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PRESS RELEASE - SEBI

 May 26, 2009
PR No. 172/2009

Interim Order against Dipak Patel (Portfolio Manager of Passport India Investment (Mauritius) Limited) and connected entities on account of prima facie front running trades 

SEBI has found that a client named Shri Kanaiyalal Baldevbhai Patel was prima facie trading ahead of orders placed by Passport India Investment (Mauritius) Limited, a sub-account of Passport Capital LLC. It is prima facie observed that Dipak Patel, Portfolio Manager of Passport India Investment (Mauritius) Limited who shares a close relationship with Shri Kanaiyalal Baldevbhai Patel was passing on trade related information to him. These activities were violation of provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. This activity continued from January 2007 till January 2009. It is felt that if such activities go unchecked without any prompt remedial action, it is likely that these persons may deleteriously affect the market and damage integrity of the Indian Securities Market and there would not any deterrent element in the market for unscrupulous persons who are out to gain/benefit at the cost of genuine investors and take ill-legal advantage of market mechanisms. 

In view of the above, Whole Time Member (Dr. K.M. Abraham) has passed an ad-interim order dated May 28, 2009 with following directions: 

  1. Dipak Patel, Portfolio Manager of Passport India Investment (Mauritius) Ltd not to buy, sell or deal in any securities, directly or indirectly till further directions in this regard.
     

  2. Dipak Patel may not be associated with any FII or sub-account or any registered entity of SEBI till further orders.
     

  3. Kanaiyalal Baldev Patel, Anandkumar Baldevbhai Patel, Bhoomi Industries are hereby directed not to buy, sell or deal in any securities, directly or indirectly till further directions in this regard. The details with regard to the PAN and Passport number of the above stated entities are given below:

    Name of the Entity

    PAN/ Passport Number

    Dipak Patel

    (Citizen of the United States of America )

    U.S.A Passport No.209189753

    Kanaiyalal Baldev Patel

    AEWPP1442H

    Anandkumar Baldevbhai Patel

    AACFB8866B

    Bhoomi Industries

    AACFB8866B


     

  4. Kanaiyalal Baldev Patel and Anandkumar Baldevbhai Patel to deposit the profits amounting to Rs. 1,12,68,660 made by him with the National Stock Exchange of India Ltd (NSE) within 15 days from the date of issue of this order. NSE shall keep this amount in their custody till further directions from SEBI. Failure to deposit the amount by the identified clients within the prescribed time would result in further actions against the client as may be deemed fit under the Acts, Rules, and Regulations that govern the same.
     

  5. M/s. Passport Capital, LLC (SEBI Registration No IN-US-FA-1016-05) and its Sub-account M/s Passport India Investment (Mauritius) Ltd to conduct an internal enquiry into the above matter and initiate appropriate actions against their employee Dipak Patel (Portfolio Manager of Passport India Investment (Mauritius) Ltd) named in this order and submit an action taken report within 30 calendar days of this order to SEBI.
     

  6. M/s. Passport Capital, LLC and its sub-account M/s Passport India Investment (Mauritius) Ltd is directed to take steps to ensure that their trading information and other trade related details are not misused to the detriment of market integrity. I also direct them to exercise due diligence in supervising their employees to the above end.
     

  7. A copy of this Order shall be served on all recognized stock exchanges and depositories to ensure that the above mentioned entities are not allowed to undertake transactions prohibited in Para a & c above.


Mumbai

May 29, 2009 

For full copy of order against ANANDKUMAR BALDEVBHAI PATEL, click here.

For full copy of order against BHOOMI INDUSTRIES, click here.

For full copy of order against DIPAK PATEL, click here.

For full copy of order against KANAIYALAL BALDEVBHAI PATEL, click here.

For full copy of order against PASSPORT CAPITAL,LLC, click here.

For full copy of order against PASSPORT INDIA INVESTMENT (MAURITIUS) LTD., click here.
 
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