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September 28, 2005
PR No. 125/2005
ORDER IN THE MATTER OF IFSL LTD.
SEBI vide order dated September 28, 2005 has issued the following directions in the matter of IFSL Ltd.:
The promoter of IFSL Ltd. viz. Sonal Fincap Pvt Ltd and directors of IFSL viz. P.K.Singh, Ramdas Kshisagar, Mukesh Vora, Dilip Kulkarni, Rishi Vashist, N.Narendra and Rakesh Singhvi shall not buy, sell or deal in securities of IFSL Ltd, directly or indirectly, till further directions in this regard and IFSL Ltd shall not issue any equity shares or any other instrument convertible into equity shares, in any manner, or shall not alter its capital structure in any manner, till further directions in this regard.
The clients viz. New Leader Trading Co. (P) Ltd., Sharpline Trading Co Pvt Ltd Right Star Trading Co.(P) Ltd., Stockholm Mercantile Co Pvt Ltd, White Moon Mercantile Co.(P) Ltd., Amar Adhav, Deepak Narvekar, Umesh Choukekar, Ganesh Raut, Deepak Todkar, Rajkishore Singh and , Prakash Yadav, Jay Shah, Vishalkumar Textiles Pvt Ltd., and Jayesh Waghela shall not buy, sell or deal in securities of IFSL LTD, directly or indirectly, till further directions in this regard.
The Stock Brokers viz., Indiabulls Securities Ltd. (formerly Orbis Securities Pvt Ltd), Insight Share Brokers Pvt. Ltd., Fortis Securities Ltd, Joindre Capital Services Ltd., India Infoline Securities Pvt. Ltd., Ruchiraj Share Stock Broker, Penninsular Capital Market Ltd., Archi Shares & Stock Brokers Pvt. Ltd. shall not buy, sell or deal in securities of IFSL Ltd. on behalf of the promoters, directors and clients mentioned at para (a) and (b) directly or indirectly, till further directions in this regard.
All the above directions shall take effect immediately and shall be in force until further orders.
The above order has been passed by Shri G Anantharaman, Whole Time Member, SEBI in the following context:
Sudden spurt in price and trading volume of certain companies in a short period of time, often referred to as �mid cap� or �small cap� companies have been engaging the attention of SEBI and the stock exchanges for some time. Such trading has been under the surveillance of SEBI and the stock exchanges to determine whether the trading volumes and price rise have been the result of unfair trade practices or market manipulation. One such company whose shares have shown a significant increase in prices as well as trading volumes in a short
period of time is IFSL Ltd. (the company), formally known as Interlink Financial Services Ltd. which was listed on BSE in September 1996 as a company solely engaged in the business of trading in securities, but suddenly proposed to diversify its activity in 2005 to a totally unrelated business of implementing power projects through the acquisition of a company called San-Infra Trading Pvt. Ltd, (San Infra) about which no details have been made available by the company to the market as yet. The database of the filings with the Department of Company Affairs interestingly describes San Infra as a company registered only in 2002 and engaged in �retail trade not classified elsewhere�. The share holding pattern of the company (IFSL) as on June 30, 2005 shows that while the promoting company held only 17% of the share capital, the non-promoter holding included a few broking firms including Fortis Securities, Fortis Finvest Ltd., Prowess Financial Services Pvt. Ltd., India Bulls Financial Services Ltd. and K & A Securities Pvt. Ltd.
The trading history of the shares of the company showed that while there was very limited trading in the shares till December 2003 when the shares were quoted in the range of Rs.10.60 to Rs.16.75 and trading took place only on 49 days. The share languished without any trading for seven months between January 2004 and August 2004. The share price thereafter moved by quantum jumps from range of Rs.15 to Rs.18 in September 2004 to around Rs.233 in June 2005 in around 200 trading days. The company went through a share split on July 1, 2005 when a Rs.10 share was split into Rs.1 and consequently the number of paid up shares of the company increased to 8 crore from 80 lakh at the time of incorporation. The share price which was at Rs.26.70 on July 1, 2005 after the split rose to Rs.33.65 on September 13, 2005. Interestingly the average daily trading volume in the shares was around 70 lakh between August 1, 2005 to August 18, 2005 which accounted for only around 10% of the equity capital of the company. The very low turnover ratio clearly demonstrated lack of widespread investor interest in this share till that time. There was then a sudden spurt in average daily trading volume to around 177 lakh during the period August 19, 2005 to September 13, 2005. What was intriguing was the coincidence of this spurt in trading volume with the trading in the share of the company by the promoters through off market transactions, as well as by the entities to whom the promoters transferred nearly 12% of the total share capital of the company.
The above developments in the share of the company warranted an immediate inquiry in to the dealings in the shares. While the inquiry is in progress, based on findings of the preliminary inquiry, SEBI has issued the above directions.
Mumbai
September 28, 2005
For full copy of order against AMAR YUVRAJ ADHAV, click here.
For full copy of order against ARCHI SHARES & STOCK BROKERS PVT.LTD., click here.
For full copy of order against ARCHI SHARES & STOCK BROKERS PVT.LTD., click here.
For full copy of order against DEEPAK NARVEKAR, click here.
For full copy of order against DEEPAK TODKAR, click here.
For full copy of order against DILIP KULKARNI, click here.
For full copy of order against FORTIS SECURITIES LTD., click here.
For full copy of order against FORTIS SECURITIES LTD., click here.
For full copy of order against FORTIS SECURITIES LTD., click here.
For full copy of order against GANESH RAUT, click here.
For full copy of order against IFSL LTD., click here.
For full copy of order against IFSL LTD., click here.
For full copy of order against INDIA INFOLINE SECURITIES PVT.LTD., click here.
For full copy of order against INDIA INFOLINE SECURITIES PVT.LTD., click here.
For full copy of order against INDIABULLS SECURITIES LTD., click here.
For full copy of order against INDIABULLS SECURITIES LTD., click here.
For full copy of order against INSIGHT SHARE BROKERS PVT.LTD., click here.
For full copy of order against INSIGHT SHARE BROKERS PVT.LTD., click here.
For full copy of order against JAY J.SHAH, click here.
For full copy of order against JAYESH WAGHELA, click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against JOINDRE CAPITAL SERVICES LTD., click here.
For full copy of order against MUKESH VORA, click here.
For full copy of order against NARENDRA NAVLAKHA, click here.
For full copy of order against NEWLEADER TRADING CO.PVT.LTD., click here.
For full copy of order against PENINSULAR CAPITAL MARKET LTD., click here.
For full copy of order against PENINSULAR CAPITAL MARKET LTD., click here.
For full copy of order against PRAKASH YADAV, click here.
For full copy of order against PREM KUMAR SINGH, click here.
For full copy of order against RAJ KISHOR SINGH, click here.
For full copy of order against RAMDAS KSHIRSAGAR, click here.
For full copy of order against RIGHTSTAR TRADING CO.PVT.LTD., click here.
For full copy of order against RISHI VASHIST, click here.
For full copy of order against RUCHIRAJ SHARES & STOCK BROKERS PVT.LTD., click here.
For full copy of order against SHARPLINE TRADING CO.PVT.LTD., click here.
For full copy of order against SONAL FINCAP PVT.LTD., click here.
For full copy of order against STOCKHOLM MERCANTILE CO.PVT.LTD., click here.
For full copy of order against UMESH B.CHOUKEKAR, click here.
For full copy of order against VISHAL KUMAR TEXTILES PVT.LTD., click here.
For full copy of order against WHITEMOON MERCANTILE CO.PVT.LTD., click here.
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