Oct. 28, 2009 (The Hindu Business Line) --
The Securities Appellate Tribunal (SAT) on Wednesday dismissed an appeal filed by Mr Shankar Sharma against a February 2009 SEBI order that barred him from accessing the securities market for a period of one year.
The SAT upheld the order of the Securities and Exchange Board of India, which had found Mr Sharma guilty of synchronising trades on a large scale in certain scrips (in 2001) resulting in artificial volumes in those scrips (Global Tele Systems, Himachal Futuristic Co Ltd, DSQ Software, Zee Telefilms, Wipro, Satyam (NYSE:SAY) Computers, MTNL, SBI, Infosys Technologies (NASDAQ:INFY) and Sterlite Optical).
The SAT had dismissed a 2002 SEBI order barring First Global Stock Broking (broker) and Vruddhi Confinvest India (sub-broker), both owned and promoted by Mr Sharma and his wife Devina Mehra, in the matter relating to manipulation in the 10 above-mentioned scrips.
The SAT dismissal was, however, on technical grounds. Following this, SEBI in 2004 issued a show-cause notice to Mr Sharma and his wife in their individual capacities for their vicarious liability in synchronised trades executed by them on behalf of First Global and Vruddhi Confinvest. This was followed by a supplementary show-cause notice in March 2008 when SEBI “realised that the appellant had synchronised a large number of trades in his proprietary account on his own behalf and not on behalf of the companies through Bang Equity Broking Ltd.”
This show-cause notice alleged that Mr Sharma and his wife had executed fictitious trades by taking opposite positions and placed buy and sell orders between themselves. SEBI’s debarring order of February 2009 followed this show-cause notice.
