Order in respect of M/s Tirumph International Finance (India) Limited in the matter of SSI Limited

WTM/PS/82/IVD/ID-01/MARCH /2011

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER IN THE MATTER OF S.S.I LIMITED In respect of Triumph International Finance India Limited (SEBI Registration No. INB 230634232) ORDER Under Regulation 28(2) read with Regulation 38(2) of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 1. The Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) conducted investigation into the dealings in the scrip of S.S.I Limited (hereinafter referred to as ‘SSI’) for the period of October 01, 1999 to June 09, 2000. The trading details of the persons who had traded in the scrip were collected and analyzed along with the data of volumes contributed by the persons traded during the relevant period. During the investigation period, the price of the scrip increased from `650 as on October 01, 1999 to `5,380 as on March 10, 2000. Thereafter, the price started declining from `4,950 as on March 13, 2000 to `2,700 as on June 09, 2000.

2. During the course of investigation, it was inter alia revealed that the Triumph International Finance India Limited (hereinafter referred to as the ‘noticee’), registered with SEBI as a stock broker, bearing SEBI registration no. INB 230634232, while trading in the scrip of SSI executed trades in the nature of synchronized deals. Such deals were found to be mainly executed among the entities associated with Ketan Parekh.

3. Based on the findings of the investigation, SEBI initiated enquiry proceedings as against the noticee in terms of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to an ‘Enquiry Regulations’), by appointing an Enquiry Officer under Regulation 5 (1) of the Enquiry Regulations. SEBI appointed the Enquiry Officer, to enquire into the alleged violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 (hereinafter referred to as ‘PFUTP Regulations’) and SEBI (Stock Broker and Sub Brokers) Regulations, 1992 (hereinafter referred to as ‘Broker Regulations’). The Enquiry Officer submitted his Report dated April 30, 2005, in terms of Regulation 13 (1) of the Enquiry Regulations recommending a penalty of suspension for a period of six months for violating the provisions of Regulation 4(b), (c) and (d) of PFUTP Regulations, Regulation 7 read with Clause A (3) and (4) of the Broker Regulations.

4. Subsequently, a show cause notice dated April 10, 2006 (hereinafter referred to as ‘SCN’) under Regulation 13 (2) of the Enquiry Regulations was issued to the noticee asking it to show cause as to why the appropriate action including the penalty recommended by the Enquiry Officer, should not be imposed. The noticee was advised to reply to the SCN, together with the documents that it may choose to rely upon in support of the reply within fifteen days of the receipt thereof. The noticee was also informed that in case of failure, it would be presumed that it had no explanation to offer and that SEBI shall be free to take such action in the manner as it deemed fit. A copy of the Enquiry Report was also forwarded to the noticee along with the SCN.

5. The noticee replied to the SCN vide its letter dated April 29, 2006, and requested for an opportunity of personal hearing. Accordingly, an opportunity of hearing was granted to the noticee on March 09, 2010. On the date fixed for hearing, the noticee failed to appear for the personal hearing despite due intimation issued to it. Further, no communication was received from the noticee. Pursuant to this, the noticee filed an application for the settlement of proceedings through a consent order. The application filed by the noticee was dealt in accordance with the SEBI Circular dated April 20, 2007. Subsequently, the proceedings initiated under the SCN were revived as the application for consent was rejected by SEBI. Having seen that sufficient opportunity have been given to the noticee to explain its case, I am compelled to proceed with the matter on the basis of material available on record.

6. I have carefully considered the Enquiry Report, the SCN issued to the noticee and its reply. The main submissions of the noticee, in brief are: - Trade log referred is beyond the period of investigation. - Transactions were done in accordance with the prevailing market prices. - Alleged transactions are genuine trades and were executed on the instructions of their clients, while acting as broker. The trades were done on the order matching mechanism of exchange. - The volumes traded by it were only 93 trades. No harm or prejudice had been caused to the investors. - Negotiated deals vide SEBI Circular dated September 14, 1999 is considered to be valid. - It had exercised proper due diligence and there was effective transfer of beneficial ownership.

7. At the outset, I note the argument of the noticee that the trades considered for the present proceedings are beyond the period of investigation; as the investigation and enquiry were limited to the period of January 06, 2000 to June 07, 2000. I find no merit in this argument of noticee as the investigation period in the present case was October, 1999 to June, 2000 and the trades alleged are well within this period.

8. I note that the registration of the noticee was cancelled by SEBI vide orders dated May 16, 2002 and March 08, 2004 for its indulgence in manipulative trades in various scrips along with other entities controlled by Ketan Parekh. I note that these orders were challenged by the noticee before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as ‘SAT’). Hon’ble SAT vide its order dated May 04, 2007, after considering the material on record dismissed the appeal of the noticee on merits. Hon’ble SAT in its order dated May 04, 2007 has held the noticee to be a close associate of Ketan Parekh and his investment/ broking companies. Pursuant to this, the noticee has filed an appeal against this order of Hon’ble SAT before the Hon’ble Supreme Court, which was also dismissed. In view of this, I note that the order of SEBI passed on May 16, 2002 holds good, by which the registration of the noticee was cancelled.

9. Considering this, I note that no useful purpose will be served by suspending the noticee. Therefore, I hereby dispose of the present Enquiry proceedings initiated against the noticee without passing any further directions.

10. I note that pursuant to the notification of the Intermediaries Regulations, the Enquiry Regulations have been repealed and in terms of Regulation 38(2) of the Intermediaries Regulations, notwithstanding such repeal, any enquiry commenced under the Enquiry Regulations, shall be deemed to have been commenced under the corresponding provisions of Intermediaries Regulations.

11. Taking into consideration, the facts and circumstances of the case, I, in exercise of the powers conferred upon me in terms of Section 19 of the Securities and Exchange Board of India Act, 1992 read with Regulation 28(2) of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008, hereby dispose of the Enquiry proceedings as above, against Triumph International Finance India Limited [SEBI Registration no. INB 230634232].

DATE : 17/MARCH/2011 PRASHANT SARAN PLACE : MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA