Order in respect of Master Trust Ltd, Mr. Rajinder Kumar Singhania and Mr. Harjeet Singh Arora

WTM/RKA/ISD/98 /2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER IN RESPECT OF MASTER TRUST LTD, MR. RAJINDER KUMAR SINGHANIA AND MR. HARJEET SINGH ARORA – IN THE MATTER OF FIRST FINANCIAL SERVICES LTD. 1. Securities and Exchange Board of India ("SEBI"), vide an ad interim ex-parte order dated December 19, 2014 (hereinafter referred to as “interim order”), in the matter of First Financial Services Ltd, restrained 152 entities, including Master Trust Ltd, Mr. Rajinder Kumar Singhania and Mr. Harjeet Singh Arora from accessing the securities market and further prohibited them from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, till further directions.

2. While the proceedings against Master Trust Ltd, Mr. Rajinder Kumar Singhania and Mr. Harjeet Singh Arora pursuant to the interim order are still in progress, Master Trust Ltd vide letter dated May 23, 2016 inter-alia requested for release of shares of Prime Industries Ltd pledged with The Punjab State Industrial Development Corporation Ltd (hereinafter referred as "PSIDC") in favour of pledgors and also get the shares of PSIDC transferred in the name of Master Trust Ltd in view of the following submissions:

a. PSIDC invested ₹ 88.5 lac in the equity shares capital of Prime Industries Ltd ( formerly known as Prime Proteins Ltd), listed on Bombay stock exchange (BSE), vide agreement dated September 14, 1993 wherein PSIDC was allotted 8,85,000 shares of face value of Rs 10 each of Prime Industries Ltd.

b. As required under the aforesaid agreement, Promoters of Prime Industries Ltd namely Master Trust Ltd, Mr. Rajinder Kumar Singhania, Arora Financial Services Ltd (company promoted & managed by Mr. Harjeet Singh Arora) and their associates had pledged their shares of Prime Industries Ltd. with PSIDC as collateral vide agreement /undertaking dated September 16, 1993 c. Promoters of Prime Industries Ltd availed the One Time Settlement Scheme (OTS) announced by PSIDC in 2003 by full and final payment of ₹ 2.6 crore in June 23, 2008. However due to Public Interest Litigation (PIL), PSIDC withdrew scheme in February 2009. Order in respect of Master Trust Ltd, Mr Rajinder Kumar Singhania and Mr Harjeet Singh Arora d. Subsequently PSIDC announced the OTS in 2009 to which the promoters again applied, however due to some technical issue /legal interpretation, their application/offer was rejected by the PSIDC.

e. Based on the writ petition filed by the promoters, Hon'ble High court of Punjab and Haryana Chandigarh vide order dated October 10, 2014 directed PSIDC to accept the offer and also refund with interest the extra amount paid by the promoters under OTS scheme 2009.

f. Against the said order, PSIDC filed a leave petition application (LPA) dated October 10, 2014 which was disposed off as per order dated May 19, 2015 of Hon'ble High Court of Punjab and Haryana Chandigarh.

3. Based on the submissions made before me I note that Master Trust Ltd and other promoters of Prime Industries Ltd including Mr Rajinder Kumar Singhania availed the OTS scheme announced by PSIDC in 2009. There was a dispute between these two parties i.e promoters of Prime Industries Ltd being one party and PSIDC being another party and the matter has been under litigation before Hon'ble High Court of Punjab & Haryana.

4. I need not go into the facts and circumstances of the dispute and the directions issued by the Hon'ble High Court. Since the interim order, inter-alia, restrains the Master Trust Ltd, Mr. Rajinder Kumar Singhania and Mr. Harjeet Singh Arora from accessing the securities market directly and indirectly, the limited matter before me is whether the request of Master Trust Ltd, Mr. Rajinder Kumar Singhania and Arora Financial Services Ltd (company promoted & managed by Mr. Harjeet Singh Arora) for transfer of pledged shares of Prime Industries Ltd in their name, if, released from PSIDC and the request of Master Trust Ltd to transfer the shares of Prime Industries Ltd so subscribed by PSIDC transfer in its name, be acceded to.

5. I note that promoters had availed the OTS scheme in 2009 i.e much prior to the interim order coming into force. I further note that this transaction is prima facie not connected to the allegations levelled against Master Trust Ltd, Mr. Rajinder Kumar Singhania and Mr. Harjeet Singh Arora in the interim order.

6. In view of the foregoing, I have no objection to:

(i) The transfer of pledged shares of Prime Industries Ltd to Master Trust Ltd, Mr. Rajinder Kumar Singhania and Arora Financial Services Ltd, if, released from PSIDC and (ii) Transfer of shares of Prime Industries Ltd, so subscribed by PSIDC, in the name of Master Trust Ltd subject to the condition that shares received by Master Trust Ltd and Mr. Rajinder Kumar Singhania will be considered as part of their portfolio and will be guided by the interim relief provided vide letter dated January 20, 2016 till further direction.

7. The aforesaid relief shall be subject to the supervision of exchanges and depositories and shall be without prejudice to the findings of pending investigation in the matter.

Sd/- DATE: August 19, 2016 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA