Order against Mr. Dilip S Pendse, Mrs. Anuradha S Pendse And Nalini Properties P Ltd in the matter of Tata Finanace Ltd[CA Appeal No.:3769/2010]

For Securities and Exchange Board of India } Mr. Suresh Gupta, General Manager Mr. Chandrakanta Mitra, Manager

1. Securities and Exchange Board of India (hereinafter referred to as SEBI) received a complaint, vide letter dated December 3, 2001 from M/s Tata Finance Limited (hereinafter referred to as TFL), alleging various irregularities allegedly committed by Mr. Dilip S Pendse (Managing Director of TFL at the relevant point of time) relating to the disclosure in the letter of offer dated March 20, 2001 in respect of the rights issue of 9% cumulative convertible preferential shares of TFL. It was also alleged that at the instance of Mr. Pendse, his friends, relatives and associates sold 2,90,000 shares of TFL, on the basis of unpublished price sensitive information received by him, during March 2001. It was alleged that India Emerging Companies Investment Limited (hereinafter referred to as IECIL) had made a payment to the extent of Rs.1.95 crore in excess of the then existing market price to M/s Jhunjhunwala Stock Brokers Private Limited (hereinafter referred to as JSBPL) and Malini Sanghi Securities Private Limited (hereinafter referred to as MSSPL) towards the purchase of 2,15,000 shares of TFL @ Rs. 91/- per share during March 2001. SEBI also received a reference from the Joint Parliamentary Committee forwarding a complaint received from TFL regarding the alleged insider trading committed inter alia by Mr. Pendse, his relatives/associates/friends.

2. Thereafter, SEBI initiated an investigation to find out inter alia the alleged insider trading committed by Mr. Pendse and others. Notice to the parties in terms of Regulation 6(1) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 was waived under Regulation 6(2) thereof in the interest of investors and the securities market. The investigation conducted by SEBI prima facie observed that Mr. Pendse was the Managing Director of TFL and a director of Niskalp Investment and Trading Company Limited (hereinafter referred to as Niskalp), a subsidiary of TFL. It was further observed that, by virtue of the said position he was also a member of Investment Committee of Niskalp and hence aware of the poor estimated financial results of TFL for the quarter ending March 2001 which were discussed with him by the Finance Department of TFL in the second/third week of March 2001. Apart from this, he was also aware of the estimated loss/erosion in the value of investment portfolio of Niskalp/its subsidiaries as the copy of Net Asset Value of the investment of Niskalp was prepared and given to him on a daily basis. The investigation conducted by SEBI revealed that the information relating to the erosion of the finance of TFL and Niskalp was not in public domain. The information in respect of the provisional losses to the tune of Rs.79.37 crores of Niskalp as on March 31, 2001 was disclosed to the shareholders only on April 30, 2001. It was prima facie observed that as Mr. Pendse knew that the news about losses in the books of subsidiaries of TFL on becoming public would have an adverse impact on the price of the shares of TFL, he had advised his associates/relatives to sell the shares of TFL on the basis of this unpublished price sensitive information. Accordingly, the associates/ relatives of Mr. Pendse sold 2,90,000 shares of TFL during March 2001. The investigation conducted by SEBI observed that 2,90,000 shares of TFL were sold by Mrs. Anuradha S Pendse (wife of Mr. Pendse), Dr. Anjali Beke (acquaintance and associate of Mr. Pendse and director of Anjudi Property & Investment Private Limited) and Nalini Properties Private Limited in the following manner:

Seller No. of Stock broker shares Mrs. Anuradha S Pendse 10,000 Malini Sanghi Securities Private Limited Nalini Properties Private Limited 30,000 Malini Sanghi Securities Private Limited Dr. Anjali Beke 20,000 Malini Sanghi Securities Private Limited Anjudi Property & Investment Private Limited 80,000 Malini Sanghi Securities Private Limited Anjudi Property & Investment Private Limited 1,50,000 Jhunjhunwala Stock Brokers Private Limited

3. It was observed that the above mentioned sellers were prima facie connected to Mr. Pendse in some or the other way. Mrs. Anuradha S Pendse and Mr. Sudhakar Pendse (Mr. Pendse’s father) are the only directors in Nalini Properties Private Limited. Dr. Anjali Beke is an associate of Mr. Pendse and was known to him over 10 years. Anjudi Property and Investments Private Limited (hereinafter referred to as APIPL) is a company promoted by Dr. Anjali Beke and Dr. Dilip Beke (Dr. Anjali’s Beke’s husband). It is also observed that it was Mr. Pendse who had introduced APIPL to Canara Bank, Bombay Samachar Marg Branch, Mumbai and Citibank where APIPL was maintaining bank accounts. Besides, Dr. Anjali Beke in her statement given to SEBI had said that one Ms. Mona Lundhwani, who was the accountant of APIPL, was also the accountant of Nalini Properties Private Limited (hereinafter referred to as NPPL) and that she worked in Mr. Pendse’s office at Churchgate, Mumbai. It was further observed that APIPL was introduced to the stock brokers JSBPL and MSSPL by Mr. Pendse and that NPPL had given amounts to the extent of Rs.2.85 crores to APIPL during the period April 2000 to June 2001 as Inter Corporate Deposits (ICDs). It was also found that Mr. Pendse was a director of Khudagawah Investments Private Limited. The said company too had given amounts to the extent of Rs. 75 lakhs to APIPL as ICDs. It was found that on several occasions, payments were made by the family concerns viz. NPPL, Khudagawah Investments Private Limited to APIPL which were further remitted by the latter to stock brokers including JSBPL and MSSPL.

4. The investigation conducted by SEBI prima facie observed that the shares of TFL were sold by the persons/entities shown in the table in Para 2 above, during March 28-31, 2001 when the market price was around Rs.39 – Rs.43 per share. However, the contract notes were backdated as that of September 11, 2000 and the said deals were shown to have taken place at Rs.90 per share. The associates of Mr. Pendse sold the shares to stock brokers who claim to have issued Form B Contract Notes showing purchase on principal to principal basis. It was also seen that the above stock brokers MSSPL and JSBPL in turn sold the shares (which were bought by them from the persons/entities as specified in table at Para 2 above), to IECIL and M/s Sarjan Securities Private Limited (hereinafter referred to as SSPL) in off-market deals.

5. Thus, the investigation conducted by SEBI found that the sale of 2,90,000 shares of TFL (as mentioned in the table at Para 2 above) was neither executed on any recognized stock exchange nor reported to any stock exchange. It was also prima facie observed that Mrs. Anuradha S Pendse, NPPL, Dr. Anjali Beke and APIPL sold the shares of TFL in the month of March 2001 on the basis of unpublished price sensitive information received from Mr. Pendse. The contract notes, bills and books of accounts appeared to have been backdated and falsified with a view to misrepresent that the sale of shares of TFL had taken place during September 2000, whereas the said transactions had actually taken place during March 2001.

6. The above acts were prima facie in violation of Section 13 of Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as SCRA), Regulation 3 read with Regulation 4 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as the Insider Trading Regulations) and Regulation 6(d) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 1995 (hereinafter referred to as the FUTP Regulations).

7. On the basis of the aforesaid prima facie findings, SEBI issued separate notices dated April 07, 2003 to Mr. Pendse, Mrs. Anuradha S Pendse, NPPL, Dr. Anjali Beke and APIPL asking them to show cause as to why appropriate directions should not be issued for the alleged violations committed by them, as mentioned above. The observation of the investigation conducted by SEBI was communicated to the aforesaid persons in the said show cause notice. Mr. Pendse, Mrs. Anuradha S Pendse and NPPL are hereinafter collectively referred to as the noticees, for the sake of brevity. As the noticees had neither submitted any reply nor availed the opportunities for personal hearing granted to them on a number of occasions (such as February 4, 2005, March 22, 2005, March 1, 2006, December 12, 2006 September 11, 2007, October 5, 2007 and November 16, 2007), SEBI, vide an ex-parte order dated January 11, 2008 inter alia restrained the noticees, Dr. Anjali Beke and APIPL from accessing the securities market and prohibited from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever for a period of five years.

On appeal filed by the noticees (Appeal Nos. 39, 40 & 41 of 2008 filed by Mr. Pendse, Mrs. Anuradha S Pendse and NPPL respectively), the Hon’ble Securities Appellate Tribunal (hereinafter referred to as SAT), vide order dated September 25, 2008 in Appeal No. 39 of 2008 inter alia observed “In this view of the matter, we set aside the impugned order qua the appellants only and remand the case back to the Board. Since the matter is being sent back, the Board may serve a fresh notice on the appellants or proceed on the basis of the notices already issued and allow the appellants to file their response and thereafter pass a fresh order in accordance with law.” SAT, further observed that “the primary issue to be decided in these cases is whether the trades were executed in September 2000 as contended by the appellants or in March 2001, as alleged in the show cause notice.” Dr. Anjuli Beke and APIPL have not filed any appeal against the said order. It may be noted that SEBI had also initiated adjudication proceedings inter alia against Mr. Pendse and Dr. Anjali Beke. While the Hon’ble SAT remanded the adjudicating officer’s order as against Mr. Pendse back to SEBI for fresh consideration, the adjudicating officer’s order as against Dr.Anjali Beke was upheld by the Hon’ble SAT in Appeal No. 148 of 2005 (Dr.

Anjali Beke Vs. The Adjudication Officer, Securities and Exchange Board of India) vide order dated October 26, 2006. The Hon’ble SAT, while dismissing the said appeal inter alia observed “In view of the above, when a person has received unpublished price sensitive information or who has had access to such information, he becomes an insider. He need not be a person connected with the company. It is an admitted fact that Dr. Anjali Beke was well known to Shri Dilip Pendse for more than ten years and it is her own case that he carried on business in her name. Their closeness cannot, therefore, be in doubt. It is because of this closeness that he passed on the unpublished price sensitive information to her on the basis of which she traded in the shares of TFL. She is, therefore, an insider. Shri Pendse was the managing director of TFL of which NITC was a wholly owned subsidiary and, therefore, by virtue of this connection he had access to the unpublished price sensitive information in respect of the securities of TFL. Unpublished price sensitive information was the loss suffered by NITC which had a direct bearing on the price of the shares of TFL.

The charge of insider trading is complete when it is established that an insider traded in the scrips of the company. We have already held that the appellant was an insider and it is on record that she and API had sold the shares of TFL before the price sensitive information was made public on 30th April, 2001.”

(NITC as referred above is Niskalp Investment and Trading Company Limited.)

8. Thereafter, SEBI, vide letter dated December 5, 2008 granted an opportunity of hearing to the noticees on January 7, 2009. Subsequently, Bhave & Company, advocates, vide letter dated December 12, 2008 on behalf of the noticees requested SEBI to allow them to inspect certain documents. The said request was conceded by SEBI and the noticees were allowed to inspect the documents on January 2, 2009. SEBI also advised the noticees to appear for a hearing on January 23, 2009. In response, Bhave & Company, Advocates, vide letter dated January 2, 2009 requested to postpone the date of inspection as its client (Mr. Pendse) was not available in Mumbai. Allowing the request made on behalf of the noticees, SEBI advised them to inspect the documents on January 13, 2009 and thereafter to appear for a hearing on February 12, 2009. Mr. Pendse inspected the documents on behalf of all the noticees on January 13,

2009. Thereafter, vide letter dated January 15, 2009, Bhave & Company requested SEBI to provide certified copies of various documents. The said documents were provided to Mr. Ravindra Daji Indulkar (authorized representative of Bhave & Company).

9. Subsequently, Bhave & Company, advocates, vide letter dated February 2, 2009 forwarded separate submissions (on similar lines), of the noticees in reply to the show cause notice dated April 07, 2003. It was inter alia stated that the notice as required under Regulation 6 of the Insider Trading Regulations was not given to the noticees. They further contented that the order waiving such notice was also not given to the noticees. The noticee stated that Mrs. Anuradha S Pendse and NPPL sold 10,000 and 30,000 shares of TFL respectively to MSSPL on a principal to principal basis on September 11, 2000. They further added that a contract note in Form B was issued for the said transaction and the Ledger Account of Mrs. Anuradha S Pendse and NPPL were respectively credited with the said amounts on September 16, 2000. With reference to the sale of shares by APIPL, the noticees stated that they have no connection whatsoever with the said company. With reference to the transactions by Dr. Anjali Beke, the noticees have denied that she is an associate of Dr. Pendse. They have requested that Dr. Anjali Beke be made available for cross examination in order to give the noticees a fair chance to meet the case sought to be made against them in the interest of natural justice and equity. The noticees denied that deliveries and/or payments in respect of the transactions stated hereinabove that took place during March 28, 2001 to March 31, 2001. Mrs. Anuradha S Pendse stated that on two occasions, she had given ICDs to APIPL. The noticees denied that no payments were made by the stock brokers JSBPL and MSSPL to Mrs. Anuradha S Pendse and NPPL. They have also denied the allegation that the payments for the purchases made by MSSPL were made only on March 30, 2001 and March 31, 2001. According to the noticees, no bearing should be given to the statement of Mr. V. Ramanujam (Senior Vice President, TFL) until and unless the noticees are given an opportunity to cross examine him. The noticees stated that adequate disclosures as per the then prevailing rules and regulations of SEBI as applicable to the Rights Issue were made in the Rights Issue Offer document as Rights Issue Offer document are verified and certified by the Statutory Auditors of the company and Merchant Bankers to the Issue.

10. The noticees added that a ‘spot delivery contract’ and Form B contract i.e. principal to principal contract are not one and the same and that they are two different types of contracts/transactions which can be entered into by the parties. They have stated that the alleged discussion by the Finance Department of TFL in the second week of March 2001 is irrelevant and has no bearing on the sale of shares which took place in September, 2000. They have denied that it was at the behest/instance of Mr. Pendse that the quantities of shares of TFL were purchased by IECIL and Inshaallah Investments Limited in March, 2000. The noticees stated that the Disciplinary Action Committee of BSE in its meeting held on March 12, 2003 exonerated JSBPL (stock broker) and that the minutes of the said meeting reflected that the transactions were reported to the exchange by MSSPL (stock broker). The noticees denied the allegations that being an “insider”, Mr. Pendse had communicated unpublished price sensitive information and had by his directions caused the associates and purchasers to act upon the said unpublished price sensitive information to their benefit and to the detriment of other investors. Further, the noticees denied that there had been any antedating of transactions and stated that contemporaneous records would establish that the allegations of ante-dating of contract note was incorrect.

11. According to the noticees, purchase of shares by IECIL and Inshaallah Investments Limited were pursuant to the decisions of the Board/ Investment Committee respectively and in any event purchase by IECIL and Inshaallah Investments Limited in March 2001 would have no bearing on the sale of shares in September 2000 and the alleged unpublished price sensitive information in March 2001. Mr. Pendse denied that the loss of Niskalp would have prompted any reasonable investor to sell the shares held by him to avoid further losses. It was also stated that Mrs. Anuradha S Pendse having sold 10,000 shares in September 2000, which was 20% of her total shareholding in TFL (45,000 shares) at the relevant point of time. Mr. Pendse stated that he had not sold a single share either in September 2000 or in March 2001 though he himself had a shareholding of 28,000 shares of TFL at the relevant time. The noticees denied the allegation that the sale of shares by Mrs. Anuradha S Pendse and/or NPPL was on the basis of information disseminated by Mr. Pendse. He further stated that the Dr. Anjali Beke and/or APIPL were not his associates and he had no unpublished price sensitive information in September 2000 and/or did not disseminate any such information in March 2001 or at any time to any person including the alleged associates.

Mr. Pendse stated that the sale of shares by Mrs. Anuradha S Pendse and NPPL to entities was not on his instructions and that the sale of shares to MSSPL was on principal to principal basis during September 2000 and the money was also credited in September 2000 itself. Mr. Pendse denied the allegation that the shares sold to MSSPL and JSBPL were the same shares sold to IECIL and SSPL. Mr Pendse denied having any knowledge of the fact that SSPL was related to Suzlon Energy Limited. He denied that SSPL had received funds from Suzlon Energy Limited and denied any wrongdoing, more specifically regarding the allegation that SSPL had purchased shares at a higher price on account of obligation since Tata group had purchased wind mills from Suzlon Energy Limited. He further stated that the allegations were made only to create prejudice against him and to subserve the interest of a powerful business house. Mr. Pendse stated that IECIL did not become a subsidiary of Niskalp in October-November 2000. He further stated that IECIL had invested in the shares of TFL on the instruction of the then Tata Group financial adviser.

He contented that in spite of this being on record, the financial adviser of Tata group, any senior member of Tata Industries or of Sheba Properties Limited was not called by SEBI for verifying the said statements.

12. Subsequently, Mr. Vicky Mohan Singh, Advocate as authorized by the noticees / Bhave & Company appeared before me on February 12, 2009 and made submissions on behalf of the noticees on the lines of the replies that they had made. He further stated that the sale of shares was completed on or about September 11, 2000 and moneys were credited into their respective running accounts on or about September 16, 2000. He also denied the allegation that the sale of shares of TFL was executed in March 2001 at Rs.39/ - Rs.43/ share, while contract notes were antedated to September 2000 at Rs.90/- share. The learned counsel further submitted that, MSSPL itself had informed the Bombay Stock Exchange Limited (hereinafter referred to as BSE) of the impugned transactions, vide letter dated September 16, 2000. He submitted that BSE, vide letter bearing No.ISC/PG/RD/10 dated November 26, 2002 addressed to IECIL have recognized the fact that, MSSPL had vide letter dated September 16, 2000 submitted to BSE, the copies of the contract notes in respect of the principal to principal transactions executed in the shares of the TFL. According to the learned counsel, Mr. Pendse has not communicated any unpublished price sensitive information to the entities who sold the shares of TFL nor has he ‘counseled’ nor ‘procured’ any one of the entities to purchase shares or sell shares at any particular time. Pursuant to the hearing, Bhave & Company, vide letter dated February 18, 2009 submitted a copy of the Income Tax Return filed by Mrs. Anuradha S Pendse for the year 2001- 2002 (on September 3,2001).

13. I have examined the show cause notice issued to the noticees, the oral as well as written submissions made on their behalf and other materials available on record. The case of the noticees is that the transactions of Mrs. Anuradha S Pendse and NPPL with the stock brokers (as mentioned above) in the shares of TFL were executed in September 2000 on a principal to principal basis and that the same was reported to BSE in the same month. Thus, on consideration of the facts and circumstances including the submissions made on behalf of the noticees and the observation made by the Hon’ble SAT in the appeal cited supra, the following issues arise for consideration:

i) Whether the trades of Mrs. Anuradha S Pendse and NPPL in the shares of TFL were executed in the month of September 2000 or in March 2001? ii) If the trades were in March 2001, whether such trades were on the basis of unpublished price sensitive information received from Mr. Pendse?

My findings in respect of the above issues are as under.

14. I note that the noticees have contended that the trades of Mrs. Anuradha S Pendse and NPPL in the shares of TFL had taken place in the month of September 2000. In support of their claim, they contended that MSSPL reported the impugned transactions to BSE in September 2000 itself. The noticees further relied upon the letter of MSSPL (stock broker) dated September 16, 2000 to BSE, enclosing 5 contract notes executed by it in Form B, bearing nos. GBO1/1, GBO1/2, GBO1/3, GBO1/4 and GBO1/5. The noticees claimed that the said letter was acknowledged by BSE on September 19, 2000. I have perused the copy of such letter of MSSPL. I note that the date and time of receipt is absent in the said letter in the place provided for the same in the acknowledgment seal. Instead, the date ‘19/9/2000’ is handwritten on the said letter with the initial, outside the space provided for in the acknowledgment seal. I further observe that all such contract notes claimed to have been issued by MSSPL in Form B (as submitted by the noticees) are dated September 11, 2000 with consecutive serial numbers starting from GB01/1 to GB01/ 5, as mentioned below:

Contract Note No. Person/Entity Quantity GB 01/ 1 Mrs. Anuradha S Pendse 10,000 shares GB 01/ 2 Dr. Anjali Beke 20,000 shares GB 01/ 3 IECIL 1,40,000 shares GB 01/ 4 APIPL 80,000 shares GB 01/ 5 NPPL 30,000 shares

15. While the contract note is printed, its sub-serial number is observed to be hand written in few instances. All these contract notes were issued by MSSPL. In fact, the case is that Mrs. Anuradha S Pendse, NPPL, APIPL and Dr. Anjali Beke sold the shares of TFL to the stock brokers as mentioned in the table at Para 2 of this order. I note that the contract notes claimed to have been issued on September 11, 2000 by MSSPL indicates that the transactions of Mrs. Anuradha S Pendse, Dr. Anjali Beke, APIPL and NPPL were entered under the column ‘Securities SOLD To you for’ and in the case of IECIL the transaction was mentioned under the column ‘Securities BOUGHT FROM you for’. In fact, the case of the noticees is that they had sold the shares of TFL to the aforesaid stock broker on September 11, 2000. While all along the noticees have been relying on these contract notes as proof that their sale transaction was in September 2000, I find that the basic content of these contract notes are in the contrary and opposite direction as they reflect buy transactions in place of the sale transaction of Mrs. Anuradha S Pendse and NPPL in the shares of TFL as claimed by them.

Since the copy of the contract notes submitted by the noticees, on the face of it, indicate certain alleged ‘buy transactions’ of Mrs. Anuradha S Pendse and NPPL, I can only hold that, they (contract notes) are not relevant but are extraneous to the issue in question. The show cause notice alleged that Mrs. Anuradha S Pendse and NPPL sold shares of TFL, pursuant to the receipt of unpublished price sensitive information from Mr. Pendse. The noticees could not produce any contract notes to support their sale transactions during September 2000 as contended by them. As mentioned above, the contract notes submitted by the noticees pertain to some ‘buy’ transactions of the noticees, APIPL and a sell transaction of IECIL. If the noticees had sold the shares of TFL to MSSPL and JSBPL on principal to principal basis, then the contract notes should have specifically mentioned such fact i.e and they would have been reflected clearly as sale transactions. If the noticees could produce copy of contract notes in respect of the buy transactions they could have very well produced the same in respect of the sale transactions.

No such document was produced by them. Besides, the case of the noticees is that MSSPL sold shares of TFL to the IECIL. But the copy of the contract notes submitted by them indicates that IECIL was a seller in the said transactions. These factual circumstances raise strong doubts about the genuineness of the contract notes issued by MSSPL themselves.

16. Further, from the submissions of Mrs. Anuradha S Pendse and NPPL (vide their respective letters dated January 21, 2002), I note that, 10,000 shares of TFL were debited from the account of Mrs. Anuradha S Pendse on March 28, 2001 and 30,000 shares of TFL were debited on March 30, 2001 from the account of NPPL. Even if the transactions of the noticees were sell transactions, how could the stock broker (MSSPL) sell 1,40,000 shares of TFL [Contract Note No. GB01/3 in the Table in Para 14], when only 30,000 shares of TFL were available [Contract Note Nos.GB01/1 (for 10,000 shares) and GB01/2 (for 20,000 shares) as mentioned in the Table in Para 14]. In the absence of any contract notes to support the claims of the noticees, I am of the view that Mrs. Anuradha S Pendse and NPPL executed sell transactions in the shares of TFL in the month of March 2001, as alleged in the show cause notice.

17. Besides, I note from the Party Ledger statement of Mrs. Anuradha S Pendse (maintained with the stock broker, MSSPL) for the financial year 2000- 01, (as submitted by her, vide letter dated January 21, 2002 to SEBI), that Rs.9,00,000/- was credited by MSSPL to her account on September 16, 2000 by bill no 201003/ZGBO1. In her aforesaid letter, Mrs. Anuradha S Pendse further stated that the delivery was given in the prescribed demat form subsequent to the transaction and the same was debited to their account on March 28, 2001. However, I note that Mrs. Anuradha S Pendse in her written explanation (to the show cause notice dated April 7, 2003) denied that the delivery and/or payment in respect of the transaction took place during March 28, 2001 to March 31, 2001. This submission is contrary to her submissions made vide letter dated January 21, 2002, as stated above. Similarly, I note from the Party Ledger statement of MSSPL (in respect of Mrs. Anuradha S Pendse) that, there was a credit amount of Rs.9,00,000 on September 16, 2000 towards Bill No. 201003. However, the corresponding debit was recorded only on March 30, 2001. The time lag between the credit entry in the ledger account of the stock broker (MSSPL) and the actual receipt of payment by her is approximately six months. This delay has not been explained by her. This inordinate delay stands out in sharp contrast to the normal time taken for similar entries in the ledger, as seen in the instances outlined in the succeeding paragraph.

18. Additional credits were entered in the ledger account of Mrs. Anuradha S Pendse vide entries dated November 18, 2000 and November 25, 2000 against Bill Nos. 134009/ ZGA34 and 135008/ZGA35 respectively to the tune of Rs.16,113.34/- each, totaling to Rs.32,226.68/-. The consequent payment for these credit entries was received by Mrs. Anuradha S Pendse on December 15, 2000 vide PYMT No. 468/ZBCO8 for a sum of Rs.32,226.68/-. Here, the time lag between the advancement of the credit and the actual receipt of payment is less than a month. Further, there was a credit provided on February 24, 2001 vide Bill No. 148009/ZGA48 for a sum of Rs.31,728.83/- and the corresponding payment was received by her, vide PYMT No. 693/ZBCO8 dated March 23, 2001. Here also, the time lag between the advancement of the credit and the receipt of payment by her is less than a month. However, for the credit of Rs.9 lakh on September 16, 2000, the actual payment was made almost after 7 months. Even this factual position would strongly indicate that the transaction had not taken place in September 2000, instead the same had taken place in the month of March 2001 as mentioned in the show cause notice. Besides, bank account statement (of Account No.1107) of Mrs. Anuradha S Pendse maintained with Canara Bank, Bombay Samachar Marg, Mumbai Branch (as submitted by her vide letter dated January 21, 2002) also indicate that the payment was received by her only on April 21, 2001.

19. In the facts and circumstances and the documents available on record, I note that the transaction involving the credit of Rs.9,00,000/- which is pertinent here stands out and is in stark contrast to the other similar transactions transacted between MSSPL and Mrs. Anuradha S Pendse as discussed above. No explanation is available on record for such delay. This, in turn, raises strong doubts in my mind regarding the genuineness of the transactions executed by the aforesaid persons in September 2000 as contended by them. Moreover, Mrs. Anuradha S Pendse, in her statement to SEBI on August 26, 2002 inter alia stated the following:

“Q.14 Why did you decide to sell the shares of TFL in second week of September 2000.

A.14 I was in need of funds and NPPL was also in need of funds and hence I decided to sell shares of TFL in second week of September 2000.

Q.16 Whether you or NPPL received any actual payment against these sale transactions in September 2000.

A.16 In my account, I received the payment in March 2001.NPPL was a running account with the broker and it got adjusted with the broker.”

20. Thus, according to Mrs Anuradha S Pendse, she was in need of money when she decided to sell the shares of TFL belonging to her and NPPL. However, the consideration against such transactions as claimed by her was received only in March 2001. The receipt of money in March 2001 (as claimed by her) does not support her claim that she/NPPL was in need of money in September 2000. If she had sold the shares of TFL in September 2000, as she needed money then, she would not have waited till March 2001/April 2001 to realize the same. This fortifies the inference that the shares were actually sold in the month of March 2001 and not in September 2000.

21. Similarly, I also note from the Party Ledger statement of NPPL for the financial year 2000-01 (as submitted by the said entity vide letter dated January 21, 2002), that Rs.27,00,000/- was credited by MSSPL to the account of NPPL on September 16, 2000 by Bill No.201006/ZGBO1. However, there is no mention of any date of receipt of actual payment for the said credit entry by NPPL from MSSPL. However, I observe from that very same document that additional credit was advanced to the account of NPPL vide Bill Nos.

200001/ZGFC2, 200003/ZGFC3 and 200001/ZGFC4 respectively to the tune of Rs.18,12,941.99/-, Rs.13,13,006.82/- and Rs.2,05,726.38/- respectively. The consequent payment for these credit entries were received in the month of September 2000 itself vide PYMT No. 317/ZBCO8, PYMT No. 320/ZBCO8 and PYMT No. 321/ZBCO8 for the corresponding amounts as mentioned above. Thus, the time lag between the advancement of the credit and the receipt of payments is less than a month. From the said copy of the ledger statement, I further observe that MSSPL has received Rs.50,00,000/- from NPPL which was shown as a credit entry on December 20, 2000 in the books of MSSPL. Payments of Rs.50 lakhs by NPPL to MSSPL in December 2000 when NPPL had a credit due of Rs.27 lakhs since September 16, 2000 and the absence of any valid explanation on records for the same again raises strong doubts regarding the genuineness of the alleged transaction in shares of TFL, as contended by the noticees. The facts and circumstances of the case would go to prove that the noticees sold the shares of TFL in the month of March 2001 to the stock brokers as alleged in the show cause notice.

22. There is one more reason that would further support the deduction that the transactions were executed in the month of March 2001. The statements of Mrs. Anuradha S Pendse to SEBI dated August 26, 2002 as quoted below are pertinent in this regard:

“Q. 21 When were the deliveries given for 30,000 shares of TFL sold by NPPL and 10,000 shares of TFL sold by you in your account.

A. 21 As far as I remember, soon after the transaction in September 2000, I had given blank signed transfer request forms for shares of TFL sold by myself and NPPL to the broker MSSPL.

Q. 23 How do you say that these transfer request forms were for sale of TSL shares by yourself and for NPPL where there were no details such as date, name of the shares, no. of shares mentioned on it. When were the shares actually delivered?

A.23 I had verbally told the broker that these blank transfer request forms were for shares of TFL sold by myself and NPPL. As far as I remember, the shares have actually gone from my account and also from the account of NPPL during March 2001”.

Clearly there is an express admission by Mrs. Anuradha S Pendse that the shares have actually gone from her account and also from the account of NPPL during March 2001.

23. Besides, the above statement, Mrs. Anuradha S Pendse and NPPL vide separate letters dated January 21, 2002 (both signed by Mrs. Anuradha S Pendse) informed SEBI that they (Mrs. Anuradha S Pendse and NPPL) respectively sold 30,000 shares (September 11, 2000) and 10,000 shares (September 16, 2000) and that the delivery was debited to the respective accounts on March 30, 2001. In the said letter, Mrs. Anuradha S Pendse further stated that the payment with respect to the said transactions was received on March 30, 2001 and subsequently credited to her account on April 26, 2001. This would further show that the deliveries were effected only in month of March, 2001 which would further show that the transactions had in fact taken place in the month of March, 2001.

24. I also note that MSSPL vide letter dated August 30, 2002 informed BSE {in the subject of dealing in the scrip of Tata Finance Ltd. (TFL) with India Emerging Cos. Investment Ltd.} that, “We received delivery from selling clients on 28.03.2001 & 30.03.2001 and gave delivery to IECIL on 30/31.03.2001 (enclosed demat statement of last week of March 2001)”. MSSPL also stated in the said letter, “Delivery and Payments were delayed and completed in March, 2001. Buyer & Sellers accepted the delay and completed the transactions.” The aforesaid letter is important as it was issued by MSSPL, the stock broker that had allegedly issued contract notes to Mrs. Anuradha S Pendse and NPPL. The said contract notes were issued in respect of the entities/persons mentioned in the table at Para 14 of this order. This letter would rebut the contention of the noticees that the impugned sales transactions were completed in the month of September 2000 itself. It may be noted that the noticees in their submission to the show cause notice contended that the transactions were completed in the month of September 2000. Thus, the submission of the noticees in this regard is only to mislead the Regulator. Further, the aforesaid letter of MSSPL would also prove that the same shares of TFL which were sold to it by Mrs. Anuradha S Pendse, Dr.Anjali Beke, NPPL and APIPL were subsequently sold to IECIL. This is evident from the submission of MSSPL in the said letter that “We received delivery from selling clients on 28.03.2001 & 30.03.2001 and gave delivery to IECIL on 30/31.03.2001”. This would indicate that MSSPL had given the delivery of shares of TFL to IECIL only after the receipt of shares from the selling clients (including Mrs. Anuradha S Pendse and NPPL).

25. One more pertinent issue is to note that in the letter dated January 21, 2002 (as cited in Para 21 of this order), Mrs. Anuradha S Pendse stated that she had sold 10,000 shares of TFL to MSSPL on September 16, 2000 whereas in the contract note submitted by MSSPL which were relied upon by the noticees including Mrs. Anuradha S Pendse reflect the date of transaction as September 11, 2000 and that too in respect of a different transaction. Even, assuming for argument sake that the contract note pertains to the sale transactions, Mrs. Anuradha S Pendse’s statement goes to disprove the date of transaction. Thus, the noticees are inconsistent in their submissions.

26. I have noted the minutes of the BSE Disciplinary Action Committee meeting held on March 12, 2003 wherein it was observed that the allegations leveled against Jhunjhunwala Stock Brokers Private Limited were not proven beyond reasonable doubt though ‘there was some scope of terming the transactions as irregular’. The noticees have relied on the findings of the said Disciplinary Action Committee of BSE. I note that these transactions pertain to the financial year 2000-2001, whereas the minutes are dated March 12, 2003. Further, the contract notes relied upon by the Disciplinary Action Committee suffers from several discrepancies as has been mentioned above in this order. Considering the above, I am of the view that since the findings of the Disciplinary Action Committee of BSE were based on the documents which included the said contract notes, I cannot accept the contention of the noticees that the impugned transactions have taken place in the month of September, 2000.

27. From the submissions of Mrs. Anuradha S Pendse in her letter dated January 21, 2002, I note that she had received credit in her account with the stock broker for sale of 10,000 shares of TFL on September 16, 2000 but the payment was received on March 30, 2001 which was subsequently credited on April 26, 2001. NPPL in its letter dated January 21, 2002, stated that it had received credit in its account maintained with the stock broker for sale of 30,000 shares of TFL on September 16, 2000 but there are no further details of the date of actual receipt of payment in bank account. Out of 290,000 shares sold, I find that by entering into these transactions, Mr. Pendse wanted to hide the fact that shares were sold in March 2001 by his relatives/associates/their companies based on information about impending losses of TFL. The fund flow analysis as discussed hereinabove clearly brings out that the requisite fund transfers were effected in March 2001. Also a perusal of the demat account statements exhibited that the transfer of shares also took place in March 2001 as discussed earlier in this order. Based on the same, I am of the considered view that the said 2,90,000 shares of TFL were sold by the associates of Mr. Pendse during March 28-31, 2001 when the market price was around Rs.39/- to Rs.43/- per share.

28. Besides, during the course of the hearing before me, the learned counsel for the noticees referred to the Income Tax Returns for the Assessment Year 2001-02 of Mrs. Anuradha S Pendse. The copy of the same was subsequently forwarded to SEBI by letter dated February 18, 2009. I have perused the same and I note that the said return was filed with the Income Tax authorities on September 3, 2001. As per the noticees, the transactions were carried out during September 11, 2000. With regard to the sale of shares of TFL by Mrs. Anuradha S Pendse, I note that she had claimed a taxable gain of Rs. 6,05,199 on sale of 10,000 TFL shares. For the sale of shares in September 2000 as claimed by her, she was required to pay advance tax on the capital gains by September 15, 2000 or December 15, 2000 as applicable. I further note from the annexure to the copy of said return that no advance tax was paid during the financial year 2000-01 and in fact interest of Rs. 44,057 u/s 234B of the Income Tax Act, 1961 was paid for default on payment of advance tax and a further sum of Rs. 31,754 was paid u/s 234C of the said Act towards interest for deferment of advance tax. All these payments were on account of delay in the payment of advance tax including advance tax arising on sale of TFL shares. On the one hand Mrs Anuradha S Pendse had claimed a credit balance of Rs.9 lakh with MSSPL whereas on the other hand she had paid interest u/s 234B and 234C of the said Act, as aforementioned. Thus, the document furnished by Mrs. Anuradha S Pendse not only does not support her claim that these transactions happened in September 2000, but it amply indicates that these trades in fact happened in March 2001 and hence no advance tax could be paid earlier.

29. In the present case, it is established that the payments and deliveries in respect of the transactions of Mrs. Anuradha S Pendse and NPPL were effected only in the month of March 2001 and thereafter. Mrs. Anuradha S Pendse also admitted that she received the payment in April 2001. If the transactions had happened in the month of September 2000, as alleged by the noticees, the delivery /payment would have been made in the month of September 2000 or within a reasonable time period especially taking into account the admitted reason for the sale of shares by Mrs. Anuradha S Pendse that she was in need of money. This has not happened in September, 2000. Therefore, in view of the foregoing, I can only conclude on the strength of the evidence discussed above that Mrs. Anuradha S Pendse and NPPL sold shares of TFL in March 2001. Thus, the first issue is disposed of, accordingly.

30. Having found that the sell transactions of Mrs. Anuradha S Pendse and NPPL were executed in March 2001, the next issue to be considered is whether such trades were on the basis of unpublished price sensitive information received from Mr. Pendse. In this regard, the contention of Mr. Pendse is that the ‘unpublished price sensitive information’ in March 2001 is wholly irrelevant, as according to him, the transactions had taken place in September 2000. However, this contention was found to be incorrect for the reasons stated above in this order. According to Mr. Pendse, he did not communicate any unpublished price sensitive information to any third party. I note that Mr. Pendse, in his statement dated July 24, 2002 (to SEBI) admitted that he was the Managing Director of TFL during the period April 1, 1999 to May 31, 2001. Further, he has also admitted that he was a director in fifteen Tata Group companies. Besides this, Mr. Pendse in his Appeal Memorandum (in Appeal No.39 of 2008) filed before the Hon’ble SAT against the order of SEBI dated January 11, 2008 inter alia contended that, “The respondent has failed to consider that the alleged “price sensitive information” about the erosion in the value of investment portfolio of Niskalp for the quarter ending March, 2001 was discussed with the Appellant only in the first week of March, 2001 about 6 months after the sale of shares.”

31. In addition to the above, I note that the term “insider” is defined under Regulation 2(e) of the Insider Trading Regulations as - “‘insider’ means any person who, is or was connected with the company or is deemed to have been connected with the company, and who is reasonably expected to have access, by virtue of such connection, to unpublished price sensitive information in respect of securities of the company, or who has received or has had access to such unpublished price sensitive information.” (Underline supplied). Admittedly, Mr. Pendse was the Managing Director of TFL and a director of Niskalp (a subsidiary of TFL). He is a connected person in terms of Regulation 2 ( c) of the Insider Trading Regulations and thus, he had access to unpublished price sensitive information by virtue of his position. Admittedly, Mr. Pendse was the Managing Director of TFL and was also a Director of Niskalp and as such he was in a position to have access to and/or know about the financial position of TFL and Niskalp during the relevant period under consideration. He was in a key position to have access and knowledge of the affairs of TFL and its subsidiaries as regards both published and unpublished information, either price sensitive or not. Further, the term “unpublished price sensitive information” has been defined under Regulation 2(k) of Insider Trading Regulations, as under- “any information which relates to the following matters or is of concern, directly or indirectly, to a company, and is not generally known or published by such company for general information, but which if published or known, is likely to materially affect the price of securities of that company in the market a) financial results (both half-yearly and annual) of the company b) intended declaration of dividends (both interim/final) c) issue of shares by way of public, rights, bonus etc,; d) any major expansion plans or execution of new projects; e) amalgamations, mergers and takeovers; f) disposal of the or substantially the whole of the undertaking; g) such other information as may affect the earning of the company; h) any changes in policies, plans or operations of the company.”

It is noted from above that ‘financial results’ of a company, has specifically been categorized as “price sensitive information”. This information was available with Mr. Pendse by virtue of his being the Managing Director of TFL and a Director and member of investment committee of Niskalp. I also note that, he was specifically aware of the estimated financial results of TFL for the quarter ending March 2001 and that these were discussed with him by the Finance Department of TFL in the second/third week of March 2001. Apart from this, admittedly he was aware of the erosion in value of investment portfolio of Niskalp and its subsidiaries. He was also getting copy of the Net Asset Value statement of Niskalp which was prepared daily and circulated to him. I note that the information about erosion of the finances of TFL & Niskalp was not public information. The erosion of the portfolio value of Niskalp between September 30, 2000 and March 20, 2001 was not disclosed in the Rights Issue Offer Documents of TFL. The provisional losses of Niskalp as on March 31, 2001 were Rs.79.37 crores was disclosed to shareholders only April 30, 2001. This means that it was ‘unpublished’ ‘price sensitive information’ in March, 2001. Any information which is of concern, directly or indirectly, to a company, which is not generally known or published by such company for general information but which after publishing is likely to materially affect the price of its securities in the market is considered as unpublished price sensitive information. In view of the foregoing, Mr. Pendse clearly is an insider within the ambit of Regulation 2(e) of the Insider Trading Regulations. I further note that the Hon’ble SAT in Appeal No.148 of 2005 (cited supra), inter alia observed that “…..Shri Pendse was the managing director of TFL of which NITC was a wholly owned subsidiary and, therefore, by virtue of this connection he had access to the unpublished price sensitive information in respect of the securities of TFL. Unpublished price sensitive information was the loss suffered by NITC which had a direct bearing on the price of the shares of TFL”.

32. Mrs. Anuradha S Pendse and NPPL had denied that they were insiders at the relevant point in time. Certainly, there is no case that they were holding any key managerial position at TFL during the relevant period. However, they are insiders within the ambit of Regulations 2(e), 2(h) and 2(i) of the Insider Trading Regulations read with Section 6 of the Companies Act, 1956, as Mrs. Anuradha S Pense is the wife of Mr. Pendse and one of the directors in NPPL along with the father of Mr. Pendse.

33. As discussed above, as an ‘insider’ Mr. Pendse had communicated unpublished price sensitive information and had by his directions caused the associates (the other noticees in the present proceedings) to act upon the said unpublished price sensitive information to his benefit and to the detriment of other investors, thereby resulting in violation of Regulation 3 of the Insider Trading Regulations which prohibits communication of unpublished price sensitive information by an insider. Mr. Pendse who was privy to the unpublished price sensitive information, ensured that shares held by his associates including Mrs. Anuradha S Pendse and NPPL were sold before the unpublished price sensitive information became public. Thus, I hold that the noticees are insiders within the provisions of Insider Trading Regulations and Mrs. Anuradha S Pendse and NPPL dealt in the shares of TFL on the basis of unpublished price sensitive information in the month of March 2001.

34. I also note that the Hon’ble SAT, in Appeal No. 50 of 2007 (Rajiv B. Gandhi & Ors. Vs SEBI), vide order dated May 9, 2008 inter alia observed “We are of the considered opinion that if an insider trades or deals in securities of a listed company, it would be presumed that he traded on the basis of the unpublished price sensitive information in his possession unless he establishes to the contrary. Facts necessary to establish the contrary being especially within the knowledge of the insider, the burden of proving those facts is upon him. The presumption that arises is rebuttable and the onus would be on the insider to show that he did not trade on the basis of the unpublished price sensitive information and that he traded on some other basis. He shall have to furnish some reasonable or plausible explanation of the basis on which he traded. If he can do that, the onus shall stand discharged or else the charge shall stand established” (Underline supplied)

35. During the course of hearing, the learned counsel for the noticees also requested SEBI to allow the noticees to cross examine Mr V. Ramanujam (Senior Vice President TFL) and Dr. Anjali Beke. The said request is not sustainable for the following reasons. As discussed above in this order, it is already established that Mr. Pendse was an insider. The case of Mr. Pendse is that whether he was in possession of any unpublished price sensitive information is irrelevant, as according to him, the transactions were executed in the month of September, 2000. Indirectly, Mr. Pendse only disputes the relevance of such unpublished price sensitive information in respect of the impugned transactions. Moreover, I note that the copies of statement Mr V

Ramanujam were provided to the noticees. They could have rebutted his statements. Irrespective of the statement of Mr V Ramanujam, I note that, Mr. Pendse is an insider, as discussed in preceding paragraphs of this order. Besides, Mr. Pendse in his Appeal Memorandum (Appeal No. 38 of 2008) before Hon’ble SAT, made the following as one of his grounds, while challenging the earlier order of SEBI dated February 11, 2008 passed in the matter:

“The respondent has failed to consider that the alleged “price sensitive information” about the erosion in the value of investment portfolio of Niskalp for the quarter ending March, 2001 was discussed with the Appellant only in the first week of March, 2001 about 6 months after the sale of shares.”

The above statement would establish that Mr. Pendse is an insider and he was aware of the price sensitive information in the first week of March 2001. In the facts and circumstances and also in view of the admitted position, I do not consider it necessary to allow the noticees, to cross examine Mr V Ramanujam.

36. As far as the request to cross examine Dr. Anjali Beke is concerned, I note that her statement copy was provided to the noticees. It is an admitted case that she and her family were known to Dr Pendse for approximately 10 years preceding the impugned transactions. It is pertinent to mention that APIPL was maintaining two accounts with Canara Bank, Bombay Samachar Marg, Mumbai Branch and Citibank and that Mr. Pendse had introduced them to the said banks. Further, it was also stated by Dr. Anjali Beke that one Mona Ludhwani, who was the accountant of APIPL, was also the accountant of NPPL and that she worked in Mr. Pendse’s office at Churchgate. It is further found that APIPL was introduced to the stock brokers JSBPL and MSSPL by Mr. Pendse and that NPPL had given amounts to the extent of Rs.2.85 crores to APIPL during the period April 2000 to June 2001 as ICDs. It was also noted that Mr. Pendse was a Director of M/s Khudagawah Investments Private Limited (KGIPL) and the company had given amounts to the extent of Rs.75 lakhs to APIPL as ICDs. I note that the analysis of bank statements made during the course of investigations revealed that on several occasions payments were made by NPPL and KGIPL to APIPL. It was also found that APIPL had made payments to JSBPL, MSSPL, TFSL including Mrs. Anuradha S Pendse and Mr. Pendse. The fund transactions between the parties would not be possible unless they are closely connected with each other. Instances of such payments were provided in the show cause notice issued to the parties and also reproduced herein below:

Date Recd. From Amt.(in lacs) Received By Amt.(in lacs) Given to 6.4.00 KGIPL 5.00 APIPL 5.00 TFSL 6.4.00 MG Tirodkar 100.00 APIPL 100.00 TFSL 10.4.00 NPPL 50.00 APIPL 50.00 MSSPL 11.04.00 Softech 50.00 APIPL 25.00 MSSPL 26.04.00 KGIPL 35.00 APIPL 20.00 APIPL 04.09.00 NPPL 10.00 APIPL 15.00 JSBPL 18.10.00 NPPL 25.00 APIPL 35.00 PSVPL 18.10.00 KGIPL 5.00 APIPL 5.00 PSVPL 18.10.00 - - APIPL 4.00 MSSPL 17.11.00 KGIPL 7.50 APIPL 13.00 MSSPL 4.4.01 KGIPL 15.00 APIPL 13.56 MSSPL 12.4.01 NPPL 140.00 APIPL 100.00 TFSL 26.4.01 MSSPL 5.00 APIPL 5.00 ADP 29.5.01 JSBPL 37.48 APIPL 20.00 KGIPL 29.5.01 - - APIPL 15.00 D.S.Pendse 28.6.01 - - - 16.45 NPPL

MSSPL- Malini Sanghvi Securities Private Limited NPPL- Nalini Properties Private Limited JSBPL- Jhunjhunwala Stock Brokers Private Limited TFSL- Tata Finance Securities Limited ADP- Anuradha S Pendse

APIPL- Anjudi Properties & Investment Private Limited Softech- Softech Exports (I) Limited PSVPL- Pratik Stock Vision Private Limited KGIPL- Khudagawah Investments Private Limited

Besides, the relationship between Mr. Pendse and Dr. Anjali Beke was also examined and recognized by the Hon’ble SAT in the appeal (in Appeal No. 148 of 2005) cited supra and the same is reproduced herein below at the cost of repetition:

“It is an admitted fact that Dr. Anjali Beke was well known to Shri Dilip Pendse for more than ten years and it is her own case that he carried on business in her name. Their closeness cannot, therefore, be in doubt. It is because of this closeness that he passed on the unpublished price sensitive information to her on the basis of which she traded in the shares of TFL. She is, therefore, an insider. Shri Pendse was the managing director of TFL of which NITC was a wholly owned subsidiary and, therefore, by virtue of this connection he had access to the unpublished price sensitive information in respect of the securities of TFL. Unpublished price sensitive information was the loss suffered by NITC which had a direct bearing on the price of the shares of TFL. The charge of insider trading is complete when it is established that an insider traded in the scrips of the company. We have already held that the appellant was an insider and it is on record that she and API had sold the shares of TFL before the price sensitive information was made public on 30th April, 2001.”

38. As the relationship between Dr. Anjali Beke and the noticees is already evident from the statements of the noticees and the above observation of the Hon’ble SAT, I did not find it necessary to allow the request for cross examination of Dr. Anjali Beke.

39. From the foregoing, the dealing in 40,000 shares of TFL by Mrs Anuradha S Pendse and NPPL was in violation of Regulation 3 of the Insider Trading Regulations. Thus, the noticees are guilty of insider trading in terms of Regulation 4 of the Insider Trading Regulations. I note that the out of the impugned 2,90,000 shares of TFL, 2,50,000 shares were sold by Dr. Anjali Beke and APIPL pursuant to the receipt of unpublished price sensitive information from Mr. Pendse. It may be recalled that SEBI, vide order dated January 11, 2008 restrained the noticees, Dr Anjali Beke and APIPL from accessing the securities market and prohibited from buying, selling or otherwise dealing or associating with the securities market in any manner whatsoever for a period of five years. The said order was challenged only by the noticees. Thus, the allegation of insider trading committed by Dr. Anjali Beke and APIPL in the shares of TFL has become final by the said order. Moreover, the order of the Adjudicating Officer of SEBI was challenged by Dr. Anjali Beke before the Hon’ble SAT and the Hon’ble SAT had dismissed the appeal with the observation, as mentioned earlier in this order.

40. Thus, Mr. Dilip Pendse, Mrs Anuradha S Pendse and Nalini Properties Private Limited violated Regulation 3 of Insider Trading Regulations. In view of the same, the aforesaid persons are guilty of insider trading in terms of Regulation 4 of Insider Trading Regulations.

41. In view of the above, I, in exercise of the powers conferred upon me under Regulation 11 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, hereby, restrain Mr. Dilip S Pendse (Permanent Account Number: AALPP9719M), Mrs. Anuradha S Pendse (Permanent Account Number: AAIPP2794G) and M/s Nalini Properties Private Limited (Permanent Account Number: AAACN9514F) from accessing the securities market for a period of five years. They are further prohibited them from buying, selling or otherwise dealing or associating with the securities market in any manner and in any capacity whatsoever for a period five years.

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

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

Place: Mumbai Date: March 31, 2009