Kishan & Co.

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI

Appeal No.59/2002 In the matter of: M/s. Kishan & Co. Appellant Vs. The Securities and Exchange Board of India Respondent Appearance: Shri Pradeep Sancheti Advocate Shri Prem Rajani Advocate I/b. M/s. Rajani Associates for Appellant Shri J. Ranganayakulu Jt. Legal Adviser, SEBI for Respondent

INTERIM ORDER

The present appeal is directed against the Respondent’s order dated 29.5.2002 whereby the certificate of registration granted to the Appellant to carry on business as Member, Ludhiana Stock Exchange, has been suspended for a period of six months. The order was to come into force from 10.6.2002. The Appellant filed the present appeal on 29.8.2002 praying that the impugned order be set aside. The Appellant has also prayed for interim order staying the operation of the impugned order during the pendency of the appeal, mainly on the ground that unless the order is stayed the suspension order will continue to operate and that during the pendency of the appeal itself, the suspension period will be over, thereby making appeal itself redundant and the Appellant would suffer.

The Appellant is a registered share broker. The charge against the Appellant is that while dealing in the shares of one company viz. Bestavision Electronic Ltd (the company) it did not discharge its responsibility to exercise due skill and diligence required vide clause A(2) of the Code of Conduct for the stock brokers prescribed in the Securities and Exchange Board of India (Stock Brokers and SubBrokers) Regulations 1992. The transaction is relatable to the year 1995.

The Respondent carried out investigation into the matter. The investigation revealed that the Appellant had indulged in market manipulation with a view to hike the company’s scrip price. Since the conduct of the Appellant was prima facie found not in tune with the standard required to be maintained by a Stock broker, the Respondent carried out an enquiry and the impugned order was passed based on the findings in the said enquiry.