Order against Mr. Vikram R. Patel and Mr. Prakash P. Patel in the matter of Shree Rama Multitech Ltd

WTM/PS/11/IVD/ID-3/Oct./2009 SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASANT SARAN, WHOLE TIME MEMBER IN THE MATTER OF SHREE RAMA MULTITECH LTD. In respect of Mr. Vikram R. Patel and Mr. Prakash R. Patel Date of hearing : September 25, 2009 Appearances For Noticees : Mr. Hitesh Buch, Practising Company Secretary and authorized representative of Mr. Vikram R. Patel and Mr. Prakash R. Patel For SEBI : Mr. Pradip Bhowmick, Assistant General Manager Mr. Pradeep Kumar, Legal Officer ORDER Under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

1. This case has been referred to me pursuant to the order dated August 01, 2007 passed by the Hon’ble Securities Appellate Tribunal (hereinafter referred to as ‘SAT’) in Appeal No. 377 of 2004. The said order also disposed of Appeals Nos. 378 and 380 of 2004. I note that the then Whole Time Member, Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) had passed an order dated September 06, 2004 under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) read with Regulations 11 and 13 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 against M/s. Shree Rama Multi-Tech Limited (hereinafter referred to as ‘SRMTL’) and its directors viz., Mr. Vikram Patel, Mr. Sharad Patel, Mr. Prakash Patel, Mr. Rambhai Patel, Mr. Hansraj Kanji and Dr. Prakash Trivedi, restraining them from accessing the securities market and further prohibited them from buying, selling or dealing in securities, directly or indirectly, for a period of five years. The above said SEBI order was challenged before the Hon’ble SAT in Appeals Nos. 377 of 2004 (filed by SRMTL), 378 of 2004 (filed by Vikram Patel, Sharad Patel and Prakash Patel) and 380 of 2004 (filed by Rambhai Patel, Hansraj Kanji and Dr. Prakash Trivedi).

Hon’ble SAT, while disposing of the said appeals, observed that there were some basic errors in the charges which require correction and that the whole matter qua the appellants requires reconsideration after obtaining further clarifications from them. In view of the above observation, Hon’ble SAT without expressing any opinion set-aside the impugned order and remanded the case back to SEBI. It was also observed that the Board shall proceed to obtain a fresh reply, if any, from the appellants and on a consideration of the material that it already has or may collect during the course of enquiry shall pass a fresh order expeditiously in accordance with law but not later than December 31, 2007. The appellants were also directed to co-operate with the Board in this regard.

2. I note that in accordance with the directions of Hon’ble SAT, SRMTL, Vikram Patel, Sharad Patel, Prakash Patel, Rambhai Patel, Hansraj Kanji and Dr. Prakash Trivedi were advised vide SEBI letter dated August 31, 2007 to appear before my predecessor for a personal hearing scheduled on September 03, 2007. On the said date, SRMTL, Rambhai Patel and Dr. Prakash Trivedi appeared through their authorized representatives and made oral submissions. I note that there were no representations for others viz. Vikram Patel, Sharad Patel, Prakash Patel and Hansraj Kanji.

3. Subsequently, Vikram Patel, Prakash Patel (hereinafter both are referred to as ‘noticees’) and Sharad Patel had filed for settlement of proceedings through consent order in terms of SEBI Circular dated April 20, 2007 during the month of August, 2007. In view of this, the matter was proceeded in respect of SRMTL, Rambhai Patel, Dr. Prakash Trivedi and Hansraj Kanji for passing of final orders, the proceedings as against noticees and Sharad Patel were kept in abeyance. After due consideration of the material available on record the final order against SRMTL, Rambhai Patel, Dr. Prakash Trivedi and Hansraj Kanji were passed on June 06, 2008.

4. I note that the noticees had applied for consent order in the present proceedings and had failed to fulfill the settlement terms. I have seen the delaying tactics and the time gaining methods adopted by the noticees. However, the same is not being considered at this stage and the matter is being proceeded on merits.

5. In order to conclude with the proceedings in respect of the noticees an opportunity of personal hearing to the noticees was granted on September 25, 2009 before me. On the said date Mr. Hitesh Buch, practicing Company Secretary and authorized representative of the noticees appeared on behalf of noticees and made oral submissions while relying upon the replies submitted in the earlier proceedings.

6. The brief facts of the case are: SRMTL is a company incorporated under the provisions of the Companies Act, 1956 and dealt in the manufacturing of laminated web material, lamitubes, flexible tubes etc. and was initially promoted by the Vikram Patel, Sharad Patel, Vimpsan Investments Pvt. Ltd. and Sanket Estates and Finance Pvt. Ltd. Vimpsan Investments Pvt. Ltd. and Sanket Estates and Finance Pvt. Ltd. were found to be the investment arms of the promoters of SRMTL including noticees. From the year 1994 onwards SRMTL raised its capital from time to time and allotted shares to Foreign Institutional Investors (hereinafter referred to as ‘FII’) like HSBC Pvt. Equity India Fund Ltd., CDC Financial Services (Mauritius) Ltd., Nippon Investment and Finance Co. Ltd. and South Asia Regional Fund, etc.

7. The company came out with a public issue to the tune of 80,55,750 equity shares and an offer for sale to existing major shareholders to the tune of 55,92,000 equity shares on January 15, 2000 through book building process. The total issue of equity shares was for 1,36,47,750 shares of Rs.5 each at a premium of Rs.115 aggregating Rs.163.77 crores. The paid-up capital of the company after the public issue was Rs.26.50 crores divided into 5.3 crore equity shares of Rs.5 each. Allotments were made to the associate entities of SRMTL in the aforesaid issue. The Lead Managers to the above public issue were Khandwala Securities Ltd. (hereinafter referred to as ‘KSL’), and IDBI. During the relevant time, the scrip of the company was listed at the National Stock Exchange (hereinafter referred to as ‘NSE’), Bombay Stock Exchange (hereinafter referred to as ‘BSE’) and the Ahmedabad Stock Exchange (hereinafter referred to as ‘ASE’). At NSE, the newly issued shares were listed in the month of March, 2000, with the opening price close to the issue price of Rs.120. After listing, price of the scrip came down to around Rs.50 by May, 2000. The scrip, which was quoting around Rs.55/- on June 01, 2000 with traded volume of 41,700 shares, gradually moved up to Rs.88.90 as on September 08, 2000 with a volume of 1,51,000 shares. The highest volume recorded was 2,69,600 shares on June 20, 2000 with the closing price of Rs.69.40. The net traded value from settlement no. 36 to 37 between August 30, 2000 and September 06, 2000 increased by 142% and the number of shares traded by 116%. Later, the scrip came down to the level of Rs.52 with a volume of 16,000 shares as on October 13, 2000. The price movement of the scrip at BSE and ASE was also in tandem with that at NSE.

8. The investigations conducted by SEBI revealed: a. Major concentration of dealings in the scrip between the brokers Khandwala Finance Ltd. (hereinafter referred to as ‘KFL’) at NSE and Jayantilal Khandwala and Sons Ltd., (hereinafter referred to as ‘JKSL’) at BSE. Their contribution towards gross and net volume was 39.74% and 78.66% respectively. Cross deals amounting to 4.26 lakh shares were also observed in 148 trades by the above said brokers. KFL was an associate entity of KSL, one of the lead managers to the issue. b. Related brokers, KFL and JKSL had long time association with SRMTL. KSL, an associate entity of KFL and JKSL, acted as lead manager to the public issue of SRMTL during January 2000. KFL was subsequently acquired by KSL. c. Common clients to the brokers, East West Polyart Ltd., Ideal Petro Products Ltd., Satellite Management Services Ltd., Shree Rama Polysynth (P) Ltd. and Shree Developers Pvt. Ltd. were associate entities of SRMTL. d. M/s. Global Finance (hereinafter referred to as ‘Global’) played the conduit for movement of funds for dealings in the shares of SRMTL appeared to be the investment arm of the main promoter of SRMTL. e. Movement of funds from the accounts of SRMTL to the accounts of its associates under the garb of payment for materials and other capital goods was evidenced during the investigation. Also, the funds paid by Porecha Global Securities Ltd. (hereinafter referred to as ‘PGSL’) for the transactions executed by it on behalf of the associates of SRMTL were routed through Global to reach SRMTL. f. Movement of funds were observed during the relevant period between the account of SRMTL and above mentioned associate entities.

9. On the basis of the findings of the investigations, it was alleged that the company had directly/ indirectly financed the associate companies and others and that the company and its directors had aided and abetted the price manipulation in the scrip and therefore were alleged to have violated the provisions of Regulation 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as ‘PFUTP Regulations’). In view of the said allegations, a show cause notice dated October 14, 2003 (hereinafter referred to as ‘SCN’) was issued to SRMTL and its directors including noticees, requiring them to show cause as to why suitable directions including directions debarring/ prohibiting them from buying and selling in securities for a specified period under Section 11B and 11(4) of the SEBI Act, 1992 read with Regulations 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, should not be issued. It was also mentioned that if they failed to submit any reply within the stipulated period of 15 days, then it would be presumed that they had no explanations to give in the matter and SEBI would proceed in the matter.

10. I note that interim replies to the SCN dated November 28, 2003 and November 29, 2003 were submitted by the noticees. SRMTL and its directors were given the inspection of the documents and were also supplied copies of the documents. Subsequently, SRMTL vide its letter dated March 01, 2004 submitted additional submissions to the SCN on behalf of itself and three whole time directors including the noticees. Thereafter, a personal hearing was also granted to SRMTL and its directors by my predecessor on March 22, 2004. After hearing the parties and taking into account the material available on record, the Board vide its order dated July 06, 2004 had debarred SRMTL and its directors for a period of 5 years. The said order was challenged by SRMTL and its directors vide appeals before the Hon’ble SAT as discussed in Para 1 of this order.

11. I have perused the SCN dated October 14, 2004, the replies dated November 28, 2003, November 29, 2003 of the noticees and written submissions dated March 01, 2004 from SRMTL and other material on record. The contentions of the noticees in their replies, in brief, are: - No nexus with associate entities in execution of alleged transactions for maintaining the charge of aiding/ abetting synchronization. - Grouping of entities as inter-related and associate entities in erroneous. - The transactions have been entered into with the associates were in the nature of business transactions - No corresponding provision of sub-regulations of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 has been stated hence the charge can not be made out against him. - No mens-rea proved.

12. After having perused the SCN, I find that the issue for determination would be to find whether the noticees along with SRMTL were responsible for aiding and abetting the associate entities in the price manipulation in the scrip of SRMTL, thereby violating the provisions of Regulation 4 of the PFUTP Regulations.

13. Whether the noticees along with SRMTL were responsible for aiding and abetting the associate entities in the price manipulation in the scrip of SRMTL, thereby violating the provisions of Regulation 4 of the PFUTP Regulations.?

a. I note from the investigations that East West Polyart Ltd. (hereinafter referred to as ‘East West’), Satellite Management Services Ltd. (hereinafter referred to as ‘Satellite’), Shree Rama Polysynth (P) Ltd. (hereinafter referred to as ‘Rama Polysynth’), Shree Developers Pvt. Ltd. (hereinafter referred to as ‘Shree Developers’) and Ideal Petro Products Ltd. (hereinafter referred to as ‘Ideal’) (hereinafter all collectively referred to as ‘associate entities’) are related/ associated to each other (as can be seen from the fact that one Mr. Chandrakant C. Patel was a director, common in all the mentioned entities and Mr. Mahesh Patel was director in East West, Ideal and Satellite) and had played a major role in the price manipulation of the scrip of SRMTL. Further, I also observe that some of the above named entities were promoted by the directors of SRMTL. The names of the entities with which the directors of SRMTL were associated as signatories to Memorandum of Association are: Sr. Name of Father’s/ Husband’s Name of the entity in which appearing as No. the person Name and Address a subscriber to MOA 1. Prakash R. S/o Rambhai Patel, Ram a) Ideal Petro Products Ltd. Patel Niwas -1, Khanpur, b) East West Polyart Ltd. Ahmedabad-380 001 2. Asit S/o Natubhai Patel Ram a) Ideal Petro Products Ltd. Natubhai Niwas -1, Khanpur, b) Shree Rama Polysynthetic Pvt. Ltd. Patel Ahmedabad- 380 001 c) Satellite Management Services Pvt. Ltd. 3. Sharad C. S/o Chhotabhai a) Ideal Petro Products Ltd. Patel Shankerbhai Patel b) Shree Rama Multi-tech Ltd. Ram Niwas-1, Khanpur, c) Shree Developers P Ltd. Ahmedabad-380 001 4. Natubhai S/o Umedbhai Patel Ram a) East West Polyart Ltd. Umedbhai Niwas -1, Khanpur, b) Shree Developers Pvt. Ltd. Patel Ahmedabad – 380 001

I note from the investigations that all the above said entities were operating from Ram Niwas – 1, Khanpur, Ahmedabad – 380 001, which was the registered office address of SRMTL. Moreover, persons who were related to each other and sharing common addresses were the promoters of the above said entities. I further note that East West was a company promoted by the promoters of SRMTL and Shree Developers, another related entity was among the ten shareholders of SRMTL as on January 28, 2000. All the above substantiate the allegation that the above entities and SRMTL were connected.

b. I note that with regard to such high value transactions with various associate entities, SRMTL has submitted that these payments were made mainly for the procurement of raw materials. Further, small amount of money was also spent on services received from the said entities. The explanations provided by SRMTL are as per the table below: Name of the Amount (Rs. in lakhs) Nature of transaction Remarks entity Value Recd. Paid East West 12,516.87 13,271.7 For procurement of HDPE Polyart Ltd. 4 fabric, Granules, jobwork, deposits of material procurement etc. Ref. 700 Paid for capital goods Recd. Money back Remarks purchase 07/12/2000 Satellite Nil 2.39 We avail a host of services Management from them inclusive of Services Pvt. office space, maintenance services etc. based on an Ltd. arrangement for payment of monthly fee Shree Rama 12,972 12,968 These are material deposits, Polysynthetic advance for RM etc. which Pvt. Ltd. are required for us in the normal course of business Ideal Petro 9,929 11,481 For procurement of Products Ltd. Granules, deposits for material procurement etc.

c. From the above table, it is observed that SRMTL, during the year 1999-2000 (year end September), had paid around Rs.37,720.74 lakhs to its associate entities for procurement of raw materials. However, from the Annual Report of the company for the year 1999-2000, I observe that during the whole year, the company had incurred expenses on purchase of raw materials to the tune of Rs.6,617.66 lakhs. This huge difference in the amounts creates suspicion against SRMTL. To verify this claim of the company, I have perused the ledgers of the company and find that there were repeated flows of money from the company to the associate entities and back to the company. From the ledger account of East West in the books of SRMTL, I find that during the period June 01, 2000 to September 30, 2000 there were debits to the tune of Rs.1,33,07,72,897 and credits to the tune of Rs.1,29,88,75,022.50.

d. I further note that, in the case of Rama Polysynth, huge amount of money was paid to the entity regularly at the very beginning of the month showing that the money was paid for material deposit and at the end of the month almost the same quantum of money had been credited in the company’s account against their material deposit. From the ledger account of Rama Polysynth in the books of SRMTL, I find that during the period June 01, 2000 to September 30, 2000 there were debits to the tune of Rs.1,31,67,81,000 and credits to the tune of Rs.1,29,72,29,991. I note that during the whole year, SRMTL had incurred expenses on purchase of raw materials to the tune of Rs.66.18 crores only, whereas it has shown payments to the tune of Rs.130 crores to each of the above mentioned associate entities towards procurement of raw materials during the period June – September, 2000. The same manner of fund flow was found in the case of Ideal also. I find that such a fund flow from the company to the associate entities and back to the company is only a ploy to conceal their intent to aid and abet the entities in manipulating the price of the scrip.

e. I note that numerous high value transfers took place during the period June – September, 2000 among the associate entities, Global and PGSL. I further note that the investigations have found that the payments to the stock brokers for the trades in the scrip were made from the bank account (Central Bank of India, Ballard Estate Branch- A/c No. 3391) of Global, which was controlled by Mr. Asit Natubhai Patel, promoter of Ideal, Rama Polysynth and Satellite.

Asit Patel was senior executive (Vice President, Marketing) in SRMTL and the nephew of Vikram Patel, Chairman and Managing Director of SRMTL. Further, the proprietor of Global, Asit N. Patel was introduced to the Central Bank of India (Ballard Estate Branch) by Mahesh S. Patel, director of East West, Ideal and Satellite. I note that Global was involved in the business of financing. Its networth for year 2000-01 was Rs.24.35 lakhs, whereas its fund transfers were usually in crores of rupees. I note that the pay-outs received from the associate entities through their brokers were transferred to Global, which in turn transferred amounts to those entities who had to meet the pay-in obligations. I note that such instances have been indicated in the SCN issued to the entities, including the noticees in this order. I note that during one such instance, Satellite had received Rs.87,23,520 on August 16, 2000 from PGSL, out of which Rs.87,22,500 was transferred to Global vide a cheque. Likewise, Shree Developers had received Rs.2,57,47,770 from PGSL and immediately the next day Rs.1,49,40,000 was transferred to Global vide cheque. After receiving the above said funds, Global transferred Rs.1,78,40,000 to East West through cheques. The investigations have found that East West then transferred Rs.71,00,000 to SRMTL vide cheques and the balance amount was utilized by it for meeting its pay-in obligation with KFL. I note that the payments for the dealings in the scrip of SRMTL had been made from the account maintained by Global which is being controlled by Asit N. Patel, a nephew of Vikram Patel, CMD of SRMTL. I also note that from the information gathered from the Central Bank of India, Ballard Estate, Global operated from 152, Mittal Court, A Wing, 15th Floor, Nariman Point, Mumbai – 400 021 and that SRMTL was found to have a branch office/ administrative office at the above address at which the letter addressed to Global had been acknowledged. From the above, it can be inferred that Global was acting as a conduit from where funds came in and went out to enable the associate entities to trade in the scrip in an unfair and fraudulent manner. I note that the said bank account (Account no. 3391) of Global was maintained with the Central Bank of India, Ballard Estate Branch. Being in the median,

Global was able to allow flow of funds to and from the entities, which facilitated the associate entities to buy/ sell shares in a structured/ synchronized manner so as to rig the price of the shares of the company.

f. I note that the associate entities have traded through various brokers, the details of the shares traded are as below:

i. Trading details of East West Name of the Trading Member Purchases Sales Gross Net Total position 1163811 1355576 2519387 -191765 Jayantilal Khandwala Sons, BSE 364027 662780 1026807 -298753 Khandwala Finance Ltd., NSE 797784 108006 905790 689778 M/s Porecha Global Sec. Ltd., BSE 2000 584790 586790 -582790 ii. Trading details of Ideal Name of the Trading Member Purchases Sales Gross Net Total position 20690 26305 46995 -5615 Jayantilal Khandwala Sons 20690 0 20690 20690 Khandwala Finance Ltd. 0 26305 26305 -26305 iii. Trading details of Shree Developers Name of the Trading Member Purchases Sales Gross Net Total position 0 333100 333100 -333100 M/s Porecha Global Sec. Ltd. (PGSL) 0 333100 333100 -333100 iv. Trading details of Satellite Name of the Trading Member Purchases Sales Gross Net Total position 101464 117000 218464 -15536 Jayantilal Khandwala Sons 27725 0 27725 27725 Khandwala Finance Ltd. 73739 0 73739 73739 M/s Porecha Global Sec. Ltd. 0 117000 117000 -117000 v. Trading details of Rama Polysynth Name of the Trading Member Purchases Sales Gross Net Total position 0 202690 202690 -202690 M/s Porecha Global Sec. Ltd. 0 202690 202690 -202690

I have observed that during the period June – September 2000, the associate entities had initially purchased huge quantities of the shares of the company.

Further, they had also manipulated the price of the scrip by entering into numerous cross and structured deals among themselves at a price significantly higher than the prevailing market price. I find that the time differences between the buy order and the sell order in such cases were within few seconds. After rigging the price, the associate entities off-loaded their stake to Unit Trust of India (hereinafter referred to as ‘UTI’).

g. I note that SEBI, after noticing such manipulation in the scrip of SRMTL had passed orders under Sections 11 and 11B of the SEBI Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Practiced Relating to Securities Market) Regulations, 2003 against Global Finance, East West, Shree Developers, Ideal and Satellite, debarring the said entities from accessing the capital market and further prohibited them from buying, selling or otherwise dealing in securities for a specified period. I also note that the appeals filed before the Hon’ble SAT were dismissed on merits and upheld the orders passed by SEBI against the above said entities.

h. I also note that my predecessor after having considered all these details found SRMTL instrumental in the transfer of funds to the associate entities. These associate entities utilized the said funds to ramp up the price of the scrip of SRMTL. Further, the company was held guilty of aiding and abetting the associate entities in their role in manipulation and was accordingly debarred from the market for a specific period.

i. Taking in view of this, I note that SRMTL has already been held guilty as stated above. The noticees being the person in-charge of the affairs of SRMTL and responsible to it for the conduct of its business at all relevant times are liable for the violations of provisions of the SEBI Act, Rules and Regulations.

14. Now, I will deal with the technical issues raised by the noticees:

a. Noticees has argued that they have been stated to have violated Regulation 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995/2003 without stating the corresponding provision of which sub-Regulation of Regulation 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. In this connection, I observe that the SCN alleges the violation of Regulation 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, without mentioning of relevant sub-regulation(s). The argument of the noticee is that this leads to uncertainty as to which sub-regulations are alleged to have been violated. It might be argued that the allegation are in respect of all sub-regulations i.e. Regulations 4(a),(b),(c),(d) and (e). From the above discussion, I note that specifically the charge of violation of Regulations 4(a) and 4(e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 stands established against the noticees as discussed in earlier part of this order. Hence, the argument of noticees is not sustainable.

b. Noticees also argued that all the transactions have been entered into with the associates (including Global Finance) were in the nature of business transactions and do not constitute any transaction with an intent to influence the price of the scrip of SRMTL. The said submission has no ground today as the findings of the Board with respect to the price manipulation and fund flow have been upheld by the Hon’ble SAT, though the company was a not a party in those appeal filed by the associate entities. I note that the company has also submitted that here has been no codified definition of the terms “associated” and “inter relationship” as has been used time and again in the SCN. Also, there has been no nexus established with the other entities mentioned to be associated with SRMTL and that mere existence of relationship in the nature of cousins, nephews or the sharing of the same address by the companies can in no way go to prove the fact that, the companies are indeed related and are associated among themselves. I find that in a complex commercial transaction like that of securities, relationship/ nexus has to be inferred from the trading pattern, common addresses or relationships between the persons. The inference is based on the circumstantial evidence available at hand and need not necessarily be exclusively on the basis of cross holding of capital.

c. Noticees have argued that no motive has been established for the alleged manipulation of the price or for the creation of artificial markets of SRMTL by either the company or on the part of its directors. The ‘mens rea’ or the mental element in any offence would not be important to prove such offence as has been held by the Hon’ble Supreme Court in the matter of Chairman, SEBI vs. Shriram Mutual Fund and another1 and observed by Hon’ble Bombay High Court in the matter of SEBI vs. Cabot International Capital Corporation, 2005 (123) CC 841 (Bom).

15. Therefore, on the basis of the discussion above, I find that Vikram Patel and Prakash Patel have contravened the provisions of Regulation 4 (a) and (e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 read with Regulation 13 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. I consider that the noticees had tried to delay the present proceedings by not fulfilling the consent terms even after agreeing for the same.

16. In view of the above, I, in exercise of the powers conferred upon me by virtue of Section 19 read with Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, hereby direct that Vikram Patel and Prakash Patel be restrained from accessing the securities market and prohibited from buying, selling or dealing in securities, directly or indirectly, for a period of five years.

1 2006 INDLAW SC 237

17. I note that the noticees have already undergone debarment for a period of around two years and eleven months. Therefore, they should undergo debarment for the remaining period of two years and one month from the date of this order.

18. This order shall be served on all recognized stock exchanges and depositories to ensure that the noticees are not allowed to undertake transactions as prohibited in Para 16 above.

19. The directions in this order shall come into force with immediate effect.

Date: October 30, 2009 Place: Mumbai PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA