ORDER DEBARRING/RESTRAINING SHRI RAJKUMAR CHAINRAI BASANTANI, PROMOTER OF SOUNDCRAFT INDUSTRIES LTD., SHRI SUHAS PATIL, SHRI DINESH PATEL, SHRI YOGESH PANCHAL AND SHRI NAGRAJ KUNDAR IN THE CASE OF SOUNDCRAFT INDUSTRIES LTD.

Securities and Exchange Board of India (SEBI) initiated investigations in the scrip of Soundcraft Industries Ltd. herein after SIL) on the basis of a reference from exchanges on alleged attempt made by certain entities to create false market and manipulate the price of the scrip. Investigations were conducted in the scrip for the period December 1998 to July 1999. Investigations brought out various irregularities committed in the scrip by the market intermediaries/non-intermediaries and revealed that certain entities tried to create a false market for the shares of Soundcraft Industries Ltd. through "Circular Trading" i.e. by making simultaneous sales and purchases through counters of different brokers. Sellers and buyers connived to create large buy/sell position in the scrip. 

Investigations brought out that the Chairman and the main Promoter of SIL was instrumental in committing the irregularities in the scrip through his stock broking arm by colluding with other brokers/clients to manipulate the scrip price. M/s Rajkumar C Basantani, Member, National Stock Exchange which is also an entity owned and controlled by the main Promoter of Soundcraft Industries Ltd., contributed significant volumes in the scrip during the period of investigations and the clients/brokers across the exchanges aided and abetted the promoter in the price manipulation of the scrip. 

S/Shri Suhas Patil, Dinesh Patel, Yogesh Panchal and Nagraj Kundar merely acted as front entities to the Promoter of SIL and aided and abetted in the manipulation of the scrip price. Pursuant to the investigations, Show cause notices were issued to Shri Rajkumar C Basantani, the Promoter of SIL and the clients mentioned above u/s 11B of SEBI Act, 1992. The Promoter and the clients were also given an opportunity to appear before Chairman, Securities and Exchange Board of India. After carefully examining the records and other relevant materials, SEBI passed orders on 16th of September 2002 u/s 11B of SEBI Act, 1992 against Shri Rajkumar C Basantani, Promoter of Soundcraft Industries Ltd., Shri Suhas Patil, Shri Dinesh Patel, Shri Yogesh Panchal and Shri Nagraj Kundar debarring/restraining them from dealings in securities for a period of three years.