Order against Dharnendra Overseas Limited

1. Dharnendra Overseas Limited (hereinafter referred to as the Company) is a company incorporated under the Companies Act, 1956 having its registered office at 4th Floor, Maradia Plaza, C G Road, Ahmedabad, Gujarat 380009, as per the records of the Bombay Stock Exchange Limited. The Securities and Exchange Board of India (hereinafter referred to as SEBI) received several complaints against the Company from the investors. As on September 24, 2008, a total of one hundred and nineteen investor grievances were pending unresolved by the Company. The investor complaints received against the Company were forwarded to it for redressal. Periodical reminders were also sent to the Company for resolving such pending complaints. The complaints and reminders sent to the Company were returned undelivered.

2. Thereafter, SEBI, vide letter dated September 25, 2008, forwarded the list of such one hundred and nineteen investor grievances to the Company for redressal. The Company was advised to resolve all the grievances within thirty days from the date of receipt of the said letter and to submit a status report. In the said letter, SEBI had also made reference to Sections 15C and 24 of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act) and informed the Company of the consequent action that may be taken by SEBI in view of such non-redressal. However, as the said letter returned undelivered, a public notice dated January 23, 2009 was given in the website of SEBI (www.sebi.gov.in) advising the Company to resolve the pending investor grievances and to submit the Action Taken Report. Despite such letters and public notice, SEBI had not received any response from the Company or its directors.

3. In view of the above, a show cause notice dated November 6, 2009 was issued by SEBI under Sections 11B and 11(4)(b) of the SEBI Act to the Company requiring it to show cause as to why it should not be restrained from accessing the securities market and prohibit it from dealing in securities till such time the pending investor grievances against the Company are resolved. The said notice was sent to the Company. However, the said notice could not be delivered on the Company. Thereafter, an opportunity of personal hearing was also granted by SEBI to the Company, on August 5, 2010. As the show cause notice issued to the Company returned undelivered from the last known address, a copy of the same along with the notice of hearing was delivered to the Company at its corporate office at 2nd Floor, Chakravarti Complex, Near Vijay Char Rasta, Ahmedabad – 380 009. Mr. Shailesh Shah an employee of the Company accepted the said notices on behalf of the Company. A paper publication was also made by SEBI on June 13, 2010, in respect of the said show cause notice and hearing in various newspapers having nationwide and state wide circulation including ‘Sandesh’ (Rajkot Edition) and ‘Gujarat Samachar’ (Vadodara Edition). Thereafter, the Company, vide letter dated August 4, 2010 inter alia enclosed an affidavit (affirmed by Mr. Dharmendra Gandhi, director of the Company) to the effect that the Company was unable to redress investor complaints due to the non receipt of the names, addresses of the complainants and the nature of complaints. The Company also undertook to resolve majority of the complaints within forty-five days of receipt of the required details. The Company further requested for an adjournment of the personal hearing scheduled on August 5, 2010. As requested by the Company, SEBI forwarded the required details, vide letter August 20, 2010. The said letter was acknowledged by the Company on August 26, 2010. The Company was afforded another opportunity of hearing on September 7, 2010. Thereafter, Mr. Dharmendra Gandhi (a director of the Company), vide letter dated

September 2, 2010, while acknowledging the receipt of details of the pending complaints as on August 30, 2010 informed SEBI that the Company was in the process of approaching the shareholders for resolving their complaints and submit an action taken report on or before September 27, 2010. In view of the above, the Company had requested to adjourn the personal hearing scheduled on September 7, 2010. The said request was acceded to by SEBI and another opportunity was provided to the Company on October 12, 2010. Though, the said letter was acknowledged by the Company, there was no appearance on behalf of the Company on the said date of hearing. The Company also failed to submit the action taken report.

4. I have considered the facts of the matter and the material available on record. I note that sufficient opportunities have been provided to the Company to redress the pending investor grievances by SEBI, as stated above in this Order. In this regard, it may be noted that the Company had affirmed (on August 4, 2010) to resolve majority of the complaints within forty-five days on receipt of the required details. The required details were sent to the Company by SEBI on August 20, 2010 and the same was acknowledged by it on August 26, 2010. Subsequently, the Company had informed SEBI that the Company was in the process of approaching the shareholders for resolving their complaints and submit an action taken report on or before September 27, 2010. However, no such action taken report was filed by the Company with SEBI, till date. The Company was also not represented on October 12, 2010, the date of hearing, even after acknowledging the hearing notice. Admittedly (as per the letters of the Company dated August 4, 2010 and September 2, 2010), there are one hundred and twenty two investor complaints pending to be resolved by the Company. As requested by the Company, sufficient time was granted by SEBI, to redress the pending investor grievances and to submit the status report. Further, as authorised by the Company, its director, Mr. Dharmendra Gandhi made a solemn affirmation that the Company would be redressing the investor grievance within a specified time, as mentioned above in this Order.

The said period had expired on September 27, 2010. Till date, no action taken report was filed by the Company in respect of the redressal of the pending investor complaints. No sanctity was given by the Company to its own affirmation through its director. The protection of the investors in the securities market is one of the paramount duties of SEBI and the present case involves a listed company that not only failed to redress the investors’ grievances but also failed to respond to the letters/show cause notice issued by SEBI. In such circumstances, permitting such a company to access or deal in the securities market would be against the interests of the investors. In view of the lapses of the Company in redressing the investor grievances as advised by SEBI, I find it appropriate to issue necessary directions against the Company for its failure to redress the grievances of the investors.

5. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(4)(b) and 11B thereof, hereby restrain Dharnendra Overseas Limited (Permanent Account Number - AAACD4127G), having its corporate office at 2nd Floor, Chakravarti Complex, Near Vijay Char Rasta, Ahmedabad- 380009, from accessing the securities market and prohibit it from buying, selling or otherwise dealing in securities, directly or indirectly, with immediate effect, till all the pending investor grievances against the aforesaid company are resolved and the same is reported to and confirmed by the Securities and Exchange Board of India.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: APRIL 7, 2011