Complaint Against Nse

To Chairman Securities Stock Exchange Board of India Mittal Court, “B’ wing, Narman Point Mumbaii Dated 24/12/2005 Subject:- Complaint against NSE officials and its panel of Arbitrators for ignoring directions of law, violations of statutory provisions of SEBI-act/rules, NSE rules Circulars to harm/injure complainant and favour member broker M/s Sunglow Capital Services Ltd, Delhi

1.

I had sent complaint against M/S Sunglow Capital Services Ltd, member broker of NSE on 25/08/2003 to NSE & SEBI.

2.

NSE sent me letter on 02/09/2003 asking to give some information which I had complained that broking member/his agents did not provide, I replied on 22/09 giving all required information available with me and clarifying my position on balance points.

3.

Again I received letter on 8/11/03 asking for same information, I again replied on 18/11/2003 clarifying on issues and gave comments on reply of M/s Sunglow.

4.

Again on 05/12/03 I received letter from NSE, asking for same information and intentionally ignoring my reply. NSE intentionally did not reply to queries raised by me, which if replied would have resulted in action against broking member.

5.

NSE again sent me letter on 05/01/04 signing on same tune and intentionally ignoring my reply, NSE on 19/01/2004 again sent letter asking for the same information which I had replied on 15/01/2004, although NSE acknowledged the letter but intentionally ignored the contents proving without any reasonable doubt that NSE intentionally avoided to take action on issues, NSE was legally supposed to take as per law .

6.

NSE’s letter dated 19/01/2004 was again replied on 29/01/04. NSE again sent a letter on 04/2004 asking for same information and again enclosing the reply of M/S Sunglow dated 20/02/2004 and taking vindicating and false stand that since I was dealing with Mr. Anil Thukral/Mr B.R.Arora who are not registered sub-broker, NSE can not take any action.

7.

NSE intentionally to favour M/S Sunglow ignored my detailed reply dt 29/04/2004 giving clarifications on stand of M/S Sunglow, evidence that Mr. Anil Thukral/ Mr. B.R. Arora were agents of M/s Sunglow and it was for M/S Sunglow to register complainant as client and allot unique customer ID. NSE intentionally ignored the violations of rules and regulations of NSE/SEBI by member broker to favour M/S Sunglow & harm complaint.

8.

SEBI in an adjudicating proceedings has held M/s Sunglow as guilty of not registering complainant as client and not resolving complaint in time and imposed penalty of Rs one lakh, this was informed to NSE vide letter dated 14/09/2004, but NSE intentionally ignored and did not reply.

9.

NSE intentionally to favour M/s Sunglow did not investigate charges of involvement in dabba trading by M/S Sunglow, NSE did not investigate that brokers engaged in dabba trading register their agents as client.

10.

Economics offences wing Delhi Police sent NSE file containing my complaint which was against Mr. B.R.Arora, Mr. Anil Thukral & M/s Sunglow, although with me NSE maintained that NSE can not take action against .Mr Anil Thukral/ Mr B.R.Arora as they are not NSE registered sub-brokers, but intentionally to favour M/s Sunglow sat on file and did not take any action, NSE did not inform EOW Delhi police that NSE does not take action on criminal matters or on matters concerning to persons not registered as sub-broker with NSE.

11.

NSE intentionally to save M/s Sunglow ignored various circulars of NSE/SEBI, which if referred proved that M/S Sunglow had employed Mr Anil Thukral/Mr B.R. Arora as agent or illegal sub-broker., Some of circulars, rules ignored by NSE are given below:A) As per SECURITIES AND EXCHANGE BOARD OF INDIA

(STOCK BROKERS AND SUB-BROKERS RULES 1972, "sub-broker" means any person not being a member of a stock exchange who acts on behalf of a stock-broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock-brokers; MR ANIL THUKRAL WAS ASSISTING THE INVESTORS IN BUYING SELLING SHARES THROUGH M/S SUNGLOW, ON BASIS OF ABOVE DEFINITION, HE WAS ACTING AS SUB-BROKER. SINCE HE IS NOT REGISTERED WITH SEBI AS SUCH HE WAS ACTING AS ILLEGAL INTERMEDIARY. Trading member’s responsibility for Partners, Agents and Employees (b) A trading member shall be fully responsible for the acts and omissions of its authorised officials, attorneys,

