Decided on March 13,2003



G.N.Bajpai, - (1.) INVESTIGATIONS were conducted by SEBI into the alleged irregularities by Shriram Mutual Fund (SRMF) into the scrips of Videocon International Ltd (VIL) during June 1998. SRMF and its associates / sister concerns viz.SIS Stock Broking Pvt. Ltd (SIS) and Springfield Securities Ltd (SSL) belonging to the Shriram Group of Companies were operating from 101/102, Dalamal Towers, Mumbai.
(2.) It was observed in the investigations that SRMF purchased 1,20,600 shares of VIL @ Rs.84/- per share. This purchase was claimed to have been made by SRMF on 19.6.98. However, the contract note issued by broker M/s. Jaysukhlal Jagjivan Stock Brokers Pvt Ltd (JJSB) showed that the purchase was made on 24.6.98. It was also observed that the market price of the shares of VIL was Rs.62.75/- on 24.6.98. It was further revealed that the purchase of the shares of VIL by SRMF was part of bail out operations conducted for brokers of BSE having payment difficulties due to large carry forward positions in VIL. On the basis of enquiry conducted with SSL, it was found that it purchased 5,00,000 shares of VIL as a part of the said bail out operations. Shri Surin Usgaonkar, Chairman of SSL in his statement made before SEBI informed that on the basis of request made by Shri Rajendra Banthia, Vice President of BSE, SSL agreed to take up 5,00,000 shares of VIL from the brokers facing the payment problem. He admitted that SSL agreed to purchase the shares @ Rs. 90/- per share, though the rate in the contract note was mentioned as Rs. 111.60. SSL clarified that the difference of Rs. 21.60 on 5,00,000 shares of VIL i.e. Rs. 108 lacs was received by it on behalf of various brokers from Joy Holdings Pvt. Ltd. (JHPL). Investigations prima facie revealed that Joy Holding is an associate concern of VIL.
(3.) IT was found that out of these 5,00,000 shares which SSL had agreed to purchase, SSL eventually bought 2,14,100 shares through M/s Jaysukhlal Jagjivan Stock Brokers Pvt. Ltd. (JJSB) Rs. 111.60 per share. This purchase was made from the contingency pool of BSE on June 19, 1998 after the closure of trading hours in three transactions.;

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