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

JudgesK.M. Abraham, Member
IssueCompany Law
Judgement DateDecember 29, 2009
CourtSecurities and Exchange Board of India


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 P. Arora & 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. While recommending the suspension of the certificate of registration of the stock broker for a period of six months, the Enquiry Officer found that the stock broker had violated Clause A(5) of the code of conduct for stock brokers specified in Schedule II of 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 dated January 16, 2004 was issued to the stock broker along with the copy of the Enquiry report. The stock broker, vide letter vide letter dated February 12, 2004 inter alia stated that it had not violated the provisions of law. According to the stock broker, all the transactions were made through LSE. Thereafter, SEBI had provided various opportunities of personal hearing to the stock broker. During the hearing held on November 7, 2008, the authorized representative of the stock broker had informed that it was opting for consent, in terms of the SEBI Circular dated April 20, 2007. Subsequently, a consent application dated November 26, 2008 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. Roop Kishore, authorised representative of the stock broker appeared before me on the said date and requested to take a lenient view in the matter, as the violation was of the year 1995 and that pursuant to its executing carry forward transactions, the same was allowed at LSE on its...

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