The Supreme Court has quashed the Securities Appellate Tribunal (SAT) decision that let off Ahmedabad-based Opee Stock-Link from charges of manipulating IPO of Jet Airways and Infrastructure Development Finance Company in 2008.
A bench headed by Justice Anil Dave upheld the Sebi’s order disgorging Opee Stock Link of R1.2 crore and barring it from trading for one year.
“Looking at the fact that number of persons, having common address of their demat accounts, selling their shares at the same price to a particular person before listing of shares of a company with a stock exchange is not a normal thing,” the bench said, adding that “the transfer of shares did not comply with the requirements of the provision of either Section 13 or Section 2(i) of the the Securities Contracts (Regulation) Act, 1956. Therefore, the off market trading indulged in by the respondents (Opee) was rightly held to be per se illegal.”
Sebi had found that Opee Stock Link had cornered the retail category shares of Jet Airways and IDFC by using several fictitious demat accounts and thus deprived genuine retail investors from investing in the IPOs.
However, contrary to Sebi findings, SAT on December 30, 2009 held that Opee Stock Link was not a “key operator” in manipulating the 12,000 shares in the Jet Airways IPO as alleged by Sebi.
Sebi had found that the demat account holders were not genuine and either they were benami or fictitious and the shares were purchased on behalf of someone who had financed these demat account holders and all these transactions were nothing, but a scam which had resulted in undue benefits to Opee Stock Link.
The latter also got the shares transferred from the demat holders at a price which was less than the market price of the shares, Sebi said.