Interim Order in the matter of Mishtann Foods Limited

WTM/AB/CFID/CFID-SEC3/31030/2024-25 SECURITIES AND EXCHANGE BOARD OF INDIA INTERIM ORDER CUM SHOW CAUSE NOTICE Under Section 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the Securities and Exchange Board of India Act, 1992 In respect of:

Sr. No. Name of the Noticee PAN 1. Mishtann Foods Limited AAACH5335G 2. Hiteshkumar Gaurishankar Patel ASZPP4210E 3. Navinchandra Dahyalal Patel AHKPP9016G 4. Ravikumar Gaurishankar Patel ASZPP4552H 5. Jatinbhai Ramanbhai Patel AWRPP3066G 6. Bharatbhai Jethabhai Patel BITPP3746E 7. Devalkumar Bharatbhai Patel CSYPP6285L 8. Surendra Kumar Yadav AOBPY4416K 9. Kanakkumar Vinodbhai Patel EUWPP8468M 10. Tejal Ravikumar Patel BEUPP6389A 11. Nikitaben Devalbhai Patel CCEPP0198L 12. Manjulaben Gaurishankar Patel NA 13. Rekhaben Kanakkumar Patel NA 14. Ajitkumar Narayanbhai Patel ARTPP1350J 15. Bhaveshkumar Vasantbhai Patel ARMPP8208Q 16. Ravikumar Ramanbhai Patel BBJPP0622A 17. Heemaben Janakkumar Patel CXFPS8047D 18. Utpalbhai Dineshbhai Raval APNPR5493Q 19. Bhumi Jayantkumar Gor ALYPG1705D 20. Rajnish Pathak CWGPP8117D 21. Ashish Agarwal AKXPA2136J 22. Nurudin Jiruwala AJRPV6597R

Interim Order in the matter of Mishtann Foods Limited

23. Mikil Dineshbhai Vora ARLPJ2881Q 24. Vishal Bipinchandra Doshi ATGPD5132K (The aforesaid entities are hereinafter individually referred to by their respective names/Noticee No. and collectively as “Noticees” unless the context specifies otherwise). In the matter of Mishtann Foods Limited Background 1. Mishtann Foods Limited (“Mishtann”/ “MFL”/ “Company”) is a public limited company engaged in processing/manufacturing of rice, wheat and other agricultural products. A snapshot of the relevant details of MFL are as under:

Name of Company Mishtann Foods Limited Date of incorporation February 27, 1981 Registered address B-905, Empire Business Hub, Opp. Shakti Farm, Science City Road, Sola, Ahmedabad, Gujarat - 380060 Listed on BSE Ltd. (BSE) and Metropolitan Stock Exchange of India Limited (MSEI) Date of Listing on BSE January 22, 2016 Paid-up equity capital (as at end Rs. 108 crore of Sep 2024 quarter) Shareholding pattern Promoters: 43.48% FIIs: 5.63% Public: 50.90% Market capitalization (as on Rs. 1633 crore December 3, 2024) Closing price per share (as on Rs. 15.15 (Face value: Re. 1/- per share) December 3, 2024)

2. Securities and Exchange Board of India (“SEBI”) received a SCORES complaint on September 16, 2022, inter alia, alleging circular/dummy turnover, Goods and Services Tax (“GST”) fraud, stock/inventory manipulations, excessive booking of electricity expenses, income tax fraud, bank fraud, etc. by MFL. The complainant also informed that Mr. Hiteshkumar Gaurishankar Patel, Managing Director (MD) of MFL was arrested by the GST Department for GST fraud amounting to Rs. 78 crore. 3. SEBI also received a reference dated October 4, 2022 from the Office of the Commissioner of Central GST & Central Excise, Gandhinagar (“GST Office” or “CGST Authority”), inter alia, informing that the company was involved in large-scale manipulation of its books of accounts, revenue, income, and expenditure details by creating fake/paper entities in the form of buyers/suppliers. The GST Office also informed that searches conducted on the purported suppliers/buyers of MFL revealed that many of these supplier/buyer firms were in the names of relatives/family members of the MD of MFL, Mr. Hiteshkumar Gaurishankar Patel and these firms were found to be non-existent or non-operational at their respective business addresses.

Further, the GST Office also shared with SEBI a list of the allegedly fake/non-existent/non-operational buyers/suppliers along with the amount of the transactions done by MFL with these entities. 4. The complaint was forwarded to BSE for necessary examination and BSE submitted its examination report on February 20, 2023. Based on the findings/observations of the GST Office and BSE, SEBI investigated the matter to ascertain whether there was any violation of the provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) read with the provisions of SEBI Act, 1992. The period of investigation was April 1, 2017 to March 31, 2024 (hereinafter referred to as the “Investigation Period”/ “IP”). The findings of the investigation have been brought out in subsequent paragraphs. 5. Further, pursuant to completion of its investigation, the CGST Authority shared with SEBI a copy of the Show Cause Notice dated July 30, 2024 issued to MFL, along with the recorded statements of various entities and the Panchnama of the search operations carried out at the premises of MFL and its various buyers/suppliers.

6. Additionally, BSE was asked by SEBI to conduct surprise site visits to the office of MFL, its factory and to the addresses of some of the buyers/suppliers of MFL, and pursuant to the site visits, BSE submitted its report in August 2024, inter alia, observing that most of the entities were not found at their registered addresses.

Findings of Investigation

7. A snapshot of the company’s financial results between FY18 to FY24, as available on the BSE website, is as under: (Amount in Rs. Crore) Standalone Consolidated Particulars FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY18 * FY24 $ Total Income 387.53 481.82 482.12 351.17 498.59 650.43 322.47 490.60 1288.09 Total Expenses 379.31 468.23 486.48 354.76 455.31 578.61 300.36 482.12 934.16 Profit before Tax 8.30 17.61 0.03 1.02 48.03 76.81 22.12 8.48 353.98 Profit after Tax 5.61 11.80 0.03 0.73 31.41 49.92 14.17 5.79 346.03 EPS 1.81 0.24 - 0.01 0.62 0.50 0.14 1.87 3.35 Net worth 38.39 69.18 69.12 69.95 101.16 150.21 218.68 38.44 550.77 Long term 13.10 3.40 0.55 5.78 17.70 20.29 19.48 15.47 19.48 Borrowings Short Term Loan 17.00 32.41 45.50 47.33 22.93 39.99 27.13 17.00 27.13 * During FY18, the Company’s consolidated revenue included revenues of its subsidiary Mishtann Agro Pvt. Ltd. $ During FY24, the Company’s consolidated revenue included revenues of its Dubai based wholly owned subsidiary Grow and Grub Nutrients FZ LLC. A. Failure to furnish information and non-cooperation with the investigation by MFL 8. In respect of the irregularities observed by the CGST Authority and BSE in MFL’s financial statements for the period between FY18 to FY24, certain clarifications/explanations were obtained from MFL vide summons, letters and emails issued by SEBI.

However, in each response, MFL stated that a major fire broke out at its registered office on May 6, 2022 which destroyed all office properties, equipment, systems, documents and internal records since the inception of the Company. MFL further stated that it had also filed a police complaint in respect of the said fire accident. It is, however, pertinent to note that MFL did not even provide the documents pertaining to the period subsequent to the fire accident, i.e., FY23 and FY24. Accordingly, the relevant documents such as copies of invoices, proofs of transportation of products such as lorry bills, electricity bills, agenda and minutes of the Board and Audit Committee (“AC”) Meetings for FY18 and FY19, etc., were not provided by MFL to SEBI. BSE also commented in its examination report that MFL did not cooperate with the investigation, provided only partial responses as per its convenience and failed to provide any supporting documents /proofs to support its sales, generator bills, etc. 9. Further, statements of managing director, promoters, executive director and CFO, statutory auditor, and accountant of MFL were recorded in the matter.

In addition, summonses were also issued to the top buyers/suppliers to provide information/documents with respect to their sale/purchase transactions with MFL including transportation expenses. However, none of these entities responded to the said summons and no documents were provided to SEBI. Further, none of the four partners/promoters/directors who were common to the majority of these buyers/suppliers appeared before SEBI for deposition, in response to the summonses issued by SEBI. 10. In view of the aforesaid, the investigation by SEBI relied on information obtained from sale and purchase ledgers maintained by MFL in respect of its top buyers/suppliers, bank statements and bank account opening forms of MFL and its buyers/suppliers (as procured from several banks), submissions of MFL and its MD/promoters/directors/CFO/statutory auditors, Annual Reports of MFL and its buyers/ suppliers, BSE examination report and site visit reports, and the disclosures made by MFL on BSE website. 11. Thus, by failing to furnish various information, details, etc. as sought by SEBI vide multiple summonses without any justifiable reasons, MFL was prima facie found to have violated the provisions of section 11C (2) read with section 11C (3) of SEBI Act, 1992. 12. Further, in response to SEBI’s summonses, the common partners/ directors/ promoters of majority of the buyers/sellers of MFL, viz., Mr. Devalkumar Bharatbhai Patel, Mr. Jatinbhai Ramanbhai Patel, Mr. Kanakkumar Vinodbhai Patel and Mr. Surendra Kumar Yadav, failed to appear before SEBI and failed to furnish information such as audited financial statements, details of bank accounts, ITRs, etc. pertaining to these buyers/sellers, without any justifiable reasons for such failure and thus, are prima facie found to have violated the provisions of section 11C (5) of SEBI Act, 1992.

B. Misrepresentation/mis-statements in the Financial Statements of MFL Inflation of sale/purchase transactions of MFL 13. The sale and purchase transactions of MFL, as disclosed in its Annual Reports on standalone basis, during the Investigation Period are as under: (Amount in Rs. crore) Particulars 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Total Total Sales 387.53 481.72 482.03 351.07 498.58 650.39 322.42 3173.74 Total Purchases 368.71 458.71 456.64 354.09 443.62 551.62 287.72 2921.11 14. The details provided by MFL of its total sales and purchases done with its top buyers and suppliers during the Investigation Period are as under: (Amount in Rs. crore) Sr. Name of entity Value of Value of Value of Value of sales No purchases purchases from sales by from entity as. of MFL from entity as % of MFL to % of total entity total purchases entity sales by MFL during of MFL during during during Investigatio Investigation Investigati Investigation n Period Period on Period Period 1 Arihant Corporation - - 175.71 5.54 Mishtann Shoppee India Pvt - - 1326.59 41.80 2 Ltd/Mishtann Agro Pvt. Ltd. 3 Button Industries Pvt Ltd - - 917.02 28.90 4 Patel Brothers - - 101.18 3.19 5 Anand Corporation - - 112.74 3.55 6 Cropberry Foods Pvt Ltd 784.61 26.86 7 Artlay Agritech Pvt Ltd. 620.77 21.25 - - 8 Gayatri Trading 265.89 9.10 - - 9 Dharati Marketing 80.06 2.74 - - 10 Payal Sales Agency 607.52 20.80 - - 11 Celtis Commodities Ltd 79.00 2.70 20.31 0.63 12 Vraj Corporation 140.50 4.81 - - 13 Ravi Trading 29.23 1.00 - - 14 Mementos Foods Pvt Ltd - - 8.70 0.27 15 Wilshire Nutrifoods Ltd 16.00 0.55 - - 16 Swarnim Foods Pvt Ltd 25.21 0.86 - - TOTAL 2648.79 90.67 2662.25 83.88 15. It is, thus, noted from the table above that total sales and purchases of MFL with the aforesaid top buyers/suppliers accounted for approx.

91% and 84% of the total purchases and sales of MFL respectively during the Investigation Period. It is also pertinent to note that these buyers/suppliers of MFL are related to each other and also to MFL because of common partners/directors. The same would be highlighted in the subsequent paragraphs as part of the analysis of the sale and purchase transactions of MFL. For ease of reference, these entities and their partners/directors are henceforth referred to as “group entities” in this Order. Sale transactions (I) M/s Arihant Corporation ("Arihant") 16. As per information submitted by MFL, the details of sale transactions booked by MFL with Arihant during the Investigation Period are as under: Particulars FY Amount (in Rs. crore) % of total sales of MFL for the respective FY Sales 2017-18 44.73 11.55 2018-19 130.98 27.19 Total 175.71

17. Upon an analysis of the bank account statements of Arihant, it was observed that more than 99% of the amounts credited in Arihant’s bank account during the Investigation Period were received from certain group entities and approximately the same amounts were transferred by Arihant to MFL and to one of the independent directors of MFL. The summary of transactions done in the bank account of Arihant during the Investigation Period is as under:

From To Total % of total Amount (in credits/debits in Rs. crore) the accounts Credits Group entities Arihant 172.91 99.34 Other Arihant 1.15 0.66 Total Credits 174.06 100 Debits Arihant MFL 172.80 99.28 Arihant Devalkumar Bharatbhai Patel (Independent Director of MFL) 1.26 0.72 Arihant Other 0.00 0.00 Total Debits 174.59 100

18. It was further observed from an overall analysis of bank transactions among all group entities that the aforesaid amounts transferred by Arihant to MFL were originally received by Arihant from MFL itself through other group entities and all these fund transfers occurred within a very short span of time. Thus, it was prima facie found that there was a circular flow of funds between MFL, Arihant and the other group entities. A sample illustration of the circular fund transfers is as under: Date and time From To Amount (in Rs.) 18/01/2018 12:28 MFL Payal Sales 44,16,830 18/01/2018 12:34 Payal Sales Ravi Trading 44,13,670 18/01/18 13:57 Ravi Trading Arihant 44,03,000 18/01/18 14:00 Arihant MFL 20,00,000 18/01/18 14:01 Arihant MFL 20,00,000 18/01/18 14:02 Arihant MFL 3,70,380 Date and time From To Amount (in Rs.) 08/06/2018 16:18 MFL Payal Sales 1,03,12,685 08/06/2018 16:42 Payal Sales Mishtann Agro 1,01,50,000 08/06/2018 18:07 Mishtann Agro Arihant 52,37,062 08/06/2018 18:24 Arihant MFL 19,50,830 08/06/2018 18:24 Arihant MFL 20,00,000 08/06/2018 18:25 Arihant MFL 12,84,630

19. Further, as per the Bank Account Opening Form (“AOF”) of Arihant, it was observed that Arihant was a partnership firm and Mr. Bharat Jethabhai Patel and Mr. Kanakkumar Vinodbhai Patel were its partners from August 23, 2017. However, it is pertinent to note that Mr. Bharat Jethabhai Patel was also an independent director of MFL during September 30, 2015 to July 03, 2019 and Arihant entered into the aforesaid transactions with MFL during October 02, 2017 to March 31, 2019. Thus, it was prima facie found that Arihant was a related party of MFL as per regulation 2(1)(zb) of LODR Regulations and the sales by MFL to Arihant in FY19 were material related party transactions (“RPTs”), being 27% of the previous year’s annual consolidated turnover of MFL. Further, Mr. Bharat Jethabhai Patel was also a partner/director of other group entities such as Mishtann Agro with whom Arihant had sizeable bank transactions. It was also observed that the bank account of Arihant became dormant since May 27, 2019 and almost the entire balance amount in Arihant’s account was transferred to MFL. 20. SEBI issued summonses to Arihant and its Managing Partner, Mr. Kanakkumar Vinodbhai Patel seeking documents such as audited financial statements, copies of Income Tax returns, details of sale/purchase transactions, top five buyers and suppliers, bank account details, expense details including transportation expenses, etc. However, no information was furnished in response to the said summonses.

Further, as per BSE’s site inspection report, Arihant was not found at the address available in its Bank AOF. 21. It was also observed that there were no debit transactions in Arihant’s bank account other than to MFL and to Mr. Devalkumar Bharatbhai Patel (one of the independent directors of MFL). Thus, in the absence of receipt of any other documents such as invoices and financial statements of Arihant (which were not available in the public domain as Arihant was a partnership firm), it was prima facie found that Arihant did not incur any other expenses, including storage or transportation expenses, during the Investigation Period. 22. In view of the aforesaid observations, viz., circular flow of funds between MFL, Arihant and other group entities, NIL storage/transportation expenses incurred by Arihant during the Investigation Period, Arihant not being found at its address during site visit by BSE and no response by Arihant to SEBI’s summonses, it was prima facie concluded that the sales booked by MFL with Arihant were fictitious.

(II) Mishtann Shoppee India Pvt. Ltd. (formerly known as Mishtann Agro Pvt. Ltd.) (“Mishtann Shoppee/Agro”)

23. Mishtann Agro Pvt. Ltd. was incorporated on August 07, 2012 and changed its name to Mishtann Shoppee India Pvt. Ltd. on April 25, 2019. As per the financial statements of MFL for FY18, Mishtann Agro Pvt. Ltd. was shown as a subsidiary of MFL and later, it ceased to be subsidiary of MFL with effect from May 14, 2018. 24. As per information submitted by MFL, the details of sale transactions booked by MFL with Mishtann Shoppee/Agro during the Investigation Period, along with the details of total purchases of Mishtann Shoppee/Agro as obtained from MCA database are as under:

(Amount in Rs. crore) Particulars FY Amount of % of total Amount of total Purchase from MFL sales by sales of MFL purchases of as a % of total MFL to during FY Mishtann purchase of Mishtann Mishtann Shoppee/ Agro* Shoppee/Agro for the Shoppee/ during FY respective FY Agro during FY Sales 2017-18 28.55 7.37 281.70 10.13 2019-20 438.76 91.02 564.69 77.68 2020-21 314.59 89.56 378.32 83.15 2021-22 389.28 78.08 647.87 60.08 2022-23 150.86 76.07 * - 2023-24 4.55 1.41 * - Total 1326.59 * Sourced from MCA database. The financial statements are not available for FY23 and FY24. 25. It is noted from the table above that during FY20 to FY22, Mishtann Shoppee/Agro booked a significant proportion of its total purchases with MFL and MFL also booked a significant proportion of its total sales with Mishtann Shoppee/Agro during this period. 26. Upon an analysis of the bank account statements of Mishtann Shoppee/Agro, it was observed that approx. 92% of the credit entries and approx. 93% of the debit entries during the Investigation Period in Mishtann Shoppee/Agro’s bank accounts were only from/to MFL or the group entities. The summary of transactions done in the bank accounts of Mishtann Shoppee/Agro during the Investigation Period is as under: From To Total % of total Amount credits/debits in the (in Rs. accounts crore) Credits Group Entities Mishtann Shoppee/Agro 2216.59 92.16 Other entities Mishtann Shoppee/Agro 188.56 7.84 Total Credits 2405.15 100.00 Debits Mishtann Shoppee/Agro MFL 1310.47 54.48 Mishtann Shoppee/Agro Group Entities 925.41 38.47 Mishtann Shoppee/Agro Other entities 169.57 7.05 Total Debits 2405.45 100.00

27. It was further observed from an overall analysis of all bank transactions among all group entities that the aforesaid amounts transferred by Mishtann Shoppee/Agro to MFL/other group entities were originally received by Mishtann Shoppee/Agro from MFL itself through other group entities and all these fund transfers occurred within a very short span of time. Thus, it was prima facie found that there was a circular flow of funds between MFL, Mishtann Shoppee/Agro and the other group entities. A sample illustration of the circular fund transfers is as under: Date and time From To Amount (in Rs.) 12/11/2019 MFL Payal Sales 90,00,000 12/11/19 09:52 Payal Sales Button Industries 25,00,000 12/11/19 09:52 Payal Sales Button Industries 25,00,000 12/11/19 09:52 Payal Sales Button Industries 25,00,000 12/11/19 09:53 Payal Sales Button Industries 15,00,000 Mishtann 12/11/19 09:56 Button Industries 35,94,500 Shoppee/Agro Mishtann 12/11/19 09:58 Button Industries 47,39,100 Shoppee/Agro Mishtann 31,58,760 12/11/2019 10:12 Shoppee/Agro MFL Mishtann 44,96,025 12/11/2019 Shoppee/Agro MFL 28. It was also observed that Mr. Devalkumar Bharatbhai Patel was a promoter-director of Mishtann Shoppee/Agro since April 2, 2018 and was also an independent director of MFL during September 30, 2015 to July 03, 2019. Further, the previous promoters/directors of Mishtann Shoppee/ Agro (during August 7, 2012 to April 10, 2018) were Mr. Hiteshkumar Gaurishankar Patel, managing director of MFL and Mr. Ravikumar Gaurishankar Patel, executive director/CFO of MFL.

Since Mishtann Shoppee/Agro had entered into transactions with MFL during this period, it was prima facie found that Mishtann Shoppee/Agro was a related party of MFL as per regulation 2(1)(zb) of LODR Regulations. Further, the current director, Mr. Devalkumar Bharatbhai Patel was also a partner/director of other group entities such as Button Industries Pvt. Ltd. with whom Mishtann Shoppee/Agro had sizeable bank transactions. 29. Further, SEBI also issued summonses to Mishtann Shoppee/Agro seeking documents such as audited financial statements, copies of Income Tax returns, details of sale/purchase transactions, top five buyers and suppliers, bank account details, expense details including transportation expenses, etc. However, no information was furnished in response to the said summonses. 30. In addition, summonses were also issued to the director of Mishtann Shoppee/Agro, Mr. Devalkumar Bharatbhai Patel who, inter alia, submitted through emails in July 2024 that he was travelling for marketing purposes and would not be able to appear in person. He also requested that he may be allowed to appear once he returns from tour after August 2024 and also sought sufficient time to provide the information as required by SEBI.

SEBI responded to his emails and also made several calls on his mobile phone. Mr. Devalkumar Bharatbhai Patel picked up the first phone call but hung up stating that he would call back. However, he did not pick up or return any calls from SEBI thereafter. 31. Further, as per BSE’s site inspection report, Mishtann Shoppee/Agro was not found at the address available in its Bank AOF and some other company, viz., M/s. Elastic Serve was operating from the said address. 32. Upon an analysis of financial statements of Mishtann Shoppee/Agro for FY18 to FY22 as available on MCA database, the following was observed in respect of the expenses of Mishtann Shoppee/Agro: (Amount in Rs. crore) Item FY18 FY19 FY20 FY21 FY22 Revenue from sale of products 132.47 283.69 568.11 380.56 590.10 Purchases 132.11 281.71 564.68 378.32 647.87 Other Expenses 0.03 1.24 2.80 1.70 4.10 Other expenses as % of revenue 0.02% 0.44% 0.49% 0.45% 0.69% from sale of products Inventory 1.10 0.73 1.39 0.73 0.80 Borrowings (Long and Short term) 2.37 2.37 1.88 1.00 0.96 It was observed from the table above that the highest-ever value of ‘Other Expenses’ (which may include transportation expenses) of Mishtann Shoppee/Agro during these five years was a miniscule 0.69% of its revenue.

However, considering that Mishtann Shoppee/Agro has four branches in different regions of India, the transportation expenses (even if the entire amount of ‘Other Expenses’ is considered to be towards transportation expenses) incurred by it was not commensurate with its revenues. Thus, it was prima facie found that Mishtann Shoppee/Agro did not incur any expenses towards transportation of goods during the Investigation Period. It was also noted from the table above that Mishtann Shoppee/Agro had negligible inventory and negligible short term/long term borrowings during this period. 33. In view of the aforesaid observations, viz., circular flow of funds between MFL, Mishtann Shoppee/Agro and other group entities, negligible inventory and borrowings, negligible transportation expenses incurred by Mishtann Shoppee/Agro during the Investigation Period, Mishtann Shoppee/Agro not being found at its address during site visit by BSE, and no response by Mishtann Shoppee/Agro to SEBI’s summonses and calls, it was prima facie found that the sales booked by MFL with Mishtann Shoppee/Agro were fictitious.

Sale transactions with other group entities 34. Similar to the aforementioned modus operandi of MFL booking sale transactions with group entities, viz., Arihant and Mishtann Shoppee/Agro, the analysis regarding sale transactions with other top buyers of MFL is summarized as under: (III) Button Industries Pvt. Ltd. (“Button”) Details of sale Particulars FY Amount of Amount of Total Purchase transactions of sale by sale to purchase of from MFL as MFL with Button MFL to Button as % Button a % of total Button of total sale during FY purchase of (as per during FY of MFL (in Rs. Button information (in Rs. during FY crore) * during FY crore) submitted by Sales 2021-22 106.29 21.32 176.04 60.37 MFL) and total 2022-23 494.72 76.07 812.98 60.85 2023-24 316.02 98.14 * purchases of Total 917.03 Button (as per MCA database) * Financial Statements not available for FY24 As noted from the table above, during FY22 and FY23, Button booked more than 60% of its total purchases with MFL. Further, MFL booked an even higher proportion of its total sales for FY23 and FY24 with Button. Observations 97.60% of credit entries and 99.59% of debit entries in the bank regarding Credit accounts of Button during the Investigation Period were from/to the and Debit entries group entities only. in Button’s bank Further, the amounts transferred by Button to MFL/other group accounts entities were originally received by Button from MFL itself through other group entities and all these fund transfers occurred within a very short span of time.

A sample illustration of the same is as under: Amount Date and time From To (in Rs.) 28/03/2022 MFL Artlay 73,28,710 28/03/2022 MFL Artlay 67,32,981 28/03/2022 Artlay Tremento 73,22,690 28/03/2022 Artlay Tremento 67,39,610 28/03/22 17:11 Tremento Button 54,46,605 28/03/22 17:33 Button MFL 54,49,631 28/03/22 17:34 Tremento Button 87,89,230 28/03/22 17:35 Button MFL 87,90,143

Thus, it was prima facie found that there was a circular flow of funds between MFL, Button and the other group entities Response of Button did not respond to the summons. Button and its Summonses were also issued to the promoter-director of Button, Mr. Director/Promote Devalkumar Bharatbhai Patel, who, inter alia, submitted through r to summonses emails in July 2024 that he was travelling for marketing purposes issued by SEBI and requested that he may be allowed to appear after August 2024 seeking details of and also sought sufficient time to provide the information as required financial by SEBI. However, as mentioned earlier, Mr. Devalkumar statements, Bharatbhai Patel did not thereafter respond to SEBI’s emails and sale/purchase calls. transactions, expenses, etc. Observations of Upon inquiry by BSE team from nearby office, it was informed that BSE regarding Button’s premises was never seen open. Further, no reply was site visit to received from the contact number mentioned on the company name Button’s address board. Observations Transportation expenses not recorded in Button’s books of account. from Button’s However, Notes to the accounts mentioned that transportation cost financials for purchase and sales were included into the cost of purchase and regarding sales respectively. A snapshot of the relevant information from the transportation financial statements of Button is as under: expenses, (Amount in Rs. Crore) inventory and FY20 FY21 FY22 FY23 Revenue from Sale of 368.83 163.71 169.01 749.52 borrowings of Products Button Purchases 369.08 163.96 176.05 812.99

Other Expenses 0.38 0.04 0.29 3.08 Other Expenses as % of 0.10% 0.02% 0.17% 0.41% revenue Inventory 0.76 1.15 0.00 0.00 Borrowings (Long and Short 0.00 0.00 0.00 48.47 term) 35. In view of the aforesaid observations, viz., circular flow of funds between MFL, Button and other group entities, minimal inventory, Button not being found at its address during site visit by BSE, no transportation expenses booked by Button, and no response by Button to SEBI’s summonses and calls, it was prima facie found that the sales booked by MFL with Button were fictitious. 36. Further, the findings of the investigation related to two other top buyers of MFL, viz., M/s Anand Corporation and M/s Patel Brothers are summarised as under: (a) The sale transactions booked by MFL with these two entities in FY18 and FY19 comprised approx. 10-15% of the total sales of MFL during these years. (b) More than 99% of the credit and debit entries in the bank accounts of both of these entities during the Investigation Period were from/to the group entities only and there was circular flow of funds between these entities, MFL and other group entities. (c) Both the entities and their partners did not respond to SEBI’s summonses and the partners failed to appear before the Investigating Authority on the scheduled dates. (d) Both the entities were not found at their addresses during site visit conducted by BSE. (e) Both the entities were prima facie found to have not incurred any expenses towards storage or transportation during the Investigation Period. 37. In view of the aforesaid findings, it was prima facie found that the sales booked by MFL with Patel Brothers and Anand Corporation were fictitious.

Purchase transactions (I) Cropberry Foods Pvt Ltd (“Cropberry”) Details of Particulars FY Purchase Purchase Total sale Sale to MFL by MFL from of as % of total purchase from Cropberry as Cropberry sale of transactions of Cropberry % of total during FY Cropberry during FY purchase of (in Rs. during FY MFL with (in Rs. MFL during crore) Cropberry (as per crore) FY Purchases 2020-21 89.11 25.15 155.07 57.46 information from submitted by Cropberry 2021-22 194.59 43.86 368.30 52.83 MFL) and total 2022-23 335.71 60.86 552.51 60.07 sales of 2023-24 165.21 57.42 * * Total 784.62 Cropberry (as per MCA database) * Financial Statements not available for FY24 As noted from the table above, during FY23 and FY24, MFL booked more than 50% of its total purchases with Cropberry. Further, Cropberry also booked more than 50% of its total sales for FY21, FY22 and FY23 with MFL. Observations 99.21% of credit entries and 97.14% of debit entries in the bank regarding Credit accounts of Cropberry during the Investigation Period were from/to and Debit entries the group entities only. in Cropberry’s Further, the amounts transferred to Cropberry by MFL/other group bank accounts entities were subsequently returned to MFL itself through other group entities and all these fund transfers occurred within a very short span of time. A sample illustration of the same is as under: Date and Amount From To time (in Rs.) 19/10/2020 MFL Cropberry 49,32,700 19/10/2020 Cropberry Button 49,32,800 19/10/2020 Button Mishtann 49,33,177 Shoppee/Agro 19/10/2020 Mishtann Shoppee/Agro MFL 52,00,000 Also, the current and previous promoters/directors of Cropberry are/were also the partners/directors of other group entities such as Arihant, Anand Corp, Dharati Marketing, Patel Brothers, etc. It was prima facie found that there was circular flow of funds between MFL, Cropberry and the other group entities.

Response of Summonses were issued to Cropberry and its directors, Mr. Cropberry and its Kanakkumar Vinodbhai Patel and Mr. Surendra Kumar Yadav. Director/Promote However, no response to the summonses was received and the r to summonses directors also failed to appear before SEBI on the scheduled date. issued by SEBI seeking details of financial statements, sale/purchase transactions, expenses, etc. Observations of BSE informed that Cropberry was not found at its registered address BSE regarding and the address was located in a residential area. site visit to Cropberry’s address Observations Transportation expenses were not recorded in Cropberry’s books of from Cropberry’s accounts. However, Notes to the accounts mentioned that financials transportation cost for purchase and sales were included in the cost regarding of purchase and sales respectively. A snapshot of the relevant transportation information from the financial statements of Cropberry is as under: expenses, (Amount in Rs. Crore) inventory and FY21 FY22 FY23 borrowings of Revenue 155.06 368.29 522.51 Cropberry Purchases 162.06 384.92 535.12 Other Expenses 0.01 0.43 5.47 Other Expenses as a % of 0.01% 0.12% 1.05% revenue Inventory 7.13 24.46 43.14 Short-term Loans & 4.34 9.11 33.23 Advances 38. In view of the aforesaid observations, viz., circular flow of funds between MFL, Cropberry and other group entities, Cropberry not being found/ located at its address during site visit by BSE, no transportation expenses booked by Cropberry, no details including invoices received from Cropberry, and no response by Cropberry to SEBI’s summonses, it was prima facie concluded that the purchase transactions booked by MFL with Cropberry were fictitious.

(II) Artlay Agritech Pvt. Ltd. (“Artlay”) Details of Particulars FY Purchase Purchase Total sale Sale to MFL purchase by MFL from Artlay of Artlay as % of total from as % of total during FY sales of transactions of Artlay purchase of (in Rs. Cropberry MFL with during MFL during crore) during FY FY (in FY Artlay (as per Rs. information crore) Purchases 2020-21 108.70 30.67 190.17 56.85 submitted by from Artlay MFL) and total 2021-22 197.60 44.54 463.01 42.68 2022-23 196.39 35.60 430.36 45.64 sales of Artlay 2023-24 118.07 36.62 * * (as per MCA Total 620.76 database) * Financial Statements not available for FY24 As noted from the table above, during FY21 to FY24, a significant proportion of purchases of MFL were booked with Artlay. Further, Artlay also booked a significant proportion of its sales during FY21 to FY23 with MFL. Observations 99.21% of credit entries and 95.92% of debit entries in the bank regarding accounts of Artlay during the Investigation Period were from/to the Credit and group entities only. Debit entries in Further, the amounts transferred to Artlay by MFL/other group entities Artlay’s bank were subsequently returned to MFL itself through other group entities accounts and all these fund transfers occurred within a very short span of time. A sample illustration of the same is as under: Date and time From To Amount (in Rs.) 28/10/2020 MFL Artlay 30,62,150 28/10/2020 Artlay Button 30,18,440 28/10/2020 Button Mishtann 13:30 Shoppee/Agro 29,16,445 28/10/2020 Mishtann MFL 13:38 Shoppee/Agro 31,29,800 Also, the current and previous promoters/directors of Artlay are/were also the partners/directors of other group entities such as Arihant, Anand Corp, Dharati Marketing, Patel Brothers, Cropberry, etc. It was prima facie found that there was circular flow of funds between MFL, Artlay and the other group entities.

Response of Summonses were issued to Artlay and its directors, Mr. Kanakkumar Artlay and its Vinodbhai Patel and Mr. Surendra Kumar Yadav. However, no Director/Prom response was received to the summonses and the directors also failed oter to to appear before SEBI on the scheduled date. summonses issued by SEBI seeking details of financial statements, sale/purchase transactions, expenses, etc. Observations BSE informed that Artlay was not found at its registered address and of BSE the address was located in a residential area. regarding site visit to Artlay’s address Observations Transportation expenses were not recorded in Artlay’s books of from Artlay’s accounts and only loading and unloading expenses were recorded. A financials snapshot of the relevant information from the financial statements of regarding Artlay is as under: transportation (Amount in Rs. Crore) expenses, FY21 FY22 FY23 Revenue 190.18 463.01 430.36 inventory and Purchases 197.98 455.46 475.45 borrowings of Other Expenses 0.01 0.59 7.27 Artlay Other Expenses as % of 0.01% 0.13% 1.69% revenue Inventory 7.91 1.25 53.94 Short-term Loans & 0.01 0.00 36.72 Advances 39. In view of the aforesaid observations, viz., circular flow of funds between MFL, Artlay and other group entities, Artlay not being found/ located at its address during site visit by BSE, no transportation expenses booked by Artlay, no details including invoices received from Artlay, and no response by Artlay to SEBI’s summonses, it was prima facie concluded that the purchase transactions booked by MFL with Artlay were fictitious.

(III) M/s Payal Sales Agency (“Payal”) Details of purchase Particulars FY Amount (in Rs. Purchase from Payal as % crore) of total purchase of MFL for transactions of the respective FY MFL with Payal Purchases 2017-18 111.00 30.10 2018-19 193.32 42.07 (as per 2019-20 303.19 66.40 information Total 607.51 submitted by As noted from the table above, during FY18 to FY20, a significant MFL) proportion of purchases of MFL were booked with Payal. Observations 99.32% of credit entries and 90.83% of debit entries in the bank regarding accounts of Payal during the Investigation Period were from/to the Credit and group entities only. Debit entries in Further, the amounts transferred to Payal by MFL/other group entities Payal’s bank were promptly returned to MFL itself through other group entities. All accounts these fund transfers occurred within a very short span of time. A sample illustration of the same is as under: Date and time From To Amount (in Rs.) 24/01/2018 14:10 MFL Payal 25,16,750 24/01/2018 14:16 Payal Ravi Trading 24,38,920 24/01/2018 00:00 Ravi Arihant 23,25,000 Trading Corporation 24/01/2018 11:00 Arihant MFL 20,00,000 Corporation 24/01/2018 11:01 Arihant MFL 3,30,000 Corporation In addition, the partners of Payal, Mr. Kanakkumar Vinodbhai Patel and Mr. Surendra Kumar Yadav, were also the partners/directors of other group entities such as Arihant, Anand Corp, Patel Brothers, Artlay, Cropberry, Dharati, etc. It was prima facie found that there was circular flow of funds between MFL, Payal and the other group entities. Response of Summonses were issued by SEBI to Payal and its partners, Mr. Payal to Kanakkumar Vinodbhai Patel and Mr. Surendra Kumar Yadav. summonses However, as mentioned earlier, there was no response to the issued by SEBI summonses issued by SEBI and no appearance on the scheduled date seeking details by any of the partners.

of financial statements, sale/purchase transactions, expenses, etc. Observations BSE informed that Payal was not found at the address available in its of BSE Bank AOF. regarding site visit to Payal’s address

40. In view of the aforesaid observations, viz., circular flow of funds between MFL, Payal and other group entities, Payal not found at its address during site visit by BSE, no details including invoices or financial statements received from Payal, and no response by Payal to SEBI’s summonses, it was prima facie found that the purchase transactions booked by MFL with Payal were fictitious. Purchase transactions with other group entities 41. Further, the findings of the investigation related to four other top sellers of MFL, viz., M/s Gayatri Trading Agency (“Gayatri”), Dharati Marketing (“Dharati”), Vraj Corporation (“Vraj”), M/s Ravi Trading (“Ravi”) are summarised as under: (a) The purchase transactions booked by MFL cumulatively with these four entities in FY18, FY19 and FY20 comprised approx. 43%, 56% and 19% respectively of the total purchases of MFL during these years. (b) Approx. 98-99% of credit entries in the bank accounts of Gayatri, Dharati and Vraj and approx. 73% of credit entries in the bank account of Ravi were from the group entities only. Further, approx. 99% of debit entries in the bank accounts of Dharati and Vraj, approx.

80% of debit entries in the bank account of Gayatri and approx. 60% of debit entries in the bank account of Ravi were to the group entities only. In addition, there was a circular flow of funds between these respective entities, MFL and other group entities within a very short span of time. (c) The partners of all these four entities functioned as the independent directors/directors of MFL at different times during the Investigation Period when these entities booked purchase transactions with MFL. Thus, these entities were related parties of MFL. Further, the partners of these four entities were also the partners/directors of certain other group entities. (d) There was no response to the summonses issued by SEBI and no appearance on the scheduled dates by any of the partners of these entities. (e) None of these entities were found to be located at addresses mentioned in the Bank AOF during site visit conducted by BSE. 42. In view of the aforesaid findings, it was prima facie found that the purchase transactions booked by MFL with these four entities were fictitious. Investigation findings regarding circular movement of funds 43. In respect of the circular flow of funds between MFL and the group entities as noted above, it was also observed that the trade receivables of MFL increased exponentially during the Investigation Period and by the end of September 2024 quarter, it constituted almost 97% assets of MFL.

However, the trade payables remained stable as per its financials and the same are tabulated below: (Amount in Rs. Crore) Particulars FY18 FY19 FY20 FY21 FY22 FY23 FY24 Trade Receivables 31 57 99 81 99 221 260 Trade Payables 1.61 0.25 4.66 3.01 2.31 3.48 2.52 Cash Flow: Operating Activity -23 -9 3 -5 -12 -3 -54 Investing Activity 0 0 0 0 0 0 0 Financing Activity 23 9 -3 5 12 2 54 Further, as noted from the table above, MFL had negative operating cash flow during the entire Investigation Period except in FY20 even though it was booking substantial amount of sales during this period. These figures indicate that the Company was paying its purported suppliers in full on time, however, it was not receiving the full payment against sales from its purported buyers. 44. In view of the fact that the purported buyers and suppliers of MFL were actually the group entities of MFL involved in circular flow of funds, it is also pertinent to note that during the Investigation Period, the group entities transferred funds amounting to Rs. 217.30 crore to the promoters/ directors and their relatives and received funds amounting to Rs. 170.20 crore from the promoters/ directors and their relatives.

Thus, the group entities transferred a net amount of Rs. 47.10 crore to the promoters/ directors/ partners of MFL and group entities and their relatives, viz., Mr. Hiteshkumar Gaurishankar Patel, Mr. Navinchandra D Patel, Mr. Ravikumar Gaurishankar Patel, Mr. Devalkumar Bharatbhai Patel, Mr. Kanakkumar Vinodbhai Patel, Mr. Jatinbhai Ramanbhai Patel, Ms. Manjulaben Gaurishankar Patel, Ms. Nikitaben Devalbhai Patel, Ms. Tejal Ravikumar Patel, Mr. Bharatbhai Jethabhai Patel and Ms. Rekhaben Kanakkumar Patel. 45. Considering that the sale and purchase transactions of MFL with the group entities were prima facie found to be fictitious and these group entities were found to have received funds only from MFL and other group entities, the net transfer of funds by these group entities to the promoters/ directors/partners of MFL and group entities and their relatives cannot be considered to be genuine business transactions. Thus, it was prima facie found that MFL, by booking fictitious sale/purchase transactions with the group entities, diverted/ misutilised/ misappropriated its funds amounting to Rs. 47.10 crore.

Investigation findings regarding transportation cost 46. The findings of the investigation of SEBI regarding the expenses incurred on transportation for the sale and purchase transactions of MFL are as follows: (a) MFL did not incur any transportation cost related to its sales and purchases of goods as per its Profit and Loss statements. (b) As per submissions of MFL, it purchased goods at factory delivery charges (FOB) and supplied the goods on ex-factory rates and thus, no expenses were accrued and recorded in the books of accounts. (c) Mr. Hiteshkumar Gaurishankar Patel (“HGP”), MD of MFL, inter alia, submitted in his statement before SEBI that there were no transportation charges or freight charges or any other manufacturing expenses like labour and wages, repair to machinery, direct manufacturing expenses etc., in MFL, however, he failed to submit any supporting documents or reasons in support of his submission. (d) Mr. Ravikumar Gaurishankar Patel, promoter and executive director and Mr. Navinkumar D Patel, executive director and CFO of MFL, inter alia, submitted during their depositions that MFL did not incur transportation charges.

Therefore, initially, these observations appeared to indicate that transportation cost related to sales and purchases were incurred by the counterparty buyers and sellers.

47. However, as noted earlier, majority of the group entities either did not record any transportation expenses in their books of accounts or mentioned in the notes to the accounts that transportation cost for purchases and sales were included in the cost of purchase and sales respectively. 48. Further, HGP, in his deposition before the CGST Authority on March 24, 2021, inter alia, submitted that 85-90% of sales of MFL were through the distributor, i.e., Mishtann Shoppee/Agro and upon receiving the order, the goods were dispatched to locations informed by the distributor. In this regard, Mr. Devalkumar Bharatbhai Patel, the Promoter-Director of Mishtann Shoppee/Agro, in his deposition before the CGST Authority on September 28-29, 2021, inter alia, submitted that delivery of goods was made by MFL directly at Mishtann Shoppee/Agro’s warehouses. 49. Thus, the statements of MD of MFL and Promoter-Director of Mishtann Shoppee/Agro before CGST Authority indicated that MFL was responsible for transportation of goods which was however, contrary to the submissions of MFL and its Directors/CFO before SEBI that transportation cost was not borne by MFL. Statement of Statutory Auditor 50. The statutory auditor of MFL, Mr. Jaswant Manilal Patel, during his deposition before SEBI, inter alia, submitted as follows: (a) In March 2023, the value of the closing stock of MFL increased by approx. Rs 10 crore to show higher/inflated profit of the company. Accordingly, the general reserve was increased to that extent and the same was utilised for bonus issues. (b) There was undisputed income tax liability against MFL to the tune of Rs. 15.85 crore for FY22 and Rs. 26.89 crore for FY23 in addition to disputed tax liability of Rs. 117.44 crore. (c) Inventory of MFL was maintained in Tally software and the audit relied solely on the Tally software and no physical verification of inventory was carried out. The management of MFL did not provide the physical verification report and reconciliation of inventory. (d) No verification was done with the buyers/suppliers of MFL, so not able to comment on the genuineness of the buyers/suppliers of MFL.

51. The auditor in its audit report for FY23, noted that the value of closing stock at the end of FY23 was inflated by Rs. 9.55 crore since MFL valued its inventory at the net realisable value in FY23 and hence, the profit also increased to that extent. However, as per Ind AS 2, inventories should be valued at lower of the cost and net realisable value and thus, the valuation of the inventory by MFL as per net realisable value in FY23 (when the cost of inventory was lower than the net realisable value) was not in accordance with Ind AS 2, despite the statutory auditor highlighting the same. 52. Further, the Managing Director and CFO of MFL stated in their certificate issued under regulation 17(8) of LODR Regulations for FY23 that there were no significant changes in accounting policies during the year. However, as noted above, MFL changed its accounting policy in respect of inventory valuation in FY23 and did not consistently follow the accounting policy for inventory valuation through the years. Thus, it was prima facie found that MFL violated the provisions of Ind AS 2 and Ind AS 8. 53. In this regard, it was also noted that the accounting policy not being in accordance with Ind AS 2 was only reported as a ‘key audit matter’ by the statutory auditor and not as a qualified opinion.

Further, the auditor solely relied on the Tally software for the sale, purchase and closing stock figures instead of doing vouching, inventory verification or third party verification for the genuineness of suppliers/buyers of MFL. Hence, it was found that the statutory auditor failed to perform its duties while certifying the financial results of MFL. Investigation findings regarding closing stock of MFL 54. The inventory of MFL was Rs. 39.66 crore and Rs. 40.29 crore as on March 31, 2021 and March 31, 2022 respectively. However, as per the Panchnama dated April 20-21, 2022 (i.e., just 20 days after March 31, 2022) recorded by CGST Authority, goods only worth Rs. 2.42 crore were seized. Thus, the value of inventory held by MFL came down from 40.29 crore to Rs. 2.42 crore, a reduction of Rs. 37.87 crore within a span of 20 days, which would mean that MFL would have sold stock worth Rs. 37.87 crore, assuming there were no purchases during this period. 55. In this regard, BSE sought reconciliation of closing stock as on March 31, 2022 and as on April 20-21, 2022. However, MFL submitted the stock reconciliation wherein only details of quantity of stock were available but not the details of value of stock.

On seeking clarification, MFL responded that the stockholding position keeps changing on a daily basis. 56. As per the party-wise ledgers and stock reconciliation submitted by MFL, it was observed that MFL had sold the stock in April 2022 to Button and no major purchases were done between April 1, 2022 to April 20, 2022. However, as per the earlier prima facie findings, the transactions of MFL with Button were fictitious, which indicates that the sale transactions with Button were booked by MFL merely to match with the quantity seized by CGST Authority and thus, the inventory of Rs. 40.29 crore as per the financials of MFL was prima facie overstated. 57. Further, the reconciliation statement submitted by MFL was stamped by the auditor, however, the auditor submitted that the reconciliation statement was issued on the basis of Tally software and sale/purchase register of MFL rather than physical verification of stock or third party verification with buyers/suppliers. Thus, the said reconciliation statement was not found to be a concrete evidence and was as such unreliable. 58. Further, as per the GST return, the sales turnover of MFL for April 2022 was Rs. 49.55 crore, however, the CGST Authority alleged in its SCN that MFL was evading GST by wrongly claiming/availing GST exemption.

Since no invoices are required to be raised for exempted supplies and only aggregate value of exempted supplies are reported in the GST returns, the genuineness of sales turnover reported by MFL in its GST return could not be ascertained. Investigation findings regarding inflation of sales and profit of the Company during FY24 59. As per the consolidated financial statement of MFL for FY24, the revenue of MFL’s Dubai-based wholly owned subsidiary (“WoS”), viz., Grow and Grub Nutrients FZ LLC amounting to Rs. 967 crore was consolidated in MFL’s revenue. However, on a standalone basis, the revenue of MFL during FY24 (Rs. 322 crore) was only 50% of the previous FY’s standalone revenue of Rs. 650 crore. 60. Regarding the sudden drop in standalone revenue and sudden rise in consolidated revenue, MFL submitted that certain adverse decisions on the statutory front (such as increase in Minimum Export Price of rice which led to a supply glut in domestic market and consequent plummeting of domestic prices) led to lower margins in the Indian market. MFL submitted that it had anticipated this situation and during FY24, it used its foreign subsidiary to procure and sell products in the international market.

61. In this regard, the details of the WoS such as bank statements, details of purchases/sales, audited financials, etc. were sought from MFL. However, it provided no details except the audited financial statements for the calendar year ending December 31, 2023. 62. Further, it was observed that Mr. Jatinbhai Ramanbhai Patel and Mr. Ramanbhai Keshabhai Patel were shown as managers in the said WoS. However, Mr. Jatinbhai Ramanbhai Patel, who was once a Promoter and Whole Time Director of MFL and partner/director of many group entities, inter alia, submitted vide email dated August 7, 2024 that he had resigned from the WoS with effect from March 1, 2024 and Mr. Ramanbhai Keshabhai Patel, his father, was never a part of the WoS in any capacity. 63. In view of the non-submission by MFL of the details of its WoS, it was prima facie found that the sales and profits booked by the WoS were also fictitious and led to inflating the consolidated turnover and profit of MFL by Rs. 965.62 crore and Rs. 331.86 crore respectively. Findings related to non-disclosure of advances as per schedule III of the Companies Act 2013 64. As per the Annual Report of MFL for FY22, Long Term Loans and Advances amounting to Rs. 14.33 crore were shown.

However, the same was shown under operating cash flow in its Cash Flow Statement (CFS). In this regard, MFL submitted that it was a set practice in the agro commodities sector to pay advances to various parties such as commission agents, brokers, semi-millers, etc. to procure large quantities of various agro commodities and since these amounts were part of the regular operating cycle, they have been included as part of the operating cash flow. MFL also confirmed that all accounting policies were accordingly followed. 65. However, in terms of para 60 and 66 of Ind AS 1 (Presentation of Financial Statements), such amounts should have been shown as advances to creditors or advance against purchase, i.e., as short-term loans and advances under current assets rather than as long-term loans. Thus, it was prima facie found that MFL violated the provisions of Ind AS 1 relating to such advances. Impact of the misrepresentation/mis-statement in financial statements on the MFL scrip 66. The deliberate misreporting of the financial statements of MFL misled and defrauded the investors of MFL who made a decision to invest in the MFL scrip under the impression that the financials of MFL were reflecting a true and fair view of its performance which had a significant impact on the price of the MFL scrip during the Investigation Period.

The share price of MFL went up from Rs. 27.30 on August 01, 2018 (first day of trading during the IP) to Rs. 118.25 on October 31, 2018, before declining to Rs.17.58 on March 28, 2024 (end of the Investigation Period). The price movement in the MFL scrip is pictorially shown below: Close Price 150 118.25 100 17.58 37.5 50 0 27.3 01-Aug-18 01-Aug-19 01-Aug-20 01-Aug-21 01-Aug-22 01-Aug-23 67. Further, MFL had split its shares in FY19 (10:1 stock split) and issued bonus shares (1:1 bonus) in FY23 and the price movement, adjusted for split and bonus issue, is given below:

Adjusted price 35.53 40 35 30 25 17.58 20 12.2 15 10 1.37 5 0 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 -g -v -b -y -g -v -b -y -g -v -b -y -g -v -b -y -g -v -b -y -g -v -b u o e a u o e a u o e a u o e a u o e a u o e

68. Further, the price movement of MFL scrip as compared to the trend in BSE FMCG Index and SENSEX during the Investigation Period is given below: 2500 Comparison Chart 2000 MFL (Adjusted for split and 1500 bonus) 1000 Sensex 500 BSE-FMCG 0 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 -g -v -b -y -g -v -b -y -g -v -b -y -g -v -b -y -g -v -b -y -g -v -b u o e a u o e a u o e a u o e a u o e a u o e

69. The above data shows that starting from August 01, 2018, while the SENSEX remained in the range of 100-200% of its start level and the BSE-FMCG Index remained in the range of 100-169% of its start level during the Investigation Period, the share price of MFL went up 26 times during the Investigation Period. During the said period, the adjusted scrip price (Face value: Re. 1/- per share) increased from Rs. 1.37 on August 01, 2018 to a high of Rs. 35.53 on April 08, 2019 before closing at Rs. 17.58 on March 28, 2024. At the peak price of Rs. 35.53, the market capitalisation of MFL was Rs. 1777 crore. 70. Notably, the promoters of MFL did not subscribe to its rights issue amounting to Rs. 49.82 crore during April-May 2024. Further, HGP, the MD and sole promoter of MFL, offloaded 2.96 crore shares of MFL during July-August 2024 at an average rate of Rs. 16.75 per share amounting to Rs. 49.58 crores. Investigation findings regarding misrepresentation/ mis-statement of financials of MFL 71. In view of the aforesaid analysis of the transactions of MFL with its purported buyers and sellers, it was prima facie found that these buyer/seller entities were involved in a circular flow of funds with MFL and there was no actual movement of goods between MFL and these entities.

72. Almost all of the top buyers/sellers of MFL were related to MFL and to each other through common directors/partners and common addresses. The site visits conducted by BSE found that most of these buyers and sellers of MFL were fake/non-existent/non-operational at the addresses provided by MFL and as mentioned in bank AOFs. None of these buyers/sellers and their common partners/directors responded to SEBI’s summonses or appeared before SEBI for deposition. 73. Further, the statutory auditor of MFL submitted that it made no physical verification of the inventory of MFL and no verification was done with these buyers/sellers of MFL and thus, was not able to comment on the genuineness of the buyers/sellers of MFL. In addition, the auditors of many of these buyers/sellers were common. These entities did not cooperate with SEBI’s investigation or provide any response to SEBI’s summonses. 74. Thus, it was prime facie found that the sales and purchases booked by MFL with these entities were fictitious and mere book entries meant to inflate their financials. The year-wise quantum of fictitious sales and purchases booked by MFL with these entities during the Investigation Period is tabulated below: (Amount in Rs. Crore) FY Amount Amount % of fake sales Amount of Amount of % of fake of fake of total as compared fake total purchases as sales sales to total sales purchases purchases compared to total purchases 2017-18 152.24 387.53 39.28 272.31 368.71 73.85 2018-19 263.48 481.72 54.70 453.92 458.71 98.96 2019-20 457.66 482.03 94.94 421.75 456.64 92.36 2020-21 327.17 351.07 93.19 292.81 354.09 82.69 2021-22 495.57 498.58 99.40 392.18 443.62 88.40 2022-23 645.58 650.39 99.26 532.10 551.62 96.46 2023-24 320.55 322.42 99.42 283.72 287.72 98.45 Total 2662.25 3173.74 83.88 2648.79 2921.11 90.67 Thus, around 84% of the total sales and around 91% of total purchases of MFL during the Investigation Period were found to be fictitious which led to misrepresentation /mis-statements of MFL’s financials.

Resultantly, it was prima facie found that MFL violated the provisions of regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(f), 4(2)(k), 4(2)(r) of PFUTP Regulations read with section 12A(a), (b), (c) of SEBI Act, 1992. 75. Apart from the findings of investigation by SEBI, it is also interesting to note that the CGST Authority also alleged in its SCN that several group entities, viz., Mishtann Shoppee/Agro, Anand Corporation, Patel Brothers, Payal Sales, Vraj

Corporation, Ravi Trading and Gayatri Trading were fake/non-existent/non-functional buyers/sellers of MFL. 76. Further, it was prima facie found that by contravening the provisions of Ind AS 1 as discussed in the above paragraphs, MFL violated the provisions of regulations 4(1) (a), (b), (c), (d), (e), (g), (h), (i) and (j), 4(2)(e)(i), 33 (1)(c) and 48 of LODR Regulations. C. Related Party Transactions without requisite approvals 77. As per details of RPTs submitted by MFL in response to SEBI’s summons, MFL booked sales amounting to Rs. 49.65 crore and purchases amounting to Rs. 56.71 crore with related parties during FY18 to FY23. However, it was observed during investigation that MFL did not take necessary approvals of related party transactions (RPTs) conducted with certain related parties such as Arihant, Patel Brothers, Umiya Agency, Gayatri Trading and Vraj Corporation, and did not make disclosures to the stock exchanges regarding these RPTs. The details of these RPTs are as under: (Amount in Rs. Crore) Sr. No. Entity name Transaction Type of Amount Amount as % of during FY transaction Annual Consolidated turnover of MFL in the previous FY 1 Arihant 2018-19 Sale 130.98 26.68 2 Patel Brothers 2018-19 Sale 60.81 12.38 3 Umiya Agency 2018-19 Sale 47.28 9.63 4 Gayatri 2018-19 Purchase 172.53 35.14 5 Vraj 2018-19 Purchase 81.51 16.60 6 Celtis 2019-20 Sale 17.41 3.62 Commodities Ltd. 7 Celtis 2020-21 Purchase 78.99 16.38 Commodities Ltd. 78. As per regulation 23(2) of LODR Regulations, prior approval of Audit Committee (“AC”) is required for all RPTs and as per regulation 23(4) of LODR Regulations, approval of shareholders through resolution is required for the material RPTs.

Further, as per regulation 23(9) of LODR Regulations, RPTs are required to be disclosed to the stock exchanges. MFL also failed to make any disclosures of the above related party transactions in its Annual Reports for the respective FYs as required under regulation 34 (3) read with schedule V of LODR Regulations and Ind AS 24. 79. As noted from the table above, the sale and purchase transactions done by MFL with Arihant, Patel Brothers, Gayatri, Vraj during FY19 and purchase transactions done with Celtis during FY21 were material RPTs in terms of the proviso to regulation 23(1) of LODR Regulations, as they were more than 10% of the annual consolidated turnover of the previous FY. 80. In this regard, MFL, vide letter dated March 04, 2024, submitted that not taking approval for RPTs was the result of human error/lapses. 81. In view of the above, it is noted that the aforesaid prima facie fictitious transactions of MFL with its related parties, if taken at face value, would fall foul of the LODR Regulations since it is found that by not taking prior approval of these RPTs from the AC and shareholders and not disclosing the RPTs to the exchanges, MFL prima facie violated the provisions of regulation 4(1)(a), (b), (c), (d), (e), (g), (h), (i) and (j), 4(2)(e)(i), 23(2), 23(4), 23(9), 34(3) read with schedule V and 48 of LODR Regulations.

D. Investigation findings on diversion/ misutilisation/ misappropriation of funds by MFL D.1 Excessive booking of electricity expenses leading to diversion/ misutilisation/ misappropriation of funds 82. The CGST Authority informed vide its reference dated October 4, 2022 that the company grossly inflated electricity expenses during FY18 to FY22 as the actual electricity charges as per Uttar Gujarat Vij Company Limited (“UGVCL”) were Rs. 0.60 crore and as per audited financial statements of MFL, the electricity charges claimed by the company were Rs. 4.03 crore during the said FYs. 83. In this regard, BSE vide its examination report, informed that MFL submitted that it operated on power supplied by UGVCL and diesel generators which were procured on rental basis from various suppliers. However, as per the ledger and invoices of electricity expenses provided by MFL, it was observed by BSE that there was a different supplier of diesel generator every month and the invoices were not signed by the suppliers which brings their authenticity into question.

Thus, BSE concluded that MFL booked incorrect power and fuel expenses in profit and loss account to reduce its profit. 84. In this regard, vide summons dated February 27, 2024, SEBI sought the details of actual electricity expenses of MFL along with the electricity bills raised by UGVCL and the proof of payment. In response to the same, MFL submitted that its electricity expenses included charges for electricity bills raised by UGVCL and charges of diesel generator used by MFL on lease and MFL shared the ledger of electricity expenses. However, no signed invoices, etc. were submitted and it was observed from the ledger of electricity expenses that two directors of MFL, Mr. Ravikumar Gaurishankar Patel and Mr. Jatinbhai Ramanbhai Patel, were shown as generator providers. 85. In view of the above analysis and the failure of MFL to provide documents such as tax invoices in support of generator charges, it was prima facie found that electricity expenses were inflated by MFL during FY18 to FY22 and thus, this amount of Rs. 3.43 crore was misutilised/diverted/misappropriated by MFL. D.2 Investigation findings on diversion of funds to promoters of MFL as a result of circular flow of funds amongst group entities 86. As a result of the circular flow of funds pertaining to the fictitious sales and purchases between MFL and the group entities, the group entities transferred a net amount of Rs. 47.10 crore to the promoters/ directors and their relatives during the Investigation Period, as was earlier noted at paras 44-45 above. D.3 Investigation findings on Mis-utilization/diversion of proceeds from Rights Issue 87. MFL filed a draft letter of offer (DLOF) with SEBI in May 2023 for a rights issue of an amount of approx. Rs. 150 crore, which was subsequently withdrawn by MFL citing market conditions and strategic considerations. However, in February 2024, MFL filed a DLOF for a rights issue with BSE for an amount of Rs. 49.9 crore with the object of augmentation of existing and incremental working capital requirement, general corporate expenses and issue related expenses (there is no requirement of filing a DLOF with SEBI for a rights issue of size less than Rs.50 crore).

88. SEBI sought the details of utilisation of issue proceeds along with extracts of bank statements from MFL vide email dated August 14, 2024. In response, MFL submitted that the issue proceeds were utilised for augmentation of working capital of the company. However, the full extracts of bank statements were not provided by MFL. It was observed from the bank statements obtained directly by SEBI from MFL’s bank that issue proceeds of Rs. 49.82 crore were received by MFL on May 6, 2024 and May 15, 2024. As per the statement of deviation/variation in utilisation of rights issue proceeds filed by MFL with BSE on July 16, 2024, the entire issue proceeds were utilised towards the objects of the issue by June 30, 2024 and there was no deviation/variation in the utilisation. 89. On an analysis of bank statements of MFL, it was observed that the total amount debited from its account between May 06, 2024 to June 30, 2024 was Rs. 75.33 crore, of which Rs. 70.99 crore was transferred to Artlay and Cropberry, thereby indicating that almost the entire rights issue proceeds were transferred to these two group entities. Further, it was observed that Artlay and Cropberry transferred an amount of Rs. 40.27 crore to Mr. Kanakkumar Vinodbhai Patel between May 6, 2024 to August 12, 2024. 90. It was observed from the bank statements of Mr. Kanakkumar Vinodbhai Patel that he transferred almost an amount of Rs. 40.15 crore to his wife, Mrs Rekhaben Kanakkumar Patel, who in turn transferred majority of these funds to various entities, viz., Zerodha, Mr. Vinodbhai Ramabhai Patel, M/s Blue Bird Infotech, etc. 91. Considering that the purchase transactions of MFL with Cropberry and Artlay were prima facie found to be fictitious, and these entities were found to be non-existent at their registered addresses, it was prima facie concluded that rights issue proceeds transferred to these related entities were not for genuine business purposes and were misappropriated or diverted. 92. It was further observed during the investigation that out of the cumulative diverted amount of Rs. 96.92 crore (i.e., Rs. 47.10 crore diverted pursuant to the fictitious sales/purchases amongst group entities and Rs. 49.82 crore diverted from the rights issue proceeds), an amount of Rs. 87.35 crore was diverted to individuals linked/related to MFL and its promoters/directors as follows:

Name Amount received by Amount Net amount received individuals from transferred by from/ transferred to the group entities individuals to group entities (in Rs. group entities crore) Bharatbhai Jethabhai Patel 1.09 1.09 Devalkumar Bharatbhai Patel 2.40 0.85 1.55 Hiteshkumar Gaurishankar Patel 43.19 7.35 35.83 Jatinbhai Ramanbhai Patel 23.03 22.24 0.79 Kanakkumar Patel 69.22 24.04 45.18 Manjulaben Gaurishankar Patel 23.10 22.55 0.54 Navinchandra D Patel 1.37 1.37 Nikitaben Devalbhai Patel 0.05 0.05 Ravikumar Gaurishankar Patel 12.28 3.29 8.99 Rekhaben Kanakkumar Patel 50.95 31.18 19.77 Rinkal Jatinbhai Patel 3.36 37.13 -33.77 Tejal Ravikumar Patel 15.07 15.07 Vandanaben Hiteshkumar Patel 12.45 21.57 -9.12 Total 257.56 170.21 87.35 93. Accordingly, it was prima facie found that MFL, by indulging in diversion/ misutilisation/ misappropriation of its funds, violated regulation 4(1) of PFUTP Regulations. 94. Astonishingly, it was also found during investigation that the company filed a fresh DLOF with BSE for raising an amount less than Rs. 50 crore on August 13, 2024. The object of the issue was unsurprisingly same as the earlier rights issue, viz., “To augment the existing and incremental working capital requirement of our Company”.

This application is still pending with BSE. E. Investigation findings on Corporate Governance Failures E.1 Failure to appoint minimum number of independent directors and proper constitution of various committees 95. Mr. Bharatbhai Jethabhai Patel and Mr. Devalkumar Bharatbhai Patel, were independent directors of MFL from September 30, 15 to July 03, 2019 and were also the Member/Chairman of AC, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Social Responsibility Committee of MFL for FY18 and FY19. 96. However, as noted earlier, both these individuals were also partners/directors of various group entities such as Arihant, Patel Brothers, Dharati, Gayatri, Mishtann Shoppee/Agro and Vraj with whom MFL had booked fictitious sale/purchase transactions. As per regulation 16(1) (b) of LODR Regulations, an "independent director" means a non-executive director, other than a nominee director of the listed entity who, apart from receiving director's remuneration, has or had no material pecuniary relationship with the listed entity, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year.

97. In view of the sizeable amounts of sale and purchase transactions booked by MFL during FY18 to FY20 with the aforesaid group entities where these directors were partners/directors and in the absence any details of the income of these two directors due to their non-cooperation during the investigation, it was prima facie concluded that Mr. Bharatbhai Jethabhai Patel and Mr. Devalkumar Bharatbhai Patel had material pecuniary relationship with MFL during this period. Thus, Mr. Bharatbhai Jethabhai Patel and Mr. Devalkumar Bharatbhai Patel were not qualified to be appointed independent directors of MFL as per regulation 16(1) (b) of LODR Regulations. Accordingly, it was observed that during the period April 1, 2017 to July 3, 2019, the number of independent directors (excluding Mr. Bharatbhai Jethabhai Patel and Mr. Devalkumar Bharatbhai Patel) were less than half of the total number of directors as tabulated below: Period Number of Number of Actual no of independent Directors independent directors (Excluding Mr. directors Bharatbhai Jethabhai required to be Patel and Mr. Devalkumar on the board Bharatbhai Patel) April 1, 2017 to 8 4 3 September 29, 2017 September 29, 2017 to 9 5 4 October 31, 2018 October 31, 2018 to July 7 4 3 3, 2019 Thus, MFL prima facie violated the provisions of regulation 17 (1) (b) of LODR Regulations.

98. Further, as per regulations 18(1)(a) and (b) of LODR Regulations, the AC shall have minimum three directors as members and two-thirds of the members shall be independent directors. The composition of the AC of MFL during FY18 and FY19 was as under: Period Number of Number of independent Actual no of independent directors in AC directors on directors required to be on (excluding Mr. Bharatbhai Jethabhai AC the AC Patel and Mr. Devalkumar Bharatbhai Patel) FY18 3 2 1 FY19 3 2 1

99. In view of the fact that Mr. Bharatbhai J Patel and Mr. Devalbhai B Patel were not qualified to be independent directors, it was observed that the composition of the AC during FY18 and FY19 was prima facie in violation of the provisions of regulations 18(1)(a) and (b) of LODR Regulations. 100. Further, as per regulation 19 (1) of LODR Regulations, the Nomination and Remuneration Committee (“NRC”) shall have minimum three directors, all directors shall be non-executive and at least fifty percent of the directors shall be independent directors. The composition of the NRC of MFL during FY18 and FY19 was as under: Period Number of Number of Actual no of independent Directors on independent Directors in NRC (excluding Mr. NRC directors required to Bharatbhai Jethabhai Patel and be on the NRC Mr. Devalkumar Bharatbhai Patel) FY18 3 2 1 FY19 3 2 1 101. In view of the fact that Mr. Bharatbhai J Patel and Mr. Devalbhai B Patel were not qualified to be independent directors, it was observed that the composition of the AC during FY18 and FY19 was prima facie in violation of the provisions of regulation 19 (1) of LODR Regulations.

E.2 Failure to appoint qualified CFO and Chairman of Audit Committee 102. Mr. Navinchandra Dahyalal Patel was executive director (since March 10, 2015) and CFO (since March 25, 2019) and Mr. Ajitkumar Narayanbhai Patel was independent director and chairman of the AC (for FY20 and FY21) of MFL. It was observed that Mr. Navinchandra Dahyalal Patel and Mr. Ajitkumar Narayanbhai Patel, inter alia, submitted in their statements before SEBI that their educational qualification was “12th pass”. However, in the minutes of the meeting of AC and the Board, MFL had shown their educational qualification to be “Graduate”. In this regard, MFL submitted vide letter dated March 4, 2024 that they were both graduates in commerce. Documents pertaining to their educational qualification were not available in MFL’s records. 103. Further, Mr. Navinchandra Dahyalal Patel, CFO, inter alia, submitted in his statement before SEBI that he was a relative of the MD of MFL and did not attend any committee meetings including meetings of the AC. He further submitted that he did not have any financial knowledge/background but he signed the financial statements of MFL and issued the certificate under regulation 17(8) of the LODR Regulations, relying on his relative, the MD of MFL, Mr. Hiteshkumar Gaurishankar Patel.

He also failed to reply of most of the finance/accounts related findings/observations/queries put before him. 104. Mr. Ajitkumar Narayanbhai Patel, the chairman of the AC, inter alia, submitted that he was unaware of the role and responsibility as Chairman of AC and acted as the Chairman of AC free of cost as the MD of MFL was his friend. He further submitted that he did not know the meaning of financial statements and only signed the meeting related documents brought before him. He also submitted that he did not have any idea about RPTs and gave approval for RPTs as per the instructions of HGP. 105. Thus, the submissions of the CFO and Chairman of AC indicated that they were financially illiterate and did not have accounting or related financial management expertise. Although there is no specific provision for the qualifications and experience of CFO in LODR Regulations, with regard to a member of the AC, regulation 18 (1) (c) of LODR Regulations, inter alia, specifies that all members of AC shall be financially literate and at least one member shall have accounting or related financial management expertise.

106. Accordingly, by appointing a person who was not financially literate as Chairman of the AC, MFL prima facie violated the provisions of regulation18 (1) (c) of LODR Regulations. E.3 Reclassification of promoter shareholding 107. It was observed that during FY22, HGP, the promoter and MD of MFL acquired the shares of all four other promoters, viz., Mr. Ravikumar Gaurishankar Patel, Mr. Jatinbhai Ramanbhai Patel, Mr. Navinchandra Dahyalal Patel and Ms. Manjulaben Patel, through inter se transfer of shares among promoters by way of gift and became the sole promoter holding 49.28 per cent shares of MFL. 108. In this regard, BSE in its examination report submitted that MFL did not apply for reclassification of the status of promoters after transfer of the shares among the promoters as per the requirement of LODR Regulations despite MFL being asked to apply for such reclassification or to submit revised shareholding pattern with zero promoter holding for the 4 transferee-promoters.

109. Thus, by not applying for reclassification of status of promoters and not disclosing all the promoters in the shareholding pattern, it was prima facie found that MFL violated the provisions of regulations 31(4) and 31A (2) of LODR Regulations. E.4 Non-disclosure of Material event 110. It was observed that a search was conducted by the CGST Authority on February 19, 2021 and April 20-21, 2022. HGP, the sole promoter and MD of MFL was arrested on July 19, 2022 under section 69 of Central Goods and Service Tax Act, 2017 (“CGST Act”) for committing the offence specified under section 132(1)(a) of CGST Act. He was directed to be released on bail vide order of the Hon’ble Gujarat High Court dated November 14, 2022. However, the company did not make any disclosure in respect of the said material events. 111. In this regard, MFL submitted before BSE that the arrest was illegal and MFL had approached the Hon’ble High Court for the same. MFL also submitted that since the matter was sub judice, disclosing the facts would have affected the image of HGP and also of the company. 112. However, MFL later made the disclosure of the arrest as a material event on January 6, 2023 pursuant to BSE’s intervention although it has still not made any disclosure regarding the investigation and search and seizure proceedings as required to be done in terms of the provisions of LODR Regulations.

In this regard, HGP, in his deposition before SEBI accepted that the arrest not being disclosed initially by MFL was a mistake. 113. Therefore, in view of the delay in disclosure of arrest of Managing Director of MFL and failure to disclose the search and seizure proceedings by CGST Authority, it is found that MFL prima facie violated the provisions of regulation 30(2) read with Para A of Schedule II of LODR Regulations. F. Investigation findings regarding role of entities F.1 Role of Board of Directors (I) Role of Mr. Hiteshkumar Gaurishankar Patel, Promoter and Managing Director of MFL: 114. HGP, being the Managing Director of MFL signed the company’s financials from FY18 to FY24. Further, he was also shown as one of the signatories on the Certificate under regulation 17(8) of LODR Regulations during FY21 to FY24, inter alia, stating that financial statements of MFL presented a true and fair view of its financial performance and were in compliance with the existing accounting standards, applicable laws and regulations. 115. Considering the irregularities observed as discussed above, the statement of HGP was recorded by SEBI wherein he, inter alia, admitted that his arrest and the search and seizure proceedings by CGST Authority were not disclosed as material events which was a mistake and the disclosures were done after intervention by BSE.

He also submitted that Mr. Ajitkumar Narayanbhai Patel, Chairman of AC had all the knowledge related to financial transactions and was lying regarding his financial literacy. He also admitted that a few buyer/supplier firms of MFL were in the name of his relatives. 116. Out of the net amount of Rs. 87.35 crore which was diverted/ misutilised/ misappropriated by MFL as mentioned at para 92 above, the investigation found that an amount of Rs. 35.83 crore was received by HGP. (II) Role of Mr. Navinchandra Dahyalal Patel, Promoter, Executive Director & CFO: 117. Mr. Navinchandra Dahyalal Patel, was the promoter and executive director of MFL. He was also appointed as CFO in FY19. Being the whole time director (“WTD”) of MFL, he signed the company’s financials from FY19 to FY24. Further, he was also shown as one of the signatories on the Certificate under regulation 17(8) of LODR Regulations during FY19 to FY24, inter alia, stating that financial statements of MFL presented a true and fair view of its financial performance which were in compliance with existing accounting standards, applicable laws and regulations.

118. Mr. Navinchandra Dahyalal Patel, inter alia, submitted during his deposition that he was a relative of the MD of MFL and did not attend any committee meetings including meetings of the AC till date. He further submitted that he did not have any financial knowledge but he signed the financial statements of MFL and issued the certificate under regulation 17(8) of the LODR Regulations, relying on his relative, HGP, who was the MD of MFL. He also failed to reply of most of the finance/accounts related findings/observations/queries put before him.

119. Out of the net amount of Rs. 87.35 crore which was diverted/ misutilised/ misappropriated by MFL as mentioned at para 92 above, the investigation found that an amount of Rs. 1.37 crore was received by Mr. Navinchandra Dahyalal Patel. (III) Role of Mr. Ravikumar Gaurishankar Patel, Promoter, Whole Time Director & CFO: 120. Mr. Ravikumar Gaurishankar Patel was the Promoter and Executive Director of the company. He was the CFO of MFL for FY17 and FY18. Being the whole time director of MFL, he signed the company’s financials for FY18. Further, he was also shown as one of the signatories on the Certificate under regulation 17(8) of LODR Regulations for FY18, inter alia, stating that financial statements of MFL presented a true and fair view of its financial performance which were in compliance with existing accounting standards, applicable laws and regulations. 121. Out of the net amount of Rs. 87.35 crore which was diverted/ misutilised/ misappropriated by MFL as mentioned at para 92 above, the investigation found that an amount of Rs. 8.99 crore was received by Mr. Ravikumar Gaurishankar Patel. (IV) Role of Mr. Jatinbhai Ramanbhai Patel, Promoter and Whole Time Director: 122. Mr. Jatinbhai Ramanbhai Patel was the promoter of MFL till FY22 and its whole time director during FY18 and FY19. He is/was partner/director of many entities, viz., Mementos Foods Pvt. Ltd., Button Industries Pvt. Ltd, Rinkal Enterprise Private Limited, Mishtann Shoppee India Pvt. Ltd. etc., with whom MFL had made circular transactions during the Investigation Period. 123. In response to summonses issued by SEBI for appearance in person, he responded that he was on a business tour and would update SEBI regarding personal appearance whenever he returned from tour. However, he did not appear in person before SEBI. 124. Out of the net amount of Rs. 87.35 crore which was diverted/ misutilised/ misappropriated by MFL as mentioned at para 92 above, the investigation found that an amount of Rs. 0.79 crore was received by Mr. Jatinbhai Ramanbhai Patel.

Investigation findings regarding the role of MD/WTD/CFO 125. The details of attendance of the managing director/ whole time director / CFO in the Board of Directors meetings of MFL during the Investigation Period are as under: Name of Director/ CFO FY18 FY19 FY20 FY21 FY22 FY23 FY24 Number of Board meetings held 15 14 6 5 10 7 13 Number of Board meetings attended Mr. Hiteshkumar Gaurishankar Patel, MD 15 14 6 5 10 6 13 Mr. Navinchandra Dahyalal Patel, Whole Time 15 14 6 5 10 7 13 Director & CFO Mr. Ravikumar Gaurishankar Patel, Promoter, 15 - - - - - - Whole Time Director & CFO (Director till October 31, 2018) Mr. Jatinbhai Ramanbhai Patel, Promoter & 15 - - - - - - Whole Time Director (Director till October 31, 2018) 126. In view of the involvement of the managing director/ whole time director / CFO in the day to day decision making process of a company and having access to information such as the financial position of the company, annual accounts, etc., it is their duty and responsibility to ensure that proper systems and controls are in place for financial reporting and to monitor the efficacy of such systems and controls.

In view of the aforesaid findings of the investigation, it is noted that Mr. Hiteshkumar Gaurishankar Patel, Managing Director, Mr. Navinchandra Dahyalal Patel, Whole Time Director and CFO, Mr. Ravikumar Gaurishankar Patel, whole time director and CFO, and Mr. Jatinbhai Ramanbhai Patel, whole time director, failed to perform their duties and obligations which resulted in publication of untrue and misleading financial statements of MFL for FY18, FY19, FY20, FY21, FY22, FY23 & FY24. Therefore, it was prima facie found that these four directors violated the provisions of regulations 4(2)(f)(i)(2), 4(2)(f)(ii)(1), 4(2)(f)(ii)(2), 4(2)(f)(ii)(6), 4(2)(f)(ii)(7), 4(2)(f)(ii)(8), 4(2)(f)(iii)(1), 4(2)(f)(iii)(3), 4(2)(f)(iii)(6), 4(2)(f)(iii)(7), 4(2)(f)(iii)(12) and 4(2)(f)(iii)(13) of LODR Regulations. 127. Further, by virtue of being partners/ directors/ promoters of group entities which were involved in fictitious sales/purchases with MFL, and in terms of section 27(1) of SEBI Act, 1992, these directors are also prima facie found responsible for violations committed by MFL, i.e., regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(f), 4(2)(k), 4(2)(r) of PFUTP Regulations read with section 12A(a), (b), (c) of SEBI Act, 1992 and regulations 4(1) (a), (b), (c), (d), (e), (g), (h), (i) and (j), 4(2)(e)(i), 17(1)(b),18(1)(a), (b) and (c),19(1), 23(2), 23(4), 23(9), 30(2) read with Para A of Schedule II, 31A (2), 33(1)(c), 34 (3) read with schedule V and 48 of LODR Regulations and section 11C (2) read with section 11C (3) of SEBI Act, 1992. 128. Further, Mr. Hiteshkumar Gaurishankar Patel, Managing Director, Mr. Navinchandra Dahyalal Patel, Whole Time Director and CFO, and Mr. Ravikumar Gaurishankar Patel, Whole Time Director and CFO, by furnishing false certification of the company’s financial statements, are prima facie found to have violated regulation 17(8) of the LODR Regulations.

129. Furthermore, Mr. Jatinbhai Ramanbhai Patel, Whole Time Director is also prima facie found to have violated provisions of section 11C (5) of SEBI Act, 1992. F.2 Role of independent directors and members of audit committee 130. Under LODR Regulations, the responsibilities of members of the AC in a listed company include oversight of a listed entity’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient, and credible. Further, the members of AC have a duty of approving and reviewing the disclosure of any related party transaction. (I) Role of Mr. Bharatbhai Jethabhai Patel, independent director and AC member: 131. Mr. Bharatbhai Jethabhai Patel was the independent director of MFL from September 30, 15 to July 03, 2019 and was also the AC member during FY18 and FY19. He attended all the Board meetings and Audit Committee meetings held during FY18 and FY19. 132. Further, Mr. Bharatbhai Jethabhai Patel is/was the partner/director of many entities, viz., Gayatri Trading, Arihant, Mishtann Shoppee India Pvt Ltd, Salepush Overseas Pvt Ltd, Acoustic Eco Foods Pvt Ltd, Tremento Exports Private Limited, Acoustic Eco Foods Pvt Ltd, etc., with whom MFL had booked fake sale/purchase transactions during the Investigation Period.

133. Out of the net amount of Rs. 87.35 crore which was diverted/ misutilised/ misappropriated by MFL as mentioned at para 92 above, the investigation found that an amount of Rs. 1.09 crore was received by Mr. Bharatbhai Jethabhai Patel.

(II) Role of Mr. Devalkumar Bharatbhai Patel, independent director and AC member: 134. Mr. Devalkumar Bharatbhai Patel was the independent director of MFL from September 30, 15 to July 03, 2019 and was also the member of the AC during FY18 and FY19. He attended all the Board meetings and Audit Committee meetings held during FY18 and FY19. 135. Further, Mr. Bharatbhai Jethabhai Patel is/was the partner/director of many entities, viz., Arihant, Mishtann Shoppee India Pvt Ltd, Button Industries Pvt Ltd, Dharati Marketing, Gayatri Trading, Patel Brothers etc., with whom MFL had booked fake sale/purchase transactions during the Investigation Period. 136. Out of the net amount of Rs. 87.35 crore which was diverted/ misutilised/ misappropriated by MFL as mentioned at para 92 above, the investigation found that an amount of Rs. 1.55 crore was received by Mr. Bharatbhai Jethabhai Patel. (III) Role of Mr. Ajitkumar Narayanbhai Patel, independent director and chairman of AC: 137. Mr. Ajitkumar Narayanbhai Patel was the independent director of MFL during FY19 to FY21 and was also the chairman of AC during FY19 and FY20. He attended all the Board meetings held during FY19 and FY20. 138. As mentioned earlier at para 104 above, during his deposition before SEBI, he, inter alia, admitted that he was unaware of his duty, role and responsibility as Chairman of AC and that he only signed the AC meeting related documents brought before him and gave approval for RPTs as per instructions of the MD of MFL. (IV) Role of other independent directors and members of audit committee: 139. The period of membership of the other members of AC (who were also independent directors of MFL) are as under: Name of audit committee members Period of membership (FYs) Mr. Bhaveshkumar Vasantbhai Patel FY18, FY19 Mr. Ravikumar Ramanbhai Patel FY19 Mrs. Heemaben Janakkumar Patel FY19, FY20 Mr. Utpalbhai Dineshbhai Raval FY20, FY21 Mrs. Bhumi Jayantkumar Gor FY21, FY22,FY23, FY24 Mr. Rajnish Pathak FY22, FY23, FY24 Mr. Ashish Agarwal FY22,FY23, FY24

Investigation findings regarding the roles of Independent Directors and Members of Audit Committee 140. MFL was prima facie involved in mis-statement/misrepresentation of its financial statements during the entire Investigation Period. Upon perusal of the minutes of meetings of the board of directors and AC as provided by MFL, it was observed that the independent directors had not raised any concerns on the financials of the company. This indicates that the above mentioned independent directors as members of board of directors and AC of MFL did not perform their roles and duties cast on them by LODR Regulations and were involved in gross misconduct, negligence, and professional wrongdoing. 141. Thus, by failing to perform their duties and obligations which resulted in publication of untrue and misleading financial statements of MFL, it was prima facie found that these independent directors violated the provisions of regulations 4(2)(f)(i)(2), 4(2)(f)(ii)(2), 4(2)(f)(ii)(6), 4(2)(f)(ii)(7), 4(2)(f)(iii)(1), 4(2)(f)(iii)(3), 4(2)(f)(iii)(6), 4(2)(f)(iii)(7) and 4(2)(f)(iii)(12) of LODR Regulations. 142. Further, as members of the AC, it was prima facie found that these independent directors violated the provisions of regulation 18(3) read with Para A of Part C of Schedule II of LODR Regulations. 143. In addition, Mr. Bharatbhai Jethabhai Patel and Mr. Devalkumar Bharatbhai Patel, by being a partner/director/promoter of group entities, which were involved in the fictitious sales/purchases with MFL and by receiving a part of the amount diverted/ misutilised/ misappropriated by MFL, are prima facie found to have violated the provisions of regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(f), 4(2)(k), 4(2)(r) of PFUTP Regulations read with section 12A(a), (b), (c) of SEBI Act, 1992.

F.3 Role of other entities Sr. Name of Findings of the investigation Provisions No. entity prima facie found to be violated 1 Mr. (i) He was a partner/director of majority of the Regulations Kanakkumar group entities which were involved in fictitious 3(a), 3(b), 3(c), Vinodbhai sale/purchase transactions with MFL. 3(d), 4(1), Patel (ii) Received an amount of Rs. 45.18 crore out 4(2)(e), 4(2)(f), of the Rs. 87.35 crore diverted by MFL. 4(2)(k), 4(2)(r) (iii) Failed to appear before SEBI and failed to of PFUTP furnish information regarding the entities in Regulations which he was a partner/promoter/director, in read with response to SEBI’s summonses, without any section justifiable reasons for such failure. 12A(a), (b), (c) 2 Mr. Surendra (i) He was a partner/director of majority of the of SEBI Act, Yadav group entities which were involved in fictitious 1992; sale/purchase transactions with MFL. Section 11C(5) (ii) Failed to appear before SEBI and failed to of SEBI Act, furnish information regarding the entities in 1992. which he was a partner/promoter/director, in response to SEBI’s summonses, without any justifiable reasons for such failure. 3 Ms. Tejal (i) She was a partner/director of majority of the Regulations Ravikumar group entities which were involved in fictitious 3(a), 3(b), 3(c), Patel sale/purchase transactions with MFL. 3(d), 4(1), (ii) Received an amount of Rs. 15.07 crore out 4(2)(e), 4(2)(f), of the Rs. 87.35 crore diverted by MFL. 4(2)(k), 4(2)(r) 4 Ms. Nikitaben (i) She was a partner/director of majority of the of PFUTP Devalbhai group entities which were involved in fictitious Regulations Patel sale/purchase transactions with MFL. read with (ii) Received an amount of Rs. 0.05 crore out of section the Rs. 87.35 crore diverted by MFL. 12A(a), (b), (c) of SEBI Act, 1992.

5 Ms. Received an amount of Rs. 0.54 crore out of the Regulations Manjulaben Rs. 87.35 crore diverted by MFL. 3(a), 3(b), 3(c), Gaurishankar 3(d), 4(1), Patel (Mother 4(2)(e), 4(2)(f), of HGP) 4(2)(k), 4(2)(r) 6 Ms. Received an amount of Rs. 19.77 crore out of of PFUTP Rekhaben the Rs. 87.35 crore diverted by MFL. Regulations Kanakkumar read with Patel (Wife of section Mr. 12A(a), (b), (c) Kanakkumar of SEBI Act, Vinodbhai 1992. Patel) Auditors of group entities 7 Md. Nurudin Failed to furnish various information, details, Section 11C Jiruwala etc. in respect of the group entities as sought by (2) read with 8 Mikil SEBI vide summons without any justifiable section 11C Dineshbhai reasons for such failure (3) of SEBI Vora Act, 1992 9 Vishal Bipinchandra Doshi

Need for interim directions

144. The prima facie findings recorded in this Order lay bare the misrepresentation of large proportions in financial statements by MFL, primarily by inflating sale and purchase figures by booking fictitious transactions with fake/non-existent entities created in the names of the MFL’s promoters/directors and their relatives. The fact that more than 90% of the credit and debit entries in the bank accounts of these entities were either amongst themselves or with MFL shows the level of fraud with which MFL perpetrated money transfer scheme with the help of multiple shell entities. These entities, which had no business operations of their own, functioned as pass-through vehicles and conduits for fund transfer amongst themselves and MFL. Such acts by MFL, a listed company, impaired the rights of the investors and caused harm to the securities market. 145. Further, the gross misrepresentation of financials by MFL continuously for seven years, viewed in the light of the disclosure based regime of the securities market, has potential to impair the integrity of the securities market. 146. This is of concern, given the fact that the destiny of MFL and over 4.2 lakh of its shareholders lies essentially in the hands of one person, i.e., HGP, who is the Managing Director and now also the sole promoter of MFL holding approx.

43% shares of MFL. He controls several of the fake buyers/sellers of MFL through his relatives. The fact that he recently garnered approx. Rs. 50 crore by offloading around 3 crore MFL shares and still holds another 47 crore shares of MFL illustrates the risk of imminent financial loss especially to unsuspecting retail shareholders who are unaware of the machinations of HGP who seeks to unjustly enrich himself at the expense of common shareholders. 147. What makes this case stand out is the sheer scale of manipulation of the Company’s financials and its dramatic rise in the recent years. The Company commands a market cap of approx. Rs. 1600 crore on BSE (as on December 4, 2024) and the growth rate of the scrip price of MFL during the Investigation Period has outpaced the growth of BSE Sensex by several multiples. Equally disturbing is the fact that the number of public shareholders of the Company spiked from a mere 516 at the end of FY18 to 4.23 lakh at the end of the September 2024 quarter, an 800-times rise within a span of around six years. 148. The lengths to which the Company had gone to hoodwink its shareholders and the broader securities market in general is visible at the first glance of its immaculately designed website where the company, inter alia, claims that its branded basmati rice is one of the finest aromatic basmati rice available in the market.

In order to further bestow legitimacy on MFL’s exaggerated claims, the website also features a dedicated page containing a collection of “choicest” recipes which can be prepared from the “finest of basmati grains sourced from the rich and fertile plains of Himalayas”. It is time that this façade comes to a close as the only connection it has to the ‘finest basmati grains’ and ‘rich and fertile plains of Himalayas’ is in the empty words reflected on MFL’s website. MFL being a listed company with little genuine business and a sizeable number of public shareholders, the claims on its website constitute deliberate misrepresentation and fraud. The aroma of the finest Mishtann Basmati advertised on its website does little to cover the deep fraud perpetrated by the promoter, his relatives and associates. 149. The nonchalance with which the Company indulged in its misdeeds reached new heights when MFL entered into an MoU with the Government of Gujarat in December 2021 for setting up apparently India’s biggest grain based ethanol project. MFL in its filing with the BSE in October 2022 claimed that in accordance with the 'Atmanirbhar Gujarat, Atmanirbhar Bharat' initiative of the Government of India, the proposed ethanol project would aid in reducing India’s burden of import of crude oil!

Given the fact that almost all of the sale/purchase transactions of MFL since FY20 were prima facie found to be fictitious, such tall claims by the company were brazenly fraudulent. 150. Apart from the inflation of sale/purchase figures and the circular flow of funds between MFL and its purported buyers/sellers, MFL also overstated its inventory, diverted its rights issue proceeds, excessively booked electricity expenses and improperly appointed its CFO, independent directors and members of the AC. Further, the misdeeds of the Company were not limited to the domain of the securities market but also appear to involve evasion of GST by fraudulently claiming GST exemption which led CGST Authority to conduct search and seizure proceedings and ultimately, arrest HGP. 151. The state of affairs discussed in this Order also reveal a larger systemic rot since the purported watchdogs in the corporate structure, viz., audit committee and statutory auditor were silent observers to the machinations employed by MFL and its directors. This was evident in the fact that certain members of the AC were not financially literate and the statutory auditor simply relied on the inventory details maintained by MFL in the Tally software and its sale/purchase registers, rather than physically verifying the stock or carrying out any third party verification with the purported buyers/sellers of MFL.

152. The prima facie findings which lead me to the conclusion that this case warrants immediate interference and issuance of interim directions are summarized below:

(a) MFL has negligible fixed assets on its books, negative cash flow from its operating activity and a very low inventory as compared to its sizeable sale figures and 84% of the total sales and 91% of the total purchases booked by MFL during the Investigation Period were prima facie found to be fictitious involving circular flow of funds. Since it is a listed company with little real business, there is a possibility of MFL continuing its practice of misreporting its financials in the future too. (b) By consolidating its financials with those of its Dubai-based wholly owned subsidiary (whose sales/purchases were also found to be prima facie fictitious) for FY24, MFL has artificially shown heavily inflated sales and profits figures during FY24, thereby misrepresenting its financials in order to attract gullible investors. (c) The share of trade receivables of MFL out of its total assets has been constantly rising over the years, so much so that as of the end of September 2024 quarter, trade receivables constituted almost all the assets (approx. 97%) of MFL. Considering that almost all of the sale/purchase transactions of MFL since FY20 were prima facie found to be fictitious, there is little possibility of these trade receivables ever being realised and it seems quite probable that these trade receivables would have to be written off in due course in compliance with applicable accounting standards. This would further impact the Company’s financials and ultimately the shareholders. (d) The number of public shareholders of MFL have drastically increased from a mere 516 at the end of FY18 to 4.23 lakh by the end of September 2024 quarter. The published manipulated financial statements of MFL are still in public domain and are being relied upon by the unsuspecting investors and stakeholders to make investment decisions and the public shareholding at the end of September 2024 quarter is more than 50%. On the other hand, in July-August 2024, HGP, the sole promoter of MFL, offloaded around 3 crore shares of MFL held by him garnering an approx. Rs. 50 crore and the promoter holding, in general, is declining since March 2024 quarter. Thus, the sole promoter appears to be waiting to for an opportune time to offload his shares to the detriment of the retail investors.

(e) MFL filed a draft letter of offer for a rights issue amounting to approx. Rs 150 crore in the month of May 2023 with SEBI but the same was later withdrawn by MFL. However, the company later came up with a rights issue amounting to Rs.49.9 crore in the month of April 2024 and the issue proceeds were found to be misutilised/ misappropriated by transferring the issue proceeds to partners/ directors of its group entities. Further, on August 13, 2024, the company filed a fresh draft letter of offer with the stock exchange for another rights issue of an amount of less than Rs. 50 crore. Since there is no requirement of filing a draft letter of offer with SEBI for a rights issue of an amount less than Rs. 50 crore, it is apparent from the aforesaid modus operandi that MFL intended to circumvent SEBI’s oversight and compliance with ICDR Regulations, by withdrawing the initial Rs. 150 crore rights issue and then proceeding to raise money in multiple smaller tranches through rights issues of amounts less than Rs. 50 crore. Given the track record of the Company, there is every possibility that in case the Company is allowed to go ahead with the proposed rights issue, it may again divert its proceeds. Order: 153. Keeping in view the foregoing, I, in exercise of the powers conferred upon me under sections 11, 11(4) and 11B (1) read with section 19 of the SEBI Act, 1992, hereby issue by way of this interim order cum show cause notice, the following directions, which shall be in force until further orders: (a) Noticee No. 1 is restrained from raising money from the public, until further orders. (b) Noticee Nos. 1 to 5 are restrained from buying, selling or dealing in securities, or accessing capital market either directly or indirectly, in any manner whatsoever until further orders. If the said Noticees have any open position in any exchange-traded derivative contracts, as on the date of the order, they can close out /square off such open positions within 7 days from the date of order or at the expiry of such contracts, whichever is earlier. The said Noticees are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order.

(c) Noticee Nos. 2 to 13 are restrained from associating themselves with any intermediaries registered with SEBI, any listed public company or any company that intends to raise money from the public, until further orders. (d) Noticee No. 1 is directed to bring back the Rights issue proceeds amounting to Rs. 49.82 crore misutilised/ misappropriated/ diverted through group entities and the amount of Rs. 47.10 crore which was misutilised/ misappropriated/ diverted to promoters/directors of MFL and their relatives through fictitious sales/purchases with group entities. (e) Noticee No. 1 is directed to constitute a new Audit Committee and place the copy of the SEBI order/findings before it. The new Audit Committee is directed to have enhanced oversight of related party transactions including approvals as applicable, financial reporting process and the disclosure of financial information to ensure that the financial statements are correct, sufficient and credible. Further, the new Audit Committee is directed to ensure that the company is complying with the requirements of LODR Regulations. 154. BSE is directed to not approve any rights issue application filed by MFL till further orders. 155. The foregoing prima facie observations contained in this Order, are made on the basis of the material available on record. The said prima facie findings shall also be considered as a show cause notice and the Noticee Nos. 1 to 13 are directed to show cause as to why suitable directions/prohibitions under Sections 11(1), 11(4) and 11B(1) of SEBI Act, 1992, including the directions of restraining them from accessing the securities market including buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly, for a specified period and further restraining them from associating with any listed company and any registered intermediary or any other directions as deemed fit by SEBI, should not be issued against them. 156. Further, the Noticee Nos. 1 to 24 are also called upon to show cause as to why inquiry should not be held against them in terms of Rule 4 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 and penalty be not imposed on them under Sections 11(4A) and 11B(2) read with Sections 15A(a), 15HA and/or 15HB of the SEBI

Act, 1992 for the above alleged violations of provisions of SEBI Act, 1992, PFUTP Regulations and LODR Regulations, as the case may be. 157. The Noticee Nos. 1 to 24 may, within 21 days from the date of receipt of this Order, file their reply/objections, if any, to this Order and may also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard. 158. The above directions shall take effect immediately and shall be in force until further orders.

159. A copy of this order shall be served upon the Noticees, Stock Exchanges, Registrar and Transfer Agents and Depositories for necessary action and compliance with the above directions.

DATE: DECEMBER 05, 2024 ASHWANI BHATIA PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA