Order against Sicorp Finlease Ltd., Ms. Sandhya Shirish Shah, Ms. Pravina Chandrakant Shah, Mr. Rajesh Panchal, Mr. Prasad Tandel, Mr. Prashant Narvekar, Mr. Ashok Sonu Bhagat and Mr. Prakash D'Souza in the matter of G-Tech Info Training Ltd

IN THE MATTER OF M/S G-TECH INFO TRAINING LTD. In respect of Sicorp Finlease Ltd., Ms. Sandhya Shirish Shah, Ms. Pravina Chandrakant Shah, Mr. Rajesh Panchal, Mr. Prasad Tandel, Mr. Prashant Narvekar, Mr. Ashok Sonu Bhagat and Mr. Prakash D’Souza Date of hearing: March 05, 2010 Appearances For Noticees: Mr. Shirish Shah for Sicorp Finlease Ltd, Sandhaya Shah and Praveena Shah Mr. Prakash D’souza for himself, Mr. Prasad Tandel, Mr. Prashant Narvekar and Mr. Ashok Sonu Bhagat For SEBI: Mr. Kirti Kumar Jadhav, Presenting Officer Mr. G. Ramar, Deputy General Manager Mr. Lamber Singh, Manager 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 10 and Regulation 44(f) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 in the matter of G- Tech Info Training Ltd.

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) conducted investigation into the buying, selling and dealing in the scrip of the G-Tech Info Training Ltd. (hereinafter referred to as ‘G-Tech/ target company') for the period from July 01, 2003 to December 31, 2003, upon receiving complaints from investors about non-dematerialization of the shares of G-Tech in order to create an artificial scarcity of floating stock in its scrip.

2. During the period of investigation a substantial rise in prices of the scrip of G- Tech was observed. However, its financial results were not satisfactory enough to justify such increase. Investigation revealed that on most of the occasions when there was a rise in the prices, a group of connected clients namely Sicorp Finlease Ltd. through its director Mr. Shirish Shah, Ms. Sandhya Shirish Shah, Ms. Pravina Chandrakant Shah, Mr. Rajesh Panchal, Mr. Prasad Tandel, Mr. Prashant Narvekar, Mr. Ashok Sonu Bhagat and Mr. Prakash D’Souza (hereinafter all collectively referred to as ‘noticees/ acquirers’) also referred to as ‘Shah group’, appeared to be as major buyers, pushing up the prices of the scrip by placing bulk buy orders for large quantities. In addition to the alleged manipulation in the prices of the scrip, noticees while acting in concert were also found to have collectively acquired 15,93,400 shares constituting 15.93% of share capital of G-Tech as on October 16, 2003, making it mandatory for them to make a public announcement to acquire further shares as per the provisions of Regulation 10 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as ‘Takeover Regulations’). However, acquirers did not make the mandatory public announcement and continued to acquire further shares taking their cumulative holding to 31.62% by the end of investigation period.

3. On completion of investigations, SEBI inter alia issued a common show cause notice dated November 07, 2008 (hereinafter referred to as ‘SCN’) to noticees to show cause as to why suitable directions to make a public announcement in terms of Regulation 10 of Takeover Regulations under Section 11 and 11B of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) read with Regulation 44(f) of Takeover Regulations should not be passed against them.

4. Acquirers replied to the SCN as per the details below: S.No. Name Date of reply 1. Ms. Pravina C. Shah February 11, 2009 2. Ms. Sandhya S. Shah February 11, 2009 3. Sicorp Finlease Ltd. & its director Mr. Shirish Shah February 07, 2009 4. Mr. Prashant Narvekar February 27, 2009 5. Mr. Prasad Tandel March 04, 2009 No reply was received from others. Before proceeding further in the matter an opportunity of personal hearing was granted to all the noticees on February 05, 2010. All noticees except Rajesh Panchal sought adjournment.

Considering the requests, another opportunity of personal hearing was granted to all the noticees on March 05, 2010.

5. On the date fixed Mr. Sirish Shah appeared for Sicorp Finlease Ltd., Ms. Sandhya Shah and Ms. Pravina Shah. He made oral submissions and requested for three weeks time to file the written submissions and documents relied upon. Mr. Prakash D’souza appeared for himself and for Mr. Prasad Tandel, Mr. Prashant Narvekar and Mr. Ashok Sonu Bhagat. He also asked for ten days time to file the written submissions and documents relied upon. In the interest of justice, the time as asked by acquirers was granted. I note that till date none of the acquirers have filed their written submissions and documents.

6. I note that Mr. Rajesh Panchal has failed to appear for the personal hearing in spite of due intimation. Moreover, he has not requested for another opportunity of personal hearing. I have seen the service report of hearing notice sent to him and find that the principles of natural justice have been duly complied with and it appears that Rajesh Panchal is not interested in submitting his stand in the present proceedings. In view of this, I am compelled to proceed with the matter ex-parte, on the basis of material available on record, having complied with the principles of natural justice.

7. I have carefully considered the SCN, replies of the acquirers who have replied to the SCN. The main contentions of the noticees in their replies, in brief, are: a. Sicorp Finlease Ltd., Ms. Sandhaya Shah and Ms. Pravina Shah vide their letters dated February 07, 2009, February 11, 2009 and February 11, 2009 respectively had taken up the common arguments: - Have not been provided with the relevant material. - Were not part of the group and had no connection with other noticees except among themselves i.e. Shirish Shah, Ms. Pravina Shah, Ms. Sandhaya Shah. Had not acted in concert with each other.

- They shared the office premises only. Sharing of office address and telephone number does not mean being associated persons. - Had purchased shares only for investment purposes. - The number of shares said to have been rematerialized is not 45,25,500 but 33,45,500 shares. - The collective acquisition constituted 12.27% and not 20.62% as alleged in the SCN. - Had also sold the shares from time to time and the net resultant acquisition has not triggered the requirements of Takeover Regulations. - SCN failed to take cognizance that the entities from time to time sold the shares hence net resultant acquisition did not trigger Regulation 10 of Takeover Regulation. b. Prasad Tandel and Prashant Narvekar vide their letters dated February 27, 2009 and March 04, 2009 had taken up the common arguments: - Have not been provided with the relevant material. - Was not the part of group and not related to entities mentioned. - Same telephone number and address were taken for economy in expenses of office routine. Hence not connected and did not violate the Regulation 10 of Takeover Regulation.

8. I note the common contention raised by noticees that they have not been supplied with the relevant material. I observe that all relied upon documents have already been supplied to the noticee. However, I note that no document, which has not been provided to the noticee, is being relied upon in the present proceedings. Considering this, the issue remains for consideration are: a. Whether noticees were part of single group and were acting in concert? b. Whether the acquirers have triggered Regulation 10 of Takeover Regulations? My findings on these issues are as under:

9. Whether noticees were part of single group and were acting in concert? a. I have seen the allegation that the noticees were closely related with each other as per the details retrieved from their Know Your Client (hereinafter referred to as ‘KYC’) forms. It is an admitted fact that Mr. Shirish Shah, director, Sicorp Finlease Ltd. is the son of Ms. Pravina C. Shah and husband of Ms. Sandhya Shah. Further, they were having common address. Sicorp Finlease Ltd. is further found related to other noticees. For example, noticees namely Prasad Tandel, Prakash D’Souza, Ashok Sonu Bhagat, Rajesh Panchal, Prashant Narvekar used common phone numbers as noted from their KYC forms. I note that these phone numbers were of Sicorp Finlease Ltd. registered in the name of Mr. Chandrakant Shah father of Shirish Shah. For better understanding about the inter-relationship among the noticees and G-Tech a chart showing the details have been reproduced below:

Pravina C. Shah and Sandhya S. Shah Prasad Tandel • Both admittedly related and shared • Common telephone nos. as that common address as that of Sicorp. of Sicorp. • Both related to director of Sicorp, Shirish • Had off-market deals with Shah. Prakash D’ Souza.

