Order in respect of M/s. Shubh International Limited (now known as M/s. Geetanjali Credit & Capital Ltd.)

WTM/RKA/IVD/NRO/ 24/2013 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: RAJEEV KUMAR AGARWAL, WHOLE TIME MEMBER ORDER Under Section 11(1), 11(4) (b) and 11b of the Securities and Exchange Board of India Act, 1992. In respect of M/s. Shubh International Limited (now known as M/s. Geetanjali Credit & Capital Ltd.) PAN: AADCS1991C 1. The Securities and Exchange Board of India (hereinafter referred to as 'SEBI') had conducted an investigation into the buying, selling and dealing in the shares of M/s. Shubh International Limited (now known as M/s Geetanjali Credit & Capital Ltd. and hereinafter referred to as "the Shubh") for the period February 23, 1999 to May 21, 1999 (investigation period). 2. It was observed that during the investigation period :- (a) The price of the shares of Shubh increased from ` 19/- on February 23, 1999 to ` 48/- on May 21, 1999 at Delhi Stock Exchange (DSE). (b) During investigation period entire trading in the scrip of the Shubh at DSE was carried out by two stock brokers, namely M/s. Indus Portfolio Private Ltd. (hereinafter referred as "Indus") and M/s. V. H. Securities Ltd. (herein after referred as "VH").

(c) Indus had traded in the scrip, on behalf of M/s Gagan Securities, who dealt on behalf of M/s. G. K. Investments, who in turn traded on behalf of Shri Deepak Batra, who had traded on behalf of Shri Parveen Bansal and Shri Rajesh Kumar. (d) VH traded on behalf of Shri Ajay Jain and Shri Ajay Jain's proprietary concern, M/s. Unique Securities. Shri Ajay Jain had traded on own account and on behalf of his clients namely Shri Rajesh Kumar, Shri Asim Jain and Shri Sunil Gupta. M/s. Unique Securities had traded on his own account and on behalf of its client Shri Asim Jani. (e) These entities allegedly indulged in circular trading in the shares of the Shubh. There was regular increase in the price of the scrip on 18 trading days due to trade at a price more than last closing price. (f) Shubh Poultries Ltd., a group company of the Shubh had transferred 2400 shares of the Shubh to Ms. Seema Bansal, wife of Shri Parveen Bansal. Since the transfer deed signed by Shubh Poultries Ltd. and Ms. Seema Bansal did not bear stamp of any stock-broker, there is a possibility that the shares could have been purchased in off-market by Ms. Seema Bansal, wherein the probability of buyer and seller knowing each other is high.

The delivery of shares was from doubtful / unknown sources. Shri Parveen Bansal is professionally connected to Shri Deepak Kumar Gupta, a partner in M/s R. K. Deepak & Co., auditor of the Shubh. (g) In view of the above alleged connection it was alleged that Shubh had indulged in manipulation of the market with the intention of artificially raising price of its shares and inducing the common investor to sell or purchase its shares.

3. Based on the above observations of the investigation, a Show Cause Notice (SCN) dated February 20, 2001 was issued to the Shubh ('the noticee') alleging that it violated the provisions of regulation 4(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 (PFUTP Regulations) calling it to show cause as to why suitable directions including directions prohibiting it from accessing the capital market and dealing in securities for a suitable period under section 11B of the SEBI Act read with regulation 11 of PFUTP Regulations should not be issued against it. 4. The SCN sent to the noticee was returned undelivered and the same was re-sent on February 20, 2001 at the address of Shri Sunil Gupta, director on the noticee, which was delivered. The noticee vide its letters dated April 6, 2001 and September 20, 2004 replied to the SCN and submitted inter alia the following: a) All the allegations leveled in the SCN are denied. b) It is denied that the noticee or any of its directors ware involved in structured trades with an intention to manipulate the stock prices. c) Mr. Parveen Bansal is a member of Regional Council of the Institute of Chartered Accountants of India and Shri Deepak Gupta is a member of Central Council of the same body and both of them meet regularly in official meetings and functions.

Nothing on record proves any business association between Shri Deepak Gupta & Shri Parveen Bansal. Merely because Shri. Praveen Bansal knew Shri Deepak Gupta cannot be basis to conclude that he must have acted in an illegal and fraudulent manner on behest of Shri Deepak Gupta. Such conclusion has to be corroborated with facts and evidence and not merely on observations or presumptions. d) Neither the noticee nor its directors /promoters have effected, taken part in or entered into transactions in the shares of the noticee. There is no authorization to any person whatsoever to deal in the shares of the noticee on its behalf or on behalf of any of its directors / promoters. 5. Several opportunities of personal hearing were granted to the noticee on various occasions before the then Whole Time Members. However, the noticee failed to appear on the scheduled dates. An opportunity of personal hearing was given the noticee before me on November 23, 2012, the noticee once again failed to appear on the scheduled date. Considering these facts and circumstances, I am of the view that enough opportunities of personal hearing have been provided to the noticee and it does not want to avail the opportunity of personal hearing.

Therefore, I proceed in the matter on the basis of written replies of the noticee and relevant material available on record. 6. I have carefully considered the SCN, the replies of the noticee and relevant material available on record. I note that the transaction in question pertains to the year 1999 and considerable time has elapsed in the matter. It is also pertinent to mention that there are separate proceedings pending in respect of the entities who allegedly dealt in the scrip of Shubh in a fraudulent manner. In this order, I am not dealing with allegations against other entities and this order is limited to the role of the Shubh as alleged in the SCN. 7. I further note that in this case, there is no allegation or charge that the noticee or its promoters/directors, directly or indirectly, traded in the scrip of the noticee during the investigation period. Further, there is no allegation of abetting the trades of other entities by noticee by financing their transactions by the noticee. 8. The basis of allegation in this case is based on the observation that delivery of shares was from 'doubtful / unknown sources' and the possible acquaintance between Shri Parveen Bansal who dealt in the scrip of the noticee and Shri Deepak Kumar Gupta, who was a partner in audit firm which was auditor of the noticee.

9. It is settled position that the allegation of market manipulation with intention of artificially raising the price of securities needs to be established on the basis of a higher degree of preponderance of probability. In this case, on the basis of material on record, I find that the first factor is based on suspicion and the relation between the noticee and Shri Praveen Bansal through Shri Deepak Kumar Gupta is remote and role of the noticee in alleged manipulation cannot be established on the basis of remote possibilities. I, therefore, give benefit of doubt to the noticee and drop the charges against it. 10. The Show Cause Notice No. IES/NRO/03/320/99-2000/SG/8278 is disposed of accordingly.

Rajeev Kumar Agarwal Date: July 02, 2013 Whole Time Member Place: Mumbai Securities and Exchange Board of India