Adjudication Order in respect of Vishvjyoti Trading Limited

The Securities and Exchange Board of India (SEBI) initiated an investigation into Vishvjyoti Trading Limited following a reference from the Income Tax Department concerning alleged market manipulation. SEBI issued summons to the company for crucial information, but Vishvjyoti Trading Limited failed to provide any response despite multiple opportunities. Consequently, adjudication proceedings were initiated against the company for violating Section 11C(3) of the SEBI Act.

BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO: Order/PM/VC/2020-21/9173)

UNDER SECTION 15-I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES) RULES, 1995.

In respect of:

Vishvjyoti Trading Limited
(PAN-AAACV4012A)

FACTS OF THE CASE

1. Pursuant to a reference received from Department of Income Tax, Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) initiated investigation into the alleged manipulation in the scrip of Vishvjyoti Trading Limited (hereinafter referred to as ‘Noticee’/‘Company’) for the period March 01, 2012 to January 06, 2015 (hereinafter referred to as ‘Investigation Period’) and prima facie observed that certain entities had played a role in price rise patch by selling shares in minuscule quantity repeatedly at a higher circuit limit price.

2. It was observed during the course of investigation that one Mr. Shailesh Ghansham Parab was director in certain companies wherein certain directors of the Noticee were also directors. In view of this and in order to examine further connections between alleged manipulators and the Noticee, and to draw precise conclusions in the matter regarding the role of the Noticee, the Investigating Authority (IA) of SEBI had issued summons dated February 22, 2017 to the Noticee at its address located at 7A, Sai Shakti CHS, L T Road, Near Railway Station, Dahisar-west, Mumbai-400068 seeking certain details/information/records. The Noticee did not submit any reply to the summons. Upon non-receipt of any reply, vide summons dated March 03, 2017, the Noticee was again advised to submit the information/details/documents sought vide the earlier summons dated February 22, 2017. The said summons dated March 03, 2017 was also served on the Noticee and the same is evident from the postal confirmation which is on record. However, I observe that the Noticee has failed to furnish the information in spite of several reasonable opportunities provided to the Noticee. In view of the aforesaid, it was alleged that the Noticee has failed to comply with the summonses dated February 22, 2017 and March 03, 2017 and, therefore, adjudication proceedings were initiated against the Noticee under section 15A(a) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) for the violation of the provisions of Section 11C(3) of the SEBI Act by the Noticee.

APPOINTMENT OF ADJUDICATING OFFICER

3. The undersigned was appointed as the Adjudicating Officer, vide Order dated July 24, 2017 under Section 19 read with Section 15-I of the SEBI Act read with Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereafter referred to as ‘Adjudication Rules’) to inquire into and adjudge under the provisions of section 15A(a) of the SEBI Act for the alleged failure on the part of the Noticee to furnish the documents/information/details as required to be produced by it in terms of the summons dated February 22, 2017 and March 03, 2017, which were issued to the Noticee by the IA during the course of investigations and thereby, violating the provisions of Section 11C(3) of the SEBI Act.

SHOW CAUSE NOTICE, HEARING AND REPLY

4. A Show Cause Notice ref. EAD/ADJ/PM/AA/OW/27802/2017 dated November 10, 2017 (hereafter referred to as 'SCN') was issued to the Noticee in terms of the provisions of Rule 4 of the Adjudication Rules requiring the Noticee to show cause as to why an inquiry should not be held against it and why penalty, if any, should not be imposed on it under the provisions of Section 15A(a) of the SEBI Act.

5. It was alleged in the SCN that the Noticee had failed to submit details sought by SEBI vide summons dated February 22, 2017 and March 03, 2014. By its failure, the Noticee has allegedly violated the provisions of Section 11C(3) of SEBI Act.

To read more in details, find the enclosed file