Order in respect of Mr. Brij Bhushan Singhal and Mr Harjeet Singh Arora

WTM/RKA/ISD/97 /2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER IN RESPECT OF MR. BRIJ BHUSHAN SINGHAL AND MR. NEERAJ SINGHAL – 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 Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal 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 Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal pursuant to the interim order are still in progress, Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal vide their respective letter dated June 06, 2016 inter-alia requested for acquisition of shares of Bhushan Steel Ltd that were earlier invoked by the financers and thereafter again pledge these shares with consortium of banks in view of the following submissions:

a. L and T Fincorp Ltd, L and T Finance Ltd and Family Credit Limited had earlier invoked the equity shares of Bhushan steel Limited pledged by Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal, promoters of Bhushan Steel Limited, for the loan availed by them.

b. On settlement of their Loan account with L and T Fincorp Ltd, L and T Finance Ltd and Family Credit Limited, they have agreed for the revocation of invocation of pledge and transfer back the said shares to the respective de-mat account of Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal.

c. These shares of Bhushan Steel Ltd so received by Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal will be again pledged in favour of consortium of Banks/ lenders. as a part of corrective action plan under the JLF Mechanism.

3. The following documents were submitted by Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal in support of its claim:

Order in respect of Master Trust Ltd, Mr Rajinder Kumar Singhania and Mr Harjeet Singh Arora a. Pledge / Hypothecation form indicating pledge of shares in favour of L and T Fincorp Ltd, L and T Finance Ltd and Family Credit Limited b. Share Pledge agreement with SBICAP Trustee Company Ltd

4. I note that the revocation of invocation of pledge is purely a commercial decision between the two parties i.e financers being one party and Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal being another party. The limited issue to be considered is the credit of these shares to the demat account of Mr Brij Bhushan Singhal and Mr Neeraj Singhal and thereafter further pledge of these shares with consortium of banks. Since the demat account of Mr. Brij Bhushan Singhal and Mr. Neeraj Singhal are frozen for debit and credit becoz of interim direction in force, they have sought SEBI's permission for the said transactions.

5. It is worthwhile to mention here that earlier, Mr Brij Bhushan Singhal and Mr Neeraj Singhal were permitted vide letter dated March 29, 2016 to pledge additional equity shares of Bhushan Steel Ltd and Bhushan Energy Ltd in favour of consortium of banks/lenders as required under the corrective action plan (CAP) formed by joint lenders forum as per RBI guidelines in order to exercise their better control on the companies as well as strengthen the security package for the loans extended to these companies which will enable the lenders to extend further support to the companies for sustained operations. The said interim relief was granted based on the merit and need for such request made by the promoters of Bhushan Steel Ltd and Bhushan Energy Ltd namely Mr Brij Bhushan Singhal and Mr Neeraj Singhal and banks namely State Bank of India and ICICI bank.

6. I note from the submission of Mr Brij Bhushan Singhal and Mr Neeraj Singhal that objective of the present request for revocation of invocation of pledge of equity shares of Bhushan steel Ltd and further pledging of these shares in favour of consortium of Banks/Lenders is in line with the objective/purpose of earlier request for which interim relief has already been granted. I further note that this transaction is prima facie not connected to the allegations levelled against Mr Brij Bhushan Singhal and Mr Neeraj Singhal in the interim order.

7. Considering the aforesaid submissions and evidences brought on record, I am of the view that the end objective of the request is to allow the bankers/lenders to exercise better control on the companies as well as strengthen the security package for the loans extended to these companies which will enable the lenders to extend further support to the companies for sustained operations under the corrective action plan (CAP) as per RBI guidelines. Accordingly, I allow Mr Brij Bhushan Singhal and Mr Neeraj Singhal for credit of invoked shares of Bhushan steel Ltd from L and T Fincorp Ltd, L and T Finance Ltd and Family

Credit Limited, as the case may be, in their de-mat account and thereafter, further pledge these shares with consortium of banks/lenders.

8. 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