July 30, 1999
PR No. 166/1999


The share price of Magan Industries Finance Ltd. (MIL) registered a sharp increase in the period December 1995 to January, 1996, from Rs.16.50/- to Rs. 180/- . There were also allegation of price rigging in the scrip. SEBI conducted investigations into this matter. 
Pursuant to investigations SEBI had earlier taken actions in the cases of the intermediaries (brokers) involved. Proceedings were also initiated in the case of non-intermediaries, the persons/entities mentioned hereunder, who were involved in creating an artificial price rise and false market in the scrip of MIL. These persons/entities have therefore, violated Regulation 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995.

  1. Shri Satish Pancharia, Ahmedabad
  2. Shri Shamji Kanji Gala, Mumbai
  3. Alka Synthetics Ltd, Ahmedabad
  4. Alka Spinners Ltd, Ahmedabad
  5. Karnavati Fincap Ltd, Ahmedabad
  6. Shri Mahindra Patodia, Mumbai
  • Patodia Textile Industries Ltd, Mumbai
  • Patodia Securities Ltd, Mumbai
  • Patodia Polytex Ltd, Mumbai
  • Shri Lalit Thakkar, Proprietor,

    M/s. Stock Finanze, Mumbai
  • Stock Street Services, Mumbai

The aforementioned persons/entities 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 the aforementioned persons / entities from dealing in securities markets for a period of two years with immediate effect.