Mumbai: The Securities Appellate Tribunal (SAT) on Friday quashed market regulator Sebi's order against an individual in a case related to fraudulent trade practices and violation of broker norms.
In 2012, the Securities and Exchange Board of India (Sebi) had imposed a total penalty of Rs 3.50 lakh on Rajesh N Jhaveri for his alleged involvement in price manipulation of Aditya International shares and also violation of broker norms. Consequently, Jhaveri had approached SAT challenging Sebi's order.
In its ruling on Friday, the tribunal said that Jhaveri had not violated Sebi norms and accordingly it "quashed" the market regulator's orders against the broker. Sebi had alleged that Jhaveri in many instances had placed orders at prices higher than Last Traded Price (LTP) and had influenced the share price of Aditya International.
However, SAT noted that the charge that volumes and prices were manipulated by Jhaveri to influence innocent investors "is not correct, since overwhelmingly vast majority of trade of scrip was between three entities only, whose role is being investigated".
Among others, SAT also said that Sebi's probe in the case did not bring out any motive or establish manipulation of market and failed to establish any violation in clear terms. The case relates to Sebi probe into dealings in shares of Aditya International due to fluctuation in price of scrip during December 3, 2003 to June 1, 2004.