Case: 1. SEBI, 2. In Re: Vatsa World Limited Vs Shri Sunil Kumar. Securities and Exchange Board of India

JudgesA.K. Batra, Member
IssueSecurities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 - Regulation 11; Securities and Exchange Board of India Act, 1992 - Sections 11(4) 11B and 19
Judgement DateDecember 17, 2003
CourtSecurities and Exchange Board of India

Order:

A.K. Batra, Whole Time Member

  1. Investigations were conducted by Securities and Exchange Board of India (hereinafter referred to as 'SEBI') into the dealings in the shares of Vatsa World Limited (hereinafter referred to as 'VWL') for the alleged market manipulations. Investigations conducted for the period April, 2001 to July, 2001 revealed that prices in the scrip were manipulated.

    1.1 Shri Sunil Kumar was one of the four largest trading clients in the scrip of VWL at Delhi Stock Exchange during the relevant period. Shri Sunil Kumar had dealt in the scrip through M/S Supreme Investments, a sub broker of Argus Stock Broking Ltd., (hereinafter referred to as 'Argus')

  2. Pursuant to investigations, a show cause notice dated May 22, 2003, was issued to Shri Sunil Kumar, alleging him to have indulged in creation of false market in the scrip and hindered true price discovery thereby violated Regulations 3, 4(a), 4(b), 4(c) and 4(d) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995.

  3. No reply was received from Shri Sunil Kumar. Thereafter, Shri Sunil Kumar was granted an opportunity of hearing before me on July 28, 2003, which was communicated vide letter dated July 15, 2003. The hearing 1 was further adjourned to August 6, 2003 and the same was communicated to him vide letter dated July 21, 2003. He choose not to appear for the hearing.

  4. I have examined the findings of the investigation, which inter alia contains the trading details of Shri Sunil Kumar, also incorporated in the show cause notice issue to him.

    4.1 VWL was incorporated as a private limited company in the name and style of Ongoing Advertising and Packaging Pvt. Ltd. It was converted into a public limited company on February 20, 1996. On June 24, 1996, the name of the company was changed to Vatsa World Limited. On June 19, 2001, the name of the company was once again changed to Little Kingdom World Limited after acquiring the business of Little Kingdom Edutech Ltd., an education technology based company. 4.2 The price volume data in the scrip of VWL on DSE for the period from April 9, 2001 to July 20, 2001 is as follows:

    Date Opening Price Closing Price HighPrice LowPrice Traded Quantity

    09-04-01 12.50 12.50 12.50 12.50 500 
    10-04-01 9.50 9.50 9.50 9.50 300 
    12-04-01 9.55 9.55 9.55 9.55 200 
    25-04-01 8.00 8.00 8.00 8.00 100 
    27-04-01 7.00 7.00 7.00 7.00 100 
    30-04-01 6.50 6.50 6.50
    ...

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