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 December 27, 1999

To All Trading Members

 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/sub-
broker, 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