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Adjudication Order in Respect of Vinod Shares Ltd. in The Matter of Maharashtra Polybutenes Ltd.
Adjudication Order in Respect of Vinod Shares Ltd. in The Matter of Maharashtra Polybutenes Ltd.
Adjudication Order in Respect of Vinod Shares Ltd. in The Matter of Maharashtra Polybutenes Ltd.
FACTS
1. Securities and Exchange Board of India (hereinafter referred to
as SEBI) conducted investigation into the alleged irregularities
in the trading in the shares of Maharashtra Polybutenes Ltd.
(hereinafter referred to as 'MPL') from February, 2009 to July,
2009 (hereinafter referred to as relevant period) and into the
possible violation of the provisions of the Securities and
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 1 of 17
infrequently traded
3. Vide order dated July 22, 2013, appointed Shri Piyoosh Gupta as
the Adjudicating Officer. Consequent to the transfer of Shri
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 2 of 17
Page 3 of 17
Page 4 of 17
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 5 of 17
(a) use or employ, in connection with the issue, purchase or sale of any
securities listed or proposed to be listed on a recognized stock exchange, any
manipulative or deceptive device or contrivance in contravention of the
provisions of this Act or the rules or the regulations made thereunder;
(b) employ any device, scheme or artifice to defraud in connection with issue
or dealing in securities which are listed or proposed to be listed on a
recognised stock exchange;
(c) engage in any act, practice, course of business which operates or would
operate as fraud or deceit upon any person, in connection with the issue,
dealing in securities which are listed or proposed to be listed on a recognised
stock exchange, in contravention of the provisions of this Act or the rules or the
regulations made thereunder;
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 6 of 17
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 7 of 17
Trade
Rate
LTP
Trade
Qty
VINOD
SHARES
LIMITED
47.10
-3.00
1000
Time
Diff in
putting
buy and
sell
order
00:00:10
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
50.10
3.00
401
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
50.10
0.10
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
49.10
27-February-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
27-February-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
27-February-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
27-February-2009
VINOD
SHARES
LTD
27-February-2009
Buy
Client
Name
Sell
Client
Name
Buy
Member
Name
Sell
Member
Name
27-February-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
27-February-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
27-February-2009
VINOD
SHARES
LTD
27-February-2009
The
Order
Rate
CP
Order
Rate
Buy
Term
No
Sell
Term
No
47.10
47.10
3153001
3153001
00:00:05
50.10
50.10
3153001
3153001
80
00:00:09
50.10
50.10
3153001
3153001
2.00
500
00:00:04
49.10
49.10
3153001
3153001
50.00
0.90
19
00:01:26
50.00
50.10
3153001
3153001
VINOD
SHARES
LIMITED
47.00
-0.30
400
00:00:06
47.00
47.00
3153001
3153001
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
47.00
0.00
100
00:00:30
47.00
47.00
3153001
3153001
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
50.00
3.00
500
00:00:06
50.00
50.00
3153001
3153001
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
46.70
-1.00
500
00:00:06
46.70
46.70
3153001
3153001
27-February-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
49.70
3.00
500
00:00:05
49.70
49.70
3153001
3153001
18-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
47.10
-1.65
1000
00:00:06
47.10
47.10
3153001
3153001
18-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
49.00
1.90
1300
00:00:11
49.00
49.00
3153001
3153001
18-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
47.20
-1.80
500
00:00:05
47.20
47.20
3153001
3153001
Trade Date
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 8 of 17
18-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
48.50
1.30
500
00:00:05
48.50
48.50
3153001
3153001
18-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
47.10
-0.10
300
00:00:06
47.10
47.10
3153001
3153001
18-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
47.25
-1.75
200
00:00:28
47.25
47.25
3153001
3153001
25-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
51.60
-2.30
500
00:00:04
51.60
51.60
3153001
3153001
25-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
53.80
2.20
500
00:00:07
53.80
53.80
3153001
3153001
25-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
51.70
-2.10
500
00:00:05
51.70
51.70
3153001
3153001
25-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
53.90
0.10
300
00:00:03
53.90
53.90
3153001
3153001
25-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
53.90
0.00
00:00:51
53.90
53.90
3153001
3153001
26-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
50.80
-2.00
4000
00:00:05
50.80
50.80
3153001
3153001
26-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
52.90
2.10
4000
00:00:04
52.90
52.90
3153001
3153001
26-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
51.00
-1.90
400
00:00:03
51.00
51.00
3153001
3153001
26-March-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
52.00
1.00
400
00:00:04
52.00
52.00
3153001
3153001
24-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
51.00
0.50
1000
00:00:02
51.00
51.00
3153001
3153001
24-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
52.00
1.00
1600
00:00:03
52.00
52.00
3153001
3153001
24-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
51.00
-1.00
600
00:00:08
51.00
51.00
3153001
3153001
27-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
51.00
-1.20
2000
00:00:07
51.00
51.00
3153001
3153001
27-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
52.00
1.00
2000
00:00:06
52.00
52.00
3153001
3153001
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 9 of 17
28-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
49.00
-2.00
2000
00:00:04
49.00
49.00
3153001
3153001
28-April-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
52.00
3.00
2000
00:00:04
52.00
52.00
3153001
3153001
20-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
58.50
-0.50
250
00:00:14
58.50
58.50
3153001
3153001
20-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
61.50
3.00
750
00:00:05
61.50
61.50
3153001
3153001
20-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
58.50
-3.00
500
00:00:11
58.50
58.50
3153001
3153001
22-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
72.50
0.45
500
00:00:07
72.50
72.50
3153001
3153001
22-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
73.50
1.00
500
00:00:08
73.50
73.50
3153001
3153001
27-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
71.80
-0.20
1000
00:00:06
71.80
71.80
3153001
3153001
27-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
69.80
-2.00
3000
00:00:09
69.80
69.80
3153001
3153001
27-May-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
71.80
2.00
2000
00:00:07
71.80
71.80
3153001
3153001
11-June-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
77.10
0.10
500
00:00:09
77.10
77.10
3153001
3153001
11-June-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
78.80
1.70
500
00:00:07
78.80
78.80
3153001
3153001
27-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
74.20
0.00
1000
00:00:04
74.20
74.20
3153001
3153001
27-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
76.70
2.50
1000
00:00:06
76.70
76.70
3153001
3153001
30-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
78.05
-1.95
2500
00:00:06
78.05
78.05
3153001
3153001
30-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
79.95
1.90
2500
00:00:03
79.95
79.95
3153001
3153001
30-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
79.90
-0.05
250
00:00:03
79.90
79.90
3153001
3153001
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 10 of 17
30-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
78.90
-1.00
25
00:00:04
78.90
78.90
3153001
3153001
30-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
78.90
0.00
225
00:00:05
78.90
78.90
3153001
3153001
31-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
79.10
0.10
2000
00:00:02
79.10
79.10
3153001
3153001
31-July-2009
VINOD
SHARES
LTD
VINOD
SHARES
LTD
VINOD
SHARES
LIMITED
VINOD
SHARES
LIMITED
80.10
1.00
2000
00:00:01
80.10
80.10
3153001
3153001
9. From the above, I find that Noticee executed self trades during
the relevant period spread over a period of 14 days. On perusal
of the above self trades, it is also seen that on a number of
instances, Noticee has placed buy orders at a new high price
than the LTP when shares were available at lower prices and
changed the course of the prices.
10. At this juncture, I would like to quote the Orders of the Hon'ble
Securities Appellate Tribunal (SAT) with respect to 'self trades'
wherein it was held as follows :
i.
Page 11 of 17
ii.
Order dated 23.4.2012 in Appeal no. 21 of 2012 Systematix Shares & Stocks (India) Limited vs. SEBI :
". It has been held in several cases by this Tribunal that self
trades are fictitious and reprehensible. Trades, where beneficial
ownership is not transferred, are admittedly manipulative in nature.
.."
iii.
11. From the above cited orders of the Hon'ble SAT, I also note that a) Self Trades are trades where beneficial ownership is not
transferred;
b) Self trades are fictitious and reprehensible;
c) Trades where beneficial ownership is not transferred, are
manipulative in nature;
d) Self trades create artificial volume in the market;
12. Further, the similar findings were made by the Hon'ble Securities
Appellate Tribunal in the case of Krupa Soni & Ors. v/s SEBI
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 12 of 17
(Appeal No. 32/2013) decided on January 09, 2014 holding thatOn perusal of pleadings and hearing the oral submissions, we note that
the self trades are fictitious in nature as there is no transfer of actual
beneficial ownership of share and because the buyer and seller are the
same person. Such trades are injurious to a healthy market and result
in the creation of artificial volumes in the scrip. This in turn gives a
totally wrong signal to the members of the public who may invest in the
hope of making some gains but ultimately land up with losses".
13. I find that Noticee in its reply has not submitted anything with
regard to self trades. Noticee has admittedly done proprietary
trading. In its submissions, the Noticee has stated that it has
traded in the scrip of MPL with the objective of earning profit.
However, when the Noticee realized that the ultimate objective of
earning profit from trading activity was not getting materialized,
then it stopped trading within a short span of time. It is noted from
the aforesaid table, that Noticee has traded throughout the
relevant period from February 2009 to July 2009. Thus,
the
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 13 of 17
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 14 of 17
18. Thus, the aforesaid violations by the Noticee make it liable for
penalty under Section 15HA and 15HB of SEBI Act, 1992 which
read as follows:
Penalty for fraudulent and unfair trade practices
15HA. If any person indulges in fraudulent and unfair trade
practices relating to securities, he shall be liable to a
penalty of twenty-five crore rupees or three times the
amount of profits made out of such practices, whichever is
higher.
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 15 of 17
ORDER
20. After taking into consideration the facts and circumstances of the
case, nature and gravity of the charges and the factors
mentioned in section 15J of the SEBI Act, 1992 I, in exercise of
the powers conferred upon me under Section 15I of the SEBI
Act, 1992 read with Rule 5 of the Adjudication Rules, I hereby
impose following monetary penalty on the Noticee:
Penalty Amount
Violation
` 21,00,000/- (Rupees Under Section 15HA of SEBI Act, 1992 for
violation of section 12A(a), (b) and (c) of
Twenty One Lakh Only)
SEBI Act, 1992, Regulations 3(a), (b), (c),
(d), 4(1) and 4(2) (a), (e) and (g) of PFUTP
Regulations, 2003
` 11,00,000/- (Rupees Under Section 15HB of SEBI Act, 1992 for
violation of Clause A of the Code of
Eleven Lakh Only)
Conduct for Stock Brokers as specified
under Schedule II read with Regulation 7
of the Broker Regulations, 1992
Total
` 32,00,000/- (Rupees Thirty Two Lakh Only)
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 16 of 17
22. In terms of rule 6 of the Rules, copies of this order are sent to the
Noticee and also to the Securities and Exchange Board of India.
S.V. KRISHNAMOHAN
CHIEF GENERAL MANAGER
&ADJUDICATING OFFICER
Adjudication Order in respect of Vinod Shares Ltd. in the matter of Maharashtra Polybutenes Ltd.
September 14, 2015
Page 17 of 17