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TMI Blog2016 (8) TMI 1614X X X X Extracts X X X X X X X X Extracts X X X X ..... amesh Chandra Mishra and Lokanath Mishra 16 Govind Agarwal HUF AADHG0808H 17 Heena Hitendra Nagda ABVPN8122C 1. P.K. Ramesh 18 Darshan D Bhanushali AGKPB3602K 1. P.K. Ramesh 19 Alok Navinchandra Kubadia ABFPK6567J 1. Khmir Arun Kamdar 20 Bina Devi Dhanuka AEZPD5474N 1. Zal Andhyarujna 2. Neerav Merchant 3. Archit Jayakar 4. Rahil Jhaveri 5. Akanksha Agarwal 21 Mayank Dhanuka ADLPD5568J 22 Neha Dhanuka ADOPB3260E 23 Nikunj Dhanuka ADNPD6220D 24 Rajkumari Dhanuka ADUPD7020N 25 Umang Dhanuka ADLPD0494K 26 Madan Mohan Dhanuka ADQPD6035P 27 Gajakarna Trading Pvt Ltd AAECG2103R 1. Ravi Ramaiya 28 Mahaganapati Financial Services Pvt Ltd AAHCM1333N 29 Nimesh S Joshi AAFPJ6734M 30 Roshni N Joshi AGSPJ6909M 31 Hitesh N Kawa AGYPK8780F 32 Roopal H Kawa ANMPK4236D 33 Akash Ranchhodbhai Golakia ALDPG8381J Not Appeared 34 Chintan Ranchhodbhai Golakia AEEPG1294G Not Appeared 35 Ranchhodbhai Jasmatbhai Golakia AAYPG3878J Not Appeared 36 Vijuben Ranchhodbhai Golakia AAWPG3157A Not Appeared 37 Sushilkumar Shribhagwan Fatehpuria AABPF1503E Not Appeared 38 Umadevi Sushilkumar Fatehpuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind Chhotalal Morzaria AEKPM9977L 86 Anil Kumar Chamanlal ADZPC5979N 1. Shailashri Bhaskar 87 Jay Hansraj Chheda AJLPC9910H 1. Sunil Badsiwal 88 Neha Bansal ADSPA3332J 1. Prakash Shah 89 Sadhna Rani ABHPA9244J 90 Savita Bansal AEJPB6903J 91 Monesh Israni AAJPI8348E 1. Deepak R Shah 92 Sunny Mirchandani ALVPM6130D 93 Nareshkumar Kishanlal Saraf AALPS7124C 1 Rinku Valanju. 2. Nareshkumar Kishanlal Saraf 94 Peeyush Makhija BGGPM9415G Not Appeared 95 Damji Anandji Rambhia ADPPR2047A 1. Prakash Shah 96 Kantilal Lalji Shah AAIPS4820L 1. Prachi Pandya 2. Dhaval Shah 3. Jatin K Mehta 97 Kishor Pranjivan Mehta ACMPM6181A 98 Rajesh C Mehta AAZPM0573H LTP Contributors: 99 Prem Lata Nahar AFAPN8764M 1. Prakash Shah 100 Dhirendra Kumar Gupta and Sons HUF AAFHD9092L 1. Dhirendra Kumar Gupta 101 J M S Financial Services Ltd. AAACJ8428J 1. Krishna Aggarwal 102 Nellakkara Raghunath AESPN9474K Not Appeared 103 Sanjay Kumar Shah AJSPS5543F Not Appeared 104 Rajesh Kumar Shukla BGGPS9416R Not Appeared Exit Providers: 105 Vibgyor Financial Services Pvt Ltd AAACV8378B 1. Pretti Bhardwaj 2 Minakshi Lata 106 Bazigar Trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a high price by the entities related/connected amongst themselves and with Pine (hereinafter referred to as "Exit Providers"). In the process Exit Providers, preferential allotees and the promoter related entities artificially increased the volume of the scrip and misused securities market system for making illegal gains and to convert ill-gotten gains into genuine one to avail LTCG. The modus operandi used by these entities was inter-alia as under: a) On December 13, 2012, Pine made a preferential allotment of 1,50,00,000 equity shares at the price of Rs. 10 per share (hereinafter referred to as the "1st preferential allotment") to 49 entities. b) Thereafter, the promoters namely, First Entertainment Private Limited and Unique image Production Pvt. Ltd. who were holding shares in the physical form, transferred their entire holdings i.e. 9, 27,400 shares to 6 entities, who in turn transferred the shares to 62 entities (the total of 68 entities, hereinafter referred to as "Promoter related entities ") during the period from December 28, 2012 to February 05, 2013. 49 of the Promoter related entities subsequently sold 54.76% of the shares received from the promoters. c) Subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of personal hearing before SEBI. Several entities filed their replies in the matter and availed opportunity/ies of personal hearing and filed additional written submissions after personal hearings. Some of the entities who had filed their written reply, waived the opportunity of personal hearing. Some of these entities had also sought inspection/ information/documents relied upon for passing the interim order and the same were provided to them. Total 26 entities neither filed written reply nor did they avail opportunities of personal hearing. 4. It is pertinent to mention that SEBI has passed several interim orders in similar cases against several entities based upon prima facie findings and pending investigations in those matters. Considering the large number of entities covered in such orders (more than 1200), entities common across different orders, complexities involved in the issues such as inter linkages of different tranches of alleged schemes, connection/relation amongst transacting parties in different tranche of scheme, it was considered appropriate to consider the facts and circumstances in totality after hearing maximum possible entities. 5. In the meanwhile, afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forementioned window for sale of shares lying in respective portfolio shall be withdrawn if the Noticees execute any trade beyond those mentioned in clause (iii) above. The aforesaid reliefs shall be subject to the supervision of the stock exchanges and depositories. 7. In addition to the above relief, all the entities under the categories Company, Directors, Promoters and Directors of Promoters, Promoter related entities, exit providers and some of the preferential allottees, were permitted to utilize 25% of their portfolio value for their business purposes and/or for meeting other exigencies subject to the condition that the balance portfolio value does not go below the profit/loss made by them. For the purposes of determining the portfolio value of the entities, the value of portfolio of securities lying in the demat account/s (individual and joint both) on the date of the interim order after excluding the value of shares that have been suspended from trading as on the date of the communication was to be considered. For NBFCs and stock brokers the value of portfolio was to exclude the value of clients' securities lying in their demat accounts. 8. Further, specific represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A1784D Exit Provider 4 Antaryami Traders Private Limited AALCA7880J Exit Provider 5 Blue Horizon Commosales Private Limited AAFCB0211J Exit Provider 6 Cheroot Vanijya Pvt. Ltd. AAECC9285A Exit Provider 7 Devatma Distributors Private Limited AADCD7140G Exit Provider 8 Dhlriti Traders Private Limited AAECD8235D Exit Provider 9 Dhyaneshwar Dealers Private Limited AAECD8010E Exit Provider 10 Dove Suppliers Private Limited AADCD7017J Exit Provider 11 Dreamvalley Trading Private Limited AADCD0633J Exit Provider 12 Esha Securities Limited AAACE2862P Exit Provider 13 Goldensight Traders Private Limited AAFCG4773J Exit Provider 14 Helot Properties Private Limited AACCH8885R Exit Provider 15 Indrawati Nirman Private Limited AADCI5139E Exit Provider 16 Kapeeshwar Vintrade Pvt Ltd AAECK7329P Exit Provider 17 Navdurga Investment Consultants Pvt Ltd AACCN9567A Exit Provider 18 Orchid Solution Private Limited AABCO2236J Exit Provider 19 Overload Financial Advisory Pvt. Ltd. AABCO6950F Exit Provider 20 Padma Impex Private Limited AAACL4269P Exit Provider 21 Ramya Mercantile Pvt Ltd AAGCR6009M Exit Provider 22 Rangoli Distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gamini Merchandise Private Limited Exit Provider 13 AAFCG5351A Gangeshwari Traders Private Limited Exit Provider 14 AADCH3599R Hanshika Dealers Private Limited Exit Provider 15 AACCH4303G Helpful Investment Advisory Private Limited Exit Provider 16 AACCL3868N Ladios Trading Private Limited Exit Provider 17 AAICM4750C Mobixa Distributors Private Limited Exit Provider 18 AAICM6982C Muchmore Vincom Private Limited Exit Provider 19 AACCM6582E Pride Distillery Private Ltd Exit Provider 20 AAGCR1715E Rangan Vincom Private Limited Exit Provider 21 AAGCR8144M Reachsmart Developers Private Limited Exit Provider 22 AAGCR8142P Rochak Vinimay Private Limted Exit Provider 23 AAGCR7017M Rochi Dealcom Private Limited Exit Provider 24 AAPCS7850L Shivkhori Construction Private Limited Exit Provider 25 AATCS3687H Sidhiman Vyapaar Private Limited Exit Provider 26 AADCT8403C Topwell Properties Private Limited Exit Provider 27 AAECV4988P Vishnudham Marketing Private Limited Exit Provider 12. I note that the interim order highlighted the profit/gain earned by the allotees. The details of the profit/gain earned by the preferential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Mohan Babani 6753975 48 AACPP0931H Mahendra Pandhi 4710250 49 AAQPS5640E Lata V Shah* 0 *- Lata V Shah transferred shares allotted through preferential allotment to Pankaj Dhanji Goshar who subsequently sold in the market. 13. I note that the interim order highlighted the fact that the Exit Providers bought most of the shares sold by the preferential allotees and the promoter related entities. The details of the value of the exit provided by the exit providers covered in this order and against whom confirmatory directions have already been passed are tabulated below at Table 5. The details of the profit/gain earned by the promoter related entities covered in this order are tabulated below at Table 6. As the promoter related entities had acquired the shares through off-market transactions, the purchase price has been considered at face value of the scrip. Table 4: S. No. Name PAN Total No. of shares purchased from promoter related/preferential allotees Value of the exit provided to promoter related/preferent ial allotees 1 Dreamvalley Trading Private Limited AADCD0633J 3459200 32,36,75,273 2 Rangoli Distributors Private Ltd AAECR2312K 1608411 15,05,87,67 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Limited AABCB3052B 20000 17,17,000 39 Runicha Merchants Private Limited AAECR0580M 20000 18,85,000 40 Amit Singh BABPS7447D 15000 14,14,000 41 BSR Finance And Construction Ltd AABCB0636K 7000 6,04,100 42 Swarna Pushpa Vanijya Private Limited AAJCS0597G 3470 2,99,288 43 Sanklap Vincom P Ltd AAMCS1711P 3000 2,83,200 44 Burlington Finance Limited AABCB2575P 600 51,600 Table 5: S. No. PAN Name Gr Sell Vol Gr Sell Value Purchase value of the shares sold assumed to be Rs. 10* Profit 1 ADLPD0494K Umang Dhanuka 200000 1,73,95,806.00 20,00,000.00 1,53,95,806.00 2 ADLPD5568J Mayank Dhanuka 219000 1,92,18,695.00 21,90,000.00 1,70,28,695.00 3 ADNPD6220D Nikunj Dhanuka 280000 2,39,16,117.00 28,00,000.00 2,11,16,117.00 4 ADOPB3260E Neha Dhanuka 48000 40,56,000.00 4,80,000.00 35,76,000.00 5 ADQPD6035P Madan Mohan Dhanuka 48000 45,22,400.00 4,80,000.00 40,42,400.00 6 ADUPD7020N Raj Kumari Dhanuka 120000 1,12,92,097.20 12,00,000.00 1,00,92,097.20 7 AEZPD5474N Bina Devi Dhanuka 48000 45,30,150.00 4,80,000.00 40,50,150.00 Group Total 963000 8,49,31,265.20 7,53,01,265.20 8 AAWPG3157A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 1,23,84,250.00 31 AAEPG6708K Ashish Goel 161300 1,08,81,285.00 16,13,000.00 92,68,285.00 32 ACTPC4078P Manisha Narpatkumar Chopra 500000 4,39,75,148.00 50,00,000.00 3,89,75,148.00 33 ABFPK6567J Alok Navinchandra Kubadia 250000 2,33,95,950.00 25,00,000.00 2,08,95,950.00 * - Purchase value assumed at the price face value of the scrip 14. Considering the fact that majority of entities have already been heard and that the replies are similar/identical, even though some of the entities are delaying by seeking adjournment /documents, it is felt that at this stage a view can be taken for the Noticees based on reply/submissions already received. 15. The replies/submission of 123 Noticees are summarised as under. It is noted that some of the entities belonging to the same category, have submitted replies that are similar /identical in nature. Such replies have been grouped together for the sake of brevity. In addition to the various case laws referred by the noticees, they have inter alia submitted the following I: Pine Animation Limited and Directors 1. Pine Animation Limited: a) The entity denied all allegations made against the company and its directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order placed on the exchange in the company's scrip. h) Allegation that the transfers to related entities of the promoters is irrelevant as only on account of transfer of shares to these entities, a relationship cannot be established between transferor and the transferee. These allegations are pure assumptions and have no truth which can be justified or proved. i) After revocation of suspension, the company has been able to raise funds to the tune of Rs.247.00 lacs. The increase in EPS from -0.24 to 0.15 in just a span of one year itself justifies the growth of the company and its ability to grow in future and outperform the benchmark industries. Hence, the allegation that the price of scrip was not supported by its fundamentals is incorrect, irrational and is unwarranted. j) Neither the company nor its directors have benefitted in any manner with respect to the trading in the shares of the company. k) The directors of company have just acted in their capacity of directors and have done all acts and business transactions within the purview of all rules and regulations applicable to them. l) There has been no complaint filed by anyone to any regulatory authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... play in respect to either in the movement of the price of shares of M/s. Pine Animation Limited or the volume of trades that are done. 4. Priyesh Prakash Pethe, Deepak Prakash Rane and Nirmal Pragjibhai Jodhani: Letters were received from the entities appointing CA Nikunj Kanodia to appear before SEBI on their behalf. No other replies/submission received from the entities. 5. Mandar Subhash Palav: a) The entity has stated that no documents/evidences were provided to him before passing ad-interim order against him, which is in violation to the law of natural justice. b) The entity has denied all allegation made in the order and has submitted that he has not violated the provisions of SEBI Act and PFUTP Regulations as alleged in the order. c) He had been appointed as the Non-Executive Independent Director of M/s. Pine Animation Limited (Formerly Four K Animation Limited) w.e.f 18th January, 2012. d) He had no role to play with the operation of the company and was not involved in any decision taken by the management. He was not in control of the day to day affairs of the company and had acted only in the capacity of the independent director for proper compliance and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companied Mr. Murali for discussing the transaction in Mumbai. Mr. Nimesh Joshi and Mr. Hitesh Kawa and the company arrived at the purchase price of the shares and payment towards the acquisition of shares were made subsequently through banking channels during February 2012. e. He had signed the B/S and P/L for the year ending March 31, 2012 and submitted his resignation letter on July 01, 2012 and left for USA in July 2012 and came back only in January 2013. f. On his return, he found that his name was still appearing as a Director of the company. He enquired with Mr. Nimesh Joshi and Mr. Hitesh Kawas and was assured that it will be removed soon. g. On February 4, 2013, he wrote to the Registrar of Companies, Chennai, informing them that he had resigned from the company Board through his resignation letter to the company dated July 01, 2012. The entity enclosed a copy of his letter addressed to the Registrar of Companies, Chennai, in this regard. h. He was not involved in any activities of the company after change of ownership. II: Promoters and Directors of the Promoter Companies 1. Unique Image Production Pvt. Ltd., First Entertainment Pvt. Ltd., Murali Shanmugam, P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that when he saw there is fruitful profit on the shares, she started selling the shares gradually. d. The entity has according requested to allow her to access the securities market. 2. Govind Agarwal HUF And Deepak Agarwal HUF: a. The entities have submitted that they had met Mr. Hitesh Kawa in Mumbai who informed them that he was dealing in suspended company (ies) shares. On his pursuance they decided to risk Rs 30,000/- as investments in small companies. Accordingly, Around January 2013, they bought 10,000 equity shares each, of the company which constitutes hardly 0.001% of the then paid up capital. b. They were not aware that Mr. Hitesh Kawa belonged to any alleged promoter group or the shares he bought earlier belonged to any promoter of the Company. They have never met any Director or company personnel including that of the Promoters or Mr. Hitesh Kawa thereafter. They have submitted that they are neither connected to any promoter or director of the Company nor any alleged entities. c. At the time of their purchase, as there were no trades in the stock exchange, the sell or purchase of the shares were only possible through off market deals. The payment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re neither directly nor indirectly related to the said Company or any of its Promoters or Directors and were neither in a position nor have acted in concert with Pine Animation Limited and its Promoters or Directors to misuse the Stock Exchange System. d. Ms. Nagda has submitted that the purchase of 16,000 shares of Pine in the month of March 2013 was carried out as per the provisions of law and in a bonafide manner. The entity refutes the allegation contained in the SCN that she is a 'Promoter Related Entity' as she had not purchased from promoters or in the Preferential allotment. The shares were bought from an independent third party M/s Mahaganpati Financial Services Pvt. Ltd. after having been advised by one Mr. Jasubhai in this regard. e. Mr. Bhanushali has submitted that he came across an advertisement in the Economic Times newspaper by one Bhushit Trading Private Ltd., who, as per the advertisement, were dealing in the physical/odd lot shares of all companies. In the month of March 2013, Mr. Rajkumar, the authorized person of the said firm gave an option of investing in the shares of Pine. He had legally and in a bonafide manner got transferred in his name 16,000 shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition nor have acted in concert with Pine Animation Limited and its Promoters or Directors to misuse the Stock Exchange System. d. The inclusion of his name in the Pine Group is erroneous as there is no elaboration on any evidence provided in the said Order and the examination materials provided by SEBI which conclusively establishes his nexus with the Exit Providers and the Promoter related entities. e. He has denied that his act and/or omission amounts to fraud, as there were no intentions of creating any kind of artificial price rise, nor concealment of any fact or making a false representation. He cannot be held liable for any violation of the SEBI Act or the PFUTP Regulations and strongly state that the shareholders cannot be held liable for the alleged misdeeds of the promoters or the Company or their related entities. f. He has earnestly sold shares of the said Company in a blind and transparent mechanism without any nexus to any of the counter parties. 5. Madan Mohan Dhanuka, Neha Dhanuka, Nikunj dhanuka, Bina Devi Dhanuka, Rajkumari Dhanuka, Umang Dhanuka and Mayank Dhanuka: a. The entities have submitted that they have been investing in securities from a longt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Gajakarna Trading as witnessed from the Share Certificates and there was no reason or possibility for them to ever suspect or know that the shares were ever owned by promoters of Pine. Thus, without any link or connection between them Gajakarna Trading and/or the promoters of Pine, their categorisation as a 'Promoter related entity' is itself bad in law and unreasonable. j. Off-market purchase of shares is a permitted method of purchasing the shares of a company. k. The entities have submitted that the Order is discriminatory is as much as, only those entities who have earned over Rs. 1,00,00,000 are alleged to have partaken in the wrongdoing and other entities, have, for reasons unexplained, been excluded from liability. l. There is no material whatsoever to suggest any laundering by them. The entities have submitted that notwithstanding this, and assuming for the sake of arguments that there was any alleged money laundering, the appropriate authorities would commence action. However, such allegations are not within the domain of SEBI. m. The Order fails to reconcile how, merely by making Long Term Capital Gains, our client has violated any prevailing law. n. Thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Noticees. Further, the Order altogether fails to make any connection between the loan transactions and purchase in the shares of Pine. As such the loan transaction is entirely irrelevant for the purposes of the Order and ought to have been excluded from consideration. v. Ms. Bina Devi Dhanuka, Mr. Mayank Dhanuka, Mr. Umang Dhanuka and Ms. Rajkumari Dhanuka, who are the directors of Bihariji Constructions, have submitted that in paragraph 25 of the Order, it is stated that 2 loans in a sum of Rs. 25,00,000 each were advanced by Pine to Biharij Constructions. It is alleged that the loans were advanced from monies received by Pine from the Preferential Allotments and that the said monies were not used by Pine for the stated purpose of the Preferential Allotment(s). In this regard, the said entities have submitted that they were not aware of and/or concerned with the source of funds used by Pine to advance the loans to Biharji Constructions and that the record will show that the loans were advanced on an arms-length basis and Biharji Constructions has also paid interest to Pine for the loans. The entities have submitted that therefore, they cannot be made liable by association, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies to bank accounts and not demat accounts, but both bank and demat accounts are used to park assets in the favour of beneficial owners and hence demat accounts should be treated at par with bank accounts and all the requirements for attachment of bank accounts should be complied with while attaching demat accounts, which has not been done in this case. h. The entities Mr. Nimesh Joshi, Ms. Rashmi Nimesh Joshi, Mr. Hitesh Kawa and Ms. Roopal Kawa have further submitted that by restraining them from accessing securities markets and attaching their demat accounts, SEBI has subjected their investments to a huge risk of devaluation, which they have been made to face for no fault. 