Case: SEBI Vs Shri Sunil Kumar. Securities and Exchange Board of India
| Judges | A.K. Batra, Member |
| Issue | Security Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995; Security Exchange Board of India Act - Sections 11(4) and 11B |
| Judgement Date | December 15, 2003 |
| Court | Securities and Exchange Board of India |
Order:
A.K. Batra, Whole Time Member
-
Background
Tactfull Investments Pvt. Ltd. (hereinafter referred to as 'TIL') was incorporated on August 5, 1994. The company came out with a public issue of 24,00,000 equity shares in January 1996. The shares of the company were listed on Delhi Stock Exchange (hereinafter referred to as 'DSE') on April 18, 1996. The Directors of TIL as on 13.08.2002 were Shri Vinod Gupta, Smt. Ruchi Bamba, Shri Vinod Kumar Sundryal and Shri Prashant Kumar Srivastava. As On 31.12.2001, the promoters viz. Hotline Services Pvt. Ltd., Whiteline Portfolio Pvt. Ltd., held 2.81% of the paid up capital of TIL, Private Corporate bodies held 85.91% and the public holding was 11.28%.
TIL was included in the list of vanishing companies by SEBI based on the fact that it had not responded to shareholders for a period of two years, that it had not complied with provisions of the listing agreement entered into by it and that the company was not available at the registered office. Consequently, vide order dated 17.12.1999, Securities and Exchange Board of India (hereinafter referred to as 'SEBI') prohibited TIL from accessing the capital market for a period of five years. Further, vide order dated 04.10.2000, SEBI prohibited 2 of the then Directors of TIL viz. Shri Bhupinder Kumar Singh and Smt. Sohinder Kaur Bedi from accessing the capital markets for a period of five years.
A significant variation was observed in the price of the scrip of TIL, during the period February to June 2001. The price of the scrip varied between Rs. 16/- on February 2, 2001 to Rs. 34/- on June 28, 2001 signifying a price increase of 113%. The above increase was accompanied by thin trading volumes. In view of the above, DSE conducted an investigation into the trading in the scrip of TIL for the period from February 1, 2001 to June 30, 2001 and furnished their report to SEBI. Further, DSE suspended trading in the scrip with effect from November 19, 2001.
-
Investigations
SEBI ordered a preliminary enquiry into the trading of the scrip during December 2001. During the course of preliminary enquiry, it was observed that the trading was concentrated amongst a few brokers. Also, some of the trading members and the trading clients were suspected to be associated with the company. In view of the above, SEBI ordered a formal investigation into the case during May 2002.
In the course of investigation, it was observed that the price of the scrip had shown an...
To continue reading
Request your trial