WTM/RKA/EFD/ 04 /2016 BEFORE THE SECURITIES AND … · BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under Section 11B read with section 11(4) of the Securities and Exchange

Order in the matter of Well Pack Papers and Containers Limited Page 1 of 37

WTM/RKA/EFD/ 04 /2016

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

ORDER Under Section 11B read with section 11(4) of the Securities and Exchange Board of India

Act, 1992 in respect of:

Sr. No. Entity’s name PAN

1 Mr Bharat Shantilal Thakkar AAZPT9542R

2 Mr Bipin Jayant Thaker ABYPT4984H

3 Mr Kishore Chauhan AFPPC9703G

4 Mr Prem Mohanlal Parikh ALHPP3489N

5 Mr Hemant Madhusudan Seth ANOPS8607E

6 Ms Mala Hemant Seth AZXPS0694J

7 Mr Ankit Sanchaniya BLNPS3316L

8 Mr Spectrum Chemical Pvt. Ltd. AAICS2382L

9 Mr Anand Kalu Marathe AKWPM0699M

10 Mr Santosh Deshmal Oswal AAAPO2421P

11 Mr Amar Premchand Valmiki AAUPW9971A

12 Mr Samir Sureshbhai Shah AGEPS0157L

13 Mr Jignesh C. Shah AIPPS9125H

14 Mr Shalin Kiritkumar Parikh AJAPP5421B

15 Mr Mayank Navnitbhai Gandhi AKCPG0246Q

16 Mr Bhavesh Pabari AKGPP8679N

17 Mr Pandya Hardik M. ARJPP6330Q

18 Mr Rameshbhai V Parmar ASQPP5072M

19 Mr Bipinkumar Gandhi AJHPG6989J

20 Mr Bhupesh Rathod AACPR3785K

21 Mr Samir Sureshbhai Shah HUF AGEPS0157L

In the matter of dealings in the shares of Well Pack Papers and Containers Limited

1. Well Pack Papers and Containers Limited (hereinafter referred to as ‘WPPCL/company’),

is a company listed at Bombay Stock Exchange Limited (“BSE”). Securities and Exchange

Board of India ('SEBI') carried out an investigation into the trading in five scrips including

WPPCL pursuant to the detection of a huge rise in the traded volumes and/or price of the

shares of these companies during the years 2008, 2009 and 2010.

2. Upon analysis of the trading activity in the above scrips, it was prima facie observed that

certain entities had indulged in creating artificial volume by trading among themselves in a

synchronized manner and carrying out off-market transfers among themselves for the

purpose of meeting settlement obligations of another and thus contributing to the price rise

in these scrips.


3. In view of the above, in order to protect the interests of investors and to preserve the safety

and integrity of the securities market, SEBI passed an interim order dated February 02, 2011

(hereinafter referred to as “interim order”) restraining 39 persons/entities from accessing the

securities market and further prohibited them from buying, selling or dealing in securities

in any manner whatsoever, till further directions. The interim order was later confirmed by

SEBI vide order dated July 08, 2011 (hereinafter referred to as “confirmatory order”) but

did not deal with the abovementioned entities.

4. SEBI initiated an investigation relating to buying, selling or dealing in the shares of WPPCL

to inter alia ascertain the violation of the provisions of the Securities and Exchange Board

of India Act, 1992 (“SEBI Act”) and Rules and Regulations made thereunder. The

investigation was carried out for two different periods of time i.e. November 28, 2008 to

March 12, 2010 (hereinafter referred to as ‘first investigation period') and March 15, 2010

to June 30, 2010 (hereinafter referred to as ‘second investigation period'). The investigation,

inter alia, revealed that:

i. Certain connected/related entities had traded significantly in the scrip of WPPCL during

2008, 2009 and 2010. The relationship/connection between the entities were determined

based on at least one of the following parameters:

a) Similarities in the particulars/details in the KYC documents such as common

telephone number, addresses, e-mail addresses, etc.;

b) Trading activity in terms of buy/sell among the group and the frequency and off-

market transfers between them;

c) Fund transfers between the members of the said group.

ii. On the basis of the said criteria two groups were identified as the 'Pabari-Parikh' group

and 'Walmiki-Shah' group (“WSG”). On analysis of the trade log it was observed that

Pabari-Parikh group was active in all the five scrips, whereas the WSG was active in

scrip of Well Pack Papers and Containers Ltd. The members of WSG and the bases

of relationship/connection amongst them are as follows:

Table 1: Relationship/Connection amongst WSG

Sl. No.

Client Name

KYC Relation Fund Movement

Share movement through off market

1. Santosh Deshmal Oswal

- - With entities at sl. nos. 39, 17, 2, 5, 11, 19, 21, 38, 43, 44.


2.

Samir Sureshbhai Shah (HUF)

Entities at sl. nos. 4, 7, 8, 10, 20, 22, 23, 25, 26, 33, 36, 38, 41, 42, 43, 44, 45, 37 are its clients. Entities at sl. nos. 1, 5, 19, 21, 24, 32, 39 & 29 are Paras Chaplot's friend and the entity no. 2 came in touch with Paras Chaplot as a share broker.

With entities at sl. nos. 41, 39, 18, 37, 29, 36, 19, 45, 17, 38, 42, 5, 43, 25,

With entities at sl. nos. 39, 2, 1, 17, 26, 33, 44, 45.

3. Spectrum Chemicals Pvt. Ltd.

Share a common address as that of Khodiyar Industry (Ramniklal Patel), who has the same address as that of entity at sl. no. 24, who has share and fund movement with entity at sl. no. 28.

- -

4. Pradeepkumar Jashbhai Patel

- - With entities at sl. nos. 17, 5, 20, 33, 36.

5. Amar Premchand Walmiki

- With entities at sl. nos.19, 29, 32, 39, 28, 17, 21, 30, 38.

With entities at sl. nos.28, 1, 4, 9, 15, 17, 18, 19, 21, 25, 26, 28, 37, 40, 41, 44.

6.

Bharat Shantilal Thakkar

Entity at sl. no. 28 is his nephew. Same address as that of entity at sl. no.28. Entity at sl. no. 28 is his nominee. Joint a/c with entity at sl. no. 28. Business relations with entities at sl. nos 8, 12, 13, 31, 35, 50, 51

With entity at sl. nos. 28, 31, 50.

With entity at sl. nos. 19, 28.

7.

Ragini Bipinbhai Thakkar

Same address as entity at sl. no. 10 who was introduced by entity at sl. no. 17. Introduced by entity at sl. no. 39 - as per KYC submitted by VSE Stock Services Ltd.

- With entities at sl. nos. 17, 26, 38.

8. Bipin Jayant Thaker

Same Tel. no. with entity at sl. no. 28.

With entity at sl. nos. 28..

With entities at sl. nos. 12, 28, 31, 35.


Business relations with entities at sl. nos. 6, 12, 13, 28, 31, 35, 50, 51.

9. Navneetlal Jeevanlal Gandhi

Introduced by entity at sl. no. 39 – as per KYC submitted by VSE Stock Services Ltd.

- With entities at sl. nos.5, 17, 33, 37, 44.

10. Janaki Bipin Thakkar

Introduced by entity at sl. no. 17 – as per KYC submitted by Active Finstock.

11. Rajesh Ravinarayan Hati

- - With entities at sl. nos.39, 5, 1, 21, 36, 38, 45, 46, 50, 51,

12.

Chirag Rajnikant Jariwala

Same Tel. nos. with entity at sl.no.28. Entity at sl. no. 28 is his uncle. Business relations with entities at sl. nos. 6, 8, 13, 28, 35, 50, 51.

With entities at sl. nos. 28, 35.

With entities at sl. nos. 8.

13.

Kishore Chauhan

Joint a/c with entity at sl. no. 28. Entities at sl. nos. 28 & 35 are witness for demat a/c of this entity. Business relations with entities at sl. no. 6, 8, 12, 28, 31, 35, 50.

With entities at sl. nos. 28, 31, 35.


14. Manish Suresh Joshi

Introduced by Narendra Ganatra – as per KYC submitted by Ford Brothers Capital Services Ltd.

- -

15. Tushar Rameshbhai Patel

- - With entities at sl. nos.5, 17, 21, 40.

16. Shashikant Keshavlal Shah

Entity at sl. no. 46 is witness as per KYC furnished by Gogia Capital Services Ltd.

- With entities at sl. nos.17, 18, 39,

17. Samir Sureshbhai Shah

Entity at sl. no. 9 is his father. Entities at sl. nos. 4, 7, 8, 10, 20, 22, 23, 25, 26, 33, 36, 38, 41, 42, 43, 44, 45, 37 are his clients. Sl. nos. 1, 5, 19, 21, 24, 32, 39 & 29 are Paras Chaplot's

- With entities at sl. nos.5, 17, 39, 26, 43, 1, 2, 4, 7, 9, 15, 18, 20, 21, 23, 25, 27, 33, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47,


friend and this entity came in touch with Paras Chaplot as a share broker.

18. Rakesh Gokulbhai Patel


With entities at sl. nos.17, 5, 16, 20, 22, 26, 39, 40, 42, 45, 47.

19. Manoj Bhandari

Entity at sl. no. 32 is his office staff.

With entities at sl. nos. 39, 5, 17,

With entities at sl. nos. 28, 5, 50, 13, 1, 6, 20, 45,

20. Samirkumar Kanubhai Patel

- With entity at sl. no.17.

With entities at sl. nos.2, 4, 17, 18, 19.

21. Santosh Vishram Ghadshi

- With entities at sl. no. 39, 5, 15, 17.

With entities at sl. no.5, 17, 1, 48, 11, 15.

22.

Jignesh C. Shah

Entity at sl. No. 39 is the introducer of Entity at sl. no. 22. Entity at sl. no. 39 entered into off market transactions with entity at sl. no. 28 and 35.

- With entity at sl. no.18.

23. Shalin Kiritkumar Parikh

Introduced by entity at sl. no. 17 – as per KYC submitted by VSE Stock Services Ltd. Entity at sl. no. 17 entered into off market transactions with sl. no. 5 & 28.

- With entity at sl. no. 17.

24. Bipinkumar Gandhi

- - With entity at sl. no. 28.

25. Mayank Navnitbhai Gandhi

Same address with entity at sl. no. 26. Entity at sl. no. 17 is his relative. Entities at sl. no. 25 & 26 have joint bank a/c.



26. Aditi M Gandhi

Entity at sl. no. 17 is his relative. Entities at sl. nos. 25 & 26 have joint bank a/c.

With entity at sl. no. 29.

With entities at sl. nos.5, 17, 2, 7, 42, 5, 18, 25, 26.

27.

Avinash Bothra

Entity at sl. no. 47 is his wife. Entity at sl. no. 32 has

offered him ₹10,000/- per month for lending his trading a/c.



28.

Bhavesh Pabari

Entity at sl. no. 6 is his uncle & entity at sl. no. 51 is his brother in law. Entity at sl. no. 31 is cousin of entity at sl. no.28. Entities at sl. nos. 28 & 35 both directors of Rajnandi Yarns Pvt. Ltd. Share common Tel. no. with entities at sl. nos. 50, 51, 8. Business relations with entities at sl. nos. 8, 12, 13, 31, 35, 49, 50.

- With entities at sl. nos. 31, 35, 6, 8, 50, 51, 24, 5, 19, 39.

29. Anand Kalu Marathe

Entity at sl. no. 5 is witness in nomination form.

With entities at t sl. nos. 31, 39, 5.

-

30. Rekha Bhandari

Entity at sl. no. 30 is wife of entity at sl. no. 32.


With sl. no. 5.

31.

Prem Mohanlal Parikh

Entity at sl. no. 31 is cousin of sl. no.28. Common email with entities at sl. nos. 50, 31 & 51. Entity at sl. no. 35 is nominee of entity at sl. no.31. Business relations with entities at sl. nos. 6, 8, 12, 13, 28, 35, 50, 51.



32. Sunil Bhandari

Entity at sl. no. 32 is the husband of entity at sl. no. 30.

With entities at sl. nos 5, 21.

-

33.

Nareshbhai Devabhai Patel

Entity at sl. no. 9 entered into off market transaction with entity at sl. no. 37, who entered into off-market transaction with entities at sl. no. 5 & 17.



34. Kaushik Rajnikant Mehta

- With entities at sl. nos. 46, 21.

With entities at sl. nos 28, 17, 40, 46.

35.

Hemant Madhusudan Sheth

Entities at sl. no. 28 & 35 are both directors of Rajnandi Yarns Pvt. Ltd. which share email with entity at sl. no. 51. Business relations with entities at sl. nos. 6, 31, 50, 51, 8, 12, 13, & sl. no. 49 is his wife.




36.

Ashokkumar Bhikhalal Parmar

Introduced by entity at sl. no. 17 –as per KYC submitted by VSE Stock Services Ltd. Entity at sl.no. 36 knows sl. no. 17 who is a stock broker. Entities at sl. nos. 42, 43, 44, 41 are his relatives and he

has lent his demat a/c for ₹ 6,000/- to entity at s. no. 17 for third party use on the instruction of Mr. Paras Chaplot.

With entities at sl. nos.17, 39, 18.

With entities at sl. nos.17, 4, 11, 38, 39, 43, 44, 45.

37. Manisha Navneetlal Gandhi

Entity at sl. no. 5 has off-market transaction with entity at sl. no. 28 and fund movement with entity at sl. no. 39.


38. Pandya Yaminiben M

Same address as that of entity at sl. no. 39. Entity at Sl. no. 39 is his relative and he is known to entity at sl. no. 17.

With entities at sl. nos. 39, 17, 51, 21, 18.

With entities at sl. nos. 42, 1, 7, 11, 17, 36, 39, 41, 42, 43, 44.

39.

Pandya Hardik M

Having common tel. no. as that of entity at sl. no. 17. From KYC submitted by VSE Stock Services Limited, it is observed that entity at sl. No. 17 is the promoter of M/s. Samir Shah & Co. and entity at sl.no.39 is one of its employees. Entity at sl. no. 38 is his relative and he is known to entity at sl. no. 17.

With entities at sl. nos. 19, 30, 5, 17, 29, 18, 38, 21, 2, 30, 25.

With entities at sl. nos. 28, 35, 17, 36, 38, 44, 1, 11, 16, 18, 21,

40. Bharatkumar Baldevbhai Parmar

Has common tel. no. with entity at sl. no. 44.

- With entities at sl. nos.15, 5, 17, 18.

41. Dhirubhai Antolbhai Parmar

Introduced by entity at sl. no. 39.

With entity at sl. no.17.

With entities at sl. nos.5, 17, 38, 43, 44,

42. Laxman Dhirubhai Parmar

Having common tel. no. as that of entity at sl. no. 17- KYC document submitted by Shah Investor’s Home Limited.

With entities at sl. nos.39, 17.

With entities at sl. nos.17, 38, 18, 26, 41.


Entities at sl. nos. 36, 43, 44, 41 are his relatives & entity at sl. no. 17 is a stock broker and his advisor and well wisher. It may also be noted that he lent his demat a/c for a sum

of ₹ 6,000/- per month for third party use upon the instruction of entity at sl. no. 17 for the third party use by Mr. Paras Chaplot.

43. Shobhnaben R Parmar

Entity at sl. no. 43 has the same address as that of entity at sl. no. 44. Entities at Sl. nos. 36, 42, 44, 41 are his relatives & he knows entity at sl. no. 17.

With entities at sl. nos.17, 18.

With entities at sl. nos.5, 17, 1, 27, 36, 38, 41, 44, 47.

44. Rameshbhai V Parmar

Having common tel. no. with entity at sl. no. 17. Entities at Sl. nos. 42, 43, 41 are his relatives & he knows sl. no. 17.

With entities at sl. nos. 18, 17

With entities at sl. no.5, 38, 39, 1, 2, 9, 17, 27, 36, 41, 43,

45. Amisha Samir Patel

- With entity at sl. no. 17.

With entities at sl. nos. 17, 2, 11, 19, 36, 18.

46. Vipul Hiralal Shah

Entity at Sl. No. 34 has off-market transaction with entity at sl. No. 28.

With entity at sl. No. 34.

With entities at sl. nos.28, 11, 17, 48.

47.

Dipika Dinesh Kankaria

Entity at sl. no. 27 is his husband. Entity at sl. no. 32 offered

him ₹ 10,000/- per month for lending its trading account.

With entities at sl. Nos. 33, 39, 17.

With entities at sl. Nos. 17, 43, 18, 27,

48. Shreedhar Yellaiah Kodam

- - With entity at sl. Nos. 21.

49. Mala Hemant Sheth

Entity at sl. no. 49 is the wife of entity at sl. no. 35.


With entity at sl. nos. 35.

50.

Ankit Sanchaniya

Same Tel. no. with entity at sl. no. 31 and also shares Tel. no. with entity at sl. no. 28 who is the nominee for his a/c. Business relations with entities at sl. nos.6, 8, 12, 13, 28, 31, 35, 51.


With entities at sl. nos. 28, 31, 35, 12, 51, 11.


51.

Vivek Kishanpal Samant

Entity at sl. no. 28 is the brother in law & shares common Tel. no. & entity at sl.no. 28 is the nominee of this entity for trading a/c & bank a/c. Shares email with entity at sl. no. 35. Shares email with entity at sl. no. 31.

With entity at sl. no. 35.

With entities at sl. nos. 28, 35, 12, 13, 31, 50, 11.

iii. During the first investigation period, on BSE these 51 WSG entities purchased and sold

of 2,64,36,837 shares and 1,82,98,802 shares, respectively. Out of these 51 WSG entities,

50 WSG entities traded in 98,66,868 shares constituting 19.70% % of the total market

volume in the scrip and accounted for 37.32 % of the total purchase of the group and

53.92% of the total sale of the group.

iv. Investigations also brought out that several of the trades were synchronised amongst the

members of the group, including the Noticees, in the scrip of WPPCL during the First

Investigation Period on BSE. It was noted that out of the total trading of 98,66,868

shares within the group entities, for 45,99,077 shares (accounting for 9.18% of the

market volume) the buy and sell orders were placed within one minute of each other. It

was also noted that 45,99,077 shares constituted 17.39% of the total purchase of WSG

entities and 25.13% of the total sale of the WSG entities. Out of these 45,99,077 shares,

it was observed that the buy and sell orders with respect to 7,21,545 shares accounting

for 1.44% of the total market volume, were placed in such a manner that the difference

between placement of order by buyer and seller was within one minute of each other

and the price at which the orders were placed as well as the quantity of both the buy and

sell orders were same. The said 7,21,545 shares constituted 2.73% of the total purchase

of WSG entities and 3.94% of the total sale of the WSG entities.

v. Certain entities among the WSG entities i.e. Amar Premchand Walmiki, Rajeshkumar

Ravinaryan Hati, Tushar Rameshbhai Patel, Manoj B Bhandari, Santosh Vishram

Ghadshi, Manishaben Navneetlal Gandhi, Yaminiben Maheshbhai Pandya, Hardik

Maheshbhai Pandya, Laxmanbhai Dhirubhai Parmar, Shobhnaben Rameshbhai Parmar

and Rameshbhai Vitthalbhai Parmar also indulged in self-trades on BSE (i.e. buy client

as well as the sell client for a given trade was the same resulting in no change of beneficial

ownership).

vi. The price volume data showed that the shares of WPPCL were traded for 312 trading

days during the First Investigation Period on BSE. Out of 312 trading days, the WSG


entities, including the Noticees, traded among themselves on 296 days. It was observed

that the volume of trades undertaken by the WSG entities, including the Noticees,

contributed significantly to the daily market volume in the scrip contributing to 89.17%

on December 19, 2008 and ranging from 5.63% on December 01, 2008 to 89.17% on

December 19, 2008. Out of the 223 trading days the WSG entities traded among

themselves, on 130 trading days they contributed more than 50% of the total market

volume.

vii. Out of the sad 312 trading days, on 255 trading days the WSG entities, including the

Noticees, executed synchronised trades, i.e. trades in which both buy and sell orders were

placed within a time difference of less than or equal to one minute. It was observed that

the synchronised trades executed by the WSG entities, including the Noticees,

contributed significantly to the daily market volume, ranging from 41.68% on December

02, 2008 to 52.47% on December 03, 2009.

viii. Out of 94,439 trades in the scrip of WPPCL on BSE during the First Investigation

Period, 24192 trades took place at a price less than the Last Traded Price (LTP) and

46028 trades took place at a price equal to LTP and 24218 trades at a price greater than

LTP. It was also observed that out of 94439 trades, the 51 WSG entities dealing through

multiple stock brokers entered into 50869 buy transactions. Further, out of 50869 trades

11174 trades took place at a price less than LTP (contributing a gross fall in price by ₹

6233.74), 24654 trades took place at a price equal to LTP and 15040 trades at a price

greater than LTP (contributing a gross increasing in price by ₹ 11300.09).

ix. In respect of certain trades among those executed amongst the WSG entities, first the

sell order was placed at a rate above the LTP, then the buy orders were placed above

these sell orders rates (which would mean that buy orders were placed at a rate higher

than that of available sell orders), in order to achieve an increase in the price of the scrip

above LTP.

x. During the First Investigation Period, the price of the scrip opened at ₹ 9.54 on BSE

and touched a high of ₹ 510.00 i.e. there was increase of ₹ 500.46 and the shares of

WPPCL were traded for 312 trading days during the First Investigation Period on BSE.

