Case: 1.SEBI, 2.In Re: Ranbaxy Laboratories Limited Vs 1.S.P. Rakhecha and Co. (Shanti Prasad Rakhecha). Securities and Exchange Board of India

JudgesV.K. Chopra, Member
IssueCompany Law
Judgement DateMarch 06, 2007
CourtSecurities and Exchange Board of India

Order:

V.K. Chopra, Member

  1. BACKGROUND

    1.1 Securities and Exchange Board of India (hereinafter referred to in short as "the Board") had ordered an investigation into the affairs relating to buying, selling and dealings of several entities including M/s S. P. Rakhecha & Co, (Shanti Prasad Rakhecha) in the shares of Ranbaxy Laboratories Ltd (hereinafter referred to in short as "Ranbaxy") on observing sudden spurt in price of the scrip of Ranbaxy from Rs.270/- in January 1999 to about Rs.1200/- in October 1999 accompanied with significant increase in volumes particularly on the Stock Exchange, Mumbai (BSE), National Stock Exchange (NSE) and Calcutta Stock Exchange (CSE). M/s S. P. Rakhecha & Co. is a broker of Calcutta Stock Exchange (CSE) (hereinafter referred to as "the Broker") with SEBI Registration No. INB031032718.

    1.2 The Board after considering the Investigation Report appointed an Enquiry Officer vide Order dated November 27, 2002 to enquire into the violations allegedly committed by the broker under provisions of Regulation 4(a), (b), (c) and (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 1995 (hereinafter referred to in short as "PFUTP Regulations"), Regulation 7 read with clause A(3), A(4) and A(5) of Code of Conduct as specified in Schedule II of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to in short as "Stock brokers Regulations") and Rules, Regulations and Bye-laws of Stock Exchanges.

    1.3 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 October 31, 2003 whereby he observed that the broker 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 SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992 and Regulation 4(b) & (c) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 1995. He recommended suspension of registration of the broker for a period of four months.

  2. SHOW CAUSE NOTICE

    2.1 Pursuant to the receipt of the said Enquiry Report, a Show Cause Notice dated December 05, 2003 was...

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