Sebi cancels broker registration of GKK Capital for 1 mnth

Sebi said that GKK Capital had indulged in fraudulent and unfair dealings

Sebi has cancelled the stock broker registration of GKK Capital Markets for a period of one month over alleged violations of norms for market intermediaries.

 

Securities and Exchange Board of India (Sebi) said GKK Capital "had indulged in fraudulent and unfair dealings and had not taken due care and diligence in observance and compliance of the statutory requirement in conduct of its business as a stock broker".

 

"...Hereby suspend the certificate of registration of the noticee i e GKK Capital Markets Pvt Ltd...As a stock broker and a member of Calcutta Stock Exchange for a period of one month," Sebi said in an order dated July 31.

 

The case relates to a Sebi probe in trading in the shares of Orient Trade Link for the period from July 1, 2002 to October 28, 2002.

 

During the course of investigations, it was observed that the GKK Capital was a registered client of TCP Stock Brokers.

 

It was found that GKK Capital had traded on BSE for its clients through TCP without obtaining registration as a sub-broker.

 

The probe found that GKK Capital had received third party payments against the purchases made by its clients and there were numerous matched trades executed by it on behalf of one of its client, among others.

 

Based on its finding Sebi had alleged that GKK Capital had "aided and abetted its clients in creating artificial volume and misleading appearance of trading in Orient Trade Link through matched trades and as a market intermediary...

 

"...It also failed to exercise due caution as to why such heavy trades as observed during the investigation were taking place in an illiquid scrip on behalf of the its clients," Sebi added.