Securities Appellate Tribunal rejects Sebi's review application in Bhanwar Lal Paliwal case

MUMBAI: Securities Appellate Tribunal (SAT) today rejected a review application filed by Sebi with regard to a Tribunal order, wherein a charges against an individual were set aside, on humanitarian grounds among other reasons.

In an order issued today, Securities Appellate Tribunal or SAT said "it sees no reason to change its stand on Bhanwar Lal Paliwal involvement in manipulation of Asian Star Company Ltd (ASCL) scrip or PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) violations."

SAT, in October last year, had set aside Sebi's order against Paliwal in case related to fraudulent dealings in shares of ASCL. Sebi had slapped a Rs 5 lakh fine on Paliwal for indulging in synchronised trades in firm's shares through Triveni.

"...OA (original applicant or Paliwal) had only allowed a trading account in his name to be opened by master-mind of manipulation of ASCL scrip and that another mastermind of such manipulations had introduced his KYC form; yet, in absence, of any direct involvement of OA in manipulation of ASCL scrip or any benefit, monetary or otherwise, accruing to him."

"...as a result of manipulation; and considering simple life and old age of OA; it was held by this Tribunal that OA's involvement in manipulation in ASCL scrip, does not exist," SAT had noted.

Following SAT's decision, Sebi filed a review application on various grounds like Tribunal has held Paliwal is not linked to the group, involved in violation PFUTP, except that his son knew Sunil Mehta.

Besides, review application holds that Paliwal had opened an account with the broker through Sunil Mehta, who was the mastermind in manipulation of scrip and that Tribunal has erroneously failed not to consider this crucial connection between Paliwal and Sunil Mehta of Mehta Group, responsible for manipulation of ASCL scrip.

Sebi, in its review application, noted that KYC (Know Your Client)form of Paliwal was signed by Jitendra Jain, as introducer, another member of Mehta Group, other than Sunil Mehta, which also proves connection of Paliwal with core manipulators.