Order in respect of Mr. Dipin Surana- in the matter of P.M. Telelinnks Ltd. and 8K Miles Software Solutions Ltd

IN RESPECT OF MR. DIPIN SURANA – IN THE MATTER OF P.M. TELELINNKS LTD AND 8K MILES SOFTWARE SOLUTIONS LTD. 1. The Securities and Exchange Board of India (hereinafter referred to as SEBI) had vide an ex-parte ad interim Order dated April 18, 2013 (hereinafter referred to as the 'interim order'), in the matter of dealings in the shares of P.M. Telelinnks Ltd (PMTL), and 8K Miles Software Solutions Ltd. (presently known as 8KMiles Software Services Ltd. and hereinafter referred to as 8KMILES), directed, amongst others, Mr. Dipin Surana (hereinafter referred to as ' Mr. Surana'), restraining him from accessing the securities market and prohibiting him from buying, selling or dealing in the securities market, either directly or indirectly till further directions. Mr. Surana was one of the erstwhile promoters of 8KMILES. While the investigation in the matter was going on, after affording the opportunity of personal hearing/s to all the concerned entities covered in the interim order including Mr. Surana, the interim directions were confirmed vide order dated December 30, 2013 for the reasons more particularly described therein.

2. Subsequently, Mr. Surana, vide his letter dated July 01, 2014 and August 18,2014 made representation before SEBI requesting permission to sell his 40, 000 equity shares of 8KMILES and transfer the sale proceeds in an escrow account and undertook not to use the said sale proceeds for any purpose till further directions from SEBI or completion of investigation. While the said representation was pending consideration, Mr. Surana filed an appeal before the Hon'ble Securities Appellate Tribunal ( Hon'ble SAT) seeking the aforesaid relief. The said appeal was disposed of by Hon'ble SAT vide its order dated September 25, 2014. Pursuant to the said order, SEBI disposed of the representation of Mr. Surana vide letter dated September 30, 2014 whereby the request of Mr. Surana was declined for the reason that the detailed investigation in the matter was under progress.

3. Mr. Surana challenged the aforesaid letter in another appeal before Hon'ble SAT which was disposed of by Hon'ble SAT vide order dated January 23, 2015 directing SEBI to pass fresh order on merits and in accordance with law after giving personal hearing to the appellant within 2 weeks from the date of order. Hon'ble SAT has observed in the said order that the impugned Order in the matter of Mr. Dipin Surana communication dated September 30, 2014 did not contain reasons as to how sale of shares by appellant would affect the investigation and how the interest of the appellant would be secured by not permitting the appellant to sell the shares at this stage when share prices are high and permitting the appellant to deposit the sale proceeds in escrow account pending investigation.

4. In compliance with the directions of Hon'ble SAT, an opportunity of personal hearing was afforded to Mr. Surana on February 04, 2015 when his authorised representative Mr. Joby Mathew appeared and made submissions on his behalf. Mr. Surana also filed written submissions in the matter. The submissions of Mr. Surana are inter-alia, as following : a. As the price of the scrip 8KMILES had risen many times, the entity wanted to sell the shares held by him, so as to book profits. b. No prejudice will be caused to the ongoing investigation in the matter, by the sale of the shares. However, if the price of the scrip were to fall and the entity is not permitted to sell the shares, he will suffer substantial loss and grave injustice will be caused to him, especially if SEBI, in its final order finds the entity to be innocent of the charges made against him. Therefore, the balance of convenience is in his favour. c. The price of the scrip has increased even when the entity has been restrained from dealing in securities market, from which it is evident that he has no role to pay in the increase in the price of the scrip during the period under investigation. d. The entity has not received any show cause notice in the matter and therefore, requests to consider the damage and loss being suffered by him on account of the restraint imposed on him and the uncertainty due to lack of any communication from SEBI.

5. I have carefully considered the submissions made by the entity and the limited issue to be considered in this order is whether to allow Mr. Surana to access his demat account for the purpose of sale of his 40,000 shares of 8KMILES as requested/proposed by him. It is noted that the interim order was passed on the basis of prima facie finding that that certain individuals including Mr. Surana who was one of the erstwhile promoters of 8KMILES had dealt in shares of PMTL and 8KMILES in fraudulent and manipulative manner which attracted prohibition enshrined in section 12A (a), (b) and (c) of the SEBI Act and regulation 3 (a), 3 (b), 4(1), 4(2)(a) and 4(2)(b) of SEBI (Prohibition of Fraudulent and Unfair Trade Practice relating to Securities Market) Regulations, 2003. It is worth mentioning that Mr. Surana had, as a part of fraudulent, manipulative plan /device/artifice as prima facie found in this case, funded a group of entities who had traded and manipulated the price of the scrip 8KMILES. In these facts, allowing Mr. Surana to sell the shares of the scrip in which the alleged manipulation has taken place, before the investigation is complete, may pose threat to market equilibrium and may consequently affect the rest of the shareholders adversely.

6. It is also noted the confirmatory order was passed as against Mr. Surana since he had failed to make out a case for revocation or modification of the interim order. In my view, at this stage, allowing him to sell his holdings in 8KMILES would defeat the very purpose of passing the interim order/confirmatory order and also the ongoing investigation. Since the disposal of shares of the scrip under investigation itself is not allowable for these reasons, the question of keeping sale proceeds in escrow account does not arise.

7. In view of the above, the request of Mr. Surana is not acceded to and his representations dated July 01, 2014 and August 18, 2014 are accordingly disposed of.

DATE: March 24, 2015 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA