Order in repsect of Murli Industries Ltd. etc in the matter of Sanjay Dangi and others

1. The Securities and Exchange Board of India (hereinafter referred to as SEBI) vide an ad-interim ex-parte Order dated December 2, 2010 hereinafter referred to as the Order), had issued certain directions in the matter of Mr. Sanjay Dangi, his associates and other entities in various scrips. In the said Order, the promoter/promoter related entities of the company, Murli Industries Limited (hereinafter referred to as the company), namely, Mr. Bajranglal Bankatlal Maloo, Bajranglal Maloo (HUF), Lalchand B Maloo (HUF), Mr. Lalchand Bankatlal Maloo, Mr. Mahesh Maloo, Mr. Murli S Maloo, Nandlal B Maloo (HUF), Mr. Sunilkumar S Maloo, Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Kanhaiya Mining and Minerals Private Limited, Krishnum Investments Private Limited, Lakhi

Packaging Private Limited, Ramji Agri Business Private Limited, Ramkrishana Fabrication & Machineries Private Limited, Runicha Alloys and Steel Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited (hereinafter collectively referred to as the entities and individually by their respective names) were directed not to buy, sell or deal in the securities of the company and its listed group companies, in any manner whatsoever, till further directions. The said company and their respective promoters were directed to cease and desist from carrying out activities mentioned in the Order which was prima facie in contravention of the securities laws. They were further directed to ensure that the shareholding of the promoters/promoter group in the said company is not altered in any manner till further directions. Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Kanhaiya Mining and Minerals Private Limited, Krishnum Investments Private Limited, Lakhi Packaging Private Limited, Ramji Agri Business Private Limited, Ramkrishana Fabrication & Machineries Private Limited, Runicha Alloys and Steel Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited would be collectively referred to as the ten entities. Thereafter, the company and its promoters had challenged the Order by way of an appeal in Appeal No. 198 of 2010 before the Hon’ble Securities Appellate Tribunal (Hon’ble SAT). The said appeal was disposed of as infructuous by the Hon’ble SAT, for the reasons stated therein, vide an Order dated January 27, 2011. Further, the same Order was followed while disposing (vide Orders dated January 28, 2011) of the appeals filed by the ten entities.

2. Thereafter, the company and the entities were afforded an opportunity of personal hearing on February 9, 2011. Mr. V. Sridharan, Advocate, represented the company and its promoters, namely, Bajranglal Bankatlal Maloo, Bajrang Lal Maloo (HUF), Mr. Lalchand B. Maloo (HUF), Mr. Lalchand Bankatlal Maloo, Mr. Mahesh Maloo, Mr. Murli S. Maloo, Mr.

Nandlal B. Maloo (HUF) and Mr. Sunilkumar S. Maloo, and made submissions. Mr. Prakash Shah made submissions on behalf of Ambaji Papers Private Limited, Ramji Agri Business Private Limited, Runicha Alloys and Steel Private Limited, Inco Infractructures Private Limited and Kanhaiya Mining and Minerals Private Limited. Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Ramkrishna Fabrication and Machineries Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited were represented by Mr. J.C. Patel, Advocate, who made submissions. During the hearing, while making submissions, replies were filed on behalf of the company and the entities. Mr. V. Sridharan, Advocate also requested further time for filing additional submissions for his clients (the company and its promoters) and the same was thereafter filed vide letter dated February 23, 2011.

3. I have considered the submissions made on behalf of the parties mentioned above. The limited issue for consideration in this Order would be to decide whether the ad-interim ex-parte directions issued vide the Order against the company and the entities need to be continued, modified or revoked in the light of their submissions and the facts and circumstances of the matter.

4. As stated in the Order, SEBI had initiated an investigation, on the basis of a reference and documents (as mentioned in the Order) received from the Income Tax Department (the IT Department), to find out whether there was any concentration of shareholding of the company among the ten entities and whether there was any attempt to manipulate the shares of the company before the FCCB issue. The said reference had informed SEBI of the manipulation in the shares of the company and the profit sharing arrangement between the company and one Sanjay Dangi. Based on the preliminary findings of the aforesaid investigation, it appeared to SEBI that the Dangi group entities (as defined in the Order) have influenced the price rise in the scrip during the ‘pricing period’ of FCCBs and thereafter, exited the scrip at a profit, as per the alleged agreement made with the promoters of the company. In this regard, the company had submitted that the document dated December 12, 2006 (enclosed with the reference from IT Department to SEBI) is unreliable and the same does not indicate any strategy sought to be implemented by the company.

It was further contended that the signature of Mr. Lalchand Maloo in the document dated January 31, 2007 was not his. According to the company, the share price was not manipulated to wrongfully determine a higher price for the FCCB issue and submitted that the price for the FCCB issue was determined in accordance with the provisions of the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993. It is submitted that large volumes of trading were done sometime around November 2006 mainly due to the expansion plans of the company. It is the contention of the company that the entire basis for the Order is the alleged ‘note’ entered into between the company and Mr. Sanjay Dangi and contended that the same was not admissible in evidence. The company further submitted that the IT department had recorded statements of Mr. Murli Manohar Maloo (promoter of the company) in which he had clearly stated that he did not know of the contents of the above mentioned document dated December 12, 2006 and had denied all the allegations raised by the said Department.

It was the submission of the company that if SEBI is relying on the aforesaid document for taking action against the Company then it must also consider the statement recorded under oath by the IT Department.

5. I have examined the submissions of the company and the promoters in this regard. As mentioned in the Order, the IT Department had referred the alleged manipulation in the shares of the company to SEBI along with copies of documents (as mentioned in the Order) for further necessary action by SEBI. Thereafter, SEBI had initiated an investigation in the light of the said reference and documents to find out there was any concentration of shareholding amongst the ten entities and whether there was any attempt to manipulate the shares of the company before its FCCB issuance. The independent investigation conducted by SEBI in the matter, so far, as also mentioned in the Order, prima facie observed that the promoters of the company and the ten entities were related and that their combined holding was found to be substantial during various quarters during the years 2006, 2007, 2008 and 2009, as mentioned in the order. Admittedly, there was an FCCB issuance by the company in February 2007. SEBI also observed noticeable trading by the Dangi group entities in the shares of the company, which were prima facie responsible for the increase in the share price.

It is mentioned in the Order as to how the share price was inflated through the trading by the Dangi group entities. The manner of establishment of new higher price and variation in the last traded price because of the trades of the Dangi group entities during the relevant period had been explained in detail in the Order. It was further observed that the trading activity of the Dangi group entities was mainly concentrated in the shares of the company between September 2006 and June 2007, which included the period which would be reckoned for the purpose of pricing the FCCBs. The aforesaid preliminary findings would certainly support the reference of the IT Department that there was an arrangement to manipulate the share price. It is pertinent to note that the Dangi group entities have, during May and June 2007, exited from their holdings in the scrip at higher prices, pursuant to the alleged manipulation, and that the majority of the purchases made by four of the ten entities were from the Dangi group entities. In this regard, it is to be noted that out of the purchases made by Krishnum Investments Private Limited, Lakhi Packaging Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited (four of the ten entities) in NSE, 2,57,538 shares (out of total 2,65,092 shares) were purchased from the Dangi Group entities namely, Pacific Corporate Services Limited, Supersun Trading Company Private Limited, Top City Mercantile

Company Private Limited and Ashoka Finstock Limited, who were allegedly the Dangi group entities. In BSE, the aforesaid entities (of the ten entities) had purchased 1,14,518 shares (out of their total purchases of 1,85,241 shares) from Pacific Corporate Services Limited and Ashoka Finstock Limited (the Dangi group entities). All the aforesaid facts reinforce the inference in the Order that the company and its promoters had an arrangement with the Dangi group for manipulating the shares of the company. Further, SEBI is not solely relying on the documents furnished by the IT Department in the matter. The material collected during the SEBI investigation and the preliminary findings thereon, have been found to be supporting the reference of the IT Department that the manner of trading of the Dangi group and the prima facie manipulation of the share price/volumes through their trades and maintaining the same at desired levels was as per the alleged agreement with the promoters of the company. In the facts and circumstances of the case, the submission that the document referred to by the IT department does have any admissibility, cannot be considered at this stage as the investigation in the matter is not concluded and the findings so far support the prima facie existence of such an arrangement. Therefore, the admissibility or not of the said documents would not arise at this stage, as they are found to corroborate of the other findings of SEBI in the matter and not the only material on the basis of which SEBI had passed the Order. The said document would be allowed to be tested, if relied upon by SEBI on conclusion of the investigation, by the concerned parties at an appropriate stage later on. Therefore, at this stage, I am not convinced about the submissions made by the company and its promoters in this regard. All the submissions made by them and the documents furnished would be considered by the investigation which is in progress to arrive at fact finding.

6. In the Order, the ten entities were prima facie found to be connected through common address, telephone number and electronic mail address of one Raja Mit Jayantilal. Further, through certain directors (their telephone numbers, addresses) of entities, Ramji Agri Business Private Limited, Runicha Alloys and Steel Private Limited, Inco Infrastructures Private Limited, Simple Mining and Power Private Limited and Krishnum Investments Private Limited, it appeared that the ten entities were connected with the company and its promoters. In this regard, the ten entities had submitted that the contact details of Mr. Amit Raja, was furnished for correspondence purpose as the said person is their chartered accountant as he was responsible for filing and other regulatory compliances. Further, it was submitted that the same was a standard practice in the industry and contended that merely because two companies are using the services of the same independent chartered accountant, this does not suggest that they are related. Further, according to the entities, there was no evidence that they were working with the other entities in a specific manner or pursuant to a common objective.

The entities who were earlier allotted warrants by the company had contended that transactions between them and the company alone cannot be a basis to conclude that the parties are related. Few entities, who were said to be connected to the company through common telephone numbers or addresses of their directors with the company, contended that allegations made against one of its directors in individual capacity would not fasten any liability on them. As regards the alleged connection with the ten entities, the company and its promoters denied the same and submitted that they could not have controlled or influenced the decision of the entities to trade in the securities market. The company and its promoters also denied having any relation with the other five entities who were not allotted warrants. The company further contended that the address of some of the entities is not ‘142, East Wardhaman Nagar’ and that the company and its promoters have no nexus with the said address and therefore the basis of having common address on which such nexus is established is wrong. The aforesaid submissions have been examined.

The uniqueness and striking feature of the present matter is that there was an alleged arrangement between the promoter of a company and another to manipulate the shares in relation with an impending FCCB issuance by the company. FCCB was subsequently issued. There was substantial trading in the shares of the company during the period leading upto such FCCB. Subsequently, post manipulation there was offloading by the entities who allegedly manipulated the shares. Their sales were absorbed by certain entities, who were allegedly controlled by the company/its promoters. SEBI could see one or more entities, who were prima facie found to be connected, either with each other and with the company and its promoters. Further, in the course of the investigation, it was observed that, in addition to the common contact details and other alleged connections as stated in the Order, there are also certain common shareholders in the ten entities. From the documents/details submitted by the entities and also from the details available from the website of the Ministry of Corporate Affairs (MCA), it is seen that certain directors are also common across many of the shareholders of the some of the ten entities.

For instance, one Mahendra Sethia is a director of Veeyu Traders Private Limited, Sunayana Commercial Private Limited and Namokar Consultants Private Limited. As on December 31, 2007, Veeyu Traders Private Limited is a shareholder of Taitan Management Services Private Limited and Simple Mining & Power Private Limited; Namokar Consultants Private Limited is a shareholder of Lakhi Packaging Private Limited and Simple Mining & Power Private Limited and Sunayana Commercial Private Limited is a shareholder of Inco Infrastructure Private Limited. Similarly, one Gautam Ghosh is a director in Vishal Enclave Private Limited, Techbuild Impex Private Limited, Raxon Motor finance Private Limited, Nahar Viniyog Private Limited, Mahalaxmi Marketing Private Limited, Mahabali Mercantiles Private Limited, Neelkamal Commodities Private Limited and Kiran Securities Private Limited. As on December 31, 2007, Neelkamal Commodities Private Limited is a shareholder in Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited.

Mahabali Mercantiles Private Limited is a shareholder in Inco

Infrastructures Private Limited. Kiran Securites Private Limited is a shareholder in Taitan Management Services Private Limited. Mahalaxmi Marketing Private Limited is also a shareholder in Taitan Management Services Private Limited, Lakhi Packaging Private Limted and Inco Infrastructures Private Limited. Nahar Viniyog Private Limited and Techbuild Impex Private Limited are shareholders in Ramkrishna Fabrications and Machineries Private Limited. Further, Vishal Enclave Private Limited and Raxon Motors Private Limited are shareholders in Inco Infrastructures Private Limited. The aforesaid details are represented pictorially below:

Taitan Veeyu Simple Mr. Mahendra Namokar Sethia Lakhi

Sunayana Inco

The aforesaid facts strengthen the prima facie observation that the ten entities are related. Further, the said facts indicate that though common shareholders in the ten entities are not too many in number, the number of common directors among the shareholding companies is significant. I find that some of the entities (out of the ten) have been allotted warrants by the company, and these were subsequently converted into equity shares. Further, the preliminary findings have revealed that four of the ten entities have purchased shares from the some of the Dangi group entities. The said act appears to be the manner of sharing the profits by the company with the Dangi group entities for the alleged services offered by them, as also alleged in the reference from the IT Department. As observed above, the present matter is not merely a case of commonality of address and telephone numbers. On the other hand, SEBI could observe their (may not be all the entities collectively) participation in the alleged manipulative activities at all stages. There is a strong preponderance of probability of connection/association between the ten entities and the company/its promoters. However, the submissions of the entities and the material produced by the entities in this regard would be considered by the ongoing investigation in the matter to arrive conclusively at the facts.

7. The Order had also mentioned the shareholding of the promoters of the company along with that of the ten entities for various quarters from September 2006 till December 2009. According to the preliminary findings in the matter, the combined shareholding of the promoters and the ten entities was 78.78% during the quarter ending September 2006 and the same increased to 82.61% in the quarter ending December 2006, largely due to the conversion of equity warrants issued to the some of the ten entities. Thereafter, during the quarter ended June 2007, the combined shareholding of the entities in the company had further increased to 87.69%. In view of the said shareholding levels, it was prima facie found that the observations of the IT department in their reference to SEBI, that the ten entities are holding substantial shares in the company, to be correct. Further, based on the said finding, it was alleged that the acquisition of shares by the ten entities as a group when taken together with the promoter group were in violation of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the Takeover Regulations), as they had not made an open offer in respect of their acquisitions.

In this regard, it has been contended by the entities that there was no understanding with the others or the company and that in the absence of establishing any relationship between them and the company, there cannot be any breach of the Takeover Regulations. With respect to the allotment of warrants and the subsequent conversion, the company submitted that it had allotted warrants to the tune of `27 crore (25 lacs warrants @ `108 each) to five entities, namely Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited, Runicha Alloys & Steel Private Limited and Kanhaiya Mining and Minerals Private Limited on June 8, 2005 and contended that the same was done in accordance with the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. It was further submitted that the company had informed Bombay Stock Exchange Limited on November 16, 2006 that it wanted to convert the said warrants into equity shares. One of the allottees of the warrants, Kanhaiya Mining and Minerals Private Limited (one of the allottees of warrants) had inter alia made the following submissions:

a. that it had applied for warrants on June 8, 2005; b. that the company had issued warrants in June 2005 whereas its FCCB issuance was in February 2007 and there was significant time intervening between the date of issuance of FCCB and the allotment of warrants, which clearly contradicts any concern that the issuance of warrants or its subsequent conversion was planned for manipulating the price of the shares of the company. c. that, during the period April 1, 2006 to December 31, 2007, it had not purchased or sold shares of the company, or otherwise accessed the securities market in connection with the listed shares of the company. d. that its demat statement for the period April 1, 2005 to November 16, 2009 would reveal that it had not carried out any transaction since the time the warrants were converted into shares. e. that it was not identified as one of the top clients either on net buy basis or on the sell side and that its shareholding has been constant.

Similar submissions were also made by the other four warrant allottees, namely, Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited and Runicha Alloys & Steel Private Limited. Ramkrishna Fabrications & Machineries Private Limited had inter alia submitted in its reply, that it trades in shares and had decided to invest in the shares of the company as prudent investment decision and made investments around July 2005. It contended that its name was absent in portion in the Order that raises the alleged manipulation. The said entity further submitted that it has not traded in the shares of the company since February 13, 2006 which according to it was much prior to the pre-examination period and that the same cannot be linked with the alleged scheme of manipulation of the shares of the company. The said submissions have been considered. I cannot lose sight of the fact that, as mentioned in the Order, Ambaji Papers Private Limited and Inco Infrastructures Private Limited received deposit of `4,85,00,000 and `4,86,00,000 respectively on December 5, 2006, which were then transferred to the company on December 6, 2006, which could be the consideration for the conversion of warrants.

The source of funds would have to be investigated. Further, the warrants have been allotted to the aforesaid five entities on preferential basis. Common directors in few of the entities (of the ten entities) are also noticed. Though the aforesaid facts do cast a doubt on the involvement of the entities in the scheme of things, I find that the entities, namely, Kanhaiya Mining and Minerals Private Limited Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited, Runicha Alloys & Steel Private Limited and Ramkrishna Fabrications & Machineries Private Limited have not traded in the shares of the company during the investigation period. The warrant allottees have received warrants during June 2005 and the same were converted into equity in December 2006. Other than the said acquisition, they were not found to have traded in the securities of the company during the relevant period. As regards Ramkrishna Fabrications & Machineries Private Limited, the said entity had acquired shares during the year 2005 and has not traded in the shares of the company during the relevant period.

Further, the aforesaid entities were not found to be the counter-parties for the sell transactions of few of the Dangi group entities. As mentioned in the Order, the exit route was allegedly provided by Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited, to the Dangi group entities by purchasing shares from them at inflated prices. Fund transactions (claimed to be loan transactions) were also noticed between entities Lahki Packaging Private Limited and Taitan Management Services Private Limited. After examining the facts and circumstances of the case and also the submissions of the respective parties, I find that the activities of the ten entities, as mentioned in the Order, could be clearly distinguished along the following lines:

a. Kanhaiya Mining and Minerals Private Limited, Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited and Runicha Alloys & Steel Private Limited were allotted warrants by the company during June 2005. The said warrants were admittedly converted into equity in December 2006. However, except for the aforesaid dealing in the shares of the company, they were not found to have other transactions in the shares of the company during the relevant period. b. Ramkrishna Fabrications & Machineries Private Limited had acquired the shares of the company during the year 2005, an investment as claimed by it, and has not traded in the shares of the company during the relevant period. c. The entities, namely, Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited were executing trades in the shares of the company and were found to have allegedly provided an exit route to the Dangi group entities at higher prices.

As stated above, the activities of the entities, as mentioned in the Order, are distinct. One set of entities are found to have been allotted warrants by the company or purchased shares of the company prior to the investigation period. It is claimed that the said entities continue to hold on to the shares. On the other hand, another set of four entities (Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited) have purchased majority shares (out of their total purchases) from the Dangi group entities, which act has been alleged in the Order, to be the exit route provided to the Dangi group to sell their holdings in the company at inflated prices. Though the preliminary findings prima facie takes note of the connection between all the ten entities and their connection with the company/its promoters, Kanhaiya Mining and Minerals Private Limited Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited, Runicha Alloys & Steel Private Limited and Ramkrishna Fabrications & Machineries Private Limited have not traded in the shares of the company directly during the relevant period and claim to continue to hold the said shares. Therefore, I am of the considered view that the interim ex-parte directions against them need not be continued. The alleged offences against the aforesaid six entities, as mentioned in the Order can be ascertained by the investigation. However, the said entities would be required to co-operate with the ongoing investigation and provide all information and documents sought from them without fail. In the case of entities, Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited, I do not find any valid reason to treat.

8. As already stated in the Order, prima facie, the Dangi group entities have influenced the share price of the company upwards during the ‘pricing period’ of FCCB and thereafter, appeared to have exited the scrip at a profit, as per the agreement made with the promoters of the company and that the price was artificially raised and maintained at the levels desired by the promoters of the company through the Dangi Group entities. In return, the few of the entities (as stated above) allegedly controlled by the promoters of the company had ensured an exit to the Dangi group entities at an artificially inflated share prices. It was also observed therein that, from documents received from the IT department and other sources, analysis of the trading data and the actual unfolding of the FCCB issue, that the FCCB issuance was done in the manner as pre-meditated by the promoters of the company and the Dangi group. The Order had also prima facie observed that the Dangi group, while dealing in the shares of the company, was instrumental in raising and maintaining the prices as well as providing liquidity in the trading of the shares of the company.

It was also seen that there was a noticeable fall in the share price after the exit of the Dangi group and average daily traded volumes also reduced to half the previous levels during the post-examination period. The FCCB conversion price (subscription price) was fixed by the company at `565/- per share. The conversion price is closely linked to the market price since the FCCB holders have a right to exit at any point, which would logically be above the acquisition price. The factors which would be considered by the potential subscribers clearly would include the market price and whether it is favourable to them, and whether there is sufficient liquidity or volume of trading in the scrip. The submissions of the company and the entities do not throw light on the sudden spurt in trading volumes by the entities while the Dangi entities were active in the scrip and the subsequent fall in price once they stopped trading. Though the parties have submitted that they do not have any connection with each other, I am of the view that at this stage, more particularly in cases where multiple entities/persons are prima facie observed to have formed a web to execute a manipulative plan, it would not be prudent on the part of SEBI, as a securities market regulator, to consider the role of each entity that form this cluster of entities, in isolation.

The role of entities needs to be seen against the entire case in the background. In view of the aforesaid reasons, it would not be prudent on my part to revoke the interim ex-parte directions issued vide the Order against the company, its promoters and the four entities, Taitan Management Services Private Limited, Simple Mining and Power Private Limited, Lakhi Packaging Private Limted and Krishnum Investments Private Limited, more particularly when the investigation in the matter is in progress. The investigation would, as stated earlier, consider the submissions/contentions and the documents furnished by the concerned parties and arrive at conclusions as to the involvement or otherwise of the entities concerned. Needless to say, the matter would be reviewed on completion of the investigation and appropriate course of proceedings would be taken, as deemed fit, in accordance with law.

9. I also find that the company and its promoters have also contended that the impugned direction could be issued only after making or causing to be made an enquiry and that an enquiry under the Securities and Exchange Board of India Act, 1992 (SEBI Act) would have to be undertaken by an adjudicating officer appointed under Section 15I of the said Act. It was also contended that a direction under Section 11D of the SEBI Act cannot be passed at the interim stage. I find the aforesaid contention to be without merit. The impugned directions had been issued by SEBI invoking the powers available under Sections 11(4), 11B and 11D of the SEBI Act. Section 11(4) empowers SEBI to issue directions in the interest of investors and the securities market pending investigation or inquiry. The impugned directions were issued pending such an investigation in the matter. Further, in terms of Section 11D of the SEBI Act, SEBI is empowered to pass directions to ‘cease and desist’ against a person who has violated or likely to violate any provisions of the SEBI Act or rules and regulations made there-under. This would imply that an interim order is very much within the authority of SEBI under Sections 11(4), 11B and 11D of the SEBI Act.

10. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(4), 11B and 11D thereof, hereby issue the following directions:

i. The interim ex-parte directions issued vide the ad-interim ex-parte Order dated December 02, 2010 against Murli Industries Limited, Mr. Bajranglal Bankatlal Maloo, Bajranglal Maloo (HUF), Lalchand B Maloo (HUF), Mr. Lalchand Bankatlal Maloo, Mr. Mahesh Maloo, Mr. Murli S Maloo, Nandlal B Maloo (HUF), Mr. Sunilkumar S Maloo, Krishnum Investments Private Limited, Lakhi Packaging Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited, is hereby confirmed.

ii. Further, the directions issued vide the ad-interim ex-parte Order dated December 02, 2010 against Kanhaiya Mining and Minerals Private Limited, Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited, Runicha Alloys & Steel Private Limited and Ramkrishna Fabrications & Machineries Private Limited is hereby revoked, for the reasons stated above in this Order, with immediate effect. Notwithstanding such revocation, the said entities shall co-operate with the ongoing investigation in the matter and furnish all documents and information sought by the Securities and Exchange Board of India.

11. I also direct that the investigation in the matter be concluded expeditiously and appropriate action as warranted, in accordance with law, be taken.

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

PLACE: MUMBAI DATE: MARCH 23, 2011