agents, authorised representatives and employees and if any such act or omission be held by the relevant authority to be one which if committed or omitted by the trading member would subject it to any of the penalties as provided in the Bye Laws, Rules and Regulations of the Exchange then such trading member shall be liable therefore to the same penalty to the same extent as if such act or omission had been done or omitted by itself. SINCE AS PER DIFINATION OF SUB-BROKER, AS PER SEBI BROKERS & RULES 1972, MR ANIL THUKRAL WAS SUB-BROKER OF M/S SUNGLOW AND AS PER NSE RULES M/S SUNGLOW IS RESPONSIBLE FOR ALL ACTS AND OMMISSIONS OF MR ANIL THUKRAL. NSE INTENTIONALLY IGNORED TO FAVOUR M/S SUNGLOW. National Stock Exchange of India Limited Byelaws 10 CHAPTER V TRADING MEMBERS © A trading member shall not deal with sub-brokers who are not registered with SEBI nor allow operation of its trading terminal at any office other than its registered office, branch offices and the offices of its registered sub-brokers. NSE HAVE INTENTIONALLY TO FAVOUR THE ACCUSED AND HARM COMPLAINANT IGNORED THE EVIDENCE WHICH PROVES THAT M/S SUNGLOW WERE DEALING WITH SUB-BROKER NOT REGISTERED WITH SEBI AND MR. ANIL THUKRAL WAS OPERATING TRADING TERMINAL. I HAVE TAPE-RECORDED STATEMENT OF MR ANIL THUKRAL’S BROTHER IN, WHICH HE HAS TOLD THAT M/S SUNGLOW HAS STOPPED COMPUTER TERMINAL AFTER I SENT COMPLAINT. 12.

NSE intentionally ignored following circulars to favour M/s Sunglow and arrive at false and misleading conclusion that M/s sunglow were receiving shares transferred from my d-mat account for accounts of their client Mr. Anil Thukrak

Circular No. NSE/I&ID/2001/1 Dated: March 16, 2001 Members are, therefore, inter alias, advised, besides the other risk containment measures : (i) (ii) (iii) to exercise caution while accepting deliveries from an account other than the beneficiary account of the concerned constituent/sub-broker. NSE Circular :- NSE/ARBN/1354/1999 To All Trading Members

December 27, 1999

Re: Dealings with constituents Dear Member, It has been observed that in certain cases Trading Members do not adopt the due process of maintaining client accounts and other formalities in respect of the deals executed by them on behalf of their constituents on the Exchange. Trading Members are therefore advised : 1) to maintain separate client accounts for each of their constituents in respect of the deals executed on the Exchange and that debits/credits from one client account should not be transferred to another client account without obtaining an authorisation in writing from both the clients for such transfer of debit/credit. My other brokers always ask for giving in writing from the persons from whom account if any share is transferred to my account with that Broker. M/s sunglow never asked for such an authorization. NSE have intentionally to favour M/S sunglow ignored violation of above circulars, Evidence has been given by complainant that M/S Sunglow were receiving shares and cheques from complainants d-mat accounts and did exercise caution while accepting securities from my account. 13. Complaint by Constituent • (10) When a complaint has been lodged by a constituent with the relevant authority that any trading member has failed to implement his dealings, the relevant authority shall investigate the complaint and if it is satisfied that the complaint is justified it may take such disciplinary action as it deems fit. NSE HAVE INTENTIONALLY TO FAVOUR M/S SUNGLOW IGNORED THE COMPLAINT REGARDING IMPLEMENTATION OF DEALINGS AND HENCE BECAME ACCOMPLICE IN CRIME 14.

I had been asking NSE to give following clarifications: -

i) Can a client deal with shares of 10-12 persons, buy sell shares for number of persons, transfer shares from d-mat accounts of number of persons into account of broker, and visa-versa, give cheques from accounts of 10-12 persons to Broker and get cheques in name of 10-12 persons from broker. IF SO, WHAT IS DIFFERENCE BETWEEN SUB-BROKER / AGENT AND CLIENT? WHY ONE SHOULD BECOME REGISTERED SUB-BROKER, IF ONE PERSON CAN OPERATE A TRADING TERMINAL AS CLIENT AND DEAL IN

SHARES OF 10-12 PERSONS WITHOUT SHOWING ANY MONEY TRANSACTIONS INTO HIS BANK ACCOUNT? ii) Please reply whether NSE takes cases where money has been paid to Broker, Shares given to Broker but no transactions has taken place in name of the person who has paid money & given shares. iii) Please give me evidence/ copy of NSE investigation report based on which NSE have concluded that Mr. Anil Thukral/Mr B.R.Arora were not agents / unauthorized sub-broker of M/s Sunglow. iv) Please give me evidence based on which NSE have concluded that I was giving shares & money into account of Mr. Anil Thukral Please give me copy of authorization letter if any produced by M/s Sunglow to establish that I was giving shares in account of Mr. Anil Thukral( As per NSE circular NSE Circular :- NSE/ARBN/1354/1999 December 27, 1999 v) Please give me evidence that NSE has checked future trading records of M/S Sunglow & were not engaged in dabba trading. vi) PLEASE REPLY WHETHER I CAN AVAIL THE ARBITRATION FACILITIES OF EXCHANGE, IN VIEW OF FINDINGS OF AO-SEBI MR ANANT BARUA THAT M/S SUNGLOW FAILED TO REGISTER COMPLAINANT AS CLIENT & FINED Rs ONE LAKH. vii) IN CASE NSE CANNOT TAKE ACTION AGAINST MR ANIL THUKRAL/MR BR ARORA, WHY NSE ARE NOT SENDING FILE BACK TO EOW DELHI POLICE. PLEASE INFORM WHETHER NSE IS WILLING TO SEND BACK FILE TO EOW DELHI POLICE WITH NSER COMMENTS OR NOT. viii) Please confirm that NSE has investigated my complaint against M/s Sunglow and they have not violated any provisions of SEBI Act, rules, NSE rules & regulations and circulars. NSE did not give reply to my above queries and hence failed to address to grievances of investor and thus liable to action U/S 15b of SEBI act. 15.

NSE intentionally to favour M/s Sunglow and harm/injure undersigned ignored own Circular No. 163, NSE/MEM/1591 dated April 20, 2000, some of provisions are reproduced below:-

5. If the trading member is dealing through any unregistered intermediary, such trading members should discontinue trading/dealing for and/or on behalf of any unregistered intermediary forthwith. In case the unregistered intermediary is allowed to trade / deal by any trading member, such trading member shall be fully and personally responsible for all the sale and/or purchase contracts, whether contract notes or (purchase / sale notes) issued or not, and for all the acts of commission and/or omission. Further, such trading members shall

render themselves liable for non-compliance of this requirement in terms of fines, penalty and/or other disciplinary action as may be deemed necessary by the relevant authority. Although as per above circular trading member is responsible for all sale and or purchase whether contract notes issued or not, NSE to harm/injure the undersigned insisted on providing contract notes although undersigned again and again in all letters informed NSE that trading member/ his agents/intermediary did not provide contract notes.

16.

NSE appointed Their henchmen as Arbitrators, who to justify NSE’s omissions and commissions gave award ignoring same issues/circulars and act/rules etc which NSE had been ignoring to favour member broker

17.

Corrupt practices committed by Panel of Arbitrators were brought to NSE’s & SEBI’s notice vide my letter dated 10th October, 2005, but NSE did not take any action confirming NSE involvement in conspiracy with M/S Sunglow & Arbitrators to cheat & harm/injure me.

18.

NSE gave false statement to SEBI & Delhi Police that complainant could not provide evidence of payments, where as I had given complete details of cheques given by me. NSE just to harass insisted on getting certificated from Bank, whereas as I had given in writing that these cheques have been debited into my accounts and I will give certificate for cheques which M/S Sunglow dispute having not received.

19.

NSE in reply dated Oct-2005 to Ms Deepti Agarwal of SEBI disclosed that Delhi Regional officer had fined M/S Sunglow for dealing with unregistered intermediary. I HAD BEEN ASKING THIS CLARIFICATION SINCE DEC-2003, BUT NSE DID NOT INVESTIGATE AND PROVIDE ME WITH THIS INFORMATION TO INJURE & HARM ME.

20.

NSE and Arbitrators to favour M/s Sunglow and harm/injure complainant ignored /overlooked that M/s Sunglow disclosed that shares transferred by complainant were sold in account of some Mr Mauz Malik. IT MEANS THAT MR. ANIL THUKRAL WAS DEALING WITH M/S SUNGLOW UNDER FICTITIOUS NAME AND THIS WAS IN KNOWLEDGE OF M/S SUNGLOW. THIS FACT HAS BEEN BROUGHT INTO NOTICE OF NSE & SEBI, BUT NO ACTION HAS BEEN TAKEN.

You will kindly agree that running parallel stock exchange/ dabba trading, dealing in securities illegally and working as unauthorised intermediary by some persons is not in interest of small investors as such SEBI has to take action to curb this activity.

I request that that in view of above submissions, the following orders may please be passed a) Order full fledged inquiry against M/S Sunglow Capital Services Ltd including charges of dabba trading, appointing the illegal agent/subbroker, dealing in securities by Mr. Anil Thukral/B.R, Arora illegally, covering Section 15 F, 15 HA, 15 HB, besides 15 B & 15C . b) Order full fleged inquiry against NSE officials and Arbitrators for willful negliegence to harm complainant and direct NSE to remove the Arbitrators who have ignored direction of law/nse circulars etc, passing award which is not based on material evidence on records, passing imaginary statement on behalf of complainant, to favour member broker. c) Direct NSE to give me copy of investigation report pertaining to M/S Sunglow, copy of deals & payments made by M/S Sunglow to Mr. Anil Thukral in respect of shares & money of complainant. d) Order respondent M/s Sunglow to return all shares transferred by complainant and shares purchased from funds of the complainant. I also request you to please clarify:1) Whether a person if registered with one identity can operate by another imaginary name? If so, What is use for asking identification evidence of client? 2) Mr Patil of NSE in letter to SEBI had disclosed that Delhi Regional office of NSE fined M/s Sunglow for dealing with un-registered intermediary, PLEASE CONFIRM WHETHER M/S SUNGLOW HAS BEEN LEVIED FINE FOR DEALING WITH MR. ANIL THUKRAL AS UNREGISTERED INTERMEDIARY?

S.K.Kapoor 3, SUNSHINE APARTMENT, A-3, PASCHIM VIHAR, NEW DELHI-110063