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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. ISD/ VRL-LA /AO/DRK-DS/EAD3- 582 /126 -2014]
______________________________________________________________________
UNDER SECTION 15 I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5(1) OF SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995
In respect of :

Shri Laxmilal Achha
5-B, Ashapuri Society, Akota,
Vadodara, Gujarat- 390 020
[PAN No. ABJPA6507A]

(In the matter of Vamshi Rubber Ltd.)
______________________________________________________________________

FACTS OF THE CASE IN BRIEF

1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI')
conducted an examination into the trading of the scrip of Vamshi Rubber Ltd.
(hereinafter referred to as VRL/ company) from January 1, 2011 to June 30, 2011
(hereinafter referred to as "examination period"). The shares of the company are
listed on BSE Ltd.

APPOINTMENT OF ADJUDICATING OFFICER

2. I was appointed as Adjudicating Officer under section 15 I of the Securities and
Exchange Board of India Act, 1992 read with Rule 3 of the Securities and
Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties
by Adjudicating Officer) Rules, 1995 (hereinafter referred to as Rules) to inquire
into and adjudge under Section 15HA of the SEBI Act, the violation of Regulation
3 and Regulation 4(2) of SEBI (Prohibition of Fraudulent and Unfair Trade
Practices Relating to the Securities Market), Regulations 2003 (hereinafter
referred to as PFUTP Regulations) alleged to have been committed by Shri
Laxmilal Achha (hereinafter referred to as "Noticee ").
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SHOW CAUSE NOTICE, REPLY AND HEARING

3. A Show Cause Notice no. A&E/EAD-3/DRK/CS/18200/2014 dated June 24, 2014
(hereinafter referred to as 'SCN') was served on the noticee, requiring the noticee
to show cause as to why an inquiry should not be held against him and why
penalty, if any, should not be imposed on him under Section 15(HA) of the SEBI
Act for the alleged violation of Regulation 3 and Regulation 4(2) of PFUTP
Regulations. The said SCN was sent through Speed Post Acknowledgement Due
(SPAD) and was served on the noticee.

4. It was alleged in the SCN that during the examination period the Noticee had
traded both as buyer and seller to create artificial volumes leading to wash trade.
The table below shows the analysis of trades of the Noticee:

Client Name
Buy wash
Vol
Sell Wash
Vol
Buy Wash
Val (`) `) `) `)
Sell Wash
Val (`) `) `) `)
Buy Wash
Count
Sell Wash
Count
Laxmilal 129 129 3,292 3,292 80 80

5. The SCN stated that the reply shall reach within 15 days from date of receipt of
the notice, failing which it shall be presumed that the noticee has no reply to
submit and the matter shall be proceeded on the basis of material available on
record. The SCN was sent through Registered Post Acknowledgment Due
(RPAD) and was served on the noticee.

6. Noticee vide his letter dated July 13, 2014 made the following submissions:

a) I wish to submit that the trades executed by me are by mistake not intended
to create any volume. The total number of shares bought or sold and the
value thereof is very insignificant (number of shares 129 and the value Rs.
3,292 only), Also no profit has been earned out of these trades.
b) If you require me for any personal hearing, I can appear before you.

7. After considering the facts of the case, I am of the opinion that no personal
hearing is required in the matter and the matter can be proceeded on the basis of
the reply of the noticee.

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CONSIDERATION OF EVIDENCE AND FINDINGS

8. I have taken into consideration the facts and circumstances of the case, and the
material made available on record and the reply of the noticee and the instant
matter is being proceeded on the basis of the reply submitted by the noticee.

9. It was alleged in the SCN that the Noticee had traded both as buyer and seller to
create artificial volumes leading to wash trade.Wash trades or self trades are
those where there is no change in beneficial ownership. Such trades create
artificial volume in the scrip and give a false and misleading appearance of
trading in the scrip. Self trades have been also defined by Honble Securities
Appellate Tribunal (hereinafter referred to as SAT), in Chirag Tanna vs The
Adjudicating Officer dated June 16, 2011 as trades in which both the buyer and
the seller are the same entity.

10. It is observed from the order log trade log that 80 wash trades for 129 shares on
44 days were executed by the noticee in the scrip of VRL for `3,292. It is further
observed that wash trade volume per day by the noticee is very miniscule i.e. 2 -
3 shares per day. The maximum number of shares traded by the noticee through
wash trade is 54 shares on June 23, 2011. Further, such miniscule quantity of
129 shares over a period of 44 days may not lead to false and misleading
appearance of trading in the scrip considering, the average trading volume in the
scrip was 3,541 shares during the Examination Period . Further the total value of
noticee's self trade is ` 3,292 only.

11. At this juncture, I would like to quote the order of the Hon'ble Securities Appellate
Tribunal (SAT), dated April 05, 2014 in the matter of Smt. Krupa Sanjay Soni v.
SEBI, wherein the Hon'ble SAT had observed that "a few instances of self trades
in themselves would not, ipso facto, amount to objectionable trades."

12. Hence, in the light of above discussions, the alleged violation of Regulation 3
and Regulation 4(2) of PFUTP Regulations by the noticee could not be
established.


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ORDER
13. In view of the foregoing, considering the facts and circumstances of the case and
available records, the alleged violation of the provisions of Regulation 3 and
Regulation 4(2) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices
Relating to the Securities Market), Regulations 2003 is difficult to establish
against Shri Laxmilal Achha and accordingly the present adjudication
proceedings is disposed of.

14. In terms of the provisions of Rule 6 of the Securities and Exchange Board of
India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules 1995, copies of this order are being sent to Shri. Laxmilal Achha
and also to the Securities and Exchange Board of India, Mumbai.




Place: Mumbai D. RAVI KUMAR
Date: September 09, 2014 CHIEF GENERAL MANAGER &
ADJUDICATING OFFICER




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