Market regulator Sebi today disposed the case against Hem Securities in a matter related to fraudulent trading and violations of broker norms with regard to shares of Autolite India Ltd (AIL).
Earlier, Securities and Exchange Board of India (Sebi) had alleged Hem Securities of executing synchronized, reversal/circular trades in the shares of AIL on behalf of its two clients -- Jyoti Jain and Rajeev Dadda.
After a probe, however, Sebi's adjudicating officer Piyoosh Gupta in his order said that "sufficient evidence is not available on record to conclusively establish the manipulative role played by the noticee (Hem Securities) or that the noticee had acted in concert with the clients and therefore, I intend to give benefit of doubt to the noticee on this count".
On the count of violating broker norms, Gupta gave Hem Securities 'benefit of doubt', noting that the alleged trade was carried out only for two clients and that too through a sub-broker's terminal.
Sebi had found both the clients, Jain and Dadda, had a common phone number which belonged to one Praveen Kumar Jain, a sub-broker of Hem Securities. The regulator also observed that all the orders were placed through the same terminal and location.
The regulator alleged that synchronized trades done on behalf of the two clients of Hem Securities constituted nearly 75 per cent of the trading volume in the market in the scrip of AIL during the probe period of April-May in 2008.