Sicorp Finlease Ltd. Ashok Sonu Bhagat Prakash D’Souza • Address at 18, Dhootpapeshwar, • Common telephone nos. • Common telephone nos. as Mangalwadi, Girgaum, Mumbai-as that of Sicorp. that of Sicorp. 400 004. • Director of G-Tech • Had off-market deals with • Its director Shirish Shah is son of • Common address as that Prasad Tandel. Ms. Pravina C. Shah and husband of Sicrop, Pravina and • Director of G-Tech. of Sandhya S. Shah. Sandhya. • Introducer to Pravina C. • Owned telephone nos. – Shah. 56390471/2/3.

Rajesh Panchal G-Tech Prashant Narvekar • Common telephone • Common telephone • BSE received a fax from G-Tech nos. as that of Sicorp. nos. as that of Sicorp. through Sicorp. • Had received letter of • Form-18 of G-tech shows email-id G-Tech issued by RTA. of Sicorp.

b. From above, I note that G-Tech and Sicorp Finlease Ltd. were having close nexus among themselves. This is re-inforced by the following facts:

- G-Tech sent a fax to BSE through Sicorp Finlease Ltd. - Form 18 filed by G-Tech with Registrar of Companies finds mention of Email ID of Sicorp Finlease Ltd.

I further note that the noticees namely Prasad Tandel, Prakash D’Souza and Ashok Sonu Bhagat had acted as the directors/ authorized signatories of the company G-Tech. Prashant Narvekar was also having close nexus with G- Tech as can be seen that he had received the letter issued by the Registrar to Transfer Agent (hereinafter referred to as ‘RTA’) to G-Tech.

c. I note the argument of the noticees that common telephone numbers and address were taken for economy in office expenses. Perhaps this argument could have cut more ice before the telecommunication revolution in India. It is unthinkable that totally unconnected business persons will share telephones to save on the fixed rentals (it is usually in the range of Rs.100-250 p.m. which is the only expense that can be economized upon by sharing of telephones). The other possibility is that the number belongs to a business centre, where a large number of businesses operate through a PBX exchange. No such defence has been taken so the presumption is that the telephones were stand alone. Further, this argument of the noticees appears to be weak as none of the noticees especially Prakash D’Souza and Ashok Sonu Bhagat has provided any details about the business/ work for which they had to share an office with Shirish Shah and others even as they were directors of G-Tech. Instead of using the infrastructure of G-Tech these two in addition to others had used the phone numbers of Sicorp Finlease Ltd. Facts like Prakash D’Souza being the introducer to Ms. Pravina C. Shah and common address of Ashok Sonu Bhagat and Pravina C. Shah, goes on to show that they were closely connected with Shirish Shah and his family. It can also be inferred that the G-Tech was being operated by Sicorp Finlease Ltd. and Shirish Shah was in connivance with the promoters/ directors of G- Tech.

d. I note that SEBI after considering the complaints as received from investors in the scrip, called for information from Adroit Corporate Services Pvt. Ltd., the RTA of G-Tech. However, the RTA while replying had submitted that they only provide connectivity to G-Tech with depositories, while the work related to share transfer/ registry/ dematerialization and rematerialization handled in-house by G-Tech itself and therefore they do not have the details. When the details were sought from G-Tech no reply was received from it. I note that G- Tech has also failed to provide any reply to the queries raised by SEBI during investigation. From the aforesaid facts, it can be presumed that G-Tech had not handed over the complete work relating to transfer of securities, maintenance of records of holders of securities, handling of physical securities to RTA. The work relating to dematerialization/ rematerialization and physical transfer of shares were being handled in-house by G-Tech. The noticees, along with G-Tech had, therefore, exercised control on dematerialization, re-materialization and transfer of shares of G-Tech.

