Case: Alka Securities Ltd. Vs The Securities and Exchange Board of India. Securities and Exchange Board of India
| Judges | N.K. Sodhi, J. (Presiding Officer) and Samar Ray, Member |
| Issue | Banking Law |
| Judgement Date | May 10, 2010 |
| Court | Securities and Exchange Board of India |
Order:
N.K. Sodhi, J. (Presiding Officer)
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The Securities and Exchange Board of India (for short the Board) observed spurt in the price and trading volumes in the shares of Alka Securities Ltd., the appellant herein which is a listed company on the Bombay Stock Exchange Limited (BSE). The surveillance systems of the Board had also detected several alerts in this regard. Further examination revealed that on many occasions the promoters of the appellant company were also involved in off market transfers and that they traded in the scrip executing circular trades and thereby manipulated the price and volumes. Investigations were ordered and pending investigations, the Board by an ex-parte order dated July 28, 2009 issued directions to a large number of entities including the appellant and its promoters. The appellant had been prohibited from buying, selling or dealing in any securities in its proprietary account till further orders. It had also been directed not to trade on behalf of any new client till further orders. This ex-parte order was later confirmed after affording an opportunity of hearing to all concerned. We are informed that investigations are over and the Board is in the process of proceeding further in the matter in accordance with law.
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While the aforesaid directions were operative against the appellant, the Board received information from the National Stock Exchange of India Ltd. (NSE) that the appellant had traded for two new clients namely, Jayant Shah and Anna Adhikrao Gaikwad, on April 6, 2010 and April 7, 2010. The appellant is said to have informed NSE that the two clients were the clients of a sister concern of the appellant The details of the trades executed by the appellant on behalf of these clients are given in paragraph 2 of the impugned order. On receipt of this information, the Board by an ex-parte order dated April 29, 2010 has directed the appellant not to trade at all in any security on behalf of its clients in any manner whatsoever either directly or indirectly. The appellant has been given 15 days time to file its objections to the ex-parte order obviously implying that an appropriate order would thereafter be...
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