It was observed that Santosh Deshmal Oswal, Pradeepkumar Jashbhai Patel, Amar

Premchand Walmiki, Ragini Bipinbhai Thakkar, Navneetlal Jeevanlal Gandhi, Rajesh

Ravinarayan Hati, Tushar Rameshbhai Patel, Samir Shah, Manoj Bhandari, Samirkumar

Kanubhai Patel, Jignesh C. Shah, Shalin Kiritkumar Parikh, Bipinkumar Gandhi, Mayank

Navnitbhai Gandhi, Aditi M Gandhi, Anand Kalu Marathe, Rekha Bhandari, Sunil

Bhandari, Ashokkumar Bhikhalal Parmar, Manisha Navneetlal Gandhi, Pandya


Yaminiben M, Pandya Hardik M, Dhirubhai Antolbhai Parmar, Laxman Dhirubhai

Parmar, Shobhnaben R Parmar, Rameshbhai V Parmar, Amisha Samir Patel and Ankit

Sanchaniya majorly contributed to this increase in the price.

xi. During the Second Investigation Period on BSE, 40 WSG entities including the Noticees

trading through multiple stock brokers purchased 11,66,30,714 shares on BSE

accounting for 45.81% of the total volume traded in the scrip on BSE during the Second

Investigation Period and sold 11,60,46,856 shares on BSE accounting for 45.58 % of the

total volume traded in the scrip on BSE.

xii. Ankit Sanchaniya, Santosh Deshmal Oswal, Amar Premchand Valmiki, Samir

Sureshbhai Shah, Samir Sureshbhai Shah HUF, Jignesh C. Shah, Shalin Kiritkumar

Parikh, Mayank Navnitbhai Gandhi, Pandya Hardik M, Rameshbhai V Parmar and

Bhupesh Rathod were amongst the 40 WSG entities who dealt in the scrip of WPPCL

during the Second Investigation Period.

xiii. On BSE these 40 WSG entities purchased and sold 11,66,30,714 shares and 11,60,46,856

shares, respectively during the Second Investigation Period. Out of these 40 WSG

entities, 38 WSG entities traded in 5,59,14,388 shares constituting 21.96% of the total

market volume in the scrip and accounted for 47.94% of the total purchase of the group

and 48.18% of the total sale of the group.

xiv. Several of the trades were synchronised amongst the members of the group, including

the Noticees, in the scrip of WPPCL during the Second Investigation Period on BSE

and further out of the total trading of 5,59,14,388 shares within the group entities, for

1,72,17,572 shares (accounting for 6.76% of the market volume) the buy and sell orders

were placed within one minute of each other. It was noted that these 1,72,17,572 shares

constituted 14.76% of the total purchase of WSG entities and 14.84% of the total sale

of the WSG entities. Out of these 1,72,17,572 shares, the buy and sell orders with respect

to 14,27,634 shares accounting for 0.56% of the total market volume, were placed in

such a manner that the difference between placement of order by buyer and seller was

within one minute of each other and the price at which the orders were placed as well as

the quantity of both the buy and sell orders were same. These 14,27,634 shares

constituted 1.22% of the total purchase of WSG entities and 1.23% of the total sale of

the WSG entities.

xv. 15 entities among the WSG entities including the Noticees also indulged in self-trades

on BSE (i.e. buy client as well as the sell client for a given trade was the same resulting

in no change of beneficial ownership).


xvi. The price volume data revealed that the shares of WPPCL were traded for 75 trading

days during the Second Investigation Period on BSE. Out of 75 trading days, the WSG

entities, including the Noticees, traded among themselves on all 75 days. It was observed

that the volume of trades undertaken by the WSG entities, including the Noticees,

contributed significantly to the daily market volume in the scrip contributing to 44.97%

on April 01, 2010 and ranging from 0.26% on March 16, 2010 to 44.97% on April 01,

2010.

xvii. Out of 75 trading days in which the WSG entities traded amongst themselves, on 73

trading days the WSG entities executed synchronised trades, i.e. trades in which both

buy and sell orders were placed within a time difference of one minute. It was observed

that the synchronised trades executed by the WSG entities, including the Noticees,

contributed significantly to the daily market volume, ranging from 0.03% on March 16,

2010 to 25.35% on April 20, 2010.

xviii. Out of 1,01,091 trades in the scrip of WPPCL on BSE during the Second Investigation

Period, 16,651 trades took place at a price less than the LTP, 66,146 trades took place at

a price equal to LTP and 18,294 trades at a price greater than LTP. Further, it was

observed that out of 94,439 trades, the 40 WSG entities dealing through multiple stock

brokers entered into 32,306 buy transactions. Further, it was observed that out of 32,306

trades 2,574 trades took place at a price less than LTP (contributing a gross fall in price

by ₹ 325.70), 22,828 trades took place at a price equal to LTP and 6,904 trades at a price

greater than LTP (contributing a gross increase in price by ₹ 777.35).

xix. During the Second Investigation Period, the price of the scrip opened at ₹ 34.00 on BSE

and touched a high of ₹ 74.50 i.e. there was an increase of ₹ 40.50. It was observed that

on 18 trading days and 291 occasions a new high price was discovered. Further, it was

observed that out of 291 occasions, on 195 occasions (on 17 days of 18 days),

Bharatkumar Baldevbhai Parmar, Kaushik Rajnikant Mehta, Anand Finstockservices

Ltd, Ashokkumar Bhikhalal Parmar, Santosh Deshmal Oswal, Mayank Navnitbhai

Gandhi, Hardik Maheshbhai Pandya, Shobhnaben Rameshbhai Parmar, Laxmanbhai

Dhirubhai Parmar, Vaishali Ashvinbhai Parmar, Vipul Hiralal Shah and Aditi Mayank

Gandhi contributed to increase of ₹ 29.30 (out of ₹ 40.50).

xx. The WSG entities had indulged in off-market transfer of 2,91,86,301 shares of WPPCL

amongst themselves during the period January 01, 2009 and January 31, 2011.


5. The afore-discussed actions on part, of the Noticees i.e. execution of synchronized and self-

trades, creation of artificial volume and price manipulation which distorted the market

equilibrium were also found to be fraudulent in nature. Consequently, Show Cause Notices

(SCNs) dated October 30, 2014 were issued to Mr Bharat Shantilal Thakkar, Mr Bipin Jayant

Thaker, Mr Kishore Chauhan, Mr Prem Mohanlal Parikh, Mr Hemant Madhusudan Seth,

Ms Mala Hemant Seth, Mr Ankit Sanchaniya, Mr Spectrum Chemical Pvt. Ltd., Mr Anand

Kalu Marathe, Mr Santosh Deshmal Oswal, Mr Amar Premchand Valmiki, Mr Samir

Sureshbhai Shah, Mr Jignesh C. Shah, Mr Shalin Kiritkumar Parikh, Mr Mayank Navnitbhai

Gandhi , Mr Bhavesh Pabari , Mr Hardik Pandya, Mr Rameshbhai V Parmar, Mr

Bipinkumar Gandhi, Mr Bhupesh Rathod and Samir Sureshbhai Shah HUF (hereinafter

collectively referred to as “the Noticees” and individually by their respective names), calling

upon them to show cause as to why suitable directions under section 11B read with section

11(4) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) should not be

issued against them for the alleged violation of the provisions of regulations 3 (a), (b), (c),(d),

4(1), 4(2) (a), (b), (e) and (g) of the SEBI (Prohibition of Fraudulent and Unfair Trade

Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”).

6. Vide separate letters dated November 17, 2014 and November 15, 2014 Mr. Bhavesh

Pabari, Mr. Bharat Shantilal Thakkar, Mr Bipin Jayant Thakkar, Mr. Hemant Madhusudan

Seth and Ms. Mala Hemant Seth sought copies of certain documents which were provided

to them vide letters dated December 16, 2014. While some of the aforementioned Noticees

replied to the respective SCNs issued to them, the others did not submit any reply, the

details whereof are mentioned in the following table:

Table 2: Dates of replies field by the Noticees

Sl. No. Name of the Noticee Date of Reply

1. Mr Bharat Shantilal Thakkar April 13, 2015 July 29, 2015

2. Mr Bipin Jayant Thaker April 12, 2015

3. Mr Kishore Chauhan No reply

4. Mr Prem Mohanlal Parikh April 13, 2015

5. Mr Hemant Madhusudan Seth April 14, 2015

6. Ms Mala Hemant Seth April 10, 2015

7. Mr Ankit Sanchaniya April 13, 2015

8. Mr Spectrum Chemical Pvt. Ltd. No reply

9. Mr Anand Kalu Marathe No reply

10. Mr Santosh Deshmal Oswal No reply

11. Mr Amar Premchand Valmiki April 20, 2015

12. Mr Samir Sureshbhai Shah December 24, 2014 August 03, 2015


13. Mr Jignesh C. Shah December 24, 2014 August 03, 2015

14. Mr Shalin Kiritkumar Parikh December 24, 2014 August 03, 2015

15. Mr Mayank Navnitbhai Gandhi December 24, 2014 August 03, 2015

16. Mr Bhavesh Pabari April 06, 2015 July 29, 2015

17. Mr Pandya Hardik M. December 24, 2014 August 03, 2015

18. Mr Rameshbhai V Parmar December 24, 2014 August 03, 2015

19. Mr Bipinkumar Gandhi No reply

20. Mr Bhupesh Rathod April 12, 2015

21 Mr Samir Sureshbhai Shah HUF December 24, 2014 August 03, 2015

7. An opportunity of personal hearing was granted to the Noticees on July 29, 2015. During

the hearing, Mr. Bhavesh Pabari appeared in person and authorised representatives

appeared on behalf of Mr Jignesh Shah, Mr Samir Shah, Samir Shah HUF, Mr Hardik

Pandya, Rameshbhai Parmar, Mr Mayank Gandhi and Mr Shalin Parikh. As regards, Mr.

Kishore Chauhan, it has been brought to my notice that during the adjudication proceedings

in the same matter, one Ms. Rupal K. Chauhan, claiming to be wife of Mr. Kishore Chauhan,

has informed SEBI that Mr. Kishore Chauhan had passed away on May 29, 2013 and had

enclosed a certified copy of the death certificate as issued by the Department of Health and

Family Welfare, Government of Gujarat in support thereof. None of the remaining

Noticees appeared for hearing. The Noticees vide their replies/written submissions have,

inter alia, submitted the following:

A. Bharat Shantilal Thakkar

1) The Confirmatory Order passed against the Noticee directed SEBI to complete the

investigation by December 31, 2011 which was further extended to July 31, 2012.

From the details available in the public domain, it appears that the investigation in

the case has still not been completed. The Noticee is still debarred from trading in

the securities market and his demat account is till frozen.

2) Six Show Cause Notices have been issued to him for trading in five different scrips.

These six Show Cause Notices have been issued in and around the same time and

the investigation period of the five scrips is also of around the same time. It is really

perplexing for him to understand the reason for the same. It appears that the six

different proceedings have been initiated against him as a well calculated move to

harass him.


3) A penalty of ₹ 5,00,000/- was imposed on the Noticee by the Adjudicating Officer

in the same matter.

4) The Noticee is aggrieved by the Interim Order and the Confirmatory order passed

against him making him unable to have any financial means and capacity to take

service of legal consultation and represent his case in the present proceedings.

5) SEBI has relied upon an investigation report and the allegations against the Noticee

have been levelled on the basis of the same. However, the complete investigation

report has not been provided to him and only purported relevant extracts thereof

have been provided in the SCN. SEBI should have provided the entire investigation

report and ought not to have suppressed the other parts of investigation, which

may be relevant for him to file his comprehensive defence.

6) The serious allegation of market manipulation has been made against him on the

basis of allegedly being a part of the WSG. He has been alleged to be a part of the

WSG on the basis of transfer of funds with few individuals, off market transactions

with his relatives, etc. However, no documentary evidence has been provided to

him so that he can rebut the same.

7) Noticee is not a part of any alleged group and has taken own decision to trade in

the scrip and that as per SCN the trading of the Noticee is a miniscule percentage

of the total traded volume at BSE and NSE.

8) He denied having received/transferred shares in off-market land requested SEBI

to give adequate documentary evidence to rebut the same. Nonetheless, off-market

transactions cannot be said to have resulted in a rise in price and trading volume.

As per Annexure EE, Noticee has entered into only one off market transaction of

4000 shares with Manoj Bhandari. As such, the transaction has not disturbed the

market equilibrium or has resulted into any artificial market volume.

9) He is not a part of WSG. Even otherwise his buy and sale transactions are 0.10%

and 0.11% of the entire WSG. Further, his buy and sell order placed in less than

one minute are 0.1% and his alleged synchronized trading is 0.7% of the WSG. Six

transactions of sale totalling 37053 shares which is 0.07% of the total market

volume are alleged to be synchronized by the Noticee and these transactions

happened on 5 trading days out of 312 trading days. With such miniscule volume,

it cannot be alleged that he indulged in fraudulent or unfair trade practice or that

he created a false or misleading appearance of trading in the securities market or he

entered into a transaction without the intention of performing it.

10) He had told his broker to place order in the anonymous trading platform of stock

exchange and by no stretch of imagination, he could be aware of the counterparty.

He did not enter into any self-trades.


11) He is a trader and used to carry out jobbing transactions. He traded in several scrips

other than WPPCL both before and after the investigation period.

12) He has already been debarred by SEBI from accessing the securities market and

has already faced the punishment for his trading, for no fault of his. The initiation

of adjudication proceedings by SEBI while the debarment is in force, is a “double

jeopardy” as it is in addition to the earlier action. The current proceedings have

added to the misery and pain that he is going through since the interim order was

passed against him in February 2011.

13) The period referred in several paragraphs in the SCN is different from the

investigation period.

14) Had SEBI warned the Noticee, the Noticee would have stopped trading in the scrip

of WPPCL in 2008 itself but SEBI waited for nearly three years to pass an ex parte

order without granting an opportunity of hearing.

15) While it is admitted that the Noticee knows a few entities, decision to trade in

WPPCL was an independent decision.

16) SCN has not provided any documentary evidence regarding alleged connection

with the WSG, any movement of funds for purchase/sale in the scrip of WPPCL

between the Noticee and Bhavesh Pabari or other entities. SEBI has also not

provided any documentary evidence regarding alleged connection with the PPG.

17) Alleged volume of off market transactions is not comparable with market volume

as the period of investigation is from end of November 2008 to March 12, 2010

and the off market transactions are for a period of more than 2 years and no

rationale has been provided in the SCN regarding this. The period of investigation

is mentioned differently in the SCN, bringing out the inconsistencies in the SCN.

18) SCN has failed to bring on record the rationale for giving the trading pattern of 50

entities out of total 51 entities and leaving one entity.

19) Annexure C of the SCN is incomplete and the order log and trade log have not

been provided.

20) SCN alleges that Noticee has contributed to the price rise, however, the table

provided in paragraph 13 reveals that the Noticee’s trades have resulted in decline

in price by ₹ 2.55.

21) As per Annexure C of the SCN, Noticee has bought only 59369 shares and sold

55369 shares which is 0.12% and 0.11% respectively of total market volume of

shares during the investigation period.

22) No rationale has been mentioned for selecting the period of investigation and no

other scrips in which SEBI observed huge rise in traded volume and / or prices,

have been detailed in the SCN.


23) No complaint of any investor has been against the Noticees nor has any explanation

been sought by BSE and NSE regarding his trading in the scrip of WPPCL.

24) While the Noticee carried out the impugned trading in the scrip of WPPCL, no

objection was raised by the stock broker of the stock exchange.

B. Bipin Jayant Thakkar

Mr. Bipin Jayant Thakkar made submissions similar to Mr. Bharat Shantilal Thakkar.

He further submitted the following:

1) A penalty of ₹ 5,00,000/- was imposed on the Noticee by the Adjudicating Officer.

2) The action taken report has not been provided to him by SEBI.

3) The reply of the Noticee dated 20.11.2014 may be taken on record as placed before

the AO.

4) Noticee is in the jobbing and arbitrage business for the as three years.

5) The SCN has failed to bring on record how the Noticee’s trading in question is

different from his earlier trading.

6) The off market transaction of the Noticee is only with Chirag Jariwala on a single

occasion having debit and credit reversed on the day itself. However, the SCN

alleges off market transactions with certain other entities which is factually

incorrect.

7) The Noticees trades had the slightest impact on the rice i.e. ₹ 7.60 against ₹11,300

in gross increase in price and ₹5.65 against ₹ 6,233.74 in gross fall in price.

8) No evidence to establish alleged relationship under KYC has been furnished along

with SCN even that of common telephone number as alleged in the SCN.

C. Prem Mohanlal Parikh

Mr. Prem Mohanlal Parikh made submissions similar to Mr. Bharat Shantilal Thakkar.

He further submitted the following:

1) A penalty of ₹5,00,000/- was imposed on the Noticee by the Adjudicating Officer.


the AO.

3) The action taken report has not been provided.

4) The SCN has failed to bring on record how the Noticees trading is different from

his earlier trading.

5) Out of the synchronized trading among the WSG entities, Noticee has three days

of buy totaling 12000 shares which is only 0.02% of the total traded volume.

6) The Noticees trades had the slightest impact on the price i.e. ₹ 10.55 against ₹

11,300 in gross increase in price and ₹ 4.45 against ₹6,233.74 in gross fall in price.


D. Hemant Madhusudan Seth

Mr. Hemant Madhusudan Seth made submissions similar to Mr. Bharat Shantilal

Thakkar. He further submitted the following:

1) A penalty of ₹6,00,000/- was imposed on the Noticee by the Adjudicating Officer.

2) Action proposed report has not been provided.

3) Noticee is a day trader and doing arbitrage business and hence his volume in every

scrip is always large. Trades are carried out at every price level that is after price rise

as well as after price fall. Further, no proof or evidence has been brought on record

o make allegations against the Noticee by giving title of PPG.

4) The off market transaction of the Noticee is only with Hardik Pandya on a single



incorrect.

5) Out of the synchronized trading among the PPG entities, Noticee has 7 days of

sale totaling 30573 shares which is only 0.06% of the total traded volume.

E. Mala Hemant Seth

Ms. Mala Hemant Sethb made submissions similar to Mr. Bharat Shantilal Thakkar.

She further submitted the following:

1) A penalty of ₹ 6,00,000/- was imposed on the Noticee by the Adjudicating Officer.

2) Noticee is alleged to be a part of the WSG on the basis that she is wife of Hemant

Mahusudan Sheth and has carried out some off market transactions with some

persons who are allegedly connected to Bhavesh Pabari.

3) Noticee denied having any business/ professional connection with her husband

Hemant Madhusudan Shet and confirms that she is living an independent life and

taking her own independent decisions.

4) It has been alleged in the SCN that there have been off market transfers between

the Noticee and her husband and this establishes her connection with the group.

Noticee submits that there is not a single transaction of off market between the

Noticee and her husband or any other person in the scrip of WPPCL.

F. Ankit Sanchaniya

Mr. Ankit Sanchaniya made submissions similar to Mr. Bharat Shantilal Thakkar. He

further submitted the following:

A penalty of ₹ 5,00,000/- was imposed on the Noticee by the Adjudicating Officer.



the AO.

2) The off market transaction of the Noticee is only with Rajesh Hati on a single



incorrect.

3) The Noticees trades had the slightest impact on the rice i.e. ₹ 16.95 against ₹ 11,300

in gross increase in price and ₹ 6.00 against ₹ 6,233.74 in gross fall in price.

4) No evidence to establish alleged relationship under KYC has been furnished along

with SCN even that of common telephone number as alleged in the SCN.

G. Amar Premchand Walmiki

1) The complete investigation report was not provided to the Noticee. Further, Trade

log, Order log and the Annexure to the SCN have not been provided. In the

absence of the complete trade log, order log, annexure to the SCN and the

annexures mentioned in the investigation report relied upon by SEBI while issuing

the SCN, the Noticee is not in a position to make proper submissions in the matter.