e. I further note that the acquirers were also asked to submit various information and comment on the nature of their dealings in the scrip of G-Tech by the Investigating Authority. However, it is seen that none of these have co-operated in the investigation satisfactorily. The trading details provided by them were also found to be inadequate. They did not provide the details regarding their dematerialized and rematerialization transactions. I note that during the personal hearing the acquirers had submitted that the shares purchased by them were sold. Upon asking for proofs regarding the same, acquirers sought some time which was granted to them. However, none of the acquirers have submitted any document to substantiate their submissions till date. However, it is clear that the major buyer group in the scrip was connected/ related to G-Tech and had traded heavily in the scrip.

f. From the foregoing discussion, regarding the relationship of the acquirers (like being in same premises, using same telephone numbers, entering into huge transactions in the same scrip and entering into off-market transactions etc.), it can be said that there is a pre-ponderance of probability that these all were operating for a common objective and purpose of acquisition of shares/ control of G-Tech. Considering this, all the acquirers can be referred as ‘persons acting in concert’ in terms of Takeover Regulations.

10. Whether the acquirers have triggered Regulation 10 of Takeover Regulations?

a. I note that the noticees had cumulatively purchased 32,71,500 shares and sold 1,09,300 shares of G-Tech during the relevant period of time. The net purchase of noticees constitutes about 31.12% of the capital of G-Tech. I have seen the calculation of trigger date for the requirements of Regulation 10 of Takeover Regulations and the same has been brought out below for reference:

Balance including rematerialized Shares Name Demat a/c no 15/10/03 16/10/03 31/10/03 Ashok Sonu Bhagat IN300271-10112300 3,28,900 6,63,400 8,75,000 Prakash D'Souza IN300271-10112406 35,700 35,700 75,700 Rajesh Panchal IN300271-10113394 0 0 0 12030300-00000572 0 0 0 Sicorp Finlease Ltd. IN300011-10756152 1,51,900 1,51,900 1,92,700 IN301604-10046495 0 0 5,100 12030300-00000591 3,700 3,700 3,700 Prasad Tandel IN300271-10112022 1,99,500 1,99,500 3,41,500 Prashant Narvekar IN300271-10113847 36,700 36,700 66,700 12030300-00000549 90,600 90,600 90,300 Sandhya Shah IN300271-10062733 1,06,600 1,06,600 1,06,600 Pravina Shah IN300271-10112473 3,05,300 3,05,300 3,05,300 Total for noticees 12,58,900 15,93,400 20,62,600

From the above table, I observe that the total number of shares in the demat accounts of noticees were 12,58,900 shares (i.e. 12.58%) as on October 15, 2003, which increased to 15,93,400 (i.e. 15.93%) as on October 16, 2003, with the increase in the holding of Ashok Sonu Bhagat (from 3,28,900 shares to 6,63,400 shares) there by crossing 15% of the total share capital of G-

Tech. This total shareholding then increased to 20,62,600 shares as on October 31, 2003 i.e. 20.63% and further the same increased to 31.62% by the end of investigation period.

b. The demat account statements of acquirers shows that large number of shares of G-Tech were being rematerialized after purchasing these from the market. Upon analyzing the dematerialization and rematerialization request data as obtained by SEBI, it has been revealed that in total acquirers had rematerialized 45,25,500 shares of G-Tech. It is important to note that this number had exactly matched with the total number of shares of G-Tech rematerialized during the relevant period.

c. I note the argument of the noticees namely Sicorp, Ms. Sandhya and Ms. Pravina that they had rematerialized only 33,45,500 shares of G-Tech. For this, I have seen the details of dematerialization and rematerialization transactions and note that noticees herein have rematerialized 33,45,500 shares and rest i.e. 11,80,000 shares has been rematerialized by broker Action Financial Services (I) Ltd., who was found dealing for and entering off market transactions with the said Shah group.

d. Further from the details as submitted by depositories, I note that 95,03,300 shares of G-Tech were dematerialized and sold in the market during the relevant period. From the said details, it was also observed that the entities/ individuals related to the noticees viz. Manisha A. Shah, Charu N. Shah (introduced by Shirish Shah and Ashok Sonu Bhagat respectively to the brokers) were dematerializing the shares of G-Tech and later on selling them in the market. I observe that during investigations various details were asked from the noticees about the shares bought and sold by them during the relevant period to see any possible link between sellers who were dematerializing and the buyers who were rematerializing shares simultaneously, but no such information was received from them.

e. I note the argument of Sicorp Finlease Ltd., Ms. Sandhya, Ms. Pravina that they have sold the rematerialized shares from time to time and hence these shares should not be taken into the calculation of trigger date and consequently into the violation of Regulation 10 of Takeover Regulations. While replying to SCN, noticees namely Praveena, Sandhya and Sicorp Finlease Ltd. have also produced a holding statement of gross and net acquisition of the shares of G-Tech of Ashok Bhagat, Prakash D’souza, Sicorp Finlease Ltd., Prasad Tandel, Prashant Narvekar, Sandhya Shah and Pravina Shah. Further, I note that these noticees have failed to submit any authenticated document evidencing the said sale of rematerialized shares and the details as to whom these shares were sold even after asking about it at various occasions. Interestingly, Sicorp, Ms. Sandhya and Ms. Pravina have denied their relationship from other noticees. However, while providing the details about holdings in G-Tech, they have given the details of all the acquirers.

f. In view of the above discussion, it is noted that the acquirers can not be allowed to take the benefit of their non submission of documents. Prima facie reading of the purchase/ rematerialization of shares and sales show substantial acquisition of shares of G-Tech. The contention that these rematerialized shares were subsequently sold lies in the personal knowledge of the noticees. They have been able to give no details/ documents in this regard. Hence, I am not inclined to accept their submissions that they sold the rematerialized shares. As regards Regulation 10 of Takeover Regulations, I find that in the instant case the acquirer had not fulfilled the mandatory requirement of making the public announcement. I note that when transfer of control over the target company takes place by reason of acquisition of shares the acquirers has a statutory obligation to make public announcement.

11. I note that noticee namely Rajesh Panchal though related to other noticees was not holding any shares on the relevant dates as can be seen from the table above. Considering this, his name can be excluded from the persons acting in concert.

12. From the above discussion, it is clear that acquirers namely Sicorp Finlease Ltd. through its director Mr. Shirish Shah, Ms. Sandhya Shirish Shah, Ms. Pravina Chandrakant Shah, Mr. Prasad Tandel, Mr. Prashant Narvekar, Mr. Ashok Sonu Bhagat and Mr. Prakash D’Souza were acting in concert and they have failed to make an open offer as mandated by Regulation 10 of the Takeover Regulations.

13. Therefore, in exercise of the powers conferred upon me under Section 11, 11B and 11(4) of the SEBI Act read with Regulation 10 and 44(f) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, I hereby direct Sicorp Finlease Ltd. through its director Mr. Shirish Shah, Ms. Sandhya Shirish Shah, Ms. Pravina Chandrakant Shah, Mr. Prasad Tandel, Mr. Prashant Narvekar, Mr. Ashok Sonu Bhagat and Mr. Prakash D’Souza, (acquirers) to make public announcement to the shareholders of the target company, within 45 days of the date of this order, in terms of Takeover Regulations.

14. I note that in terms of Takeover Regulations the payment of consideration to the shareholders of target company is required to be completed within 90 days form the date of public announcement. In the present case, if the acquirers would have come out with the public offer on the date when they crossed the threshold limit prescribed under Regulation 10 of Takeover Regulations then the shareholders of the target company would have got the exit opportunity, if they wished so, much before.

15. Since no public announcement for acquisition of shares of the target company has been made, which has adversely affected the interest of the shareholders of the target company, it would be just and equitable to direct the acquirer to pay interest @ of 10 % per annum on the offer price. The acquirer is hereby accordingly directed to pay the interest of 10% per annum to the shareholders or the loss of interest caused to the shareholders for the period of delay.

16. This order shall come into effect immediately.

DATE : AUGUST 18, 2010 PRASHANT SARAN PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA