Confirmatory Order in respect of Shreya Multitrade Pvt Ltd. in the matter of IPO of Taksheel Solutions Ltd

1. The Securities and Exchange Board of India (hereinafter referred to as SEBI) had, pending investigation, vide an ad-interim ex-parte Order dated December 28, 2011 (hereinafter referred to as the Order), inter alia prohibited M/s. SHREYA MULTITRADE PVT LTD and its directors (Shri Rajan Babu Bhambale and Shri Kejas Ashok Parmar) (herein referred to as Shreya) from buying, selling or dealing in securities, in any manner whatsoever, till further directions in the IPO matter of Taksheel Solutions Ltd. The order also stated that the entity/person may file their objections and seek personal hearing, if they so desire, within 21 days of the date of order.

2. Shreya, filed its written submissions vide its reply dated Nil received on February 15, 2012 requested for documents, records and statement relied upon by SEBI while passing the referred order and an opportunity of personal hearing. Shreya was advised to indicate the specific list of relevant documents relevant, for which no reply was received from them. An opportunity of personal hearing, which was granted to Shreya on March 14, 2012. On behalf of Shreya, Shri Balveer Singh Choudhary, Chartered Accountant/ authorised representative, attended the hearing and made the submissions. Thereafter, Shreya had filed additional submissions vide its letter dated March 16, 2012. The submissions of Shreya are summed up as under: • Shreya traded in the shares of Taksheel using its own funds.

• Snehsil Marketing Pvt Ltd., had placed an Inter Corporate Deposits (herein referred to as ICD) with Shreya for 2 crore for a term of six months and denied that Shreya had received any funds from Taksheel.

• Registered as Constituents with Satguru Capital & Finance Pvt ltd. since 2009 and have traded in several other stocks and maintained adequate margins and balances in their accounts with the said broker.

• The ICD which they had taken from Snehsil Marketing Pvt Ltd on October 28, 2011 is fully repaid to the extent of principal amount and interest will be paid at the year end

• The said ICD amount was given to broker for trading and margin in the MCX SX segment

Accordingly, Shreya requested to release the securities lying in their demat account so that they can repay the loans which were outstanding in the books and to drop the charges leveled against them in the matter.

3. I have considered all the submission made by Shreya vide dated Nil (received on February 15, 2012) and March 16, 2012 and the submission made during the course of hearing.

4. At this point, the limited issue to be considered is whether, the ad-interim ex parte directions issued vide order dated December 28, 2011 against Shreya including its directors, should be continued, modified or revoked in any manner.

5. Before proceeding further, it would be necessary to note the background of the matter. Taksheel Solutions Ltd (hereinafter referred to as Taksheel) came out with its IPO for issue of 55,00,000 equity shares of face value of 10 each. The issue price of the IPO was at a price of 150 each, aggregating to 82.50 crore. On the day of listing i.e. October 19, 2011, it was observed huge volatility in price and transaction volume and accordingly SEBI initiated investigation in the matter. The prima facie findings of the investigation include that Taksheel and its directors had made various misstatements in the offer documents, hidden vital pieces of information and have also made material inaccurate and untrue statements, siphoned off part of IPO proceeds in a circuitous route to certain entities and operators in order to enable them to absorb losses incurred by them in the process and lack of adequate and independent due diligence on the part of PNB Investment Services Ltd.

6. It was observed that on the day of listing i.e. October 19, 2011, Shreya traded in Taksheel scrip and suffered loss of 42.67 lac. The summary of trades of Shreya is given below: SI. Client Name Buy Buy Sell Vol Sell Value Net Buy Balanc Net Loss * Buy No Vol. Value Vol. e qty vol. % selling in price terms (in ) of issue size) 1 Shreya Multitrade 113650 14990497 112573 10662369 1077 55.85^ 42,67,977 2.07 Pvt Ltd. (SMT) ^ -closing price of BSE as on October 19, 2011 * calculation of net loss (Sr. No. 1-2)= (Sell value –buy value – balance qty value of 150000, sold on October 21, 2011) 7. Further, it was also noted by the investigation, that on October 19, 2011, Taksheel had transferred 23 crore to Silverpoint Infratech Pvt Ltd (herein referred to as SPI) out of the total IPO proceeds. Out of which, 11.40 crore was transferred by SPI to certain entities, viz; Snehsil Marketing Pvt ltd, Sugam Vinimay Pvt ltd and Anubhav Infrastructure Ltd on October 20, 2011. Again, out of this, 10.85 crore was transferred to Rosevalley Merchandise Pvt. ltd. (herein referred to as RVM), located at Kolkata on October 20, 2011.

Further, out of these funds, RVM transferred to the extent of 3 crore to Snehsil Marketing ltd on October 25, 2011. Of the 3 crore received by Snehsil Marketing Ltd., 2 crore was transferred to Shreya on October 27, 2011, which in turn paid to its Broker i.e. Sunteck WealthMax Capital Pvt Ltd. (earlier known as Satguru Capital & Finance pvt Ltd.) on October 28, 2011. The aforesaid details are presented pictorially as below: Taksheel Solutions- IPO- 19/10/11- Rs. 80.50 crore

Silverpoint Infratech Ltd 19/10/11- Rs. 23 crore

Anubhav Infra ltd Sugam Vinimay P Ltd Snehsil Marketing P ltd 20/10/11- Rs. 4.85 cr 20/10/11- Rs. 2.147 cr 20/10/11- Rs. 4.445 cr

Rosevalley Merchandise P ltd 20/10/11- Rs. 2 crore (sugam) 20/10/11- Rs. 4 crore(Snehsil) 20/10/11-Rs.4.445cr(Anubhav)

Snehsil Marketing P Ltd- 25/10/11- Rs. 3 cr

Shreya Multitrade P ltd- 27/10/11- Rs. 2 cr

Suntreck Wealthmax Cap P ltd (broker of Shreya Multitrade) 28/10/11-Rs. 2 cr

8. It is noted from diversion of funds, Taksheel had transferred 23 crore as an ICD with SPI for a period of six month. The principal along with the interest of 14% p.a. was to be repaid within six month by SPI. As on March 31, 2010, the post tax profit earned by SPI, was only 2.89 lac. Considering the financial health of SPI, it was not in a position to meet its interest liability on such large loan. SPI, was only a conduit to transfer the IPO proceeds of Taksheel to some entities including Shreya to trade on the scrip of Taksheel and absorb the losses.

9. It is noted that the financials of SPI does not support any large financial borrowing considering its repaying capacity. Thus the entire financial arrangement using SPI as a conduit is highly suspicious considering that the part of IPO proceeds had found way into the accounts of Shreya, enabling Shreya to absorb the losses suffered due to trading in the scrip of Taksheel on the day of listing.

10. Shreya has not submitted any documentary evidence for the Inter Corporate Deposit placement made by Snehsil Marketing Pvt Ltd. with Shreya for 2 crore. Shreya has also failed to demonstrate that it had not dealt in Taksheel shares in a fraudulent manner. Therefore, considering the facts and circumstances and also the submission made by Shreya, I do not find any merit in vacating or modifying the Order dated December 28, 2011, at this stage.

11. After considering the findings of investigation and replies & submission made by Shreya, I, 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(1), 11(4) and 11(B) thereof, hereby confirm the directions issued vide the ad-interim ex-parte order dated December 28, 2011 in the IPO matter of Taksheel Solutions ltd., against M/s. Shreya Multitrade Pvt. Ltd. and its directors Shri.Rajan Babu Bhambale & Shri Kejas Ashok Parmar

12. I also note that the investigation in the matter is under progress. SEBI shall expeditiously complete the investigation in the matter, in the interest of justice and thereafter shall take appropriate actions in accordance with law.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: MAY 11, 2012