Order against Eltrol Ltd, Mr. Sanjay Tripathi, Mr. Niraj Sanghvi and Mr. Deepak Rathod in the matter of Eltrol Ltd

WTM/PS/23/IVD/ID-4/JULY/2010 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER IN THE MATTER OF ELTROL LTD. In respect of Eltrol Ltd, Mr. Sanjay Tripathi, Mr. Niraj Sanghvi and Mr. Deepak Rathod Date of hearing: April 6, 2010 Appearances: For Noticees: Mr. Ravi Ramaiya, CA (authorized representative for Eltrol Ltd. and Mr. Sanjay Tripathi) None for others For SEBI: Mr. Aliasgar Mithwani, Deputy General Manager Mr. Siddhesh Lotlikar, Assistant General Manager Mr. Kirtikumar Jadhav, Presenting Officer Mr. Pradeep Kumar, Legal Officer ORDER Under Section 11, 11B and 11(4) of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 2003. 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), noticed sudden variation in price and volume in the shares of Eltrol Ltd. (hereinafter referred to as ‘Eltrol’) presently known as Shree Mahaganga Sugar Mills Ltd. The price of the scrip of Eltrol (having face value Re.1) at Bombay Stock Exchange Ltd. (hereinafter referred to as ‘BSE’) opened on January 05, 2005 at Rs.0.80 and the same increased to Rs.6.90 on August 14, 2005. Substantial variations in the daily traded volumes of scrip of Eltrol were also observed with the lowest volume on July 1, 2005, when only one share was traded and the highest being on August 26, 2005, when 1,36,70,180 shares were traded. In view of the increase in price and volume in the scrip, a preliminary examination of the dealings in the share was conducted.

2. SEBI vide an ad interim ex-parte order dated October 05, 2005 issued under Sections 11B, 11D and 11(4), pending inquiry, directed Eltrol not to issue any equity shares or any other instrument convertible into equity shares or alter its capital structure in any manner till further directions in this regard. Eltrol was also directed to cease dealings in the securities market in any manner, directly or indirectly, till further directions. Further, the directors of Eltrol namely, Mr. Sanjay Tripathi, Mr. Deepak Rathod and Mr. Niraj Sanghvi were directed not to buy, sell, pledge or deal in securities of Eltrol, directly or indirectly, till further directions in this regard. Suitable directions were also passed against 7 brokers of National Stock Exchange (hereinafter referred to as ‘NSE’), 11 brokers of BSE, 10 trading clients at BSE and 25 clients who were apparently connected with/ related to each other. In the meantime, SEBI had also initiated formal investigation into the matter for the period of January 05, 2005 to September 30, 2005. The said interim order also provided the entities/ persons to whom directions were issued to file objections, if any, to the order within 15 days from the date of order and, if they so desire, avail themselves of an opportunity of personal hearing.

3. Eltrol vide its letter dated November 15, 2005, filed its written objections to the interim order. Thereafter, an opportunity of inspection was also afforded to it, which was conducted on November 23, 2005. Pursuant to this an opportunity of personal hearing was granted to Eltrol on January 25, 2006, which was attended by its authorized representatives.

4. On completion of investigation, SEBI issued a common show cause notice dated November 19, 2007 (hereinafter referred to as ‘SCN’) to Eltrol, Mr. Sanjay Tripathi, Mr. Niraj Sanghvi and Mr. Deepak Rathod (hereinafter collectively referred to as ‘noticees’) under Section 11, 11B, 11(4) of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’). The SCN alleged that Eltrol had issued favorable announcements, with regard to the financial performance of the company, with an aim to inflate the prices of the scrip and when the price of the scrip started moving upward, the shares acquired by the entities in off-market deals were offloaded in the market at higher prices. It was also alleged in the SCN that Mr. Niraj Sanghvi and Mr. Deepak Rathod were benefited from the price manipulation in the scrip of Eltrol. The SCN therefore alleged that the acts of the noticee were in violation of Regulations 3(b),(c),(d) and 4(1),(2), (a), (d), (f), (r) of PFUTP Regulations. Accordingly, it called upon the noticees to show cause as to why suitable directions under Section 11, 11B and 11(4) of SEBI Act read with Regulation 11 of PFUTP Regulations including directions to restrain from accessing the capital market and prohibiting from buying, selling or dealing in securities, in any manner for a particular period should not be issued against them.

5. In the mean time, noticees namely Eltrol, Mr. Sanjay Tripathi and Mr. Niraj Sanghvi applied for settlement of the proceedings through a consent order in terms of SEBI Circular dated April 20, 2007. In view of this, the present proceedings were kept on hold. SEBI, however, did not agree to settle the proceedings by consent as the terms offered by the noticees were not adequate and finally rejected the application on July 10, 2009. Pursuant to such rejection, the present proceedings have been revived from the stage where these were kept on hold.

6. Pursuant to the rejection of the consent application of the noticees reminders were issued, advising them to reply to the SCN. However, no reply was received from the noticees. To proceed with the matter and in adherence to the principles of natural justice, an opportunity of personal hearing was granted to the noticees before me on April 06, 2010. On the date fixed Mr. Ravi Ramaiya, a practicing Chartered Accountant appeared before me as the authorized representative of Eltrol and Mr. Sanjay Tripathi. Mr. Ravi Ramaiya made oral submissions and also filed the reply to the SCN, dated April 05, 2010. Mr. Niraj Sanghvi and Mr. Deepak Rathod failed to appear for the personal hearing in spite of due intimation. Moreover, these persons have not requested for another opportunity of personal hearing. In view of this, I am compelled to proceed with the matter ex-parte, on the basis of material available on record, as against these two persons, having complied with the principles of natural justice.

7. I have carefully considered the ad interim order passed by SEBI on October 05, 2005, objections filed by Eltrol to the said order dated November 15, 2005, SCN, reply of Eltrol and Sanjay Tripathi dated April 05, 2010 and material available on record. I note that the allegations leveled against the noticees are that Eltrol during the relevant period had came out with a number of price sensitive corporate announcements exaggerated turnover, acquisition of Nirani Sugars Ltd., etc. It is also alleged that the entities related to the directors of Eltrol had transferred huge quantities of the shares of Eltrol in off-market and in turn these shares were off-loaded in the market through a chain of individuals and profits were made.

8. The submissions made by Eltrol and Mr. Sanjay Tripathi vide their objection and reply to SCN, in brief are: a. The change in name was effected after complying with all the legal provisions and the same was also approved on March 28, 2005 by a special resolution at Extra-ordinary General meeting. Further, as the name change of Eltrol was not effected, no requirement of disclosure as stipulated under the Cir. SMDRP/Policy/Cir-8/99 dated April, 26, 1999 does not apply. b. Profile of directors was submitted to BSE and the directors of Eltrol had possessed the experience and knowledge of sugar industry. c. The average traded quantity during the relevant period was 7,84,847 shares. d. Eltrol had made preferential allotment of preference shares without any voting rights and not equity shares. Hence, these were beyond the scope, ambit and purview of SEBI. e. Eltrol received Rs.15 crore at the end of March, 2005, by way of increase in capital. As these funds were not required immediately the same were invested in the securities market for the benefit of the company. Money paid to brokers was for the purchase of blue chip shares as treasury operations and the same was not used in manipulation. These funds were invested for short term and same was allowed by Clause 31 of Memorandum of Association (hereinafter referred to as ‘MoA’) of Eltrol. f. Section 78(2)(i) of the Companies Act, 1956 permits allotment of bonus shares from share premium accounts, hence the same cannot be treated as unjustifiable. An in-principle approval was received from BSE for allotting bonus shares. The company had held board meeting on July 11, 2005 and allotted bonus shares. g. Acquisition of Nirani Sugars Ltd. was disclosed to BSE but the SEBI order dated October 05, 2005 resulted in negative publicity. h. The off market deals in securities from the directors relatives to the other persons does not involve the company or Mr. Sanjay Tripathi and was not under the control of the company. i. Mere introduction does not mean that the person is transacting on behalf of the person being so introduced. j. Eltrol was professionally managed and its directors were not holding any shares in Eltrol. k. SEBI had acted beyond jurisdiction.

9. I note that the noticees namely Eltrol and Mr. Sanjay Tripathi have admitted that the price rise in the scrip was due to various corporate actions. Further, Eltrol being a listed company comes under the jurisdiction of SEBI and nothing restrains it to launch investigation if something abnormal is happening in a company. After having examined the above details, the issues arise for my consideration are:

a. Whether the noticees had made misleading corporate announcements which led to increase in the prices of the scrip of Eltrol? b. Whether the noticees had aided and abetted the price manipulation in the scrip of Eltrol?

10. Whether the noticees had made misleading corporate announcements which led to increase in the prices of the scrip of Eltrol?

I note that Eltrol along with other noticees had made a series of corporate announcements during the relevant period of time having bearing on the share price of the company. All these announcements require separate consideration so as to find out whether these were misleading or not. Hence, these are being discussed point wise:

a. False disclosures in the un-audited financial results.

i. A perusal of the unaudited quarterly results submitted by Eltrol for the quarter ended June, 2005, shows a sudden improvement in the performance of the company with gross turnover of Rs.781.40 lakhs and net profit of Rs.45.17 lakh. Further, results for the quarter ended September, 2005, showed a significant increase in the gross turnover to Rs.9,329.57 lakhs, however, the net profit noted a small rise at Rs.58.75 lakhs. I have also seen the audited annual result for the financial year ending March 31, 2006, which showed a gross turnover of Rs.34.5 lakhs and a loss of Rs.26.7 lakhs. All this shows that the figures provided in the unaudited quarterly results were on higher side and were misleading about the performance of Eltrol. To this, Eltrol has argued that it had purchased sugar from a local dealer and the same was subsequently sold to a local exporter. However, the goods were returned as the quality of the sugar was inferior and due to this the company had not earned any revenue from the sugar business. I note that the noticees have not produced any documentary proof in their defense, showing that the deal was entered and the same was rejected at a later date. I have seen the certificate issued by the Chartered Accountant to Eltrol stating that the company had not earned any revenue from the sugar business for the financial years 2004-2005 and 2005-2006.

ii. From this, a conclusion can be drawn that Eltrol had made disclosure which was not true and the same was solely made for the reasons of creating interest of investors in the scrip of Eltrol and to mislead the innocent investors.

b. Acquisition of controlling stake in Nirani Sugars Ltd. i. In July, 2005, Eltrol informed BSE, that it had entered into an agreement with the shareholders of Nirani Sugars Ltd. to take over it by acquiring 90% of its shares. I note that Eltrol later on has submitted that this agreement with Nirani Sugars Ltd. was terminated and submitted a letter to SEBI showing their unwillingness to sell their holdings to Eltrol Ltd.

ii. I note that SEBI, while verifying the basis of making announcements had checked the valuation report dated March 18, 2005 and March 03, 2005, concerning Nirani Sugars Ltd. submitted by Eltrol. I have seen that only the physical assets of the company were taken into consideration, the valuation report does not find any mention of the adverse financial position and the liabilities of Nirani Sugars Ltd. From the available records, I note that Nirani Sugars Ltd. had accumulated losses and preliminary expenses amounting to Rs.11,80,24,108.31/- and outstanding debt of about Rs.9,50,00,000/- and an adverse debt equity ratio. It had a negative net current asset position of Rs.3,35,86,678.30/-.

iii. From this, I note that no prudent investor would have entered into such an agreement until discussing such bad financial condition of Nirani Sugars Ltd. with its shareholders. I also note that, Eltrol has failed to produce any paper showing the ratification of its shareholders or disclosure of this condition of Nirani Sugars Ltd. to its shareholders.

iv. This goes on to show that the announcement was solely made to mislead the innocent investors by showing the financial credibility of Eltrol and its interest in the sugar business. I note that this act of noticees had also played as a fraud upon the shareholders of Eltrol.

c. Allotment of shares on preferential basis and bonus shares. i. Investigations revealed that Eltrol had made a preferential allotment of 2,00,00,000 non-cumulative preference shares with 6% dividend of face value Re. 1/- at a premium of Rs.6.50 per share during March, 2005.

ii. I note from the records that the financial performance of Eltrol was very dismal in the preceding years and it had not declared any dividend for the past many years. Considering this, it can be said that no prudent investor would have subscribed for the preference shares of Eltrol as the effective return on these would have been very low. To this the noticees have argued that it was the investment decisions of investors and was based on the expected future performance of the company.

I observe that the said shares were allotted to two private corporate bodies namely Oudh Finance & Investment Pvt. Ltd. (hereinafter referred to as ‘Oudh’) and Basmati Securities Pvt. Ltd (hereinafter referred to as ‘Basmati’) (both were stated to be registered with Reserve Bank of India as Non Banking Finance Companies). The directors of Oudh Finance & Investment Pvt. Ltd. were Mr. Dharamveer Singh Shekhawat and Mr. Magan Singh Shekhawat. As regards, Basmati, its directors were Mr. Ajay Singh Karni and Mr. Vijay Singh Karni. I note from the SCN, that these two entities were having the same Mumbai address i.e. 1/1, Kothari House, 1st floor, Oaklane, Fort, Mumbai – 400023 and all the four directors as named above were Ahmedabad based. I note that the directors of Basmati also received huge quantities of shares of Eltrol in off-market deals from the related entities of directors of Eltrol. The details thereof have been discussed in the later part of the order.

From the facts like, off-market deals with the allottees of preferential allotment, by the related persons of directors of Eltrol and common address of Basmati and Oudh indicates that the allottees were related to each other and to Eltrol as well. It appears that the allotment was made to them in order to give a fancy picture of company in the market and to mislead the innocent investors.

iii. Considering the above discussion and argument of noticee, I agree that the allotment of shares on preferential basis was the decision of investors which may not have any bearing on other investors. However, it is important to note that the allottees had also received the shares of Eltrol in off-market from the related entities of directors of Eltrol.

iv. I note that, Eltrol during the relevant time had also announced a bonus issue of 3:1 during April, 2005. I have seen that the company had not declared any dividend during the past three years because of its poor financial performance. Further, Eltrol had no such profits from its business operations or reserves, out of which it could had distributed bonus. I note that generally by way of bonus issue a company distributes its profits to its shareholders. But in the present matter no such circumstances were there. From the SCN, I note that the bonus was sought to be disbursed from the securities premium account, accumulated by the issuance of non-cumulative preference shares in March, 2005. I note the argument of the noticees that Section 78(2)(i) of Companies Act, 1956 allows it to issue shares from share premium account. However, I note that the money in this account had came just a month before the preferential allotment and the same has been diverted for the purposes of bonus issue, which definitely gives a distorted picture of the company.

v. Considering this, it can be concluded that Eltrol had made these announcements just to gain the trading interest among the investors.

d. Change in the name and object of the company. i. I note that Eltrol had changed its object from engineering business to sugar business on April 11, 2005 by amending its MoA. On May 30, 2005, Eltrol applied to BSE to record the change in name from Eltrol to ‘Shree Mahaganga Sugar Mills Ltd.’ BSE in turn intimated SEBI that Eltrol has not complied with the SEBI Circular SMDRP/Policy/Cir-8/99 dated April, 26, 1999, with regard to the disclosure of turnover, income etc. from the new activities separately in the quarterly/ annual results. Eltrol in its objections to interim order has submitted that it had disclosed its revenue in sugar business separately.

ii. I have seen the copies of un-audited financial results of Eltrol for the quarter ended June, 2005 and September, 2005. I note that the ‘notes section’ of the unaudited financial results for quarter ended June, 2005, finds mention that the turnover of the company was from new activities, i.e. dealings in sugar and its by-products. A perusal of this shows that the same is not as per the requirements of the SEBI circular. I note that Eltrol changed its object during April, 2005. In view of this as per the requirements of SEBI Circular there should have been a clear bifurcation as to what was the revenue of company prior to the change of object and after the effect of charge.

I have also seen the segment-wise reporting made by Eltrol, for the quarter ended September, 2005, as published on October 31, 2005 showing the revenue generated from the sugar business separately, in line with the SEBI Circular. However, the date of filing this is pursuant to the date of interim order passed by SEBI against the noticees.

iii. The noticees vide their reply to the SCN dated April 05, 2010, has also argued that as the change in the name of company was not effected, hence, the requirement of disclosure as stipulated under the SEBI circular does not apply to it. I find no merit in this argument of the noticees as the unaudited financial results are on record and a bare perusal of the same shows the non-compliance by the company during the relevant period of time. In view of this, I find that the noticees had failed to comply with the SEBI Circular SMDRP/Policy/Cir-8/99 dated April, 26, 1999.

From the above discussion, it is clear that during March, 2005 to July, 2005 the noticees had came out with various misleading corporate announcements which had bearing on trading in the scrip of Eltrol in the securities market. As discussed above, such announcements were not genuine and were misleading in nature, solely to lure innocent investors to trade in the scrip of Eltrol. This shows the manipulative intention of Eltrol and its management consisting of noticees namely Sanjay Tripathi, Niraj Sanghvi and Deepak Rathod who were the directors of Eltrol and were responsible for its day to day affairs at the relevant point of time.

11. Whether the noticees had aided and abetted the price manipulation in the scrip of Eltrol? a. I have observed that the entities related to the directors of Eltrol had transferred huge quantities of the shares of Eltrol in off-market through multiple layers and the investigation has revealed that these shares were then off-loaded in the market through a chain of individuals and thereby profits were made. The flow of such shares has been tabled below for ready reference: Ist Layer IInd Layer IIIrd Layer IVth Layer Source Client Date Quantity Target / Date Quantity Target / Date Quantity Target Name Source Source Client Client Client Name Name Name Mangalaben 25.04.05 7,00,000 28.04.05 17,00,000 Amit Easy 24.08.05 15,54,423 Doshi Finance Ltd. Kusum Deepak 25.04.05 5,00,000 25.08.05 1,45,577 Rathod 28.04.05 8,00,000 29.04.05 12,00,000 Harsiddhi 29.08.05 12,00,000 29.04.05 5,27,000 Manpower Ashwin Doshi 27.04.05 1,99,510 TH Vakil Ser. Pvt. Ltd. Viral C. Shah 27.04.05 10,00,000 Shares & 02.05.05 17,00,000 Shreerath 29.08.05 17,00,000 Dipak Jignesh Lakhlani 27.04.05 10,00,000 Securities P. Marketing Shah Tarun Shah 29.04.05 2,00,000 Ltd. Pvt. Ltd. 30.04.05 2,00,000 02.05.05 6,53,560 Lila 25.08.05 6,53,560 02.05.05 2,00,000 Laboratories 03.05.05 2,00,000 (India ) Ltd. 04.05.05 2,00,000 02.05.05 12,00,000 Hitendra 24.08.05 12,00,000 Navin Thakkar 29.04.05 11,27,050 Chaturbhai Shilpa Sakpal 30.04.05 2,00,000 Makwana 02.05.05 2,00,000 06.05.05 14,00,000 Karni 29.08.05 14,00,000 03.05.05 2,00,000 Ajaysingh 04.05.05 2,00,000 Rathore 05.05.05 2,00,000 Charu Niraj 21.05.05 6,56,800 Vijay Singh 29.08.05 6,22,846 Sanghvi Karni b. I note that all the above said nine entities from where the movement of shares had started were related to Mr. Niraj Sanghvi and Mr. Deepak Rathod as per know your client (hereinafter referred to as ‘KYC’) forms. However, as the same has not been provided to the noticees herein, I am not inclined to consider the shares transferred by these for the present matter except that of Kusum Deepak Rathore and Charu Niraj Sanghvi, whose details have been brought out in the SCN.

c. From the table above, I note that the shares originated from Ms. Kusum Deepak Rathod, wife of Mr. Deepak Rathod, Director of Eltrol (one of the noticees herein) on April 25, April 28 and April 29, 2005, who transferred 18,27,000 shares to T.H. Vakil Shares & Securities Pvt. Ltd. in off-market transactions were ultimately reached to Mr. Dipak Shah through multiple layers.

Ms. Charu Niraj Sanghvi, wife of Mr. Niraj Sanghvi, Director, Eltrol (one of the noticees herein) on May 21, 2005, transferred 6,56,800 shares to Mr. Vijay Singh Karni in off-market transaction which later on were transferred to Mr. Dipak Shah. I note that SEBI had issued summons to all the said entities in the table above, however, these have neither replied to SCN nor the SCN returned undelivered. Due to this, the objective and the consideration received by these entities could not be ascertained.

d. I note from the trading details, it was revealed that one of the major trader in the scrip of Eltrol during the relevant period was Maars Software International Ltd. (hereinafter referred to as ‘Maars), trading through the broker Bakliwal Financial Services. It was found that the orders for Maars were placed by Mr. Shailendra Singh who as per the KYC form submitted by Bakliwal Financial Services was the introducer of Maars. I note that Shailendra Singh is the same person who had signed the reply to summons of SEBI as the authorized signatory of Eltrol vide its letter dated

January 23, 2007. This gives an inference that Mr. Shailendra Singh, had actually traded in the scrip of Eltrol, by using the name of a front entity i.e. Maars.

e. I have seen the pattern of trading and note that about 60.37% of the purchases of Maars were executed with the counterparty Mr. Dipak Shah who received huge quantities of shares of Eltrol in off-market and through various layers and was trading through Pilot Credit Capital and P. Suryakant during the period of investigation. Such trades were executed in a synchronized manner mostly on just two days i.e. on August 24-25, 2005. I note that the net position of Maars at the end of the investigation period was nil.

f. Considering this, I note that transactions in the scrip of Eltrol were executed by the entities closely related to the company. The intention of these entities for trading in such manner could not be found by the Investigating Authority due to non-cooperation by them. However, if the case is considered in totality, the same shows the active involvement of company and its directors.

12. From the above discussion, it can be said that Eltrol and its directors along with persons connected directly with them, first came out with certain favorable announcements like venturing into the sugar business, allotment of preference shares etc. aimed at inflating the price of the scrip. Simultaneously, off-market transfers were made by the related entities of directors of Eltrol. Subsequently when the prices of the scrip moved up, the shares acquired by different entities, connected to Eltrol and its directors, in off-market transactions were offloaded into the market at a higher price and thereby profits were made.

13. Further, it had been revealed that Eltrol during the period of April, 2005 to September, 2005, transferred huge funds to various brokers including Bakliwal Financial Services (India) Ltd. for trading in the securities market, both in F&O and cash segment. It has been revealed that these were the funds received through the issue of preference shares, which Eltrol had claimed to have invested in the assets of the company. I note the argument of Eltrol, to this allegation that the said funds were not immediately required and the same were invested in the securities market as a temporary measure. It further stated that the money was paid to the brokers for the purpose of treasury operations and not used in any manipulative activities. I do not find any merit in this argument of Eltrol as the trading was observed regularly from April 11, 2005 till September 27, 2005.

14. Thus from the aforesaid, I am of the view that the charges against noticees of violation of provisions of Regulation 4(1), 4(2) (a), (e), (g) and (n) of PFUTP Regulations read with Regulation 13 of PFUTP Regulations stands established. I note that vide the interim order dated October 05, 2005, SEBI had directed:

a. Eltrol not to issue any equity shares or any other instrument convertible into equity shares or alter its capital structure in any manner till further directions and further cease its dealings in the securities market in any manner, directly or indirectly, till further directions.

b. Mr. Sanjay Tripathi, Mr. Niraj Sanghvi and Mr. Deepak Rathod not to buy, sell, pledge or deal in securities of Eltrol, directly or indirectly, till further directions in this regard.

15. Therefore, taking into consideration the facts and circumstances of the case, I, in exercise of the powers conferred upon me under Sections 19 of the SEBI Act read with Sections 11, 11B and 11(4) of SEBI Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, do hereby issue the following directions:

a. Eltrol Ltd. be restrained from buying, selling or dealing in securities and from associating in securities market in any manner whatsoever for a period of five years from the date of this order. However, the period of prohibition already undergone by Eltrol Ltd. pursuant to the interim order shall be set off and the restraint will be applicable only to the extent of remaining period.

b. Mr. Sanjay Tripathi (PAN: AANPT 7127L), Mr. Niraj Sanghvi (PAN: ABVPS 5896C) and Mr. Deepak Rathod (PAN: AABPR 0690J) be restrained from buying, selling or dealing in securities and from associating in securities market in any manner whatsoever for a period of six months from the date of this order.

16. The stock exchanges are hereby directed to permit the respective members to square off their existing open positions, if any, at the earliest in Futures and Options segment.

17. This order shall be served on all recognized stock exchanges and depositories to ensure that the noticee is not allowed to undertake transactions as prohibited in Para 15 above.

18. This order shall come into force with immediate effect.

DATE : 15/JULY/2010 PRASHANT SARAN PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA