SEBI disposes of case against Fairwealth Securities

The regulator also vacated its earlier orders that prohibited Fairwealth from dealing in the scrip of the company

January 01, 1970 5:30 IST | India Infoline News Service
Capital market regulator SEBI (Securities and Exchange Board of India) on Monday disposed of a case against Fairwealth Securities that alleged it of fraudulent trade practices in shares of Alka Securities Ltd (ASL).

SEBI said it is disposing of "the Show Cause Notice (SCN) dated October 28, 2010 issued to Fairwealth Securities in the matter of Alka Securities without any directions".

"Further, the directions issued against Fairwealth Securities in the matter vide the ex-parte interim Order dated July 28, 2009 and confirmed vide Order dated October 30, 2009 are vacated with immediate effect," SEBI said in an order. 

SEBI had observed a spurt in the price and volumes in the shares of ASL during November 2008 to March 2009 on the Bombay Stock Exchange.

SEBI prima facie found that there were fraudulent and unfair trade practices in dealing in the scrip by 9 promoter entities, 42 first level entities including the Fairwealth and 317 second level entities. 

Based on the findings SEBI in an interim order dated July 28, 2009 directed all the first and second level entities not to deal in shares of Alka, till further directions. Thereafter interim order was confirmed on October 30, 2009. 

After the completion of its investigation, SEBI in a SCN had alleged Fairwealth Securities to be one of the "first level entities" which received shares from a promoter of ASL and further transferred them to a promoter and two second level entities. 

Fairwealth was also found to have executed transactions on the market in the shares of ASL.

However, on Monday the regulator said that "the SCN and its annexures have not brought out cogent material to substantiate the allegation that the noticee (Fairwealth) 'being a first level entity', had connived with the promoters of Alka Securities in the manipulation". 

"...the noticee is entitled for a benefit of doubt with respect to the charges levelled against it in the SCN," it added.

The regulator also vacated its earlier orders that prohibited Fairwealth from dealing in the scrip of the company.

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