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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…
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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
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In the matter of Sky Industries Limited Page 2 of 29
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
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In the matter of Sky Industries Limited Page 3 of 29
!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
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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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(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
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In the matter of Sky Industries Limited Page 4 of 29
thro-h SP
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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
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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
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(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$
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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
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In the matter of Sky Industries Limited Page 12 of 29
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
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In the matter of Sky Industries Limited Page 13 of 29
Bro%er ern! No$ r!'e D!te r!'e H!ntt& S&nchronse'
r!'e H!ntt&
SP
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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$7484 J Stoc% 'eete' the 6!!nce 53
sh!res$
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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
'e =r'er ' 142727432 J Stoc% h!' p!ce' ! se or'er for 5 sh!res !t
@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 $td. on -/-//1 for
43 shares and share
'e =r'er ' 23583928 J Stoc% h!' p!ce' ! se or'er for 437 sh!res !t
@s$ 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&
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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
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In the matter of Sky Industries Limited Page 14 of 29
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
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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
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In the matter of Sky Industries Limited Page 19 of 29
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
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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
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In the matter of Sky Industries Limited Page 21 of 29
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
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In the matter of Sky Industries Limited Page 22 of 29
!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
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In the matter of Sky Industries Limited Page 23 of 29
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
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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
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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
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In the matter of Sky Industries Limited Page 2 of 29
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
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In the matter of Sky Industries Limited Page 24 of 29
SP
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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$
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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>>)(+