IES DEPARTMENT

ISSUE OF WARNING

SEBI had ordered an investigation into the buying, selling or dealing in the shares of State Bank of India by various intermediaries including M/s Jardine Fleming India Broking Limited (J.P. Morgan India Pvt. Limited -for brevity’s sake referred to as JFIBL), a member of the National Stock Exchange and registered as a broker with the Securities and Exchange Board of India. Copthall Mauritius Investment Limited, (hereinafter referred to as CMIL) a sub account of Fledgling Nominees International (FNIL) and a part of the Jardine Fleming Group was a client with JFIBL. 

During the course of the investigation and inspection of JFIBL, it was found that JFIBL’s position had been auctioned a number of times on the exchange on grounds such as "shares not available/ client failed to deliver stocks etc". It was also found that FNIL had for their sub account CMIL, squared off transactions in some scrips including SBI, without giving or taking deliveries. After considering the facts emerging from the investigation/inspection report, an Enquiry Officer was appointed to conduct an enquiry into the affairs of JFIBL and FNIL and in respect of their dealings in the scrip of SBI and the alleged violations/irregularities noticed during the investigation/ inspection as regards the provisions of the SEBI Act, 1992, (hereinafter referred to as the "Act") and the Regulations thereunder and bye laws of exchanges. 

Pursuant to completion of Enquiry proceedings, show-cause notice was issued and opportunity for hearing before Chairman was granted. After consideration of the submissions as well as the facts and circumstances of the case, JFIBL and FNIL have been warned to be diligent in future while transacting in securities and dealing with the securities market and investors and to ensure strict compliance of the provisions of the SEBI Act, 1992 and the Regulations made thereunder and Bye Laws of exchange.