Appeal No. 25 of 2011. Case: Shreehari Hira Stock Broking (P) Ltd. Vs Securities and Exchange Board of India. Securities and Exchange Board of India
| Case Number | Appeal No. 25 of 2011 |
| Counsel | For Appellant: Mr. Prakash Shah, Advocate and For Respondent: Mr. Kumar Desai, Advocate with Mr. Kersi Dastoor, Advocate |
| Judges | N. K. Sodhi, Presiding Officer and S. S. N. Moorthy, Member |
| Issue | Securities and Exchange Board of India ( Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 - Regulation 4; Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 |
| Judgement Date | June 10, 2011 |
| Court | Securities and Exchange Board of India |
Order:
N. K. Sodhi, Presiding Officer, (At Mumbai)
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This order can conveniently dispose of two Appeals no.25 and 56 of 2011 in which common questions of law and fact arise. Shreehari Hira Stock Broking (P) Ltd. is a stock broker and the appellant in Appeal no.25 of 2011. It executed trades on behalf of Vasant Bissa the appellant in the other appeal in the scrip of M/s. KRBL Ltd. The shares of this company are, among others, listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Ltd. Investigations carried out by the Securities and Exchange Board of India (for short the Board) revealed that a group of clients and brokers joined hands together and executed circular trades in the scrip of the aforesaid company. Adjudication proceedings were initiated against them and show cause notices were issued alleging that they had violated the provisions of Regulation 4 of the Securities and Exchange Board of India ( Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 (for short the Regulations). The brokers were also charged with having violated the code of conduct prescribed by the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992. The adjudicating officer by his orders dated November 23, 2010 and January 25, 2011 imposed a monetary penalty of Rs. 6 lacs and Rs. 8 lacs respectively on both the appellants who have come up in appeal.
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We have heard the learned counsel for the parties who have taken us through the record. The precise charge against the appellants is that in collusion with other clients and brokers they executed circular trades in the scrip of KRBL Ltd. The learned counsel appearing for the Board has placed before us a chart of the trades executed by the appellants. It is not necessary to examine each and every trade as the trades have not been disputed on behalf of the appellants. By way of a sample, we are referring to the trades executed by the two appellants on September 29, 2003. One Bhagwandas Shah, a stock broker, acting on his own behalf sold 1500 shares of the company to one Adolf Pinto, another stock broker, who was trading on behalf of his son Gillian Adolf Pinto. Adolf Pinto then sold the shares to Shreehari Hira Stock Broking (P) Ltd. which was then a sole proprietary concern of one Shivkumar Bissa who was trading in the name and style of M/s. Harikishan Hiralal. Shivkumar Bissa then sold the...
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