Mr. R.K.

Nair

Chief Vigilance Officer-SEBI

BKC, Bandra East
Mumbai-400051 Dated 23/03/07

Sub: - Inquiry into my allegations of favouring M/S Sunglow, ignoring

directions of law to injure me and prevent recovery of my shares from M/S
Sunglow, ignoring various circulars, rules by NSE/SEBI officials.

1. I sent complaint on 25/08/2003 to SEBI regarding cheating/dabba trading,

not returning shares of complainant, and appointment of illegal agents/sub-
broker by member broker M/S Sunglow Capital Services Ltd

2. Although after lot of pursuance, Mr. Anant Barua was appointed as

Adjudicating officer by SEBI, the term of appointment and scope of inquiry
etc were not informed to me.

3. Mr. Anant Bureau Adjudicating officer intentionally to favour M/S Sunglow

did not give proper opportunity to complainant, intentionally did not put on
record that complainant had informed him that he is in USA so cannot
attend proceedings on 21/07/2004, further he was supposed to give
reasons for not granting the adjournment, which he did not do to favour
M/S Sunglow, this is an offence U/S 167 of IPC, Mr Anant Barua was
requested to send copy of reply of M/S Sunglow so that complainant could
send reply and evidence, Mr Anant Barua not only did not send the
required documents but also did not bring on records that complainant has
requested for the same, hence he committed offence U/S 219 IPC.
Further SEBI officials did not take up violation of sections 15F, 15 HA
and dabba trading, illegal appointment of agent by M/S Sunglow,
illegal working of Mr Anil Thukral, Mr B.R.Arora violating section 12 of SEBI
act & hence ignored directions of law to harm the complainant.

4. Officials of SEBI had already made understanding with M/S Sunglow

regarding imposing of small penalty, ignoring main issues of dabba trading
and appointment of illegal agents/sub-brokers by M/S Sunglow Capital
Services Ltd. M/S Sunglow Capital Services Ltd had threatened in
advance in March-2004 that SEBI after investigation will impose small
amount as fine and ask complainant to go to civil court where they will drag
complainant for years. This fact had been mentioned by appellant in his
letter to NSE with copy to chairman SEBI (copy of letter enclosed in
support of above allegation). I was further told by M/S Sunglow that
Adjudicating officer will give orders in such a fashion that in appeal his
orders will be reversed and they will go Scot free, it is why question of
dabba trading, illegal agents/sub-brokers has not been taken up
before imposing penalty. NO OTHER PENALTY HAS BEEN IMPOSED
FOR IRREGULARITIES, WHICH CAME TO LIGHT AFTER ORDERS OF
AO-SEBI.
5. That NSE officials are guilty of protecting the member broker by ignoring
own circulars (circular no 163 NSE/MEM/1591 DT APRIL 29,2000, cir no
NSE /I&ID/ 2001/1 DT MARCH 16, 2001, NSE/ARBN/1354/1999 DT DEC
27, 1999). These circulars in my knowledge, there can be other circulars,
provisions of rules etc ignored. NSE officials & SEBI officials woke up only
when I filled writ petition in High Court. Even then intentionally delayed
filling of reply to main petition

6. That NSE officials & SEBI officials, intentionally committed following lapses
in investigations: -

a. Did not investigate allegations of dabba trading.

b. Did not investigate whether Mr. Anil Thukral was client or
unregistered sub-broker/ agent/employee, did not investigate
whether client-member agreement between Mr. Anil Thukral & M/s
Mouz Malik is fabricated or not as this is not on stamp paper. Did
not investigate date from which transactions started in name of
Mouz Malik or Mr. Anil Thukral, date of opening of account with M/S
Sunglow, date of opening d-mat account by so called “clients”
c. Circular of March 17, 1994 clearly notifies that “ Please bring it to
notice of your member brokers that dealing with sub-brokers who
are not registered (or treating them as client and not sending their
applications for registration) is violation of SEBI act 1992 and such a
brokers are liable for action” SEBI officials have ignored this circular
and not taken any action against Broker M/S Sunglow, SEBI officials
who intentionally favoured M/S Sunglow are to be punished as per
law of land.
d. NSE, Delayed taking action against M/S Sunglow and only started
face saving action after complainant filed Writ Petition in Delhi High
Court.
e. Did not inspect records of M/S Sunglow to ascertain in which
account shares transferred by me were sold. Insisted me to provide
copies of contract notes, although in SIX LETTERS/e-mails I told
that neither broker nor his agents gave me contract notes.
f. Inspite of repeated e-mails/letters, officials of NSE/SEBI did not
inform me that Mr. Anil Thukral has been found guilty of working as
unregistered sub-broker of M/S Sunglow and levied fine of Rs
25000/= to deprive me of recovering my shares from M/S Sunglow,
thus committing offences under various sections of IPC.
g. Although NSE rules provide for penalty of Rs 5000/= per day for
period broker deals with unregistered broker, a mere penalty of Rs
25000/= has been levied to favour broker.
h. To favour M/S Sunglow avoiding investigating, who was Mr. Mouz
Malik? There is every possibility that Mr. Mouz Malik is fictitious
name to cover fraudulent deals by M/S Sunglow and they are taking
false stand with connivance of NSE & SEBI that Mr. Anil Thukral
was operating this account. There is not even a single transfer of
any share from or to the d-mat account of MR. ANIL THUKRAL.
 7. That although as per Ms Amy Durga gave affidavit in Delhi high Court,
SEBI had concluded in Feb-2005 that Mr. Anil Thukral was working as
unregistered sub-broker of M/S Sunglow and proposed to prosecute Mr.
Anil Thukral, but SEBI officials inspite of repeated letters/e-mails did not
reply to my query regarding working of Mr. Anil Thukral as unregistered
sub-broker of m/s sunglow, did not start prosecution for almost 2 years.
This proves my allegations of intentional favouring M/S Sunglow by SEBI
officials and harm/injure me, which is crime as per IPC,

8. That it appears that NSE appointed Ms Lakshmi Swaminathan, Mr. Ahooja,

Mr. Biswas as Arbitrators & SEBI approved their name by unfair means, as
they did not have any knowledge of share transactions trade practices,
were corrupt, ignored various circulars, SEBI act, Arbitration act, passed
award without asking for the required records of respondent M/S Sunglow
as per NSE rules & regulations. (Details given in my complaint dated July-
2005 to Chairman-SEBI)

9. That inspite of repeatedly pointing out proper investigations have not been
conducted in working of M/S Sunglow, particularly daba trading and
fraudulent activities (working under fictitious name of Mr. Mouz Malik) &
Chairman-SEBI, members-SEBI, CVO-SEBI has not taken any action
against, SEBI officials, NSE officials & Arbitrators.

I am reproducing part of section 11 of SEBI act

11 (2) (e) prohibiting fraudulent and unfair trade practices relating to

securities markets;

4) Without prejudice to the provisions contained in sub-sections (1), (2), (2A) and (3) and
section 11B, the Board may, by an order, for reasons to be recorded in writing, in the
interests of investors or securities market, take any of the following measures, either
pending investigation or inquiry or on completion of such investigation or inquiry,
namely:-;

c) suspend any office-bearer of any stock exchange or self-regulatory

organization from holding such position;

d) impound and retain the proceeds or securities in respect of any

transaction which is under investigation;

As there is every possibility of M/S Sunglow having bribed SEBI / NSE

officials, as such you are therefore requested to conduct inquiry into my
allegations and inform action taken at the earliest.

S.K.Kapoor
3, Sunshine Apartment,
A-3, Paschim Vihar,
New Delhi-110063

CC 1. Hon’ble Finance Minister, Central Vigilance Commission