Order in respect of Hemaliben Bimalkumar Mehta, Charuben Jitendrarai Mehta and Bhavana Gautambhai Vaghasiya in the matter of Bodal Chemicals Ltd.

WTM/PS/20/IVD/ID-6/NOV/2012 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 in the matter of Bodal Chemicals Limited

1. Bodal Chemicals Limited (hereinafter referred to as "the Company") is a company incorporated under the Companies Act, 1956. Its shares are listed on the Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE").

2. BSE received a facsimile message on August 27, 2011 purportedly on the letter-head of the Company informing that the meeting of the Company's Board of Directors would be held on August 29, 2011 to consider and approve Bonus Issue; the divestiture of the Company's Single Super Phospate Plant situated in Vadodara for a cash consideration of Rs.640 crore to Kiri Dyes Limited, Ahmedabad; CRISIL has assigned GVC Level 3 rating on the Company's Corporate Governance and value creation practices for its stake holders; and the listing of the Company's shares on the NSE. As August 27, 2011 and August 28, 2011 (Saturday and Sunday) were holidays, the aforesaid information was disseminated on the website of BSE on August 29, 2011 at 08:13 hours and 08:18 hours. Pursuant to the aforesaid disclosures made in BSE, the Company informed BSE on the same day that it did not send any facsimile message on August 27, 2011. The said denial by the Company was disseminated through BSE at 14:24 hours on August 29, 2011.

3. On August 29, 2011, during the time period when the disclosures regarding the Company's future plans were made and subsequent denial by the Company (of having sent the facsimile message) was disseminated by BSE, the share price of the Company at BSE fluctuated, i.e., first it moved from the previous day's closing price of Rs.21.00/-and touched a high of Rs.23.90/- till 14:24 hours (when the denial of the Company was disseminated). However. the share price closed at Rs.18.35/- and registered an intra-day fall of 25.31% from Rs.23.90/- to Rs.17.85/-. In view of the price fluctuations and spurt in volumes in the shares of the Company noticed in the stock exchanges, NSE and BSE were advised by the Securities and Exchange Board of India ("SEBI") to analyse the trading pattern in the scrip and submit reports.

4. Based on the information and analysis of NSE and BSE into the trading in the scrip and the preliminary investigation of SEBI, it was noticed that Hemaliben Bimalkumar Mehta, Charuben Jitendrarai Mehta and Bhavana Gautambhai Vaghasiya were the clients, who sold large quantities of the shares of the Company on August 29, 2011 before the denial by the Company [denial by Company was disclosed by BSE at 14:24 hours on August 29, 2011] of having made such announcements.

5. Therefore, it appeared, prima facie, that there was an attempt to make misleading and fraudulent announcements regarding the Company/its plans in order to mislead investors and also that there was concentrated selling by a few persons in order to make profit. SEBI conducted an investigation to identify the persons who have engineered such false, misleading news and concealed the same under the garb of official announcements made by the Company and to ascertain whether there was violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 in the matter. However, in view of the urgency and to prevent any further damage and also to prevent the attempt of a few to decamp with such unlawful profits, SEBI had, pending investigation and passing of final Order, issued an ex-parte interim Order dated August 30, 2011 (hereinafter referred to as the "Interim Order") prohibiting Hemaliben Bimalkumar Mehta, Charuben Jitendrarai Mehta and Bhavana Gautambhai Vaghasiya from buying, selling or dealing in the securities market, in any manner whatsoever, till further directions. BSE and NSE were directed to withhold the pay-out of securities and funds for the trading done in the shares of the company on the respective stock exchanges on August 29, 2011 to ensure that the securities/funds are not disposed off by the alleged perpetrators of the manipulation, if any.

6. While the investigation in the matter was in progress, SEBI vide an Order dated April 04, 2012 confirmed the Interim Order with all the directions against all the persons mentioned therein, pursuant to hearing them and recording their submissions, in due compliance with the principles of natural justice.

7. The investigation in the matter has been completed. I note from the findings of the said investigation that the facsimile messages received by BSE were non-genuine. However, the persons who had engineered such false disclosures could not be identified as the facsimile messages were sent from a public telephone operated at a stationery shop. Further, no connection or relation could be established between the Company and the persons who sold large quantities of shares of the Company on August 29, 2011. The trading pattern also does not establish any manipulative or circular/synchronised trades between the entities related to the Company or between the aforesaid three clients or with entities connected with them. I, therefore, drop the charges against Hemaliben Bimalkumar Mehta, Charuben Jitendrarai Mehta and Bhavana Gautambhai Vaghasiya, for lack of evidence. In view of the same, while no further action is called for against the aforesaid three persons, the directions issued against them vide the Interim Order needs to be revoked.

8. I also note that the Interim Order had directed NSE and BSE to withhold the pay-out of securities and funds for the trading done on the respective stock exchanges on August 29, 2011. Subsequently, the restriction on pay-out was lifted for all the clients who did not have any intra-day trading on August 29, 2011 and had dues less than Rs.1 lakh or 5450 shares. Since the investigation has been completed, the aforesaid restriction could also be lifted for the remaining entities for whom the pay-out has been withheld by the stock exchanges.

9. For the aforesaid reasons, 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 and 11B thereof, hereby issue the following directions :

(i) The direction, prohibiting Hemaliben Bimalkumar Mehta [PAN- ACFPM2816F], Charuben Jitendrarai Mehta [PAN - ADOPM4398N] and Bhavana Gautambhai Vaghasiya [PAN - AHNPV2981P] from buying, selling or dealing in the securities market, in any manner whatsoever, issued vide the ex-parte interim Order dated August 30, 2011 and confirmed vide Order dated April 04, 2012, is hereby vacated with immediate effect.

(ii) BSE and NSE shall forthwith release the pay-outs of securities and funds due to the investors for their trades in the shares of Bodal Chemicals Limited on August 29, 2011, which were withheld in compliance with the SEBI Orders dated August 30, 2011 and April 04, 2012 in the matter.

10. A copy of this Order shall be forwarded to the stock exchanges (BSE and NSE) and also to the depositories, for due compliance with this Order.

Date : November 29, 2012 PRASHANT SARAN Place : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA