SAT sets aside Sebi's order against two entities
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SAT sets aside Sebi's order against two entities

Last Updated: Tuesday, July 23, 2013, 20:23
 
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SAT sets aside Sebi's order against two entities
Mumbai: The Securities Appellate Tribunal on Tuesday set aside market regulator Sebi's order banning two entities from trading in the securities market for two years, saying the charges could not be established against them.

The Securities and Exchange Board of India (Sebi), in May 2012, had restrained two entities -- Ramswarup Sarda, Ramswarup Sarda HUF -- from securities market for two years for alleged fraudulent tradings in the shares of Alka Securities.

In its order, the Tribunal today said, "None of the allegations stand proved against the appellant (Ramswarup Sarda, Ramswarup Sarda HUF) on the basis of the documents and records brought before us through pleadings."

"Therefore, the imposition of the ban of two years on the appellant to enter the securities market by the impugned order is harsh and liable to be set aside by this Tribunal," it added.

After a probe into an artificial rise in Alka Securities' share price during November 2008 to March 2009, Sebi had charged the promoters of the company along with some other persons indulged in manipulative trades with the idea of creating artificial volumes so as to give a wrong impression about the liquidity of the scrip.

The Tribunal said that Dena Bank started the process of auction for debt recovery in respect of the shares pledged with it by the company, and the appellant made a bid to the bank and purchased 50,000 shares of Alka Securities by making payment to the bank directly.

However, the shares were transferred to the appellant's account from the account of one of the promoters. Further, they had not transferred these shares to the second level entities.

"Without the appellant having transferred such shares to second level entities or to any other person, he cannot be held guilty of circular trading or creating false volumes in the scrip," the Tribunal said.

"The mere fact of transfer of the shares in question from the account of one of the promoters to the appellant's account would not, ipso facto, make the whole transaction illegal and violative of the FUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations in question," it added.

PTI



First Published: Tuesday, July 23, 2013, 20:23


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