2) SCN is general in nature and does not specify individual role in the matter.

3) No documentary evidence has been provided to prove relationship with the WSG.

Noticee is not a part of any alleged group and has taken own decision to trade in

the scrip

4) Off market transactions and synchronized trades are permitted by law.

Synchronized trades are not illegal per se. They are actionable only when they are

illegitimate and an outcome of a mischievous meeting of minds between certain

entities.

5) Synchronized trades of the Noticee were executed in the normal course of the

trading day and don’t represent even 0.1% of the marker volume. It is only a mere

coincidence that certain trades were synchronized and but there was no intention

of the Noticee to execute the same.

6) Trades which are alleged to be synchronized trades are genuine and the transfer of

beneficial ownership took place.

7) Self-trades were executed in the scrip in the normal course of business without the

intention of increasing artificial volume. Most of the self-trades are shifting of the

position from one broker to another to meet pay in or pay out obligations. It is an

admitted fact that each and every self-trade is not executed with the intention to

increase artificial volume in the market but sometimes it occurs due to

miscommunication with the dealer.


8) Noticee has placed orders at the then prevailing market price and hence his trading

in the scrip did not result in any new high price or new low price.

9) The Noticee had executed certain off-market trades which are permissible under

law as a valid mode of trade.

H. Bhavesh Pabari

1) Noticee had requested for all the materials and documents relied upon by SEBI

and the same have not been furnished to him till date. Provisions of the SEBI’s

adjudication rules provide that the documentation and information referred to in

the SCN or otherwise relied upon by SEBI for initiation of penal proceedings needs

to be enclosed along with the SCN. SEBI has failed to comply with such provisions.

2) Trading of the Noticee is a miniscule percentage of the total traded volume in the

scrip during the investigation period.

3) The Noticee has off market transactions with Hardik Pandya, Manoj Bhandari and

Amar Walmiki. The depository participants of Amar Walmiki had wrongly

transferred shares in the Noticee’s demat account which at Amar Walmiki’s request

were returned back. However, the SCN alleges off market transactions with certain

other entities which is factually incorrect

4) No allegation or relationship is found or alleged in the case of Noticee such as

witness in nomination, witness in demat, etc.

5) SEBI ought to have considered the role of Paras Chapot and Sunil Bhandari and

the voluminous transactions carried out by the persons connected to them.

6) The period of investigation is mentioned differently in the SCN, bringing out the

inconsistencies in the SCN.

7) Transactions happened on 7 trading days out of 312 trading days. Therefore the

Noticee is not a part of the WSG.

8) No complaint of any investor has been filed against the Noticee nor has any

explanation been sought by BSE and NSE regarding his trading in the scrip of

WPPCL.

9) Noticee had no fund movements with any other Noticees.

10) The action proposed chart has not been enclosed with the SCN.

11) SEBI has not provided any documentary evidence to the SCN hence there is a

gross violation of the principles of natural justice.

12) During the second investigation period, Noticee had not traded for a single share

in the stock market. There is no allegation of self-trade against the Noticee.


I. Bhupesh Rathod

1) No allegation of any nature was made against the Noticee in the Interim Order and

the Confirmatory Order.

2) The Noticee had carried out share trading activity in the normal and ordinary course

of business activity through a well-recognised SEBI registered stock broker. At the

relevant time and even thereafter till date, no grievance or complaint of any nature

has been raised by any of the aforesaid broker or the stock exchange on whose

trading terminal the impugned transactions were carried out.

3) The action proposed report was not enclosed with the documents provided.

4) The Noticee had no off market transaction in the scrip with the persons mentioned

in the SCN. Noticee had no linkages or relation to the market trades executed by

them or by him on the trading platform of the exchange; it is incomprehensible to

hold or bind the Noticee as belonging to any group or connected entities as alleged

in the Show Cause Notice. The allegation which is not supported by any evidence

necessarily leads to prove and establish that it is factually incorrect and legally

unsustainable and merely based on surmises and conjectures and hence lacks

credentials.

5) The alleged connection on the basis of which the Noticee is roped into the present

proceedings was that he had introduced Mr. Hemant Sheth, Mr. Prem M Parikh,

Mr. bhavesh P Pabari and Mr. Kishore B Chauvan for trading account. The

introduction was sought by Noticee’s broker S.P. Jain Securities Limited for merely

the sake of introduction of their identity, The Noticee had not undertaken any risk

responsibility and liability for carrying out any transactions by the, with the broker.

The Noticee had not taken any profit or income. It was an undisputed fact that

Noticee had not carried out any transaction or was instrumental for the transaction

carried out by those persons in the market.

6) Introduction of some person to his broker cannot mean that Noticee associates or

carries out share trading activity with them jointly. Introduction of every client to

broker is mandatory and therefore broker normally insists introduction from good

existing client before registering new person as client.

7) Noticee had placed an order for the quantity which he intended to buy or sell and

the volume and value of transactions were very well within his financial and risk

bearing capacity. Noticee has carried out delivery based transactions.

8) SCN has failed to bring on record the rationale for giving the trading pattern of 50

entities out of total 51 entities and leaving one entity. SEBI did not find any KYC

relationship, fund movement or any share movement through off market in his


case. The Noticee’s name is missing from the list of 51 persons mentioned above

and therefore he cannot be said to be a part of the alleged group.

9) He bought only 3200 shares and sold 1600 shares which are negligible in

comparison to the total market volume during the relevant period.

10) SEBI has not relied upon the statement of any person nor any has documentary

evidence been provided to prove relationship with the WSG. Noticee is not a part

of any alleged group and has taken own decision to trade in the scrip and that as

per SCN the trading of the Noticee is a miniscule percentage of the total traded

volume.

11) Complete trade log and order log has not been provided to him by SEBI.

J. Samir Sureshbhai Shah, Samir Sureshbhai Shah (HUF), Shalin Kirtikumar

Parikh, Hardik Pandya, Rameshbhai V Parmar, Mayank Gandhi and Jignesh C

Shah

These entities filed similar replies and also filed common written submissions pursuant

to the hearing. Their submitted inter alia the following:

1) The allegations levelled against him in the SCN are general in nature. He is not

connected with any group as alleged in the SCN.

2) Fraud has been played on them by one Mr. Paras Chaplot who is absconding. One

Mr. Rakesh Sanghvi was Mr. Paras Chaplot’s accomplice.

3) Noticees have repeatedly requested SEBI officials for making inquiries on the

details and information given by them.

4) Paras Chaplot used their demat accounts for his own purposes. Noticees were not

aware of what kind of transactions were carried out through their demat account.

5) The modus operandi by Paras Chaplot was to create alluring and tempting

conversations with the innocent and gullible investors and to use the brokers’

network to obtain such accounts at a fixed remuneration per month to such

account holders. He would tempt to open the account and use the same to his

benefit to offload the shares at higher prices.

6) One such big broker Religare Securities Limited, Mumbai was among financial

beneficiary in this mechanism and therefore was working in tandem and

connivance with Mr. Paras Chaplot and each such borrowed names purchase/sell

instructions with Mr. Paras Chaplot under any of the account of innocent people

including the Noticees were passed on the brokers from the office of Mr. Paras

Chaplot only.

7) The shares belonging to the promoters group of the Company or the benami shares

held by the promoters were passed on in an off market transaction to the front


entities in the Group. There is no filing of the disclosure at any level either from

the Company or the people involved in the transactions at the Stock Exchanges

and hence no disclosures to public at large. The fund transactions were done from

his office only and all cheques were deposited into the accounts of the Noticees

from his Mumbai Office irrespective of the fact that none of these persons were

based in Mumbai.

8) Once the shares from promoter group comes to him, he used to do off market

transactions to spread the same geographically and later would instruct his brokers

to trade might be even with malicious intentions of synchronized dealings or to

increase the volumes of scrip but ultimately he would offload the same in the

market for his own benefit.

9) The fact can be confirmed from the statement of SEBI itself where none of the

transactions in total are backed by delivery of shares and settlement f accounts.

10) The trades were executed by him only and none of the instructions for entering

into transactions were passed to the Noticees.

11) The Noticees were not part of any group. To form a group, the group forming

persons need to know each other and keep connectivity with each other through

established channels of communication. Noticees did not have and do not have any

such relationship with any of the alleged Group. From the SCN it is revealed that

there are only few parties which have done significant, more than 75% of the

transactions. Noticees are not a group and are individuals and as such in individual

cases have the self-trades of a meagre quantity of 10 shares, 2 shares, 101 shares

which may be because of the mistake that may have been committed by the trading

dealer. Major participants are those very few in numbers. If at all there can be a

group it could only be of ultimate beneficiaries who were working in tandem.

12) Noticees are not at all connected, concerned or interested in the promoters of the

company and are not gaining anything out of the alleged transactions.

13) No corresponding movement of shares against the funds movement are with

respect to the Noticees. If allegations of SEBI are true then they must have properly

taken care of the corresponding considerations in the form of money as well as

shares, which are totally missing as per the SEBI analysis.

14) The account for Hardik Pandya was opened without any sort of KYC. The fact

came to notice only when the cheque issued was dishonored and a notice under

section 138 was received by Hardik Pandya. To the astonishment of Hardik Pandya,

Ms. Religare Securities Limited under section 138, the Noticee was informed that

the account was operated from Surat, whereas he is a resident of Baroda and has

no business relationship in Surat.


8. I have carefully considered the allegations against the Noticees, their replies and the material

available on record.

9. A general contention raised by the Noticees is that from the details available in the public

domain, it appears that the investigation in the case has still not been completed and SEBI

is carrying out some discreet investigation and is concealing information from the Noticees.

In this regard, I note that the SCN forming the subject matter of these proceedings was

issued to the Noticees only after the investigation in the matter was completed. Further, I

note from the record that the information / material which has been relied upon for

levelling the allegations against the Noticees is contained in the SCN and there is no material

/ information which forms the basis of allegations against them and has not been provided

to hem. In view of the above, I reject the contentions of the Noticees in this regard.

10. A common contention of the Noticees is that six different SCNs have been sent to them

for trading in five scrips, whereas there was only one interim order in the matter. The

Noticees have further contended that there is no rationale for SEBI to do the same and

apparently these six different SCNs have been issued as a calculated move to harass them.

In this regard, I note that the interim order in the matter was passed on the basis of prima facie

findings in respect of the dealings in the five scrips. Since, the entities involved in the

trading in the five scrips were common and the time period (being the subject matter of the

preliminary inquiry) was common, a combined interim order was passed. Subsequent to the

interim order, a detailed investigation was carried out in the matter focusing on each of the

five scrips and it was revealed that separate sub-groups out of the larger groups of entities

were involved in the alleged violations in different scrips. As a result thereof, it was

considered viable to issue six different SCNs in order to clearly bring out the role of each

and every entity in respect of the alleged manipulation in the said five scrips. Thus, the

rationale behind issuing six different SCNs was to ensure clarity and brevity in the SCNs.

In view of the above, I don’t find any merit in the above contentions of the Noticees.

11. The Noticees have also submitted that they have not been provided the complete

investigation report, complete set of trade logs and order logs order and the action proposed

chart along with the SCN. Further, some of the Noticees have submitted that the relevant

trade logs and order logs were provided to them in a CD format due to which they were

unable to purify the data pertaining to them. In this regard, I note from the material available

on record that all relevant documents that were relied upon in the SCN have been duly

provided to the Noticees. The relevant extracts of the investigation report and the trade

logs and order logs related to the transactions carried out by the Noticees were also provided

to them. Further, due to the voluminous nature of the trade logs and order logs pertaining

to the respective Noticees, the same were provided in a CD. As regards the action proposed


report, the same cannot be said to be a relevant document for the Noticees to respond to

the allegations levelled in the SCN since the Noticees were notified of every action initiated

against them by way of a show cause notice. Even otherwise, it is important to note that in

the present proceedings, every entity, against whom action under section 11 and 11B of the

SEBI Act has been initiated in the scrip of WPPCL, is covered in the SCN, which is a

subject matter of consideration in the present proceedings and is being disposed of vide

this order. In my view, the documents which were relied upon in the SCN and were

provided along with the SCN or upon inspection, were sufficient in order to enable the

Noticees to respond to the charges that were levelled in the SCN. I, therefore, reject the

contention of the Noticees in this regard.

12. The Noticees have made a common contention that they are not connected / related with

each other and do not belong to WSG. They have also contended that their decision to

trade in the scrip of WPPCL was an independent one and should not be seen in conjunction

with any group. They have further contended that even otherwise, their individual trading

in comparison to the total trading of WSG is miniscule and could not have led to any

manipulation in the scrip as alleged in the SCN. In this regard, it is noted that the WSG

entities collectively purchased 2,64,36,837 shares accounting for 52.78 % of the total

volume traded in the scrip on BSE during the First Investigation Period and sold

1,82,98,802 shares accounting for 36.54 % of the total volume traded in the scrip on BSE

during the First Investigation Period. Further, the Noticees collectively purchased

11,66,30,714 shares on BSE accounting for 45.81% of the total volume traded in the scrip

on BSE during the Second Investigation Period and sold 11,60,46,856 shares on BSE

accounting for 45.58 % of the total volume traded in the scrip on BSE during the said

period.

13. It is important to note that the relationship / connection among the WSG entities as

illustrated in the SCN has been established on the basis of a multiplicity of factors including

family relationship, common address, bank account details, fund movements, share

transfers in off-market etc. Other than a general denial, the Noticees have not produced any

satisfactory material/documents to dispute the inferences regarding their inter-se

relationship brought out in SCN. In my view, it cannot be a mere coincidence that the

Noticees while trading in the scrip of WPPCL ended up trading amongst each other only

and collectively contributed to more than 50% of the total traded volume during the

investigation period. Further, the details of the synchronized and self-trades among the

Noticees were also provided to the Noticees in the SCN in response whereof they have not

provided any cogent explanation. In view of these facts and circumstances, I find that the

Noticees are connected to each other and were a part of the WSG as mentioned in the SCN.


14. The Noticees have submitted that except for the rare off-market transactions mentioned by

them in their replies, all their transactions were placed on the anonymous trading platform

of stock exchange and by no stretch of imagination, he could be aware of the counterparty.

On the basis thereof, the Noticees have contended that their transactions were not

synchronized and cannot be said to have created a false or misleading appearance of trading

in the securities market or entering into transactions without the intention of performing

them. In this regard, I note from the record that several of the trades were synchronised

amongst the members of WSG, including the noticees. During the First Investigation

Period on BSE, out of the total trading of 98,66,868 shares within the group entities, for

45,99,077 shares accounting for 9.18% of the market volume the buy and sell orders were

placed within one minute of each other. These 45,99,077 shares constituted 17.39% of the

total purchase of WSG entities and 25.13% of the total sale of the WSG entities. Out of

these 45,99,077 shares, the buy and sale orders with respect to 7,21,545 shares accounting

for 1.44% of the total market volume, were placed in such a manner that the difference

between placement of order by buyer and seller was within one minute of each other and

the price at which the orders were placed as well as the quantity of both the buy and sell

orders were same. These 7,21,545 shares constituted 2.73% of the total purchase of WSG

entities and 3.94% of the total sale of the WSG entities. The particulars of the synchronised

trades carried out by WSG entities including the Noticees are as under:

Table 3 - Synchronized trades by WSG including the Noticees during the first


Buy client name Synchronised buy trades

% of Market Volume

% of sync trades to total buy by client

Synchronised sale trades

% of Market Volume

% of sync trades to total sell by client

Santosh Deshmal Oswal 9,680 0.02 1.75 0 0.00 0.00

Pradeepkumar Jashbhai Patel 2,100 * 0.97 2,400 * 2.27

Amar Premchand Walmiki 40,299 0.08 1.10 45,887 0.09 2.22

Bharat Shantilal Thakkar 32,639 0.07 54.98 37,053 0.07 66.92

Ragini Bipinbhai Thakkar 0 0.00 0.00 1,500 * 0.69

Bipin Jayant Thaker 7,800 0.02 20.55 7,496 0.01 23.06

Navneetlal Jeevanlal Gandhi 50 * 0.02 2,124 * 0.63


Rajesh Ravinarayan Hati 697 * 0.13 7,660 0.02 2.41

Chirag Rajnikant Jariwala 18,800 0.04 38.96 11,537 0.02 30.44

Kishore Chauhan 30,530 0.06 17.02 58,737 0.12 37.81

Tushar Rameshbhai Patel 11,000 0.02 0.95 20,763 0.04 4.63

Shashikant Keshavlal Shah 22,800 0.05 10.93 5,000 0.01 2.63

Samir Sureshbhai Shah 1,924 * 0.25 250 * 0.05

Manoj Bhandari 2,500 * 0.38 21,250 0.04 4.29

Samirkumar Kanubhai Patel 0 0.00 0.00 490 * 1.19

Santosh Vishram Ghadshi 63,856 0.13 5.76 15,065 0.03 1.94

Jignesh C. Shah 0 0.00 0.00 3,000 0.01 2.67

Shalin Kiritkumar Parikh 4,038 0.01 1.92 0 0.00 0.00

Mayank Navnitbhai Gandhi 2,301 * 0.55 17,310 0.03 4.46

Aditi M Gandhi 476 * 0.13 10,000 0.02 3.01

Bhavesh Pabari 25,792 0.05 18.33 22,465 0.04 11.07

Rekha Bhandari 0 0.00 0.00 12000 0.02 5.09

Prem Mohanlal Parikh 12,000 0.02 8.88 9,865 0.02 9.37

Sunil Bhandari 19,320 0.04 5.28 2,990 0.01 2.71

Nareshbhai Devabhai Patel 1,227 * 0.42 1,500 0.00 2.07

Kaushik Rajnikant Mehta 45,490 0.09 18.21 22,376 0.04 14.21

Hemant Madhusudan Sheth 77,695 0.16 21.17 30,573 0.06 11.46

Ashokkumar Bhikhalal Parmar 2,000 * 0.73 2,000 * 3.17

Manisha Navneetlal Gandhi 8609 0.02 1.00 424 - 0.11

Pandya Yaminiben M 29,350 0.06 1.04 81,111 0.16 3.83

Pandya Hardik M 33,900 0.07 1.44 62,298 0.12 3.90

Bharatkumar Baldevbhai Parmar 13,905 0.03 11.86 0 0.00 0.00

Laxman Dhirubhai Parmar 42,574 0.09 1.90 68,679 0.14 3.22

Shobhnaben R Parmar 35,323 0.07 1.85 32,574 0.07 2.36

Rameshbhai V Parmar 0 0.00 0.00 10,000 0.02 1.80

Amisha Samir Patel 0 0.00 0.00 4,010 0.01 7.48

Vipul Hiralal Shah 69,532 0.14 19.29 29,060 0.06 8.52

Dipika Dinesh Kankaria 14,392 0.03 7.71 8,890 0.02 5.33

Shreedhar Yellaiah Kodam 5,486 0.01 1.24 14,163 0.03 3.31

Ankit Sanchaniya 19,001 0.04 15.62 30,050 0.06 26.16

Vivek Kishanpal Samant 14,459 0.03 30.00 8,995 0.02 38.47

Total 7,21,545 1.44 2.73 7,21,545 1.44 3.94


15. Similarly during the second investigation period, out of the total trading of 5,59,14,388

shares within the group entities, for 1,72,17,572 shares accounting for 6.76% of the market

volume the buy and sell orders were placed within one minute of each other. These

1,72,17,572 shares constituted 14.76% of the total purchase of WSG entities and 14.84% of

the total sell of the WSG entities. Out of these 1,72,17,572 shares, the buy and sell orders

with respect to 14,27,634 shares accounting for 0.56% of the total market volume, were

placed in such a manner that the difference between placement of order by buyer and seller

was within one minute of each other and the price at which the orders were placed as well

as the quantity of both the buy and sell orders were same. Further, it is important to note

that 14,27,634 shares constitutes 1.22% of the total purchase of WSG entities and 1.23% of

the total sale of the WSG entities. The particulars of the synchronised trades carried out by

WSG entities including the Noticees during the second investigation period are as under:

Table 4 - Synchronized trades by WSG including the Noticees during the

second investigation period

Client Name Synchronised buy trades

% of sync buy trades to market Volume

% of sync trades to total buy by client

Synchronised sell trades

% of sync sell trades to market Volume

% of sync trades to total sell by client

Anand Finstock Services Ltd 0 0.00 0.00 24,990 0.01 0.45

Amar Premchand Walmiki 65,000 0.03 0.58 0 0.00 0.00

Tushar Rameshbhai Patel 49,200 0.02 1.11 50,000 0.02 1.20

Santosh Vishram Ghadshi 16,458 0.01 0.19 2,998 * 0.04

Jignesh C. Shah 0 0.00 0.00 14,604 0.01 1.58

Mayank Navnitbhai Gandhi 14,604 0.01 0.26 50,000 0.02 0.87

Aditi M Gandhi 0 0.00 0.00 45,426 0.02 0.75


Avinash Bothra 56,196 0.02 4.89 66,109 0.03 4.44

Rekha Bhandari 0 0.00 0.00 1,81,267 0.07 9.57

Sunil Bhandari 14,1,366 0.06 8.32 23,004 0.01 1.03

Kaushik Rajnikant Mehta 39,899 0.02 1.41 20,000 0.01 0.83

Ashokkumar Bhikhalal Parmar 89,901 0.04 3.38 0 0.00 0.00

Vishal Pare 0 0.00 0.00 2,47,000 0.10 5.75

Pandya Yaminiben M 26,530 0.01 0.39 49,001 0.02 0.66

Pannalal Ukaram Prajapati 74,990 0.03 11.96 23,000 0.01 3.53

Bharatkumar Baldevbhai Parmar 1,02,998 0.04 1.01 1,01,040 0.04 1.00

Laxman Dhirubhai Parmar 23,004 0.01 0.47 93,745 0.04 1.67

Shobhnaben R Parmar 39,250 0.02 0.52 72,397 0.03 1.01

Rameshbhai V Parmar 65,109 0.03 1.32 54,205 0.02 1.08

Vipul Hiralal Shah 2,97,184 0.12 6.06 1,98,848 0.08 5.10

Dipika Dinesh Kankaria 2,73,000 0.11 20.16 1,00,000 0.04 6.10

Shreedhar Yellaiah Kodam 2,945 * 0.18 10,000 0.00 0.55

Ankit Sanchaniya 50,000 0.02 50.00 0 0.00 0.00

14,27,634 0.56 1.22 14,27,634 0.56 1.23

16. In my view, placing of buy/sell orders with same counterparties for same quantity of shares

at the same price within nil or negligible time difference repeatedly over a period of time is

a clear indication that those trades of the Noticees were synchronised/ structured. In this

regard, the following observations of the Hon’ble SAT in its order dated July 14, 2006 in

the matter of Ketan Parekh vs. Securities and Exchange Board of India, is worth mentioning:


“.......... A synchronised transaction will, however, be illegal or violative of the Regulations

if it is executed with a view to manipulate the market or if it results in circular trading or

is dubious in nature and is executed with a view to avoid regulatory detection or does not

involve change of beneficial ownership or is executed to create false volumes resulting in

upsetting the market equilibrium. Any transaction executed with the intention to defeat the

market mechanism whether negotiated or not would be illegal. Whether a transaction has

been executed with the intention to manipulate the market or defeat its mechanism will

depend upon the intention of the parties which could be inferred from the attending

circumstances because direct evidence in such cases may not be available. The nature of the

transaction executed, the frequency with which such transactions are undertaken, the value

of the transactions, whether they involve circular trading and whether there is real change of

beneficial ownership, the conditions then prevailing in the market are some of the factors

which go to show the intention of the parties. This list of factors, in the very nature of things,

cannot be exhaustive. Any one factor may or may not be decisive and it is from the

cumulative effect of these that an inference will have to be drawn.”

17. In this case, I note that several synchronized transactions amongst these Noticees were

in the nature of self–trades. Some of the Noticees (i.e. Amar Premchand Walmiki, Hardik

Maheshbhai Pandya and Rameshbhai Vitthalbhai Parmar) who belonged to WSG also

indulged in self-trades on BSE (i.e. buy client as well as the sell client for a given trade

was the same resulting in no change of beneficial ownership). The detail of the same is

presented as follows:

Table 5 - Self trades by WSG including the Noticees during the first investigation

period.

Name of the client

Total buy

Total Sell

Self Trade

% of self trades to total Buy

% of self trades to total Sell

% of self trades to Market Volume

No of self trades

Amar Premchand Walmiki 3659394 2065126 42099 1.15 2.04 0.08 16

Rajesh Ravinarayan Hati 517973 318412 6632 1.28 2.08 0.01 7

Tushar Rameshbhai Patel 1152435 448779 1000 0.09 0.22 0.00 1

Manoj Bhandari 657036 495109 1 0.00 0.00 0.00 1

Santosh Vishram Ghadshi 1107847 777695 22227 2.01 2.86 0.04 8


Manisha Navneetlal Gandhi 862555 397466 280 0.03 0.07 0.00 1

Pandya Yaminiben M 2812779 2118841 811 0.03 0.04 0.00 14

Pandya Hardik M 2350885 1597062 46406 1.97 2.91 0.09 19

Laxman Dhirubhai Parmar 2242500 2133192 977 0.04 0.05 0.00 15

Shobhnaben R Parmar 1908227 1378547 412 0.02 0.03 0.00 14

Rameshbhai V Parmar 814920 556712 2509 0.31 0.45 0.01 2

Grand Total 18086551 12286941 123354 0.68 1.00 0.25 98

Table 6 - Self trades by WSG including the Noticees during the second


Name of the entity Total buy

Total sell

Self trade qty

% of self trades to Total Buy

% of self trades to total sell

% of self trades to market Volume

No of Self trades

Anand Finstock Services Ltd 58,53,295

55,33,406 1,200 0.02 0.02 * 2

Amar Premchand Walmiki

1,11,40,657

1,19,35,307 306168 2.75 2.57 0.12 15

Ragini Bipinbhai Thakkar 6,63,276 6,81,20

5 1 * * * 1

Janaki Bipin Thakkar 2,03,369 1,98,23

9 61 0.03 0.03 *

1

Samir Sureshbhai Shah 1,86,796 1,24,04

2 2 0.00 0.00 *

1

Santosh Vishram Ghadshi 84,64,535 72,30,9

29 46,933 0.55 0.65 0.02 11

Jignesh C. Shah 9,29,653 9,23,36

0 1,001 0.11 0.11 *

2

Mayank Navnitbhai Gandhi 56,12,692

57,49,473 101 0.00 0.00

* 2

Aditi M Gandhi 56,95,018 60,60,7

08 201 0.00 0.00 *

2

Pandya Yaminiben M 68,54,348 73,72,1

57 82037 1.20 1.11 0.03 7

Pandya Hardik M 72,40,519 73,38,4

71 4,49,370 6.21 6.12 0.18 17


Bharatkumar Baldevbhai Parmar

1,01,80,688

1,00,70,174 1,60,268 1.57 1.59 0.06 15

Shobhnaben R Parmar 74,86,904 71,76,2

06 1,18,644 1.58 1.65 0.05 22

Rameshbhai V Parmar 49,17,052 50,40,7

89 10 * * *

2

Vipul Hiralal Shah 49,03,038 39,01,6

87 1,09,598 2.24 2.81 0.04 2

8,03,31,8

40 7,93,36,

153 12,75,595 1.59 1.61 0.50 102

18. It is also important to note that in all these self trades mentioned above, the buy and sell

stock brokers were also the same. The detail of the self trades undertaken by stock brokers

is placed below:

Table 7 - Stock brokers through whom WSG including the Noticees executed self

trades during the first investigation period.

Buy and Sale Member Name Client Name Total Traded Qty

No of trades

Ami Stock and Share Brokers Pvt. Ltd.

Amar Premchand Walmiki 8984 6

Manoj Bhandari 1 1

Pandya Hardik M 54 3

Ami Stock and Share Brokers Pvt. Ltd. Total 9039 10

Arcadia Share & Stock Brokers Pvt. Ltd.

Laxman Dhirubhai Parmar 977 15

Manisha Navneetlal Gandhi 280 1

Rameshbhai V Parmar 2509 2

Shobhnaben R Parmar 412 14

Pandya Yaminiben M 811 14

Arcadia Share & Stock Brokers Pvt. Ltd. Total 4989 46

Grand Total 14028 56

Table 8 - Stock brokers through whom WSG including the Noticees executed self

trades during the second investigation period.

Buy and Sale Member Name Client Name Total Traded Qty

No of trades

Arcadia Share & Stock Brokers Pvt. Ltd.

Aditi M Gandhi 201 2

Anand Finstock Services Ltd 1200 2

Mayank Navnitbhai Gandhi 101 2

Rameshbhai V Parmar 10 2


Pandya Yaminiben M 22037 5

Arcadia Share & Stock Brokers Pvt. Ltd. Total 23549 13

SSJ Finance & Securities Pvt. Ltd.

Bharatkumar Baldevbhai Parmar 10987 9

SSJ Finance & Securities Pvt. Ltd. Total 10987 9

VSE Stock Services Ltd.

Janaki Bipin Thakkar 61 1

Jignesh C. Shah 1001 2

Ragini Bipinbhai Thakkar 1 1

Samir Sureshbhai Shah 2 1

VSE Stock Services Ltd. Total 1065 5

Grand Total 35601 27

19. These self-trades clearly did not involve change in beneficial ownership of traded shares

and were, therefore, illegal. It is relevant to mention that with regard to the nature and effect

of self-trades the Hon’ble SAT, in the matter of M/s. Jayantilal Khandwala & Sons Pvt. Ltd.

vs. SEBI (Appeal no. 24 of 2011 decided on June 8, 2011), has held that “one cannot buy and sell

shares from himself. Such transactions are obviously fictitious and meant only to create false volumes on the

trading screen of the exchange.”

20. In the facts and circumstances discussed above where the buy / sell trades were carried out

amongst entities who were connected to each other as explained above and the said trades

were synchronized in terms of price, time and quantity, the argument of the Noticees that

the trades were executed on an anonymous trading platform of the stock exchange cannot

be sustained. I, therefore, reject the contentions of the Noticees in this regard.

21. Mr. Bhupesh Rathod has contended that the SCN has given the trading pattern of 50 entities

out of total 51 entities and his name is missing from the said list of 51 persons. He further

submitted that SEBI did not find any KYC relationship, fund movement or any share

movement through off market in his case. In this regard, I note that admittedly, Mr.

Bhupesh Rathod purchased and sold shares in the scrip during the investigation period.

These transactions were undertaken by him with other entities who belonged to WSG. Mr.

Rathod in his reply has admitted that that he had introduced Mr. Hemant Sheth, Mr. Prem

M Parikh, Mr. bhavesh P Pabari and Mr. Kishore B Chauvan for their respective trading

accounts and the introduction was sought by his broker S.P. Jain Securities Limited. He has

however, failed to provide any cogent explanation as to why he introduced certain persons

when he did have any connection / relationship with them or did not know them at all. It

is also noted that Mr. Rathod also had fund transactions with Mr. Ankit Sanchaniya who is

also a part of WSG. In view of these facts and circumstances, it becomes clear that Mr.

Bhupesh Rathod was a part of WSG and even though, individually, his transaction in the

scrip of WPPCL were not substantial, his transaction along with the transactions of other


WSG entities had an impact on the price and volume of the scrip of WPPCL as discussed

hereinabove. I, therefore, reject the contentions of Mr. Bhupesh Rathod in this regard.

22. I note that some of the Noticees have also stated the role of one Mr Paras Chaplot in

perpetuating a fraud on them by using their demat accounts for his own purposes. The

Noticees have also furnished copies of the police complaints filed by them. In this regard,

I note that these Noticees have themselves submitted that in exchange of a fixed

remuneration per month they had allowed Mr. Chaplot to use their trading and bank

accounts. Thus, admittedly, these Noticees by their free will for a consideration had allowed

Mr. Chaplot to use their account. I find it important to mention here that it is a matter of

due diligence to be exercised on part of the Noticees to ensure that their demat accounts

are not used/misused by any other entity. The Noticees cannot plead innocence on the

ground that they were totally unaware of their demat accounts/ bank accounts and had

given complete authority of operating their accounts to Mr. Paras Chaplot. The documents

submitted by the Noticees in support of their contention do not rule out their role in the

entire scheme of things alleged in the SCN. Admittedly, the Noticees had also carried out

off-market transactions mentioned in the SCN. In these facts and circumstances, in my

view, these Noticees cannot escape the consequence of their acts as described in the SCN.

I, therefore, reject the contentions of the Noticees in this regard.

23. In view of the foregoing, I find that the Noticees in the present proceedings were related

/ connected to each other and connived amongst themselves for execution of

synchronized and self-trades, creation of artificial volume and price manipulation which

distorted the market equilibrium and were fraudulent in nature. The Noticees have

therefore violated the provisions of regulations 3 (a),(b),(c),(d), 4(1), 4(2) (a),(b) (e) and

(g) of PFUTP Regulations.

24. The Noticees have submitted that based on the same set of facts and transactions as in the

instant case monetary penalties were imposed against the Noticees by the adjudicating

officer vide his separate order(s) and the Noticees have challenged the said order(s) before

SAT. For such examination it is relevant to refer to the scheme of enforcement actions that

SEBI may initiate in such cases under the SEBI Act. It is a settled position that SEBI Act

empowers SEBI to take both streams of actions i.e. civil and criminal, if any person

contravenes the provisions of the SEBI Act or the rules or regulations made thereunder.

The civil enforcement actions include directions under section 11 and 11B of the SEBI Act

and imposition of monetary penalty in adjudication proceedings under Chapter VIA of the

said Act. The criminal action is by way of prosecution under section 24 of the SEBI Act.

Depending on the facts and circumstances of the case, the nature, gravity and seriousness

of violations involved, impact thereof on the investors or the securities market and the


illegal gains made or loss avoided, etc., SEBI may initiate one or all of those three actions.

It cannot be said that by initiating adjudication proceedings the Board abdicates its power

to initiate other actions if the facts of the case warrant multiple enforcement actions. In the

instant case, I am satisfied that the contraventions as found in this case are grave and have

the potential to disturb the market integrity and disturb the fair, equitable and efficient

functioning of the securities market. In the instant case, the proceedings under sections 11

and 11B of the SEBI Act have been initiated against the Noticees in addition to the

adjudication proceedings against them as the charges against the entities are grave and have

larger implications on the safety and integrity of the securities market. In my view, for the

serious contraventions as found in the instant case, monetary penalty alone would not be

sufficient to safeguard the market integrity. In this regard, the following observations of the

Hon’ble SAT in the order dated December 02, 2010, in Appeal no. 70 of 2010 – Yashraj

Containeurs Ltd. v. SEBI are worth mentioning:

“.... we cannot resist observing that in view of the serious allegations made against the appellants which

stand established during the course of the adjudication proceedings, the Securities and Exchange Board

of India (for short the Board) should not have been content with initiating only adjudication proceedings

against the appellants in which only a monetary penalty could be levied. This is a fit case where the

Board should have considered initiating proceedings under Sections 11 and 11B of the Securities and

Exchange Board of India Act, 1992 for issuing appropriate directions against the appellants to protect

the integrity of the market and the interests of the investors....

This is, indeed a very serious market illegality/irregularity and, in our view, imposing a monetary

penalty alone on the company and its promoters will not meet the ends of justice. We are constrained to

make these observations because the lenient view taken by the Board does not, in our opinion, protect

the integrity of the market and not even the interest of the investors which is its primary duty. This kind

of a lenient view will not be a deterrent for others and would send a wrong signal that the delinquent

could continue with their nefarious activities by paying a monetary penalty.”

25. I note that vide the interim order dated February 02, 2011, SEBI had restrained, inter alia,

the Noticees herein (except Mr Bhupesh Rathod, Mr Jignesh C. Shah, Mr Shalin

Kiritkumar Parikh, Mr Spectrum Chemical Pvt. Ltd. and Mr Anand Kalu Marathe) from

accessing the securities market and further prohibited them from buying, selling or

dealing in securities in any manner whatsoever, till further directions. The directions in

the interim order qua these Noticees are still in force. I also note from the material on record

that Mr. Kishore Chauhan has passed away on May 29, 2013 and therefore, these

proceedings against him have abated and the SCN dated November 30, 2014 as against

him is disposed off accordingly.


26. It is important to mention that some of the Noticees in the present proceedings, against

whom the allegations levelled in the SCN have been established (i.e. Mr. Bhavesh Pabari,

Mr. Bipin Jayant Thaker, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan Seth, Ms.

Mala Hemant Seth, Mr. Ankit Sanchaniya, Mr. Bharat Shantilal Thakkar, Mr. Bhupesh

Rathod and Mr. Bipinkumar Gandhi), have already been restrained by SEBI vide order

dated May 13, 2015 in the matter of dealings in the shares of Goldstone Technologies

Limited from accessing the securities market and have been further prohibited from

buying, selling or otherwise dealing in securities, directly or indirectly, or being associated

with the securities market in any manner for a period of 5 years. Further, Mr. Bhavesh

Pabari, Mr. Bipin Jayant Thaker, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan

Seth, Ms. Mala Hemant Seth, Mr. Ankit Sanchaniya, and Mr. Bharat Shantilal Thakkar

have also been debarred by SEBI vide order dated June 29, 2015 in the matter of dealings

in the shares of LGS Global Limited from accessing the securities market and have been

further prohibited from buying, selling or otherwise dealing in securities, directly or

indirectly, or being associated with the securities market in any manner for a period of 6

years. It is noteworthy that the said restraint has been imposed on the Noticees for

indulging in fraudulent and manipulative acts in violation of the PFUTP Regulations as

has been found in the present case. In my view, repeated fraudulent acts and delinquent

behaviour of the erring Noticees does not bode well for the integrity, orderly

development and smooth functioning of the securities market. It, therefore, becomes

incumbent to deal with contraventions, digression and demeanour of the erring Noticees

sternly and take appropriate actions for effective deterrence.

27. In view of the above and considering the repetitive nature of the default by the Noticees

noted above, I, in order to protect the interest of investors and the integrity of the

securities market, in exercise of the powers conferred upon me under section 19 of the

Securities and Exchange Board of India Act, 1992 read with sections 11 and 11B thereof

and regulation 11 of the Securities and Exchange Board of India (Prohibition of

Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

hereby restrain the following entities from accessing the securities market and further

prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly,

or being associated with the securities market in any manner, whatsoever, for the period

as mentioned in the table below:

Sr. No. Name of Noticee PAN Period

1 Mr Bharat Shantilal Thakkar AAZPT9542R 7 Years

2 Mr Bipin Jayant Thaker ABYPT4984H 7 Years

3 Mr Prem Mohanlal Parikh ALHPP3489N 7 Years


4 Mr Hemant Madhusudan Seth ANOPS8607E 7 Years

5 Ms Mala Hemant Seth AZXPS0694J 7 Years

6 Mr Ankit Sanchaniya BLNPS3316L 7 Years

7 Mr Bhavesh Pabari AKGPP8679N 7 Years

8 Mr Bipinkumar Gandhi AJHPG6989J 6 Years

9 Mr Bhupesh Rathod AACPR3785K 6 Years

10 Mr Santosh Deshmal Oswal AAAPO2421P 5 Years

11 Mr Samir Sureshbhai Shah AGEPS0157L 5 Years

12 Mr Rameshbhai V Parmar ASQPP5072M 5 Years

13 Mr Mayank Navnitbhai Gandhi AKCPG0246Q 5 Years

14 Mr Pandya Hardik M. ARJPP6330Q 5 Years

15 Mr Samir Sureshbhai Shah HUF AGEPS0157L 5 Years

16 Mr Amar Premchand Valmiki AAUPW9971A 5 Years

17 Mr Shalin Kiritkumar Parikh AJAPP5421B 5 Years

18 Mr Jignesh C. Shah AIPPS9125H 5 Years

19 Mr Spectrum Chemical Pvt. Ltd. AAICS2382L 5 Years

20 Mr Anand Kalu Marathe AKWPM0699M 5 Years

28. The period of prohibition already undergone by the Noticees, who were

debarred/restrained by the interim order dated February 02, 2011, shall be taken into

account for the purpose of computing the period of prohibition imposed vide this order.

Further, it is clarified that the restraint/prohibition imposed on the Noticees, to

whomsoever applicable, shall run concurrently with the restraint/prohibition imposed by

SEBI vide order dated May 13, 2015 in the matter of dealings in the shares of Goldstone

Technologies Limited and June 29, 2015 in the matter of dealings in the shares of LGS

Global Limited.

29. This order shall come into force with immediate effect. A copy of this order shall be

served on all recognized stock exchanges and depositories to ensure that the directions

given in the above paragraphs are complied with.

Sd/-

DATE: January 4th, 2016 RAJEEV KUMAR AGARWAL

PLACE: MUMBAI WHOLE TIME MEMBER

SECURITIES AND EXCHANGE BOARD OF INDIA

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WTM/RKA/EFD/ 04 /2016 BEFORE THE SECURITIES AND … · BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under Section 11B read with section 11(4) of the Securities and Exchange