Adjudication Order in respect of M/s. JV Stock Broking Pvt. Ltd. and M/s. SPFL Securities Ltd. in...

8/9/2019 Adjudication Order in respect of M/s. JV Stock Broking Pvt. Ltd. and M/s. SPFL Securities Ltd. in the matter of M/s. S…

1/29

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In the matter of Sky Industries Limited Page 1 of 29

BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. AK/AO- 21-22 /2015]

________________________________________________________________________

UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ

WITH RUE 5 OF SEBI !"ROCEDURE FOR HODING IN#UIR$ AND I%"OSING "ENATIES

B$ ADJUDICATING OFFICER& RUES, 1995

In respect of

%/'. S"F S()*+(' . (PAN: AABCS2452C)

%/'. J S) B+3 "+4( 6( (PAN: AABCJ1783D)

In the !tter of

"#s$ S%& In'stres *te'

________________________________________________________________________

FACTS OF THE CASE

1$ Secrtes !n' +,ch!n-e Bo!r' of In'! (heren!fter referre' to !s .SEBI7) con'cte'

!n n/est-!ton 0th respect to tr!'n- n the scrp of "#s$ S%& In'stres *t'$

(heren!fter referre' to !s .SI7 or .8( )6:7) for the pero' J!n!r& 1 2 to

"!& 1 21 (heren!fter referre' to !s the .I4('3 "(+7)$ he scrp 0!s

ste' on the Bo6!& Stoc% +,ch!n-e *t'$ (heren!fter referre' to !s ;BSE7) !s 0e !s

on J!pr Stoc% +,ch!n-e *t'$ (heren!fter referre' to !s ;JSE7) !n' he C!ctt!

Stoc% +,ch!n-e *t'$ (heren !fter referre' to !s ;CSE7)$ o0e/er there 0!s no

tr!'n- n the scrp 'rn- the n/est-!ton pero' on JS+* !n' CS+$

2$ In/est-!ton o6ser/e' th!t 'rn- the n/est-!ton pero' $e$ J!n!r& 1 2 to

"!& 1 21 tot! tr!'e' !ntt& n the scrp 0!s 44949 sh!res$ It 0!s !so

o6ser/e' th!t "#s$ J Stoc% Bro%n- P/t$ *t'$ (heren!fter referre' to !s


2/29

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h!' e,ecte' sef tr!'es for 14235 sh!res (7$95; of tot! tr!'e' !ntt& of J

Stoc% thro-h the 6ro%er "#s$ SP


3/29

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!n' Iposn- Pen!tes 6& A''c!tn- =ffcer) @es 15 (heren!fter referre' to

!s ;SEBI R*=('7) to nre nto !n' !''-e the !e-e' /o!tons cotte' 6& the

Notcees$ Conseent& pon tr!nsfer of "s$ B!rn! "%heree I 0!s !pponte' !s

the A''c!tn- =ffcer /'e or'er '!te' A-st 8 213 n'er Secton 15I of the

S+BI Act re!' 0th re 3 of S+BI @es to nre nto !n' !''-e n'er secton

15A of the S+BI Act !-!nst J Stoc% !n' n'er Secton 15B of the S+BI Act !-!nst

SP


4/29

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In the matter of Sky Industries Limited Page * of 29

una$le to com&rehend the com&lete sco&e of the in#estigation and "ere una$le

to com&letely re&ly to the allegations against them+

($) ,hat the !oticees had no malafide intentions "hatsoe#er and that the allegations

are $ased on incom&lete and incorrect assum&tion of facts+

(c)

,hat JV Stock "as into trading% -o$$ing% ar$itrage of shares and had more than

9. -o$$ers% traders% ar$itragers doing share $usiness on their $ehalf+

(d) ,hat the &ercentage that matched among the traders% -o$$ers% ar$itrageurs of JV

Stock is negligi$le as com&ared to the total trading in the scri& of SIL done $y

them' "hich clearly sho"s that they did not ha#e any malafide intention+

(e) ,hat JV Stock did trading% -o$$ing% ar$itrage on a daily $asis in shares of more

than 3/.0*.. com&anies "ith turno#er ranging $et"een s*/0// crore' resulting

in deli#ery #olume of a&&roimately s04 crore on a daily $asis in the a&ital

5arket Segment ,hey also enclosed their trading &attern for a sam&le ten days

so as to indicate that the $usiness acti#ity "ere of trading% ar$itrage% -o$$ing

nature+

(f) ,hat JV Stock had dealt in more than 1'/.. scri&s other than SIL during the

in#estigation &eriod and that the &ercentage of trades carried out in the scri& of

SIL "ere #ery meager com&ared to the trades in other scri&s+

(g) ,hat an u&"ard #ariation in &rice can $e caused $y a num$er of factors like

u&"ard market trend' cor&orate announcements' fundamentals of the com&any'

market sentiment' the eisting market &osition of market &layers etc ,he S!

has failed to sho" the manner in "hich the trades contri$uted to u&"ard &rice

#ariation' if any+

(h) ,hat JV stock eecuted 2'4 trades in the scri& of SIL during the in#estigation

&eriod' out of "hich there "ere 49 self trades as &er the S!' amounting to

29/6 ,hus' #ery rarely and #ery small 7uantities may ha#e matched $et"een

their o&erators "hich is a mere coincidence' as on the same day other trades

"hich forms ma-ority of trading done in the same scri& ha#e matched "ith other

counter&arties+

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5/29

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In the matter of Sky Industries Limited Page / of 29

(i) ,hat in a num$er of cases order 7uantities &urchased and sold is not the same and

that the order 7uantities in a &articular order ha#e traded in the market &artly

"ith other counter &arties and &artly "ith JV stock ,hus' they had not done any

synchroni8ed trading as alleged+

(-)

JV Stock has denied indulging in mani&ulati#e transactions in the market to create

artificial #olumes in the shares of SIL It has $een su$mitted that there are no

reasona$le grounds for sus&ension or con-ecture lea#e alone con#iction+

(k) ith res&ect to orders eecuted from the same terminal' SPL has su$mitted that

the terminal num$ers mentioned in &ara / of the S! are the &arent om&uter to

om&uter Link (,L) ids' and the su$ ids of the main ,L id through "hich the

actual trading is done' has not $een taken into account :ence' the allegation at

&ara / of the S! that $oth $uy and sell trades "ere eecuted from the same

terminal and "ere synchroni8ed is not correct+

(l) ,hat since JV Stock has more than 9. traders% -o$$ers% ar$itragers doing share

$usiness on their $ehalf and these traders% -o$$ers% ar$itragers ha#e $een

allotted su$0ids out of the main ,L' SPL has stated that there is a &ossi$ility

that some trades ordered from different su$0ids may ha#e $een traded among the

traders% -o$$ers% ar$itragers of JV Stock' $ut' "ithout any malafide intention+

(m) SPL has further stated that in screen $ased trading' it is not &ossi$le for traders%

-o$$ers% ar$itragers to kno" "ho the counter&arty is and the trading system of

the stock echange is essentially anonymous+

(n) ,hus' SPL has su$mitted that they ha#e not acted as $roker and counter&arty for

the trades in SIL as alleged and ha#e eercised due skill' care and diligence in the

conduct of their $usiness "hile trading on $ehalf of their clients

9$ In the nterest of n!tr! stce !n' n or'er to con'ct !n nr& !s per re 4 (3)

of the @es Notcees 0ere -r!nte' !n opportnt& of person! he!rn- on =cto6er

4 213 !t S+BI e!' =ffce "6! /'e he!rn- notce '!te' Septe6er 11

213$ Shr Sh!en'r! pt! !n' Shr Ao% pt! Athorse' @epresent!t/es

(heren!fter referre' to !s ;AR' > S"F7& !ppe!re' on 6eh!f of SP


6/29


7/29

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thro-h SP


8/29

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In the matter of Sky Industries Limited Page < of 29

relation to the total traded 7uantity in the scri& of SIL "as 3


9/29

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ech!ns !t ther en' so th!t no sef tr!'es !re e,ecte' 6et0een ther o66ers#

!r6tr!-ers$ Aso th!t J Stoc% three &e!rs !-o h!' pt ! s&ste n p!ce 0heren

on& one o66er 0!s !ss-ne' to one scrp to ensre th!t sef tr!'es !re not

e,ecte'$ 'e n'/'! etters '!te' Jne 13 214 the Notcees frther

confre' the s!e$

1$ S6seent& !nother opportnt& of he!rn- 0!s !so -r!nte' to the Notcees on

Dece6er 18 214 /'e e! '!te' Dece6er 11 214$ "r$ Sh!en'r! pt!

Drector !n' Athorse' @epresent!t/e (heren!fter referre' to !s ;AR > S"F7)

!ppe!re' on 6eh!f of SP


10/29

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In the matter of Sky Industries Limited Page 1. of 29

(d) ,hat the alleged trades "ere miniscule as com&ared to their total turno#er on

those dates+

(e) ,hat the alleged self trades "ere unintended and it "as due to the &endency of

the $uy% sell orders that resulted in matched trades+

(f)

,hat they had not made any undue gain "hile trading in the scri& of SIL during the

in#estigation &eriod and that they are in no "ay connected either directly or

indirectly "ith the management or any of the insiders of SIL

CONSIDERATION OF ISSUES AND FINDINGS

11$ I h!/e c!ref& e,!ne' the SCN the s6ssons !'e !n' the 'ocents

!/!!6e on recor'$ he !e-!tons !-!nst the Notcees !re th!t J Stoc% entere'

nto sef tr!'es 0hch cre!te' !rtfc! /oe n the scrp e!'n- to f!se !n'

se!'n- !ppe!r!nce of tr!'n- n the scrp !n' hence !e-e'& fr!'ent$


11/29

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c) Does the /o!ton f !n& on the p!rt of J Stoc% !ttr!ct onet!r& pen!t& n'er

secton 15A of the S+BI Act !n' 6& SP


12/29

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Stock-Brokers to abide by Code of Conduct.

4 ,he stock0$roker holding a certificate shall at all times a$ide $y the ode of

onduct as s&ecified at Schedule II

Stock-Brokers to abide by Code of Conduct.4 ,he stock0$roker holding a certificate shall at all times a$ide $y the ode of

onduct as s&ecified at Schedule II

SC!"#$! %%

ode of onduct for Stock @rokers

&. '!(!)&$

(2) ?G?IS? A EC? S>ILL ;!E ;?F ; stock0$roker' shall act "ith due skill'

care and diligence in the conduct of all his $usiness

FINDINGS

14$ pon c!ref pers! of the !ter! !/!!6e on recor' I no0 procee' 0th the

fn'n-s n connecton 0th the roe of Notcees on the /o!tons !s !e-e' n the

c!se$ I note th!t th!t J Stoc% (!s ! cent) e,ecte' sef tr!'es for 14235 sh!res

(7$95; of tot! tr!'e' !ntt& 6& J Stoc% thro-h the 6ro%er SP


13/29

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Bro%er ern! No$ r!'e D!te r!'e H!ntt& S&nchronse'

r!'e H!ntt&

SP


14/29

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In the matter of Sky Industries Limited Page 1* of 29

I Self *rades of + Stock through SP$ on 3-/0-//1 for 102, /// and

110 shares

!) 'e =r'er ' 12473131 J Stoc% h!' p!ce' ! 6& or'er for 1

sh!res !t @s$ 94 !t 15:27:28$949442$ Ie'!te& 1 secon' !ter !t

15:27:2$88438 /'e or'er ' 23483445 J Stoc% p!ce' ! se or'er for

1 sh!res !t the s!e r!te !s the 6& or'er r!te $e$ @s$ 94$ At

15$27$3$ 75 sh!res of se or'er ' 23483445 !tche' 0th the

6& or'er p!ce' /'e 6& or'er ' 12473131 restn- n sef tr!'e for

75 sh!res$

6) 'e =r'er ' 1342323 J Stoc% h!' p!ce' ! se or'er for 1

sh!res !t @s$94$5 !t 15::27$51283$ Ie'!te& 1 secon' !ter !t

15::28$94351 /'e 6& or'er ' 234839999 J Stoc% p!ce' ! 6&

or'er for 1 sh!res !t the s!e prce !s the se or'er r!te $e$ @s$ 94$5$ At

15$$2$ 1 sh!res of 6& or'er ' 234839999 !tche' 0th

the se or'er p!ce' /'e se or'er ' 1342323 !t @s$ 94$5 restn- n

sef tr!'es for 1 sh!res$

c) 'e =r'er ' 124728984 J Stoc% h!' p!ce' ! se or'er for 1

sh!res !t @s$ 97$8 !t 15:5:3$448538$ Ie'!te& 1 secon' !ter !t

15:5:4$29583 /'e 6& or'er ' 234839332 J Stoc% p!ce' ! 6&

or'er for 1 sh!res !t the s!e prce !s the se or'er r!te $e$ @s$ 97$8$ At

15$5$41$ 7 sh!res of 6& or'er ' 234839332 !tche' 0th the

se or'er p!ce' /'e se or'er ' 124728984 !t @s$ 97$8 restn- n sef

tr!'e for 7 sh!res$ Ie'!te& !fter the sef tr!'e 0!s e,ecte' !t

15:5:58$53773 J Stoc% re'ce' the se or'er r!te of se =r'er '

124728984 to @s$ 97$55 !n' !''e' 5 sh!res to the 6!!nce 3 sh!res of

the s!' se or'er$ At 15:9:19$57 the se or'er r!te 0!s frther re'ce'

to @s$ 97$45 !n' fn!& !t 15:1:41$7484 J Stoc% 'eete' the 6!!nce 53

sh!res$



15/29

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In the matter of Sky Industries Limited Page 1/ of 29

II Self *rades of + Stock through SP$ on /0-/-// for 2// shares

'e =r'er ' 1493482 J Stoc% h!' p!ce' ! se or'er for 5 sh!res !t

@s$ 84 !t 12:14:9$51823$ Ie'!te& there!fter !t 12:14:15$75 $e$

secon's !ter /'e or'er ' 12935498 J Stoc% p!ce' ! 6& or'er for

5 sh!res !t the s!e r!te !s the 6& or'er r!te $e$ @s$ 84$ At 12$14$15$4932

5 sh!res of 6& or'er ' 12935498 !tche' 0th the se or'er p!ce'

/'e se or'er ' 1493482 restn- n sef tr!'e for 5 sh!res$

III Self *rades of + Stock through SP$ on --//1 for 41/ shares


@s$ 88$55 !t 12:44:39$591419$ Ie'!te& there!fter !t 12:45:7$34115 $e$ 31

secon's !ter /'e or'er ' 1229243 J Stoc% p!ce' ! 6& or'er for

2 sh!res !t the s!e r!te !s the 6& or'er r!te $e$ @s$ 88$55$ At

12$45$7$947354 4 sh!res of 6& or'er ' 1229243 !tche' 0th the

se or'er p!ce' /'e se or'er ' 142727432 restn- n sef tr!'e for

4 sh!res$ At 12$45$7$947731 1 sh!re /'e 6& or'er ' 1229243

!tche' 0th se or'er of !nother cent$ At 12:45:45$891727 $e$ 38 secon's

!ter J Stoc% 'eete' the pen'n- 6& or'er for 15 sh!res$ hs t s

o6ser/e' th!t J Stoc% h!' p!ce' the 6& or'er for 2 sh!res on& 0th the

ntenton to e,ecte sef tr!'e so !s to cre!te !rtfc! /oe n the scrp$

IV Self *rades of + Stock through SP$ Securities $td. on -/-//1 for

43 shares and share


@s$ 12$95 !t 15:42:2$9522$ here!fter !t 15:54:17$229247 /'e or'er '

1152918 J Stoc% p!ce' ! 6& or'er for 1 sh!re !t the s!e r!te !s the

se or'er r!te $e$ @s$ 12$95$ A-!n !t 15:58:3$71214 /'e or'er '

235839447 J Stoc% p!ce' !nother 6& or'er for 439 sh!res !t the s!e

r!te !s the se or'er r!te $e$ @s$ 12$95$ At 15$54$17$ 1 sh!res of 6&



16/29

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or'er ' 1152918 !tche' 0th the se or'er p!ce' /'e se or'er '

23583928 restn- n sef tr!'e for 1 sh!re$ S6seent& !t

15$58$4$ 439 sh!res of 6& or'er ' 235839447 !tche' 0th

pen'n- se or'er 23583928 for 439 sh!res restn- n sef tr!'e for 439

sh!res$ hs t s o6ser/e' th!t J Stoc% h!' p!ce' the se or'er for 437 sh!res

!n' 6& or'er for 1 !n' 439 sh!res on& 0th the ntenton to e,ecte sef tr!'e

so !s to cre!te !rtfc! /oe n the scrp$

18$ ho-h the Notcees h!/e conten'e' th!t the& h!' no !!f'e ntentons

0h!tsoe/er t s note' fro the !fores!' nst!nces th!t the 6& !n' se or'ers

0ere p!ce' n sch ! !nner 0th ! ce!r ntent to e,ecte sef tr!'es$ Bes'es the

!fores!' p!ttern of p!cn- of the tr!'es 6& the Notcees 0here6& () or'ers

p!ce' e/en for o'' n6er of sh!res 0ere e,!ct& !tche' 0th respect to 6& !n'

se !ntt& !s 0e !s prceK !n' () 6!!nce ne,ecte' sh!res 0hch '' not rest

n sef tr!'e 0ere e'!te& 'eete' stron-& spports the c!se th!t sef tr!'es of

J Stoc% 0ere not ere conc'ence 6t 0th ! pror ntent of the Notcees to

e,ecte the s!e$ Bes'es the !fores!' nst!nces !re ere& str!t/e n n!tre

to 'eonstr!te th!t the sef tr!'es e,ecte' 6& J Stoc% for 14235 sh!res (7$95; of

ts tot! tr!'e' !ntt&) 0ere not ere conc'ence !s st!te' n the repes of the

Notcees$

1$ hand"ala H Sons P#t

Ltd #s Securities and ?change @oard of India (;&&eal no 2* of 2.11 decided on

June


17/29

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2$ In ths c!se t frther 6ecoes necess!r& to ote the or'er of on5ble Securities

and &ppellate *ribunal 6S&*7 in Chirag *anna vs. the &d9udicating 8fficer dated

+une , / 0heren t 0!s he' !s foo0s:

"e ha#e on record the trade and order logs from "hich it has $een &ointed out $y

the learned counsel for the res&ondent @oard that the a&&ellant had eecuted self

trades ie trades in "hich he "as $oth the $uyer and seller Such trades are'

admittedly' fictitious and create artificial #olumes in the traded scri&

21$ SP


18/29

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In the matter of Sky Industries Limited Page 1< of 29

confre' 6& the Notcees /'e ther n'/'! etters$ hs I note th!t the Notcees

h!/e these/es !'tte' th!t there 0!s no sch ech!ns n p!ce n 2#21

0hen sef tr!'es 0ere e,ecte' 6& SP


19/29

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ado&ts' it is in conformity "ith the regulatory frame"ork Since the $usiness model

ado&ted $y the a&&ellant has resulted in self trades "hich are considered to $e

fraudulent' "e cannot find any fault "ith the im&ugned order "hich has held the

a&&ellant guilty of #iolating the &ro#isions of C,P regulations as "ell as code of

conduct for the stock $rokers e are' therefore' not inclined to interfere in the

matter

24$ I frther fn' th!t J Stoc% n ts rep& h!s s6tte' th!t the tot! tr!'e' !ntt& of

J Stoc% thro-h SP


20/29

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In the matter of Sky Industries Limited Page 2. of 29

S$ No$ D!teot! Sef

tr!'e t&

ot! 6&

tr!'e t&

< of self trade

=ty on buy side

ot! Se

r!'e t&

< of self trade

=ty on sell side

1)

2#18#21 2 7829 .2 7829 .2

2)

2#17#21 2 271 /./0 271 /./0

3)

2#19#21 1 1347 /./0 1547 /./

4)

2#15#21 1 782 /./ 772 /./

5)

2#11#21 23 12535 . 12439 .3

9)

2#1#21 297 1327 ./4 1327 ./4

7)

2##21 17 3254 /.2 341 /.4>

8)

1#7#21 5 5839 >.2 5839 >.2

)

1#9#21 188 254 .3 254 .3

1)

1#5#21 2 445 4.24 444 4.24

11)

1#4#21 1 737 /./ 737 /./

12)

12#21#2 12 4723 1.3 13145 .13

13)

12#18#2 713 1984 4. 8472 >.414)

12#15#2 143 4517 3. 31 3.2

15)

1#29#2 437 874 2/.// 437 //

19)

1#21#2 1 543 .>4 543 .>4

17)

1#22#2 15 185 >./ 185 >./

18)

1#19#2 5 213 3.00 213 3.00

1)

##2 1319 921 /.1 7784 .1/

2)

#8#2 24 5574 3.2 3589 2.>

21)

#7#2 3 4491 /./ 4491 /./0

22)

8#11#2 3 1527 /.1 419 /.0

23)

7#24#2 9 /./ 2937 .02

24)

7#23#2 272 4935 4. 27 11.

25)

7#17#2 5 121 4.3 925 >/.//

29)

9#25#2 135 19 >4.30 1375 1>.>

27)

9#24#2 1 2 2/.// 112 1>.>

28)

9#17#2 1 1322 0.2 322 3./2

2)

2#19#2 179 937 0.3 938 0.2>

3)

2#12#2 482 245 1.0 225 .4

31)

2#1#2 15 181 /.01 181 /.01

32)

2##2 1 253 /./4 253 /./433)

2#9#2 51 397 . 497 .3

29$ @e-!ton 3 of P


21/29

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schee or !rtfce to 'efr!' n connecton 0th 'e!n- n secrtes or en-!-e n

!n& !ct pr!ctce corse of 6sness 0hch oper!tes !s fr!' or 'ecet pon !n&

person n connecton 0th !n& 'e!n- n or sse of secrtes$ @e-!ton 4(1) of

P


22/29

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!p!rt$ In sch ! c!se I ! n!6e to !ccept the !r-ent of the Notcees th!t the

sef tr!'es 0hch -ot e,ecte' 0ere ere conc'ences 0he the& 0ere tr&n- to

t!%e !'/!nt!-e of ntr!'!& prce o/eents restn- ot of nor! tr!'n-#

o66n-# !r6tr!-e tr!ns!ctons$ =n the other h!n' the !nner n 0hch 6& !n' se

or'er r!tes of or'ers p!ce' ! fe0 secon' !p!rt 0ere !tche' 0th e!ch other on&

stren-thens the c!se !-!nst the Notcees th!t the sef tr!'es 0ere e,ecte' 6& the

Notcees to 'efe!t the prpose of !non&t& of the tr!'n- s&ste of the stoc%

e,ch!n-e$

2$ n- the p!ttern n 0hch the or'ers 0ere p!ce' n ! fe0

nst!nces ho0 J Stoc% h!' p!ce' 6& !n' se or'ers n the scrp of SI* thro-h

SP


23/29

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3$ he Notcees h!/e !so referre' to the '-ent of the on5ble S&* in the matter of

?rupa San9ay Soni 68rder dated +anuary 4, /47 to s6t th!t ! fe0 nst!nces of

sef tr!'es n these/es 0o' not i&so facto !ont to o6ecton!6e tr!'es$ It s

o6ser/e' fro the !n!&ss of tr!'n- p!ttern !t P!r! 17 !6o/e th!t or'ers p!ce'

e/en for o'' n6er of sh!res 0ere e,!ct& !tche' 0th respect to 6& !n' se

!ntt& !s 0e !s prce$ e'$ In /e0 of the s!e I ! n!6e to !ccept the contenton

of the Notcees th!t these sef tr!'es 0ere on& ! conc'ence !n' '' not !ont to

o6ecton!6e tr!'es$

32$

he Notcees h!/e frther st!te' th!t the SCN h!s f!e' to specf& n 'et! the

!nner n 0hch the tr!'es of J Stoc% h!/e contr6te' to p0!r' prce /!r!ton



24/29

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In the matter of Sky Industries Limited Page 2* of 29

f !n&$ I note here th!t the SCN 'oes not !e-e th!t the Notcees e,ecte' sef

tr!'es 0th the ntent to nf!te the prce of SI* scrp$

33$ SPe'$ hs contr!r& to the !fores!' c!se referre' 6& SP


25/29

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In the matter of Sky Industries Limited Page 2/ of 29

34$ hs n the nst!nt c!se n -ht of the f!cts of the c!se !n' !ter! !/!!6e on

recor' I fn' th!t J Stoc% e,ecte' sef tr!'es 0hch cre!te' !rtfc! /oe n the

scrp of SI* e!'n- to f!se !n' se!'n- !ppe!r!nce of tr!'n- of the scrp n the

secrtes !r%et !n' ths /o!te' @e-!ton 3 (!) (6) (c) (') 4 (1) 4(2) (!) !n' (-)

of the P


26/29

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2B - Penalty for contravention Ahere no separate penalty has been provided

hoe#er fails to com&ly "ith any &ro#ision of this ;ct' the rules or the regulations

made or directions issued $y the @oard thereunder for "hich no se&arate &enalty has

$een &ro#ided' shall $e lia$le to a &enalty "hich may etend to one crore ru&ees

37$

Fhe 'eternn- the !nt of pen!t& n'er sectons 15A !n' 15B of the

S+BI Act t s port!nt to cons'er the f!ctors stp!te' n secton 15J of S+BI Act

0hch re!'s !s n'er:

@2+ 0 actors to be taken into account by the ad9udicating officer

hile ad-udging 7uantum of &enalty under section 1/0I' the ad-udicating officer shall

ha#e due regard to the follo"ing factors' namelyF0

(a) the amount of dis&ro&ortionate gain or unfair ad#antage' "here#er 7uantifia$le'

made as a result of the default+

($) the amount of loss caused to an in#estor or grou& of in#estors as a result of thedefault+

(c) the re&etiti#e nature of the default

38$ It s 'ffct n c!ses of sch n!tre to !ntf& e,!ct& the 'sproporton!te -!ns

or nf!r !'/!nt!-e eno&e' 6& !n entt& !n' the conseent osses sffere' 6& the

n/estors$ I h!/e note' th!t the n/est-!ton report !so 'oes not '0e on the

e,tent of specfc -!ns !'e 6& the cents or 6ro%ers$ o0e/er I fn' th!t the J

Stoc% 6& e,ectn- sef tr!'es 0hch pes the tr!'es n 0hch 6oth 6&er !n'

seer !re the s!e p!rt& !n' 'oes not rest n ch!n-e of 6enefc! o0nershp

cre!te' !rtfc! /oes !n' ! se!'n- !ppe!r!nce of tr!'n- n the SI* scrp

there6& sen'n- 0ron- s-n! to the !& n/estors !6ot tr!'n- n the scrp$ Sef

tr!'es !re hence cons'ere' to 6e seros /o!ton e/en n the !6sence of

notce!6e !r%et effect 6ec!se the& 'o not refect the forces of spp& !n'

'e!n' !n' -/e ! f!se presson 0th respect to !r%et 't&$ Bes'es I fn'

th!t sch sef tr!'es of J Stoc% thro-h SP


27/29

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SP


28/29

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In the matter of Sky Industries Limited Page 2< of 29

the trno/er n Sn Info0!& *t'$ scrp 0!s nsce cop!re' to the !r-e trno/er

of the !ppe!nt !n' hence pen!t& nee' not 6e pose' !-!nst AB* c!nnot 6e

!ccepte' 6ec!se poston of pen!t& for /o!tn- pro/sons of S+BI Act !n'

re-!tons !'e theren'er !re not 'epen'ent pon tot! trno/er of person

/o!tn- the pro/sons of S+BI Act# re-!tons !'e theren'er$ he on6e SA

h!s opne' th!t one 0ho h!s /o!te' the pro/sons of S+BI Act !n' re-!tons

!'e theren'er st sffer e/en f trno/er n the scrp n 0hch /o!tons !re

fon' s nsce cop!re' to the tot! trno/er of th!t person$ In the nst!nt c!se

I fn' th!t J Stoc% thro-h SP4( =)' =:) on %/'. S"F S()*+(' .

n'er Secton 15 B of the S+BI Act for /o!ton of c!se A (2) of Co'e of Con'ct

for Stoc% Bro%ers !s specfe' n'er Sche'e II re!' 0th @e-!ton 7 of Stoc%

Bro%ers @e-!tons 0hch 0 6e coensr!te 0th the /o!tons cotte' 6&

the Notcees$



29/29

43$ he Notcees sh! p!& the s!' !ont of pen!t& 6& 0!& of 'e!n' 'r!ft n f!/or

of QS+BI Pen!tes @ett!6e to o/ernent of In'!R p!&!6e !t "6! 0thn

45 '!&s of recept of ths or'er$ he s!' 'e!n' 'r!ft sho' 6e for0!r'e' to "r$

Pr!n! J!s0! Dept& ener! "!n!-er In/est-!tons Dep!rtent S+BI Bh!/!n

Pot No$ C 4 A QR Boc% B!n'r! Er! Cope, B!n'r! (+) "6! 4 51$

44$ In ters of re 9 of the @es copes of ths or'er !re sent to the Notcees !n' !so

to the Secrtes !n' +,ch!n-e Bo!r' of In'!$

D( %+)8 12, 2015 A K(+(

"=)( %*6 A*)3 O>>)(+

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Adjudication Order in respect of M/s. JV Stock Broking Pvt. Ltd. and M/s. SPFL Securities Ltd. in...

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