The Securities Appellate Tribunal (SAT) has upheld SEBI's decision to fine Mr Rajesh N. Jhaveri Rs 3 lakh for synchronised trading and reversal of trades in the shares of Adani Exports.
SEBI had imposed a penalty on Mr Jhaveri for manipulating the price of Adani Exports.
In 19 trading days from November 27, 2003, to December 23, 2003, SEBI found that the share price went from Rs 209.55 for a share to Rs 443.10 along with sharp increase in trading volume.
Mr Jhaveri appealed to SAT against the SEBI order which now has upheld the SEBI decision.
SAT observed that Mr Jhaveri had entered into fictitious synchronised and reversal trades with specific counterparties placing buy and sell orders within 11 seconds of each other. Most trades were reversed either on the same day or on the next day after the first set of trades were executed.
It could not be a coincidence that such a large number of transactions spread over many days could have matched between specific brokers only, said SAT. Plus the near zero-time difference between buy and sell orders clearly showed the intention to create artificial volumes.
Observing that the transactions could not be deemed genuine SAT upheld that the penalty imposed was just and reasonable.
raghavendrarao.k
@thehindu.co.in