Appeal No. 25 of 2014. Case: Ford Brother Capital Service Ltd. Vs Securities and Exchange Board of India. Securities and Exchange Board of India
| Case Number | Appeal No. 25 of 2014 |
| Counsel | For Appellant: Mr. Gaurav Joshi, Senior Advocate, Ms. Neeta, Mr. Amit Dey and Ms.Akshaya Bhansali, Advocates and For Respondents: Mr. Shiraz Rustomjee, Senior Advocate and Mr. Pratham V. Masurekar, Advocate |
| Judges | J.P. Devadhar, J. (Presiding Officer), Jog Singh, Member and A.S. Lamba, Member |
| Issue | Securities and Exchange Board of India Act, 1992 - Sections11C, 11C (2), 11C (3), 11C (5), 15A (a), 15A (b), 15HA, 15HB |
| Judgement Date | April 23, 2014 |
| Court | Securities and Exchange Board of India |
Order:
J.P. Devadhar, J. (Presiding Officer)
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Whether the Adjudication Officer ("A.O." for short) of Securities and Exchange Board of India ("S.E.B.I." for short), by impugned order dated May 14, 2013 is justified in imposing penalty of ` 15 lac upon appellant under Section 15A(a), penalty of ` 10 lac under Section 15HA and penalty of ` 5 lac under Section 15A(b)of the Securities and Exchange Board of India Act, 1992 ("S.E.B.I. Act" for short) is the question raised in this appeal. Dispute in the present case relates to trading in the scrip of Nandan Exim Limited on the Bombay Stock Exchange ("B.S.E." for short) during the period from June 13, 2005 to September 30, 2005 and September 20, 2006 to November 23, 2006 ("Investigation Period" for short).
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Penalty of ` 10 lac under Section 15HA of S.E.B.I. Act has been imposed on ground that the appellant has violated Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ("P.F.U.T.P. Regulations" for short) and Securities and Exchange Board of India (Stock Broker and Sub-Brokers) Regulations, 1992 ("Stock Brokers Regulations" for short) by acting in concert with Mr. Shailesh M. Ved and giving him financial accommodation to execute manipulated trades by creating huge volume and creating artificial buying pressure in the market by putting huge buy orders at a price lesser than the last traded price/market price. It is not in dispute that the penalty imposed on Mr. Shailesh M. Ved for allegedly undertaking manipulative trades by acting in concert with the appellant herein has been set aside by this Tribunal in Appeal No. 63 of 2011 decided on 06.07.2011 and admittedly, that order has attained finality. In these circumstances, penalty of ` 10 lac imposed on ground that the appellant allegedly acted in concert with Mr. Shailesh M. Ved with a view to execute manipulated trades in the scrip of Nandan Exim Ltd. during the investigation period cannot be sustained. Hence, penalty of ` 10 lac imposed upon appellant under Section 15HA of S.E.B.I. Act deserves to be set aside.
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As regards, penalty of ` 5 lac under Section 15HB of the S.E.B.I. Act is considered it is relevant to note that in para 34 of the impugned order A.O. has recorded that during the investigation, appellant was called upon to intimate as to whether they had appointed a Principal Officer and whether the details of transactions with Mr. Shailesh M...
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