Sebi bars Shri Balaji Investments from capital markets

Sebi today barred Shri Balaji Investments, a certified market representative of Angel Broking, from the capital markets for carrying out illegal trading in shares of various firms such as Tata Power, BHEL, DLF, Punjab National Bank and Reliance Power.
The order follows a search and seizure operation by Sebi at the office of Maharashtra-based Shri Balaji Investments. This could be one of the first instances where the market regulator has exercised its newly granted powers to carry out search and seizure activities.
Based on preliminary probe, the market regulator has prima facie found that the entity, its proprietor one Manaklal Panpaliya and one Sanjay Rathi had indulged in illegal trading and settlement activities.

The entities had allegedly dealt in shares of Tata Power, BHEL, DLF, Punjab National Bank, Reliance Power, HCL Tech, HDFC, among others, outside the trading system of the stock exchanges.
Besides, the entities had also traded in derivative contracts in violations of securities market norms.
"I, prima facie, find that by trading in the equity and derivative contracts outside the trading platform of the stock exchanges or the trading terminals allotted to it and settling such trades Balaji investments has carried out illegal trading activities for which its proprietor Manaklal Panpaliya and dealer Sanjay Rathi are responsible," Sebi whole time member Rajeev Kumar Agarwal said in the order today.

Stating that activities of the entities was not in the interest of investors in the market, Agarwal said "necessary action has to be taken against them immediately".

Accordingly pending police probe, Sebi has barred "Shri Balaji Investments, its Proprietor Manaklal Panpaliya and Sanjay Rathi from buying, selling or dealing in the securities market in any manner whatsoever or accessing the securities market, directly or indirectly until further orders".
"It was brought to the notice of SEBI on May 30, 2014 that the office of Shri Balaji Investments, an Authorized Person of the stock broker Angel Broking Private Ltd. Was raided by the Police for its alleged illegal trading activities," the Sebi order said.

In the course of the raid, police seized handwritten records of various scrips bought/sold, contract register indicating certain clients having entered into certain derivative contracts on given days, cash book indicating receipt and payment of various amounts, among others.
The police had forwarded copies of these documents to Sebi and sought its help in analysing the its contents. Following this Sebi had asked NSE, BSE and Angel to examine the matter and submit reports which they did accordingly.