7. Akshar Ranchhodbhai Golakia, Chintan Ranchhodbhai Golakia, Ranchhodbhai Jasmatbhai Golakia, Vijuben Ranchhodbhai Golakia, Sushilkumar Fatehpuria, Uma Devi Sushilkumar Fatehpuria, Pankaj Kumar Beria, Poonam Pankaj Beria, Rajkumar Budhram Agarwal and Pinky Rajkumar Agarwal: a. The entities have denied all the allegations made in the said order. In addition, they submitted that they have not violated the provisions of SEBI Act and PFUTP Regulations as alleged in the said order. b. They had acquire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd, in physical form. He sold the shares of Pine Animation Ltd through his broker "Share Wise Equity Brokers Private Limited" through BOLT. He confirmed that there were no cash transaction or no exchange of monies took place illegally. He never knew who the buyers were. d. He is neither related nor connected to any promoter, directors. He further confirmed that he does not have any business or professional dealing with Pine Animation Ltd. e. SEBI has mentioned certain persons were responsible for pushing the price of the scrip but does not mention his name therefore action can be taken only against them and not against him. Further, SEBI has not given any finding in the order that any entity listed in the order is connected and/ or related to him or he is related to any exit providers. f. The entity has stated that the ex-parte order passed against him is bad in the eyes of Law. A mere possibility of committing breach is not sufficient to issue directions and restrain him from selling securities. These directions are therefore, violative of principles of natural justice. g. Therefore, the entity has submitted that all directions issued against him may be withdrawn. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the preferential issue proceeds. Further, they have stated that they are not connected whatsoever with the company, its promoters, any of the preferential allottees, any of the other purchase of the shares, with the person who sold them the shares, with any of the alleged exit providers, etc. i. Further, they are neither a part of the Promoters nor connected with any of such persons named. They are not connected directly or indirectly whether by way of financial/personal relation or otherwise with the Promoters, the transferees from the Promoters or the Exit Providers. j. Therefore, they have requested that the bar on them on accessing the capital markets and purchasing/selling / dealing in securities be removed immediately. In addition, they may be allowed to sell shares presently held by them other than those of Pine. IV: Preferential Allotees 1. Hirji M Shah: a. The entity denied all allegations made in the interim order. b. He is a regular investor in the securities market and has been trading in scrips of various companies over a long period of time. c. The interim order has been passed in complete disregard of principles of natural justice, as no opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to invest in Pine c. The order does not offer any documentary evidence regarding any nexus of the entities with promoter directors of Pine. Therefore the allegation against them is not tenable in law. d. They have denied any relation with Pine, promoter/director, PA, promoter related entities and exit providers. In addition, they have also denied that they had ever used securities market system to artificially increase volume and price for making illegal gains. e. They have stated that end use of funds received by company through preferential allotment has no relevance to them and they were not privy to the said facts. f. They have submitted that the order was passed without seeking any explanation from them which is in violation of principles of natural justice, equity and fair play. The findings are in the nature of final orders drawing final conclusions and have been made against them without giving opportunity to present their case. g. They have denied that they have misused the stock exchange system to generate fictitious profit. h. They have stated that the directions against them are harsh, disproportionate and therefore have requested to withdraw the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares sold by them were purchased by exit providers. They had no role in price rigging and have no relation with alleged entities that were responsible for price rigging. g. They deny that they are in any way connected with the Company, the Promoter Related entities and the Exit Provider entities. h. Investment made by them in Pine was based on presentation received by them about business plan, expansion plan, future prospects, balance sheet, annual report of company & was post revocation of suspension. i. It is not established that they have made cash payment to make long term gain and avoid income tax. j. They are not guilty of any provisions mentioned in the interim order as they have no role to play in unfair trade practice. k. Investing in company is not a crime and for wrongdoing of the company, investors cannot be punished l. The Order is unconstitutional & causing grave, serious and undue hardship to them. m. Accordingly, the order passed against them deserves to be set aside and have requested for de-freezing their demat account, permitting to access the securities market and be allowed to buy sell or deal in securities directly or indirectly. 5. Haresh T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . e. They expected reasonable returns from this investment and did not have any malafide intentions in investing in the shares of the said company. f. They are still holding a majority of the shares purchased which implies that they had no intentions to make a profitable exit giving rise to the alleged artificial price rise. g. They deny that they are in any way connected with the Company, the Promoter Related entities, Exit Provider entities and the entities who have contributed to the price rise. h. Investment made by them in Pine was based on presentation received by them about business plan, expansion plan, future prospects, balance sheet, annual report of company and was post revocation of suspension. i. They have denied that their act and/or omission amounts to fraud, as they had no intentions of creating any kind of artificial price rise, nor did they conceal any fact of make false representation. They cannot be held liable for any violation of the SEBI Act of the PFUTP Regulations and strongly state that the shareholders cannot be held liable for the alleged misdeeds of the promoters of the company or their related entities. j. While making investments in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have contributed to the price rise. h. Has denied that their act and/or omission amounts to fraud, as they had no intentions of creating any kind of artificial price rise, nor did they conceal any fact of make false representation. They cannot be held liable for any violation of the SEBI Act of the PFUTP Regulations and strongly state that the shareholders cannot be held liable for the alleged misdeeds of the promoters of the company or their related entities. i. The investment made in the Pine Animation Limited was made from his own/family funds and the same was not sourced from any of the Pine Group Entities. j. While making investments in the company, he had relied on documents and factors like (a) revocation of suspension dated 18th June 2012 of the company by the Stock Exchange (b) presentation on company received by us explaining about the business plan and why funds were needed, expansion plan, future prospects etc. for preferential allotment (c) Balance sheets /Annual Reports of the company. k. He has denied that he had paid a premium of Rs. 10 per share. l. He had purchased the shares looking at the projected growth or potential in the animation industry and onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nied that their act and/or omission amounts to fraud, as they had no intentions of creating any kind of artificial price rise, nor did they conceal any fact of make false representation. They cannot be held liable for any violation of the SEBI Act of the PFUTP Regulations and strongly state that the shareholders cannot be held liable for the alleged misdeeds of the promoters of the company or their related entities. h. They being a private limited company, provisions of Section 115JB of Income Tax Act relating to minimum alternative tax (MAT) on book profit is applicable to them and they have paid approximately 20% income tax (MAT on book profit) and thus it is clearly indicative that they had no intentions of creating any bofus and not taxable profits. i. The investment made in the Pine Animation Limited was made from their funds and the same was not sourced from any of the Pine Group Entities. j. While making investments in the company, they had relied on documents and factors like (a) revocation of suspension dated 18th June 2012 of the company by the Stock Exchange (b) presentation on company received by us explaining about the business plan and why funds were needed, exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock in period of one year and it is difficult to envisage that he knew about profit booking on the said shares 12 months in advance. d. The entity has submitted that he has been investing in securities market since last 15 years and is genuine investors and invested in Pine from his own sources of fund. e. The entity has submitted that he is no way connected or associated to any promoter/director, preferential allotees, promoter related entities and exit providers & Pine group. In addition, he denied that he was not involved in either pushing up or down the share price of Pine. He has submitted that he is a mere investor and sold only part of the allotted equity and retained a substantial portion of 12,00,000 shares and in fact suffered a loss on the quantity of the retained equity. f. SEBI is only concerned with the market movement and not the issues pertaining to long term capital gain or otherwise which are within the domain of income tax authority. The provisions of income tax act are being misinvoked and misapplied only for sole object of giving direction in the matter and without hearing the parties hearing concerned. g. The entity has denied of his involvement in mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lock-in period (as mandated by law) came to an end, due to circumstances arising which were not in sync with the Info Memo and was brought to my notice via the Director's Report. h. The Purported loss caused to any investors on account of their trades as alleged by SEBI is notional and not quantified. i. There is no alert issued by the Exchange with regard to trading in the scrip. It is customary that the surveillance system of the Exchange gives alerts to the general public and to the Brokers and Brokers in turn to the investors. In the absence of such an alert and advisory, it is not possible for a common investors like them to detect any market level malfeasance, if any, in a stock. j. They had applied for the shares of the Pine from his own sources of funds and not in furtherance of any fraud or part of any scheme or connivance to defraud as alleged in the Order. k. They had sold a part of their shares through broker on the online trading system of the Stock Exchange and the proceeds of sale of shares were utilised by them for his genuine business purposes. l. They have submitted that the finding that the allottees including them had a nexus with the company, its pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences referred to and relied upon in making such bald and unsubstantiated allegations against her at the time when the said Order was served upon her or at least before granting her an opportunity of personal hearing. f. The entity has submitted that an open ended Restraint Order against her is in breach of fundamental right of carrying on business bestowed upon every citizen under Article 19 (g) of the 'Constitution of India' and also in gross violation of cardinal rule of 'audi alteram partem' and therefore violates basic principles of equity, fair play and natural justice. g. She has not sold a single share on floor/automated trading system of the stock and hence the question of misusing the stock exchange system does not arise in her case and the charge thereof is absurd. h. She has not earned a single rupee from the gift of the said shares to her brother and hence there was no profit which has accrued and therefore the question of claiming any exemption as Long Term Capital Gain under Section 10(38) of Income Tax act, 1961 does not and cannot arise at all. i. She has not employed any manipulative or deceptive device or acted in contravention of the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requested for de-freezing their demat account, permitting to access the securities market and be allowed to buy sell or deal in securities directly or indirectly. 13. Hemant Jayant Gogri: a) The entity has denied that he has violated any provisions of PFUTP Regulations, 2006 and the provisions of the SEBI Act, 1992, while dealing in the scrip of 'Pine' as wrongly alleged. b) Merely because he was allotted shares on preferential basis and after expiry of lock in period, the shares got sold to the entities purportedly connected/related, directly or indirectly, to the so called Pine Group/suspected entities, and in the process he earned profits, it has been assumed that he was party to some fraud and acting concert with Pine Group and suspected entities and have misused stock exchange system to generate fictitious profits. c) He had applied for allotment in the preferential offer of Pine from his own funds. He was neither aware of nor connected with nor involved in nor participated in nor had the means to know the entities of the purported Pine Group/ Suspected on their alleged dealings. d) He has submitted that he had sold the shares of Pine on the floor of the exchange i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... active trader in the securities market. At that time he was looking to make an investment in a scrip. Therefore, he thought it as a good investment opportunity. On being shown the presentation on the operations of the company, he was of the opinion that the animation industry in India which was relatively new at that time had very high prospects of flourishing in the future. Accordingly, he decided to invest in the company through the preferential allotment. d. On the completion of the one year lock in period, the scrip witnessed a significant rise in its price. On witnessing the then prevalent trend in the scrip, he chose to sell a few of the total shares held by him in the scrip, thereby making a desirable and an entirely legal profit. He was unaware about any alleged scheme employed by the company or any other investor, until the said order was served upon him. e. At the time he invested in the company, he had no knowledge of the promoter's intention of exiting the company. Therefore, to presuppose that the said investment in this case confirms a nexus with the company and its directors/promoters is absolutely erroneous. He stated that only because he was one among the prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged. n. He denies that he has violated the provisions of Regulation 2, 3 and 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 or Section 12A of the SEBI Act. He has neither directly nor indirectly bought or sold or otherwise dealt in the securities in any fraudulent manner. o. Instead of passing a complete restraining order in terms of Section 19 read with Sections 11(1), 11(4) and 11B of the SEBI Act, 1992, A Cease and Desist Order under section 11D would have sufficed the cause and served the purpose of protecting the interest of the investors. However, to absolutely debar him from accessing the securities market is a severe course of action. p. He has stated that, to blindly assume a situation to be true for one and thereby assume the same to be true for the lot may be the cause of grave injustice to those who have absolutely no mens rea to commit any fraud and have been wrongly grouped for the sake of convenience. q. He has requested SEBI to look at his case independently and without any presuppositions or prejudice. In addition, requested to quash the order against him and all charges, inquiries and inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at of the Exit Provider, is a matter of mere co incidence. i. Profit earned by him is completely legal in nature and well deserved as a result of his risk taking ability and well timed decisions. Moreover, this does not in any way throw light upon the fact that the Exit providers and the Preferential Allottees were hand in glove with each other. j. If he would've in fact had any nexus with the Promoter Related Entities or the Exit Providers, he wouldn't have sold just a part of his share holding in the scrip of the company. Instead he would've, like any other prudent person who was to possess a nexus, sold his entire share holding in the scrip of the company, thereby maximizing his profit. k. The price at which he sold his shares was rarely near to the highest price for that particular trading day. Out of 70 trading days, only on 8 trading days the trades executed by him in the days's high price. Therefore, had it been the case that he was colluding with other entities to artificially increase the price and the volume, he would have sold the shares at the highest market price to gain maximum profits. But, the fact that the selling price was actually much less than the hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t matter. Passing an interim order against him was unwarranted and unjustified and any post decisional hearing cannot cure the basic lacuna and deficiency in law. b) His demat account has been frozen and he has been restrained from buying, selling and dealing in the securities market directly or indirectly in any manner. As a consequence, presently he has been deprived of an opportunity to sell his existing shares at the best opportune time during prohibitory period. Further, he has been deprived of an ongoing opportunity of making investment in the stock market such as "offer for sale" of Public sector Undertakings. c) He has been carrying out investment activities in the market in past and has had an unblemished and clean track record of carrying out activities in the stock market. Even in the matter of his dealing in Pine Animation scrip, he is not in violation of any provision of securities market law as alleged or otherwise. d) There has been proper disclosure of his dealing in Pine Animation shares as statutorily required and it had been carried out in absolutely fair and transparent manner as required. He had invested in preferential allotment of Pine Animation Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry in a case having adverse civil consequences as well as reputational adversity. In the instant case, there was no such emergent situation or circumstance warranting such an ex-parte ad interim order. e) They have been dealing in the stock market since a considerable period of time and have never defaulted in meeting their payment or delivery obligations on any occasion. f) They had come to know about the investment proposal through their father/father-inlaw. After paying the consideration amount, the shares were allotted by the company. After the lock-in-period expired, they continued to hold the shares for more than one and a half year and subsequently sold the shares in the secondary market through their stock broker. g) The pay-out amount received from the broker towards sale of shares of Pine Animation were utilised by them for their own business and financial purpose. h) They have no link/connection/nexus with Pine Animation, its promoters/directors, save and except as a shareholder, by virtue of preferential allotment. They have no connection with any other entities in the order, except for their family members, who have been allotted the shares through preferential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts for 50 years of his lifetime and he had an innate sense of financial advisory. h) On February 23, 2013 the entities were further informed that Pine Animation had received an 'in principle' approval from BSE for the proposed issue of preferential shares. They genuinely assumed that considering the authority and access to information which the BSE may have over Pine Company and its management, BSE would have exercised adequate due diligence, enquiry and would have obtained all necessary information before granting permission for issue of preferential shares and also subsequent commencement of trading of Pine on the stock exchange. i) The entities are regular Income Tax Assessee and file Income Tax returns regularly and also have been paying all the taxes due. Hence the question of any 'money laundering' or 'tax evasion' does not arise in their case. j) The entities have humbly submit that they are not part of any wrong doing and genuinely had no idea of any alleged 'modus operandi' as alleged or otherwise. In addition, they are not connected or related to any person whose names are published by SEBI in the aforesaid interim order. k) The entities have stated that none of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be presumed or pre-supposed that he has a nexus, link or relationship with the Pine Company. e) He has no 'nexus', link, relationship or any association whatsoever with the alleged Pine group or its promoters, directors or employee or any other entity except his investment in the said company f) He had no idea who purchased his shares as all the transactions were executed through the normal screen based trading system of the Bombay Stock Exchange. g) The entity has submitted that he is an ordinary and lay investor of capital market and has no insight about the functioning of the company and has no capacity to carry out research or investigate utilization of funds of the company. h) The present order is in gross violation of the basic principles of 'audi alteram partem'. i) The entity has submitted that the power to issue directions under section 11, 11(4) and 11(B) is a drastic power having serious civil consequences and ramifications on the repute and livelihood of those against it is directed. There was no need, necessity or rationalisation in the present interim order for use of such severe and drastic power against him. Further, an open ended restraint order aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urities market. In addition, has submitted that continuation of such an open ended restrain order is causing great harm and has wide ramification on his livelihood and business activities. r) He has requested to allow him to sell the shares held in his portfolio and use at least 25% of the proceeds for his need based requirements. The interim order as far as it is applicable to him may be made inoperative. The allegation against him and charges qua him be quashed and he may be discharged at the earliest. 20. Anil Kumar Chamanlal: a) The entity has denied all allegations made against him in the order. The impunged order was passed in violation of natural justice, equity and fair play. b) The entity has submitted that he has been an active investor in the stock market for the past 25 years and has been investing in securities on regular basis on his own analysis and judgement and on recommendations c) He has never known, met or dealt with any person identified in the order. He has no connection/nexus with transaction, trading activity, alleged price escalation or any event that can be deemed to be in violation of any SEBI Regulations. d) His trades have been on screen by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of the exchange. d) The entities denied about their relationship with Pine Company, its promoters/directors/key management persons mentioned in SEBI's interim order neither they have any common Know Your Client details, bank statement, off-market transactions with the said entities. e) Continuation of an open ended restrain order has wide ramification on their livelihood and business activities. f) Therefore, the entities have made prayer to make the order against them inoperative and all allegations against them and charges against them be quashed. During pendency of the Order, they may be permitted to sell the shares and securities held by them and utilise the proceeds thereof. 23. Monesh Israni and Sunny Mirchandani: a) The entities have submitted that they have no relations with any of the Directors or Promoters of Pine and the issue of the shares were not under a prior arrangement between the entity and the Directors/Promoters of Pine. b) Have traded at the prevailing market price through a registered broker and there is no allegation of any synchronized trade against them in the order. c) Had no knowledge as to who were purchasing the shares, as the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd with the commercial wisdom. g) The entity has no association with the company, promoter related entities, directors, and any alleged entities mentioned in the ex-parte order. Further, he has neither made any fund transfer to company, its directors, promoters or any entity nor made any off market transaction with any alleged entities. h) The shares were purchased from his own funds and all shares of Pine were sold on the floor of the exchange. He has no nexus with any of the counterparties/exit providers. i) As the said SEBI order has adversely impacted reputation and recognition of the entity, he has requested to withdraw the directions against him. 25. Peeyush Makhija: Denies all allegations made in the order. 26. Damji Anandji Rambhia: a) The entity has denied all the allegations made in the interim order. b) He is a bonafide investor and invested money in normal course of his investment activity and his investment was within his own financial and risk bearing capacity. c) His investment decision was made on the basis of news and rumours in print media, electronic media, grapevine, investment decision of other investors etc. d) Merely because the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterim order and allow him to buy and sell shares and securities and use entire process thereof for his need based requirements. 27. Kantilal Lalji Shah, Kishor Pranjivan Mehta and Rajesh C Mehta: a) Ex-parte ad interim order has been passed against them without giving an opportunity of being heard and without conducting any investigation. This is in sheer violation of the principles of natural justice. b) They are long term investors and are not involved in any kind of illegal activity. Like any other investor, they had invested their money in securities to get returns and thus when the prices of the company's shares increased they thought it to be a good time to sell and to make some profit. There was no ill intent involved and they had acted in a prudent manner in which any other investor would have acted in the given circumstances. c) SEBI has completely overlooked the fact that they were subscribers of the smallest portion of the total preferential issue of the company. Under no circumstances it can be said that, they were part of any scheme, plan, device and artifice vide which they had evaded any tax. In any event, they had held the shares for more than one year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the scrip of Pine. Assuming without accepting that SEBI does have jurisdiction to adjudicate upon the same, then also, no case has been made out to establish that their trades in the scrip of Pine were with a view to evade tax. The allegations are a result of assumptions, conjectures and surmises and do not hold any ground. V: LTP Contributors 1. Premlatha Nahar: a) The entity has contended the allegations and observation contained in the order. b) The entity has put forward her objections on the order stating that the same has been issued ex-parte without any prior communication, notice, letter or any correspondence seeking her explanation or clarification. c) The entity has submitted that the power to issue directions under section 11, 11(4) and 11 (B) is a drastic power having serious civil consequences and ramifications on the repute and livelihood of those against whom it is directed. However, no such need, necessity or rationalization has been delineated in present interim order for use of such severe and drastic power against her. d) The entity has submitted that an open ended restraint order against her is in breach of her fundamental right of carrying on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the alleged scheme by the Pine Company and that it is untenable for any authority to arrive at a grave finding of fraud without demonstrating any connection of whatsoever nature in the order other than that she had dealt in the scrip of Pine. m) The entity has also quoted SEBI's order dated 10.11.2015 in the matte of Radford Global Ltd., in respect of Jayesh Narendra Kesharia wherein in similar facts and circumstances the Hon'ble Whole Time Member had revoked the directions against Jayesh Narendra Kesharia. The entity has requested that the principle of parity be applied since the facts and circumstances of her case are exactly similar. 2. Sanjay Kumar Shah: a) The entity has submitted that the shares of Pine Animation Ltd. are listed in BSE and Quoted and as a individual Investor there is nothing wrong on the part of the small investor like him to trade in the normal course in the quoted shares for the nominal profit/loss in share trading. The total investment on his part is only for a meagre 30 shares in two instalments which cannot be considered as a contributory factor for any price scam of the subject share by any stretch of imagination. b) The entity has sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares where bonus/stock split declared by company. b) The entity has submitted that he is an ordinary person and if he would have known wrongdoing of company, he wouldn't have bought shares of Pine. c) The entity has submitted that he has no connection with any promoters of Pine Animation Ltd and its employees. He has been trading in shares since many years. 5. Dhirendra Kumar Gupta and Sons HUF: a) The entity has submitted that they are regular traders in the stock market and do the trading on online platforms provided by stock exchanges i.e. BSE and NSE through the stock brokers. They generally keep watch on rising stocks and try to make some profit out of the rising graph and as the stock was rising consistently they tried to buy some stocks. b) The entity has submitted that they have no connection with any of the other entities mentioned in the order. c) The entity has submitted that they are not able to trade in stock market any longer apart from reputation loss as their name is being displayed in the order. d) Accordingly they have requested to review the order and restore their PAN. 6. JMS Financial Services: a) The entity has stated that the order is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s market and the said order is in violation of the very basic tenets of principles of natural justice. 2. Apex Commotrade Pvt. Ltd, Runicha Merchants Pvt. Ltd., Sanklap Vincom Pvt. Ltd., Signet Vinimay Pvt. Ltd. and Winall Vinimay Pvt. Ltd: a) They have denied all the allegations made in the interim order and submitted that they have not violated the provisions of SEBI Act and PFUTP Regulations as alleged in the interim order. b) The order was passed against the principle of natural justice and had brought huge loss to their business. c) They were neither directly nor indirectly related to Pine or any of its promoters or directors. They were neither in a position nor have acted in concert with Pine and its promoters or directors to misuse the stock exchange System. d) They acquired the shares of Pine only as an investor and the said investment was made by them out of their own savings and resources. They regularly invest in shares and securities. Those investments were made with the sole objective of earning dividend and profits. e) They had no knowledge regarding control over price and volume of shares of Pine or its promoters or directors or any other person or group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r version and the circumstances as stated in the said Order do not justify dispensation of pre-decisional hearing. d) The power to issue directions under section 11 and section 11(B) of SEBI Act has to be exercised judiciously and it is all the more necessary in a case having adverse civil consequences as well as reputational adversity. Further, it is well settled that a discretionary power is not to be invoked arbitrarily devoid of justification, as has been done in the matter under reference. e) In the instant case, there was no such emergent situation or circumstance warranting such an ad interim ex-parte order. f) The entities are an investment and financial company primarily engaged in the trading of securities in secondary and primary market. They are registered with Reserve Bank of India as a Non-Banking Financial Company (NBFC). g) Their trading activity is huge. They are carrying on the trading activities in the market with due diligence, fairness and incompliance with the provisions of law. They have never defaulted in meeting their payment or delivery obligations to the brokers or the Exchange. h) The entities have stated that SEBI has erroneously clubbed them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them from carrying on their business. Therfore, they have requested to reconsider the order to the extent it applies to them and withdraw the directions passed against them. 5. Vibgyor Financial Service Ltd.: (a) The entity is into the business of NBFC since the year 2001 and have been investing and trading in shares, derivatives and commodities from a long time. (b) The entity has purchased the shares of Pine in normal course of business after evaluating the trend of the security. His investment in shares of the company was by using the genuine money and it has been accounted for in its financial statements. (c) The trades matched with preferential allottees or promoters related entities are only a miniscule 0.26% of the market volumes. Though 77.31% of the client's trades have matched with preferential allottees/promoters related entities, the entity never knew at that time and even later, only through SEBI order has got to know that he has been trapped in the scam for no fault. (d) The purchase was done in normal course of business, is no where even remotely associated or connected in whatsoever way with the promoters/directors of Pine. (e) They were categorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all if the powers are not exercised. (k) Therefore, the entity has requested to revoke the directions passed against him. 6. Dhanraksha Vincome Pvt. Ltd.: (a) The entity has denied all the allegations made against him in the ex-parte order. (b) The entity has stated that the said Ex-parte Order has been passed without granting an opportunity of hearing and the same is therefore in gross violation of principles of natural justice. (c) Besides Investment activities, the entity engages in momentum play, by trading in shares & securities having sudden price and volume action, to make profit out such trading bets. (d) They have been trading in the securities market, in the ordinary course, devoid of any manipulative intent, independently based on his commercial wisdom and analysis and out of their own funds. They have never defaulted in meeting their payment or delivery obligations to the broker. (e) The entity has denied that they are exit providers and are not related/ connected to M/s Pine Animation ltd or M/s Compass Distributors Pvt Ltd or their directors. Further, has submitted that they are not related/ connected with M/s Spark Commodeal Pvt ltd or its directors. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 3. (m) Therefore, the directions against the entity in the ex-parte order may be set aside. 7. Divya Drishti Merchants Pvt. Ltd.: (a) The entity has denied all the allegations made against him in the ex-parte order. (b) The entity has stated that the said Ex parte Order has been passed without granting an opportunity of hearing and the same is therefore in gross violation of principles of natural justice. (c) Besides Investment activities, the entity is engage in momentum play, by trading in shares & securities having sudden price and volume action, to make profit out such trading bets. (d) He has been trading in the securities market, in the ordinary course, devoid of any manipulative intent, independently based on his commercial wisdom and analysis and out of his own funds. The entity has never defaulted in meeting his payment or delivery obligations to the broker. (e) It was stated by the entity that he has been alleged to be part of the Pine Group solely by virtue of his trading in Pine and based on some farfetched connection based on some common address with some other entities. (f) With regard to the alleged transaction with M/s Topwell Properties Pvt Ltd, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous result. (m) The shares of Pine were acquired by him from his own funds. It is denied that there has been no change in beneficial ownership of shares, so far as his trading is concerned. (n) Therefore, the directions against the entity in the ex-parte order may be set aside 8. Divya Drishti Traders Pvt. Ltd. (a) The entity has denied all the allegations made against him in the ex-parte order. (b) The entity has stated that the said Ex parte Order has been passed without granting an opportunity of hearing and the same is therefore in gross violation of principles of natural justice. (c) Besides Investment activities, the entity is engage in momentum play, by trading in shares & securities having sudden price and volume action, to make profit out such trading bets. (d) He has been trading in the securities market, in the ordinary course, devoid of any manipulative intent, independently based on his commercial wisdom and analysis and out of his own funds. The entity has never defaulted in meeting his payment or delivery obligations to the broker. (e) The entity has stated that he has been in the order solely on the fact that he shared common address with 3 othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) The entity has stated that the said Ex parte Order has been passed without granting an opportunity of hearing and the same is therefore in gross violation of principles of natural justice. (c) Besides Investment activities, the entity is engage in momentum play, by trading in shares & securities having sudden price and volume action, to make profit out such trading bets. (d) The entity has been trading in the securities market, in the ordinary course, devoid of any manipulative intent, independently based on its commercial wisdom and analysis and out of its own funds. The entity has never defaulted in meeting its payment or delivery obligations to the broker. (e) The entity has stated that it has been in the order based on the fact that there was off market transaction with Spark Commodeal. Common directors with Dhanraksha Vincom-Rajesh Kumar Agarwal and Debasis Mitra. Further, Pine Animation Ltd had off-market transaction with Compass Distributors Pvt. Ltd. Compass Distributors Pvt Ltd and Spark Commodeal have a common director -Jai Shankar Joshi. (f) The entity has submitted that it is not related/connected to Pine or Compass Distributors Pvt Ltd. In addition, not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumption and assumption and any conclusion drawn based on same would lead to erroneous result. (n) The shares of Pine were acquired by the entity from its own funds. It is denied that there has been no change in beneficial ownership of shares, so far as its trading is concerned. (o) Therefore, the directions against the entity in the ex-parte order may be set aside. 10. Linus Holdings Ltd.: (a) The entity has denied all the allegations made against it in the ex-parte order. (b) The entity has stated that the said Ex parte Order has been passed without granting an opportunity of hearing and the same is therefore in gross violation of principles of natural justice. (c) Besides Investment activities, the entity is engage in momentum play, by trading in shares & securities having sudden price and volume action, to make profit out such trading bets. (d) The entity has been trading in the securities market, in the ordinary course, devoid of any manipulative intent, independently based on its commercial wisdom and analysis and out of its own funds. The entity has never defaulted in meeting its payment or delivery obligations to the broker. (e) The entity has stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matched with that of sell trades of preferential allottees/promoter related entities. The entity further submitted that the alleged matching has occurred in the ordinary course, in the anonymous order matching system of the BSE. (o) The entity has denied that it has acted in league/concert with anybody. It is further denied that it has provided any LTCG benefit to any of the allottee or that is related to any of the allottee. It is denied that it has made any gains vide its trading. The content of the order is based on mere apprehension, presumption and assumption and any conclusion drawn based on same would lead to erroneous result. (p) The shares of Pine were acquired by the entity from its own funds. It is denied that there has been no change in beneficial ownership of shares, so far as his trading is concerned. (q) Therefore, the directions against the entity in the ex-parte order may be set aside 11. Swarna Pushpa Vanijya Pvt. Ltd.: a) The entity has denied the allegations made in the ex parte and interim order. b) The entity is a regular short term investor and frequently deals in the securities market. c) The entity has submitted that it is not directly or ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of principles of natural justice, equity and fair play. m) Therefore, the entity has requested for lifting the ban on him. 12. S N Srinivasan: a) The entity has repeatedly sought time to submit written reply. However, further reply has been submitted by the entity. 16. I have considered the allegations levelled against the Noticees in the interim order, their replies/written submissions and other material on record. I note that in the instant case, the directions issued against the Noticees are interim in nature and have been issued on the basis of prima facie findings. SEBI had issued directions vide the interim order in the matter in order to protect the interests of investors in the securities market. Detailed investigation in the matter is still in progress. Thus, the issue for consideration at this stage is whether the interim directions, issued against the Noticees vide the interim order, need to be confirmed, vacated or modified in any manner, during pendency of investigation in the matter. 17. I note that several Noticees have contended that no opportunity of hearing was provided to them by SEBI before passing the interim order. In this regard, I note that the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e passed by SEBI in the interests of investors or the securities market. It is pertinent to note that the interim order in the present case was passed under the provisions of sections 11(1), 11(4) and 11B of the SEBI Act. The second proviso to section 11(4) clearly provides that "Provided further that the Board shall, either before or after passing such orders, give an opportunity of hearing to such intermediaries or persons concerned". Further, various Courts, while considering the aforesaid sections of the SEBI Act have also held that principles of natural justice will not be violated if an interim order is passed and a post-decisional hearing is provided to the affected entity. In this regard, the Hon'ble Bombay High Court in the matter of Anand Rathi & Others Vs. SEBI (2002) 2 Bom CR 403, has held as under: "It is thus clearly seen that pre decisional natural justice is not always necessary when ad-interim orders are made pending investigation or enquiry, unless so provided by the statute and rules of natural justice would be satisfied if the affected party is given post decisional hearing. It is not that natural justice is not attracted when the orders of suspension or l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e orders are passed, then to say that objections thereupon would amount to post-decisional hearing. Second Proviso to Section 11 of the SEBI Act provides adequate safeguards for adhering to the principles of natural justice, which otherwise is a case herein also..." 20. I, therefore, find that the interim order in this case was in accordance with provisions of law envisaged in the SEBI Act and was not in disregard of the principles of natural justice. It is also pertinent to mention that the interim order has been passed in the course of preliminary inquiry and the investigation in the matter is ongoing. Based on the prima facie findings in the matter and in order to protect the interest of investors in the securities market, SEBI had issued directions vide the interim order. In this case, the purpose of the interim order is to achieve the objectives of investor protection and safeguarding the market integrity by enforcing the provisions of the SEBI Act. I, therefore, do not agree with the contentions of the Noticees. 21. The Noticees have raised another common preliminary contention that no emergency situation existed warranting such an ex parte ad-interim order. It is relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case, the restraint order has been passed by SEBI in exercise of the powers conferred upon it by law and towards fulfilment of the duties cast under the SEBI Act. As noted in the interim order, the conduct of the Noticees has been found to be prima facie fraudulent and the Noticees have therefore been restrained from accessing the securities market and dealing in securities till further directions. In view of the above, I find that the restraint order against the Noticees is not in violation of Article 19(1)(g) of the Constitution of India as contended by them. 24. I note that some of Noticees namely - Nimesh Joshi, Rashmi Nimesh Joshi, Hitesh Kawa and Roopal Kawa have contended that SEBI has attached their demat accounts without the approval of Judicial Magistrate as required under the provisions of section 11 (4) (e) of the SEBI Act which mandates such approval for all accounts including a bank accounts as well as demat accounts. In this regard, it is pertinent to mention that section 11(4) (e) of the SEBI Act mandates approval of the Judicial Magistrate of the first class for attachment of "bank account or accounts". It is noted that this requirement is applicable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any arrangement or scheme and that they have invested in its shares on their own will and after going through the company's profile and its future plans. I note that Pine has further contended that neither the company nor its directors have benefitted in any manner with respect to the trading in the shares of the company and that the directors have just acted in their capacity of directors and have done all acts and business transactions within the purview of all rules and regulations applicable to them. In this regard, it is pertinent to note that, the sharp price rise in the scrip was not supported by fundamentals of Pine or any other external factor as mentioned in the interim order, which in my opinion would not entail investments from rational investors unless the company and the preferential allottees are known to each other and there is prior arrangement between them for issue of shares. I note that company was unable to/has failed to provide sufficient material on record such as how the preferential allottees were arranged, communication between preferential allottees and the company, Information Memorandum, etc. in order to substantiate its said contention. 28. It is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to various entities as observed in the interim order, can be said to be utilisation of funds for the disclosed purposes. It has also failed to explain as to how the entire modus operandi including the preferential allotments and stock -split as alleged in the interim order was genuine and not part of device, plan as brought out in the interim order. I, therefore, reject the contentions of the company in this regard. 29. Admittedly, after revocation of suspension by the stock exchange in trading of Pine it could raise funds to the tune of Rs.247 lakhs and there was an increase in EPS from -0.24 to 0.15 in just a span of one year. The steep price rise with meagre volume followed by sudden increase in volume cannot be assumed as a normal market trend when the buyers and sellers are known entities of company, i.e., preferential allotees and promoter related entities as sellers and entities belonging to the Exit Provider group as buyers as described in the interim order. In addition, it was also observed that scrip price started falling post Patch 3 as mentioned in the interim order. If the company would have strong fundamentals, as claimed by it, the scrip price would not have fallen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012. I note that Mr. Sharma has not produced any document to substantiate that the company had received the resignation letter submitted by him in July 2012. Further, the Annual Report of the company for the year ending March 2013, continued to show Mr. Sharma as one of the directors of Pine and also mentions about his appointment as Executive Director for a period of one year from 2nd September 2013 to 1st September 2014. I therefore, do not accept claims of Mr. Sharma. Promoters of Pine and Directors of the Promoter Companies 33. I note that while the promoters have made submissions that one of the directors of Pine Mr. Nagaraja Sharma introduced Mr. Nimesh S. Joshi and Mr. Hitesh N Kawa, subsequent to which they had sold their shares during March 2012 to the new promoters namely Gajakarna Trading Pvt. Ltd. and Mahaganapati Financial Services and received payment for the same through RTGS. I note that contrary to the submissions made by the promoters, the promoter related entities who had purchased the promoters' holdings had made submissions that they had given loans to the promoters of Pine in March 2012 and as they had expressed their inability to repay the loan, they had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded from liability. Further, the entities have also submitted that for the purpose of including them in the shortlisted group, their sales have been incorrectly clubbed together, while individually, they have sold shares for less than Rs. 1 crore. In this regard, I find it important to mention that the interim order clearly mentions that detailed investigation in the matter is in progress. The fact that certain Promoter Related Entities have been left out of the interim order does not signify that they are outside the scope of SEBI's investigation or have been exonerated. At the stage of the interim order, directions were issued against entities whose role / involvement in the entire scheme was prima facie observed in light of the facts and circumstances at that stage. It is pertinent to clarify that appropriate action in accordance with the provisions of law will be initiated against every entity (including the Promoter Related Entities) who has a role in the plan, scheme, design employed in this case. In view of the above, I do not find any merit in the contention of the said promoter related entities that SEBI has adopted a discriminatory approach in the matter. 37. I note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the directors of Bihariji Constructions have with respect to the fund transaction between Pine and Bihariji Constructions, submitted that the loans were advanced by Pine to Bihariji Constructions and that they were not aware of and/or connected with the source of funds used by Pine to advance the loans to Bihariji Constructions and that therefore, the said directors of Bihariji Constructions cannot be classified wrongly as Promoter Related entities. I note that the context of mentioning this transaction in the interim order is to emphasis the fact that that funds received as proceeds of preferential allotment were immediately transferred to various entities on the same day or in a matter of next three days and were never retained in the company for executing its plans as envisaged in the special resolution passed under section 81(1A) of the Companies Act, 1956. The Bihariji Constructions or its directors have not been classified as promoter related entities, based on this transaction. I find that, pending investigation, the contentions made by the said promoter related entities with respect to the subject of transfer of funds received as proceeds of preferential allotment to var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential allotment but they have failed to explain as to how only they were selected by the Company for making presentation to them individually. The fact that such presentations were made to few preferential allottees, individually, itself suggests existence of prior understanding and nexus between the company, its promoters/directors and the Noticees. 42. It is well accepted position that a preferential allotment signifies that the allottees agree with the issuer on one-to-one basis to finance its fund requirements and is not open to general public as an investment opportunity. Such financing pre-supposes nexus and prior understanding amongst the issuer, its promoters/directors and the allottees. A stranger cannot make investment in a preferential allotment merely on the basis of an advice without having any connection direct or indirect, and prior understanding with the company. A preferential allotment is not open to all type of investment opportunity as sought to be contended by the Noticees. A company will, in no case, make a preferential allotment to a stranger who just approaches it for allotment of its shares. I, therefore, am unable to accept such explanation. 43. Infusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange mechanism in the same manner as discussed hereinabove for the purposes of their dubious plans as prima facie found in this case. In my view, the stock exchange system cannot be permitted to be used for any unlawful/forbidden activities." 45. Some of the preferential allottees have contended that they are Private Limited Companies and provisions of Section 11JB of Income Tax Act relating to Minimum Alternate Tax (MAT) are applicable to them. Therefore, they had no intension of creating any bogus and not taxable profit. In this regard I note that the interim order has reasonably highlighted the modus operandi wherein the whole scheme of preferential allotment was orchestrated to enable the allottees to book illegitimate profits, avail fictitious/bogus LTCG on these profits and convert their unaccounted income into accounted one by misusing the securities market system in the manner as mentioned in the said interim order. While the possible case of tax evasion in the instant case, is jurisdiction of other law enforcement agencies such as Income Tax Department, Enforcement Directorate and Financial Intelligence Unit, the acts and omissions of preferential allottees in the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In these facts and circumstances, I prima facie do not find any merit in the contention of the above mentioned Ms. Lata Shah in this regard and reject the same. 49. I note that some of the preferential entities, namely, Mr. Anmol Prakash Babani, Mr. Kunal Ramesh Babani and Mr. Sharan Mohan Babani have submitted that they have no nexus with the exit providers as none of the shares sold by them were purchased by exit providers mentioned in the interim order. In this regard, I find it important to mention that the interim order clearly mentions that detailed investigation in the matter is in progress. The list of exit providers mentioned in the interim order is not exhaustive and at the stage of the interim order, directions were issued against entities whose role / involvement in the entire scheme was prima facie observed in light of the facts and circumstances at that stage. It is pertinent to clarify that appropriate action in accordance with the provisions of law will be initiated against every entity who has a role in the plan, scheme, design employed in this case. In view of the above, I do not find any merit in the contention of the preferential allotees that they have no ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of May 8, 2015 needs to be seen holistically. This is further strengthened by the fact that restrictions have been imposed on some of the LTP contributors in several interim orders issued by SEBI on the same modus operandi. Hence, the role played by the Noticees in the Patch 1 need to be seen in the backdrop of scale and size of operations undertaken by helping the beneficiaries (preferential allotees and promoter related entities) to generate fictitious long term capital gains by showing that the source of their income was trading at the stock exchange. 55. As brought out in the interim order dated May 8, 2015, it was observed that in Patch 1, out of a total of 31 instances of trades establishing new high price in the scrip, six entities namely, Nellakkara Raghunath, Prem Lata Nahar, Dhirendra Kumar Gupta and Sons, J M S Financial Services Ltd., Sanjay Kumar Shah and Rajesh Kumar Shukla established new high price on 25 instances. The contribution of these six entities in establishing new high price was Rs.45.75/- out of total price rise of Rs.54.9/-, which constitutes 83.3% of the total new high price. The details of contribution to price rise by these six entities during P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders placed Sum of shares placed in all orders % of order book Avg qty per order Trade to Order ratio Sanjay Kumar Shah AJSPS5543F 14 6450 30.11 460.71 0.47 J M S Financial Services Ltd. AAACJ8428J 16 3850 17.97 240.63 0.16 Nellakkara Raghunath AESPN9474K 17 3155 14.73 185.59 22.98 59. From the above, it was observed that, with respect to the entities J M S Financial Services Ltd and Sanjay Kumar Shah, I observe that even if the contribution to the price rise is less than around 15%, the said entities have contributed to a substantial percentage of the total order book, ranging from 17.97% to 30.11%. The entities have not demonstrated the reasons as to why they would place such large quantity of buy order despite knowing that the scrip is very thinly traded, few sellers available in the scrip and also that the scrip was suspended for a considerable time. By placing huge buy orders, the Noticees had created artificial demand in the scrip and induced genuine investor to invest in the scrip. I note that this fact raises doubt on the intent and trading pattern of the Noticees. Hence, such flooding of buy side order book by J M S Financial Services Ltd and Sanj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e LTP contributors in the dubious plan, scheme or devices and to continue the directions issued in the interim order against such LTP contributors. 62. An examination of the trading pattern in the shares of the company revealed that during Patch 1, the scrip witnessed a sharp increase in price from Rs.47.2 (adjusted to share split price) to Rs. 100.60 till June 19, 2013. During this period, price of the scrip increased continuously from Rs.47.2 to Rs. 100.60 by 113% with an average volume of 38 shares per day and total volume of 1,181shares in 19 trading days with an average of 1.6 trades per day. As on quarter ending March 2013, the total share capital of the company was 2,77,00,000 shares out of which 2,47,00,000 shares (comprising 89.16% of the share capital) were held by the preferential allottees and were under lock-in during the said price increase period. Remaining 9,27,400 shares (comprising 3.35% of the share capital) was held by promoter related entities and 7.48% of the total share capital available with other investors were available for trading. Thus, out of the total share holding of the company, large chunk of shares, i.e., 92.51% was with the preferential allotees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hence could not have commanded the price as observed in Path 3. In any market, a sudden supply if not matched by similar demand leads to price fall. Considering the same, any rational investor would not have dumped a large number of shares without facing the risk of a significant price fall until and unless he was sure of the demand side absorbing the supply. In this peculiar case, the Exit Providers created the demand against the supply from the Preferential Allottees/Promoter related entities. In the whole process, the principle of price discovery was kept aside and the market lost its purpose. It is evident from the above analysis that the Exit Providers provided a hugely profitable exit to the Preferential Allottees/Promoter related entities. This could be only possible if Pine and its promoters/directors, Preferential Allottees, Promoter related entities and the Exit Providers were hand in glove with each other". 67. Exit providers have contended that they invested in the shares of Pine as a normal investment activity and did not create any artificial volume. I note that considering the share price as discussed in the interim order was not supported by fundamentals of Pine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related entities at a high price thereby enabling these preferential allotees and promoter related entities to reap the benefit of tax exemption available under the Income Tax Act, as discussed in the interim order. I, therefore, at this stage reject the contention of these Noticees in this regard. 71. Exit providers have contended that establishing any relation/connection between entities as mentioned in the interim order was flawed. In this regard, it is submitted that the basis of connection as discussed in the interim order is based on the KYC and Bank Statement analysis, off market analysis, data available with the exchange and MCA details, exit providers were observed to be dealing in the scrip during the period of examination. The basis of connection was identified to give an indication of connection of them with the other entity/entities of the Pine Group. Further, it may also be noted that the basis of connection as described in the interim order is not to be seen selectively but holistically. Therefore, I reject the contention of the Noticees at this stage. 72. With regards to the contention made by Vibgyor Financial Services Pvt. Ltd. in respect to their off market tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holdings Ltd. 75. With regard to the contention of BSR Finance and Constructions Ltd., that they have absolutely no direct or indirect or any remotest connection either with Pine Animation Ltd or any of the entities mentioned in the ex-parte interim order and that they have not done any off market transactions with Bikash Sureka in the above mentioned period nor dealt in shares of Pine Animation with any entity, I note that the entity has indeed made an off-market transaction of shares to Bikash Sureka on March 20, 2013. Further, as already indicated, this off-market transaction as discussed in the interim order was identified to give an indication of connection of them with the other entity/entities of the Pine Group. In view of the same I find no merit in the contention of BSR Finance and Constructions Ltd. 76. I note that some of the Exit Providers have contended that of the 5,73,86,531 shares sold by preferential allotees and promoter related entities, only 2,82,65,949 shares matched with the alleged 'Exit Provider' and that there is no mention of the other entities who have provided exit for 2,91,20,582 shares to the preferential allotees and promoter related entiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated by the preferential allotees, promoter related entities and the Exit Providers had the potential to induce any genuine investor to invest in the scrip without knowing the scheme of operations deployed, as in the instant case. Thus, the above facts and circumstances reinforces the finding in the interim order that preferential allotees, promoter related entities and the Exit Providers used the securities market system to artificially increase volume and price of the scrip for making illegal gains and to convert ill-gotten gains into genuine one. 79. In the instant case, the interim order has reasonably highlighted the modus operandi wherein Pine, its promoters and directors in nexus with the preferential allottees made a facade of preferential allotment ostensibly to raise money and simultaneously the promoters of Pine transferred their holdings to the promoter related entities. Thereafter the preferential allottees and the promoter related entities with the aid of the Exit providers misused the stock exchange mechanism to exit at a high price in order to generate fictitious LTCG. While the tax related issues will be looked after by the other law enforcement agencies, SEBI wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CG2103R 28 Mahaganapati Financial Services Pvt Ltd AAHCM1333N 29 Nimesh S Joshi AAFPJ6734M 30 Roshni N Joshi AGSPJ6909M 31 Hitesh N Kawa AGYPK8780F 32 Roopal H Kawa ANMPK4236D 33 Akash Ranchhodbhai Golakia ALDPG8381J 34 Chintan Ranchhodbhai Golakia AEEPG1294G 35 Ranchhodbhai Jasmatbhai Golakia AAYPG3878J 36 Vijuben Ranchhodbhai Golakia AAWPG3157A 37 Sushilkumar Shribhagwan Fatehpuria AABPF1503E 38 Umadevi Sushilkumar Fatehpuria AABPF1507A 39 Pankaj Kumar Rajkumar Beria ABFPB2995P 40 Poonam Pankaj Beria AFTPB8600D 41 Rajkumar Budhram Agarwal AAPPA6950Q 42 Pinky Rajkumar Agrawal AAPPA6951R 43 Sudhesh Jajoo AAEPJ9602R 44 Sunil Jajoo AAEPJ9603Q 45 Snehlata Jajoo AALPJ9756B 46 Kiran Jajoo AALPJ9757A 47 Anuradha Jajoo AAMPJ0021E 48 Omprakash Jajoo AARPJ7854N 49 Ashish Goel AAEPG6708K 50 Shakuntala Maru ACIPM0237D 51 Paras Chand Maru ADUPM7778C 52 Saurabh Maru AJWPM1991R Preferential Allotees: 53 Hirji Morarji Shah AAEPS8716P 54 Anil Kumar Kasaraneni AGMPK5927A 55 Neelam Mor AFPPM2107Q 56 Balchand Jain AAAPB5499G 57 Anmol Prakash Babani AEUPB3427L 58 Kunal Ramesh Babani AEUPB2920C 59 Sharan Moh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited AAPCS7492G 119 Swarna Pushpa Vanijya Private Limited AAJCS0597G 120 Winall Vinimay Private Limited AAACW8004B 121 BSR Finance and Construction Ltd AABCB0636K 122 S N Srinivasan ACIPS8803M 82. Having dealt with the contentions of the noticees as aforesaid, I note that majority of them have raised concern over challenges in running their activities on account of ban and consequent freezing of their demat accounts. Many of these entities have pleaded for removal of the restraint imposed vide the interim order or atleast allow them partial relief of permitting trading in securities other than those involved in this case. It is worth mentioning that the case in hand is peculiar as large number of entities have been restrained and the ongoing investigation in the matter may take time in completion. I have been conscious that the restraint order should not cause disproportionate hardship or avoidable loss to the portfolio of the noticees. That is why several relaxations, such as allowing investment in mutual fund units, permission to liquidate existing portfolio and keep the proceeds in escrow account and even utilize 25% of the proceeds for meeting exigencies, etc. h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purposes of determining the portfolio value of the entities, the value of portfolio of securities lying in the demat account/s (individual and joint both) on the date of the interim order after excluding the value of shares that have been suspended from trading as on the date of the communication shall be considered. For NBFCs and stock brokers the value of portfolio shall exclude the value of clients' securities lying in their demat accounts. (c) The aforesaid reliefs shall be subject to the supervision of exchanges and depositories. The stock exchanges may use this existing mechanism available for implementing the similar interim relief earlier granted to some of the entities. 85. It is, however, clarified that the aforesaid exceptions/relaxation/reliefs shall be available (a) To the aforesaid 122 Noticees and those restrained entities in respect of whom the confirmatory orders have already been passed as mentioned in para 10 above. (b) The common interim reliefs already granted in the matter earlier are subsumed in the aforesaid general relaxations/reliefs. The specific reliefs granted if any, to any of the Noticees shall remain in operation. 86. This order is wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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