Adjudication Order in respect of 8 Entities in the matter of Esteem Bio Organic Food Processing Ltd.

BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OFINDIA
ADJUDICATION ORDER NO. PM/NR/2020-21/9160-9167

UNDER SECTION15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES) RULES, 1995

In respect of

BACKGROUND

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") conducted an investigation in the scrip of Esteem Bio Organic Food Processing Ltd., (hereinafter referred to as "ESTEEM" / "Company") to ascertain whether there was any violation of the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as "SEBI Act, 1992") and SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as "SEBI (PFUTP) Regulations") by certain entities, who are connected to each other, in the scrip of ESTEEM during the period February 7, 2013 and July 31, 2015 (hereinafter referred to as "Investigation Period"/"IP").

2. Based on the variance in the quantum of trading volumes, the price movement of the scrip during the IP and the stock split, the investigation period was split into two patches. The price & volume details of the scrip ESTEEM during the two patches of the investigation period are tabulated hereunder:

It was observed that during Patch 1 of the investigation period, the price of the ESTEEM scrip opened at Rs. 5.25 on February 7, 2013, touched a high of ₹645 on April 22, 2014 and closed at ₹444 on February 10, 2015 with an average traded volume of 39,851 shares. On February 11, 2015, the Company carried out stock split in the scrip in the ratio of 10:1. The trading volumes were high in the scrip during the period February 11, 2015 and July 31, 2015 i.e., Patch 2 of the investigation period. The investigation revealed that the Noticees viz., Accurate Buildwell Pvt., Ltd., (Noticee 1), Pawan Kumar Kaul (Noticee 2), Vishal Yadav (Noticee 3), Ashvin Verma (Noticee 4), Century Buildmart Pvt., Ltd., (Noticee 5), Core Capital Services Ltd., (Noticee 6), River High Right Share Brokers Pvt., Ltd., (Noticee 7) and Sure Portfolio Services Pvt., Ltd., (Noticee 8) who were connected to each other had contributed to the price rise of the scrip of ESTEEM by their positive contribution to Last Traded Price (LTP) and established a New High Price (NHP) in the scrip by trading among themselves in a concerted manner. The investigation found that 8.89% to total market positive LTP during the period of investigation was contributed by the Noticees 1 to 8 who traded amongst themselves continuously and the Noticees 1 to 7 by executing trades among themselves had contributed to 9.15% of total market NHP during the period of investigation. Therefore, it is alleged that the Noticees have violated the provisions of Regulations 3(a),(b),(c),(d),4(1), 4(2)(a) and (e) of SEBI (PFUTP) Regulations.

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