laboratories Ltd (hereinafter referred to in short as "Ranbaxy").
1.2 The price of the scrip of Ranbaxy had moved up significantly from Rs. 270/- in January 1999 to about Rs. 1200/- in October 1999 accompanied with significant increase in volumes. The Board initiated preliminary investigation into the scrip in August 1999 considering the major spurt in price and volumes traded in the Exchanges particularly on the Stock Exchange, Mumbai (BSE), National Stock Exchange (NSE) and Calcutta Stock Exchange (CSE).
1.3 The Board after considering Investigation Report, appointed an Enquiry Officer vide Order dated November 27, 2002 to enquire into the violations allegedly committed by the Broker under the provisions of the Regulation 7, read with schedule II, clause A(3) and (4) of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to in short as "Stock Brokers Regulation") and the provisions of Regulation 4 (a),(b),(c) and (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995 (hereinafter referred to in short as "PFUTP Regulations") and Rules, Regulations and Byelaws of Stock Exchanges.
1.4 The Enquiry Officer, after conducting an enquiry in accordance with the provisions of Regulation 6 of the Securities and Exchange Board of India (Procedure for holding Enquiry by Enquiry Officer and imposing penalty) Regulations, 2002 (hereinafter referred to as 'the Enquiry Regulations'), submitted a report dated December 23, 2003 wherein he observed that the Broker has violated the provisions of SEBI circular No. SMDRP/POLICY/CIR-32/1999 dated September 14, 1999; Regulation 7 read with clause A(3) and (4) of Code of Conduct as specified in Schedule II of Stock Brokers Regulations, and Regulation 4(b) & (c) of PFUTP Regulations. He recommended suspension of registration of the Broker for a period of four months.
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SHOW CAUSE NOTICE
2.1 Pursuant to the receipt of the said Enquiry Report, a Show Cause Notice dated April 28, 2004 was issued to the Broker, along with a copy of the said Enquiry Report, advising him to...
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