Nova Petrochemicals: Sebi disposes of case against 5 people

Markets regulator Sebi today disposed of an over-a-decade old case against five individuals related to alleged fraudulent trading in shares of the erstwhile Nova Petrochemicals Ltd (NPL) as no violation could be established.
The company has since been demerged into two separately listed entities -- CIL Nova Petrochemicals Ltd and GSL Nova Petrochemicals Ltd.
GSL Nova Petrochemicals incidentally figures among 331 companies trading in whose shares were restricted last month on orders of Sebi for being 'suspected shell companies'.
The regulator conducted an investigation in the share trading of NPL, which was listed on BSE and NSE, during the period from November 14, 2005 to March 31, 2006 to ascertain any violation of Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations.

According to Sebi, the five individuals -- Uday Vora, Sonal U Vora, Dhiren Vora, Sonali D Vora and Saryuben Vora -- had traded in the scrip of the firm through broker Parklight Investment on BSE and through H Nyalchand Financial Services on NSE.
The regulator observed that Uday Vora is the director of Parklight Investment and the five individuals are related to each other and also connected to the broker.

At BSE, out of total buy orders of 87,00,285 shares placed by 237 brokers, the individuals placed 25 buy orders on 9 days for 2,72,720 scrips through Parklight Investment.
At NSE, out of total buy orders of 32,02,418 shares, they placed 124 buy orders on 8 days for 2,05,815 scrips through H Nyalchand.

"The orders placed by the noticees (the five individuals) are not on daily basis, sequential, directional to create an artificial volume so as to induce others to trade in the stock and had not caused significant impact on last traded price of the scrip.
"Also, the quantum of orders by the noticees is not of such magnitude vis-?-vis total volume in the scrip of NPL on daily basis that it could adversely affect equilibrium of the market as a whole in terms of price or liquidity in stock of NPL," the Securities and Exchange Board of India (Sebi) said in an order.

The regulator disposed of the case saying the evidences available on record are insufficient to conclusively establish the allegations made against the individuals.