INVESTIGATIONS, ENFORCEMENT AND SURVEILLANCE 
ID4

SUSPENSION OF REGISTRATION OF M/S RAJKUMAR CHAINRAI BASANTANI, MEMBER, NATIONAL STOCK EXCHANGE

Securities and Exchange Board of India (SEBI) initiated investigations in the scrip of Soundcraft Industries Ltd. 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 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 main promoter of the company was instrumental in committing the irregularity in the scrip and colluding with other broker/clients to manipulate the scrip price. M/s Rajkumar Chainrai 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 and the clients/brokers across exchanges aided and abetted the promoter in the manipulation of the scrip price. Pursuant to the investigations, enquiry proceedings were initiated against M/s Rajkumar Chainrai Basantani. Investigations brought out that the member had violated the provisions of clause A1, A2, A3, A4 of the Code of Conduct prescribed for stock brokers in SEBI (Stock Brokers and Sub-brokers) Regulations, 1992. The member was also given an opportunity to appear before Chairman, SEBI for personal hearing, which was not availed by the member. After carefully examining the records and other relevant material, SEBI passed an order suspending the registration of M/s Rajkumar Chainrai Basantani, Member, National Stock Exchange for a period of 6 months with effect from 2nd of September 2002.