order in the matter of shri sanjay jethilal soni

8/11/2019 Order in the matter of Shri Sanjay Jethilal Soni

1/4


2/4

2

(for short the company HKGS) for a period between October 1, 2004 to

January 12, 2005 and noted that the price of the scrip went up from ` 0.93

on October 1, 2004 to` 5.48 on January 12, 2005. It was noticed that one

Eaugu Udyog Ltd. (EUL), one of the major promoters of the company

HKGS, off-loaded its shares in the market when the company HKGS was

making good profit. EUL sold 69,56,727 (Sixty Nine Lacs Fifty Six

Thousand Seven Hundred Twenty Seven) shares in the secondary market

and 25,45,000 (Twenty Five Lacs Forty Five Thousand) shares in off-

market transactions.

3. While EUL was off-loading shares in the market, it was found that

the major counter party clients were a group of connected entities, namely,

Sanjay J. Soni, Jaiprakash Jain, Haresh Soni, Jayesh C Shah, Dinesh Vijla

and Abhijit Todi. It was also noted by SEBI that these entities executed

synchronized trades and also indulged in order book manipulation while

trading through their brokers. The appellant was also found to have traded

alongwith the group of these connected persons who acted as counter

parties to the sell-off by EUL. This created artificial volume in the scrip

and ultimately facilitated EUL for off-loading the shares of the company

HKGS.

4. Accordingly, a show cause notice dated July 16, 2010 was issued to

the appellant and a detailed enquiry was conducted as per the procedure

established under Rule 4 read with Section 15I of SEBI Act, 1992. Learned

adjudicating officer after affording an opportunity of personal hearing and

seeking reply from the appellant imposed a penalty of` 10 lac for violation

of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the FUTP Regulations,

2003.Brought to you by http://StockViz.biz


3/4

3

5. We have heard the learned counsel for the parties at length and

perused the pleadings. On the basis of the off-market details received from

National Securities Depository Ltd. (NSDL) it has been brought on record

that the appellant received 25,000 shares from EUL on November 17, 2004,

3,75,000 shares from Dinesh Vijla on November 18, 2004, 6,73,125 shares

from Piramal Hotels on November 23, 2004 and November 24, 2004 and

25,000 shares from Haresh Soni on November 25, 2004. The appellant

subsequently, transferred 5,50,000 shares to Haresh Soni on November 18,

2004 and November 23, 2004, 4,12,000 shares to Jayesh Shah on

November 24, 2004 and November 27, 2004 and 25,000 shares to Charu

Sanghvi on November 25, 2004 in the off-market trades during the

investigation period.

6. It has also been established during the enquiry that the appellant

alongwith the group of entities as mentioned above in para 2 indulged in

synchronized trades and also made payments to the brokers on behalf of

one Mr. Haresh Soni to the tune of` 95,50,000/- for atleast 20 settlements.

Therefore, we have no hesitation in upholding the impugned order dated

October 21, 2011 passed by the learned adjudicating officer.

7. However, it is brought to our notice that similarly situated certain

persons, who had also indulged in the manipulative synchronized trades in

question, have been imposed lesser punishment though they had traded

enormously in the same scrip. In such similar cases involved in the

transaction of the same scrip during the same investigation period, an

average penalty of ` 6.30 lac has been imposed by the respondent.

Therefore, keeping in view the limited role of the appellant in the matter

and in the peculiar facts and circumstances of the case, the monetary

penalty of` 10 lac is modified to` 7 lac to be paid by the appellant within

Brought to you by http://StockViz.biz


4/4

4

a period of six weeks from the date of receipt of this order failing which

original penaltyof` 10lac would revive.

8. With the above modification of penalty, the impugned order dated

October 21, 2011 is upheld and the appeal is, accordingly, partly allowed.

No costs.

Sd/-Justice J. P. Devadhar

Presiding Officer

Sd/-

Jog Singh

Member

Sd/-

A. S. LambaMember

20.08.2014Prepared and compared by:

PTM

Brought to you by http://StockViz.biz

order in the matter of shri sanjay jethilal soni

Documents