INVESTIGATION, ENFORCEMENT & SURVEILLANCE DEPT.

The share price of M/s. Paro Leasing & Finance Ltd. (PLFL) registered a sharp increase in the period September-October, 1995, from Rs.9.50/- to Rs. 90/- i.e. an increase of 900% in just about a months time. The false market in the scrip persisted till December, 1995. The volumes in the scrip were abnormally high. The fundamentals of the company and the general market conditions did not warrant the price rise and volumes. There were also allegation of price rigging in the scrip. SEBI conducted investigations into this matter. 

The total equity shares of PLFL are 30,00,000 shares out of which the promoters hold 17,50,000 shares constituting 58% of the total equity capital of the company. The rest of the 12,50,000 shares were offered to the public vide the public issue which opened on 15th February 1995. SEBI investigations revealed that only 17 persons are holding 12,70,600 shares i.e. the total floating stock of the company. Further, it was seen that persons related directly (by virtue of funding the acquisitions) and indirectly (by virtue of being employees, close friends and belonging to the same community) to Tatia Group of Companies are holding 9,78,800 shares of PLFL. Tatia Finance & Leasing Ltd. Now called Tatia Stock & Options Ltd., have masterminded the creation of a corner in the scrip of PLFL, which has resulted in an artificial price rise and a false market in the scrip. They have also acquired substantial quantities without disclosing to the stock exchanges and making an open public offer. Also, the Tatia Group of Companies and related persons had a net outstanding position of 2,08,900 shares on 29.9.95 at MSE, where it was compulsorily squared off @ Rs.87/- per share. They had accumulated this position with the knowledge that the floating stock of PLFL was in their control. 

Tatia Stock & Options Ltd., Shri Dhanpat Singh Bokaria, Smt. Prabha Bokaria, Shri Vimal Doshi, Swito Finance & Estates Ltd., and Shri Sampat Kumar Parekh were asked to show cause as to why appropriate directions prohibiting them from further dealing in the securities market should not be issued against them under Regulation 11 read with Regulation 12 (a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, read with Section 11 (B) of SEBI Act, 1992. They were also given an opportunity to appear before the Chairman SEBI for personal hearing. After carefully examining the records and other relevant material, SEBI passed an order prohibiting Tatia Stock & Options Ltd.,(formerly Tatia Leasing & Finance Ltd.) from dealing in securities markets for a period of two years with effect from 18/02/99. 

Other persons/entities, namely, Shri Dhanpat Singh Bokaria, Smt. Prabha Bokaria, Shri Vimal Doshi, Swito Finance & Estates Ltd., and Shri Sampat Kumar Parekh, who have aided and abetted Tatia Stock & Options Ltd., have been prohibited from dealing in securities market for a period of One year.