Order in respect of Mr. Karthik Ramakrishnan, Mr. Sajjankumar H. Nanwal, Mr. Vishwanath H. Verma, Ms. Sunita S. Nanwal, Mr. Amritlal N. Prajapati, Mr. Shalvi Rashmin Vakta, Mr. Murarilal Bholuram Prajapati, Mr. Govind Kumar Varma, Sanghvi Fincap Limited

WTM/RKA/IVD/NRO/146 - 147/2015 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTION 11(1), 11(4) (b) AND 11B OF THE SEBI ACT – IN THE MATTER OF EONOUR TECHNOLOGIES LIMITED In respect of: Sr. No. Name of the Noticee Order Number 1. Mr. Karthik Ramakrishnan 146/2015 2. Mr. Sajjankumar H. Nanwal 147/2015 3. Mr. Vishwanath H. Verma 4. Ms. Sunita S. Nanwal 5. Mr. Amritlal N. Prajapati 6. Mr. Shalvi Rashmin Vakta 7. Mr. Murarilal Bholuram Prajapati 8. Mr. Govind Kumar Varma 9. Sanghvi Fincap Limited 10. Dwarkesh Restaurants Private Limited 1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") conducted investigation in the dealings in the scrips of Eonour Technologies Limited (hereinafter referred to as 'Eonour / the company' during the period April 01, 2003 to January 31, 2004 (investigation period). The investigation inter alia revealed that – a) The promoters of the company had sold substantial stake in the company during the financial year 2003-04. During this period their shareholding had decreased from 41.36% (3,36,89,410 shares) to mere 2.60% (21,16,510 shares).

During the same period public shareholding in the company had increased from 56.70% (4,61,80,295 shares) to 91.76% (7,47,40,180 shares). Thus, the promoters of the company had sold almost their entire stake in the company to public. During the relevant period, Mr. Karthik Ramakrishnan was one of the promoters and also the Managing Director of the company. b) Several corporate announcements were made by Eonour during the investigation period. While the company had made these corporate announcements the promoters had offloaded their entire shareholding during the said period. If the promoters had interest in the company for implementation of corporate announcements they would not have sold their In the matter of Eonour Technologies Limited Page | 1 of 12 substantial stake in the company. It was suspected that these announcements were made to induce investing public to buy shares of the company. c) The price of Eonour opened at ₹ 4.40 on April 01, 2003 and closed at ₹ 4.37 on January 30, 2004. During the investigation period, price of the scrip had reached its highest of ₹ 7.70 on December 30, 2003. Though such price rise was not significant, substantial trading volume of 10.06 crore shares took place during the investigation period.

Trading in the scrip of the company was suspended by BSE since December 2007 and the last traded price of the scrip of the company was ₹ 1.59 on December 28, 2007 with a traded quantity of 1,12,247 shares. d) The company had earned net profit of ₹ 21.24 crore during the financial year 2002-03 and it had earned good amount of net profit from quarter to quarter. Despite the fact that the company was in earning position during the financial year 2003-04, the promoters reduced their stake from 41.36% to 2.60%. e) It was observed that SEBI had earlier conducted investigation in the matter of Eonour for the period June 2000 to December 2000 and vide order dated February 10, 2003 inter-alia, restrained Mr. Karthik Ramakrishnan, promoter and Managing Director of the company from dealing in securities in any manner for a period of 3 years. Mr. Karthik Ramakrishnan obtained interim stay on operation of said order from Hon’ble Madras High Court and reduced his holding from 3.34 crore shares (41.36% of the paid up capital) in March 2003 to 21 lakh shares (2.54%) in March 2004. During the same period, public shareholding in the company increased from 56.70% (4,61,80,295 shares) to 91.76% (7,47,40,180 shares).

His shareholding in the company reduced to 3,000 shares in December 2005. f) Mr. Karthik Ramakrishnan had transferred total 2,17,47,900 shares (26.70% of total equity capital) through off market to various entities. Details of the same are given as below: Table – 1 (Details of off-market transfer of shares by Mr. Karthik Ramakrishnan) Name of the promoter Transferee entities Date of Quantity transfers Karthik Ramakrishnan Vishwanath H. Varma 20-05-2003 600,000 Karthik Ramakrishnan Sunita S. Nanwal 20-05-2003 600,000 Karthik Ramakrishnan Amritlal N. Prajapati 20-05-2003 640,000 Karthik Ramakrishnan Sajjankumar H. Nanwal 20-05-2003 600,000 Karthik Ramakrishnan Thakkar Kaushik Dhirajlal 09-06-2003 660,000 Karthik Ramakrishnan Babubhai Mohanbhai Rabari 09-06-2003 650,400 Karthik Ramakrishnan Shalvi Rashmin Vakta 09-06-2003 680,500 Karthik Ramakrishnan Murarilal Bholuram Prajapati 09-06-2003 719,500 Karthik Ramakrishnan S Natesan 09-06-2003 3,200,000 Karthik Ramakrishnan P Alagar 09-06-2003 3,200,000 In the matter of Eonour Technologies Limited Page | 2 of 12

Karthik Ramakrishnan S Natesan 23-06-2003 300,000 Karthik Ramakrishnan P Alagar 23-06-2003 730,000 Karthik Ramakrishnan S Natesan 23-06-2003 430,000 Karthik Ramakrishnan Kiran Parasrampuria 07-01-2004 3,750,000 Karthik Ramakrishnan Bimal Kumar Parasrampuria. 07-01-2004 3,750,000 Karthik Ramakrishnan Sanghvi Fincap Limited 10-06-2003 1,237,500 Total 21,747,900 g) During investigation, Mr. Karthik Ramakrishnan had claimed that he availed loan against these shares from Mr. Nazir Hakim and deployed into Eonour for operational purposes. The off-market transfer data obtained from NSDL did not support the claim of Mr. Karthik Ramakrishnan that he had transferred the shares of the company to Mr. Nazir Hakim and Mr. Karthik Ramakrishnan could not produce bank statement to substantiate his claim. He also could not substantiate the claim of utilization of loan proceeds. h) Demat account statement of Mr. Karthik Ramakrishnan revealed that during the investigation period, the shares were transferred to transferees as sated above in Table 1. i) Details of transactions executed by other 9 noticees to whom Mr. Karthik Ramakrishnan had transferred shares as mentioned in Table - 1 revealed that those 9 noticees received and gave shares in off market and some of them sold the shares of Eonour in the market. The details of off market transfers executed by the said 9 noticees are described in the SCNs as per following table:

Table: 2 (Details of off-market transfers of shares by other noticees) Transferor Transferee Execution Quantity Date R Karthik Sanghvi Fincap Ltd 10-06-2003 1,237,500 S Natesan Sanghvi Fincap Ltd 21-07-2003 500,000 Govindkumar H. Varma Sanghvi Fincap Ltd 30-07-2003 300,000 Govindkumar H. Varma Sanghvi Fincap Ltd 13-08-2003 198,200 T. Ganapathi Raja Sanghvi Fincap Ltd 21-08-2003 250,000 S Natesan Sanghvi Fincap Ltd 22-08-2003 1,000,000 Dwarkesh Restaurants Pvt Aishwarya Housing Finance Pvt. 20-08-2003 32,242 Ltd Ltd. Dwarkesh Restaurants Pvt Aishwarya Housing Finance Pvt. 21-08-2003 65,000 Ltd Ltd. Dwarkesh Restaurants Pvt Aishwarya Housing Finance Pvt. 26-08-2003 600,000 Ltd Ltd. In the matter of Eonour Technologies Limited Page | 3 of 12

Dwarkesh Restaurants Pvt Aishwarya Housing Finance Pvt. 30-08-2003 57,553 Ltd Ltd. Dwarkesh Restaurants Pvt Aishwarya Housing Finance Pvt. 13-11-2003 148,450 Ltd Ltd. Amritlal N. Prajapati Govind Kumar Varma 28-05-2003 640,000 Sajjankumar H. Nanwal Govindkumar H. Varma 15-04-2003 2,001 K Balaraman Govindkumar H. Varma 30-04-2003 100,000 S Natesan Govindkumar H. Varma 21-07-2003 500,000 P Alagar Govindkumar H. Varma 02-09-2003 500,000 P Alagar Govindkumar H. Varma 05-09-2003 410,000 j) Mr. Karthik Ramakrishnan had submitted during investigation that he sold his shares and pumped money into the company as it was failing to meet the huge orders due to cash shortage. According to him the sale of shares was not with intent to exit at the cost of someone but was to solve the company's problem. k) The corporate announcement made by the company and failure of Mr. Karthik Ramakrishnan to produce any documentary evidence that whatever funds he raised either through loan or by selling shares for revival of company indicate that he was interested in off loading shares of the company to public. These facts further indicate that he induced innocent investing public to buy shares of the company on the other hand he off loaded shares held by him which caused loss to uninformed, innocent investors. l) Mr. Sajjankumar H Nanwal acquired the shares of Eonour in off market from Mr. Karthik Ramakrishnan and sold the same in the market.

He had also facilitated the transactions of Mr. Karthik Ramakrishnan with the help of other entities and aided and abetted Mr. Karthik Ramakrishnan in offloading the shares of Eonour. The transactions arranged by Mr. Sajjankumar H Nanwal alongwith other entities acted as a deceit upon the public. 2. Pursuant to above observations, SEBI issued two separate show cause notices (SCNs) both dated October 14, 2011, one to Mr. Karthik Ramakrishnan and another to Mr. Sajjankumar H Nanwal, Mr. Vishwanath H Varma, Ms. Sunita S Nanwal, Mr. Amritlal N Prajapati, Mr. Shalvi Rashmin Vakta, Mr. Murarilal Bholuram Prajapati, Mr. Govind Kumar Varma, Sanghvi Fincap Limited and M/s. Dwarkesh Restaurants Private Limited, calling upon them to show cause as to why suitable directions under section 11 and 11B of the SEBI Act, 1992 read with regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations) including a direction to restrain from accessing the securities market and prohibition from buying, selling or dealing in securities for a particular

In the matter of Eonour Technologies Limited Page | 4 of 12 period should not be passed against them. The particulars of the SCNs are described in the following Table- Table-3-Details of the SCNs Sr. Name Alleged violations No. 1 Mr. Karthik Ramakrishnan Regulations 3 (a) (b) (c) (d) and 4 (1) (2) (e) (f) and (r) of PFUTP Regulations, 2003. 2 Mr. Sajjankumar H Nanwal, Regulations 3 (a), (d) and 4 (1), (2) (e) of PFUTP 3 Mr. Vishwanath H Varma Regulations, 2003, 4 Ms. Sunita S Nanwal 5 Amritlal N Prajapati 6 Shalvi Rashmin Vakta 7 Mr. Murarilal Bholuram Prajapati, 8 Mr. Govind Kumar Varma, 9 M/s. Sanghvi Fincap Limited 10 M/s. Dwarkesh Restaurants Private Limited

3. Mr. Karthik Ramakrishnan vide its reply dated November 5, 2011 submitted the following: a) There has been complete misunderstanding of the facts as the transactions associated with Mr. Nazir Hakim and the transactions relating to the present investigation are completely different. While the allegations relating to Mr. Nazir Hakim relate to the period around 2000 which was the subject matter of prior investigation by SEBI, present investigation is in relation to the period around 2003-04. Obviously the off market transfer data from NSDL in relation to the period between 2003-04 will not have any reference to any transfer of shares to Mr. Nazir Hakim. The reference to Mr. Nazir Hakim confuses certain earlier transactions that took place in the year 2000 with the allegation in SCN relating to dilution of shareholding in 2003-04 are completely unrelated. b) The averment that he could not substantiate the utilization of the loan proceeds also is baseless as there is no question of any loan during the period of investigation. CBI had concluded investigation in relation to price manipulation and deriving undue benefit from sale of shares for the period 1999-2000 in which clean chit was given to him and onus was fixed on Mr. Nazir Hakim. c) There is no evidence to suggest that off-loading of shares by him caused any loss to the investors.

The said allegations are not supported by any evidence and there is no ground made out with any fraudulent conduct. In the matter of Eonour Technologies Limited Page | 5 of 12 d) Though the company had a good order book position yet the company was facing cash-flow constraints. Though the company reported profits for subsequent quarters, it was faced with severe credit crunch as the company’s bankers wanted more collateral to fund even against government orders. In such situation all he ever could do was to sell substantial shares in the company in off-market transactions only with the intention of infusing funds into the company. That there has been a substantial trading volume during the period of investigation by itself cannot lend inference to any wrong doing on his part. e) As the time was running out to secure funds for the company and also he had incurred huge personal losses, he was constrained to raise monies through the dilution of his shareholding. The allegation that Mr. Nanwal facilitated his off-loading the shares of the company is totally false and without any substance and in any event there is no wrong doing associated in his sale of shares. f) He infused monies into the company from the sale proceeds of his shareholding and the same can be proved from the letter dated February 23, 2011 containing confirmations from the company with respect to infusion of monies into the company through share application money and through his personal bank statements.

Even after resignation from the company in the year 2008, he had brought in over ₹1 crore into the company to help solve the company’s financial woes and bank letters from SBI and source of funds from his mother’s company account statement and copies of Demand Draft are evidencing the same. g) The company is under obligation to disclose information relating to its business deals and orders and which the company has duly complied with and this cannot be held against it. SEBI have not shown any evidence to prove that his act of off-loading of shares has resulted in loss to public / investors. There is no case made out on the ground of fraudulent conduct or fraud played by him as determined by regulation 3(a) in the entire SCN. h) He denied the allegation that he had not produced any documentary evidence with respect to funds raised by him by sale of shares to be used for the revival of the company. He had provided copies of bank statements and proof of major portion of funds infused into the company vide letter dated February 23, 2011. There is not a slightest hint at him having used any manipulative or deceptive devise or contrivance in connection with his off-loading of shares and there is also no allegation that the various corporate announcements made were factually ineffective and evidence of the same had been submitted with BSE of the various orders obtained by the company during the relevant period. i) Allegations against him that he has violated regulations 3(a), (b), (c), (d) and 4(1), (2), (e), (f) and (r) of PFUTP Regulation, 2003 are factually incorrect and without any substance.

He has made no illegal profits or aided or colluded with any person for the purpose of committing any of the offences alleged against him. There is no allegation that he did not make the necessary disclosures relating to the shares sold by him. In the absence of the same, he had

In the matter of Eonour Technologies Limited Page | 6 of 12 sold his shares in accordance with the applicable regulations and therefore, he has not committed the wrong alleged. 4. Mr. Sajjankumar H Nanwal, Mr. Vishwanath H Varma, Ms. Sunita S Nanwal, Amritlal N Prajapati, Shalvi Rashmin Vakta, Mr. Murarilal Bholuram Prajapati, Mr. Govind Kumar Varma, M/s. Sanghvi Fincap Limited and M/s. Dwarkesh Restaurants Private Limited did not file their reply to the SCNs issued to them. Vide respective letters dated June 24, 2012 they submitted that they do not wish to avail any opportunity of personal hearing in the matter as they do not have any further submissions to make. 5. An opportunity of personal hearing was granted to Mr. Karthik Ramakrishnan on October 19, 2012, November 23, 2012, December 27, 2013, January 30, 2014, March 05, 2014, June 20, 2014, November 17, 2014 and January 30, 2015. On January 30, 2015 Mr. T. Srinivasa Murthy, Advocate appeared on behalf of Mr. Karthik Ramakrishnan and made oral and written submissions. Vide letter dated February 25, 2015 Mr. Karthik Ramakrishnan made additional written submissions in the matter.

These replies/submissions of Mr. Karthik Ramakrishnan are summarised hereunder: a) He acquired shares in the company in 1999-2000 from its erstwhile promoters and from 2000 till April 2008, Mr. Karthik Ramakrishnan was the Managing Director of the company. He had resigned as Managing Director of the company on April 16, 2008 and since then, he had no dealing whatsoever with the company except to settle some of the liabilities of the company on account of having furnished personal guarantees. b) On March 26, 2010 the Hon'ble High Court of Madras passed a winding up order in respect of the company. Pursuant thereto, the official liquidator attached to the High Court of Madras took over the affairs of the company as well as custody of all the assets and records of the company. Thus, records of the case relevant to the period under investigation are not in the custody of Mr. Karthik Ramakrishnan but are with the company which itself is now in liquidation and under the control of the official liquidator. With great difficulty Mr. Karthik Ramakrishnan was able to obtain the bank statements and certain other documents, even these documents brought on record have not been considered and the SCN has been issued to him in a mechanical manner. c) The sale of shares in off-market transactions during the period under investigation is admitted.

The list of buyers has been disclosed and there is no discrepancy found or alleged in that regard. d) During the investigation period in question, there was no transaction whatsoever with Mr. Nazir Hakim in respect of Eonour. The reference to Mr. Mr. Nazir Hakim was made inadvertently and has been clarified by Mr. Karthik Ramakrishnan as being entirely unconnected with the proceedings in the present case. Undoubtedly, Mr. Karthik In the matter of Eonour Technologies Limited Page | 7 of 12

Ramakrishnan had dealings with Mr. Nazir Hakim in the year 2000 in relation to the company and this transaction was the subject matter of earlier investigations by SEBI and CBI. While CBI gave clean chit to Mr. Karthik Ramakrishnan, SEBI passed an order on February 10, 2003 restraining him from participating in the stock markets for a period of 3 years. By order dated 27/02/2003 and 06/09/2003 Hon'ble High Court of Madras stayed the order passed by SEBI. During the pendency of the proceedings before the Hon'ble High Court of Madras, while there was a stay operational, the impugned share sale transactions took place. In view of the order passed by the Hon'ble High Court of Madras, no illegality or mala fide motive can be imputed to him. e) Since there has been no transaction with Mr. Nazir Hakim in relation to the company during the period under investigation, clearly there will be no record on that behalf and therefore for the SCN to proceed on the basis that “off market transfer data obtained from NSDL does not support noticee’s contention that he had transferred the shares of the company to Mr. Nazir Hakim and the notice also could not produce bank statement to substantiate his claim” is entirely perverse. f) During the investigation period the company had obtained orders for software development from several companies, and had been generating good revenues, there was a shortfall of working capital.

On account of the pendency of proceeding initiated by SEBI, there was difficulty in obtaining adequate financing from banks and other investors / lenders. Mr. Karthik Ramakrishnan also stood personal guarantee for working capital loans from Canara Bank obtained in 2002-2003 and was therefore vitally interested in ensuring that the company did not default on its obligations. g) The particulars of the sale were duly intimated to the company and the company in turn intimated the stock exchanges. The intimation of the sales to the stock exchanges is undisputed. h) Mr. Karthik Ramakrishnan and his family discharged several of these outstanding to the banks and even as on date, Mr. Karthik Ramakrishnan and his mother are shown as unsecured lenders to the company which is in liquidation. i) Mr. Karthik Ramakrishnan has placed on record vide letter dated 25/01/2011 and 5/11/2011 details of bank account statements which demonstrate infusion of funds by Mr. Karthik Ramakrishnan into the company. These have not been considered by the board at all. j) No material has come on record to show that announcements made by the company in the period under investigation about obtaining contracts are factually incorrect. k) He had provided copies of various orders received during the investigation period to establish that the company was a going concern and required funds to execute the order and the same was done by selling the shares in the market.

In the matter of Eonour Technologies Limited Page | 8 of 12 l) He had also filed detailed bank statement. The funds were principally used to invest in various companies owned by him. He had also filed consolidated statement along with the mapping of funds to show that a substantial portion of funds were reinvested directly or through M/s. Justice Holdings into company or its subsidiaries. m) He had further engaged in discussion with bankers namely ICICI during his tenure as director and State Bank of India even after his resignation from the Board of Directors of the company on 16.04.2008 and discharged the liability towards such banks. n) The present case is a delivery based trading and the delivery of shares has been admitted and the actual transfer on interest in the share has been established. Therefore, there is no artificiality involved and the trading took place for the reasons stated earlier. The funds have been infused into the company and there is no evidence to show that inducements to buy and sell shares. o) In the present case there is no such false or misleading statements.

Therefore, regulation 4 of PFUTP Regulation has no application. 6. I have carefully considered the SCNs, submissions of the noticees and other material on record. I note that the SCNs have been issued to the noticees on the basis of the same set of facts and allegations. I, therefore, deem it appropriate to deal with the SCNs issued to Mr. Karthik Ramakrishnan and other 9 noticees by way of this common order. 7. It is noted that the noticees have not disputed the facts about the corporate announcements issued by Eonour, the off-market sale of shares by Mr. Karthik Ramakrishnan as mentioned in Table 1 and subsequent off-market transfer of shares by other entities as mentioned in Table 2. However, they have contested the charges and the basis thereof as leveled in the SCNs. I note that there is no allegation that the corporate announcements mentioned in the SCNs were false, misleading or were made by Eonour with intent to manipulate the price or volume in the scrip during the relevant period. There is no material on record or allegation in the SCNs that the corporate announcements were not implemented or they were made without intention to perform.

Though the SCNs suspect that the corporate announcements were made to induce the investing public to buy the shares of the company, there is no material on record or allegation in the SCNs that the corporate announcements were issued as a fraudulent device or artifice to manipulate the price or volume of the scrip during the investigation period. There is no data or material to suggest that the corporate announcements had induced buying and selling of the scrip. The SCNs have recognised that the company was earning profits during the relevant period and the price rise was not significant. The SCNs have not found fault with the increase in trading volume and are silent as to how these corporate announcements had induced public shareholders to buy shares of the company particularly when majority of transactions, relied upon in the SCNs were off-market transfers. In the matter of Eonour Technologies Limited Page | 9 of 12

8. It is noted that the only basis of such suspicion in the SCNs is the sale of total 2,17,47,900 shares (26.70% of total equity capital) by Mr. Karthik Ramakrishnan, during the period when corporate announcements were made, to transferees mentioned in Table 1 and subsequent off-market transfers of shares by several entities mentioned in Table 2 and on-market transfers by some of them. It has been alleged that Mr. Karthik Ramakrishnan, on one hand, induced the innocent investing public to buy shares of the company, on other hand, he offloaded shares held by him, which caused loss to uninformed innocent investors. With regard to other 9 noticees it has been alleged that Mr. Sajjankumar H Nanwal acquired the shares of Eonour in off-market from Mr. Karthik Ramakrishnan and sold the same in the market. He had also facilitated the transactions of Mr. Karthik Ramakrishnan with the help of other noticees and thereby he along with other noticees aided and abetted Mr. Karthik Ramakrishnan in offloading the shares of Eonour. The transactions arranged by Mr. Sajjankumar H Nanwal alongwith other noticees acted as a deceit upon the public.

Such allegations have been made on the following basis- a) Mr. Karthik Ramakrishnan had failed to substantiate his claim that he had transferred the shares of the company to Mr. Nazir Hakim in respect of loan obtained by him. b) On one side the company made several corporate announcements and on the other side Mr. Karthik Ramakrishnan off-loaded majority of the shareholding. He had submitted that he off -loaded his shareholding to infuse money in the company to solve its cash shortage problem. 9. With regard to the first basis, it is noted from the material available on record that with regard to the investigation for the period 1999-2000, CBI had investigated the loan availed by Mr. Karthik Ramakrishnan from Mr. Nazir Hakim but had not charge-sheeted Mr. Karthik Ramakrishnan. Further, in the earlier investigation in the matter of Eonour for the period June 2000 to December 2000, SEBI had also taken note of the fact of loan availed by Mr. Karthik Ramakrishnan from Mr. Nazir Hakim in the year 2000. The said transfer of shares of the company by Mr. Karthik Ramakrishnan was in the year 2000 and subject matter of earlier investigation.

In view of the same, I find merit in submissions of Mr. Karthik Ramakrishnan that reference to transfer of shares to Mr. Nazir Hakim during investigation in instant case was inadvertent. Accordingly, those transfers that relate to different period and part of different investigation cannot be made basis for the charge in respect of transfers that are subject matter of investigation which is basis of the instant SCNs. 10. With regard to the second basis, it is noted that it relates to the crux of charges that Mr. Karthik Ramakrishnan transferred his shares to other 9 noticees in off-market and those 9 noticees offloaded such shares through off-market/ market transactions. It has been alleged in the SCNs In the matter of Eonour Technologies Limited Page | 10 of 12 that -"Mr. Vishwanath H. Verma, Ms. Sunita S. Nanwal, Mr. Amritlal N. Prajapati, Mr. Sajjankumar H. Nanwal, Mr. Shalvi Rashmin Vakta, Mr. Murarilal Bholuram Prajapati, Mr. Govind Kumar Varna, Sanghvi Fincap Limited and Dwarkesh Restaurants Private Limited received and gave shares in off-market and some of them transacted and sold the shares of the company in the market."

It is noted that this charge is leveled predominantly on the basis of off-market transfers mentioned in Tables 1 and Table 2. 11. With regard to the allegation of the subsequent off-market transfer after receipt of the same from Mr. Karthik Ramakrishnan, it is noted that the SCNs are vague as the basis of the said charge is unsubstantiated and unclear in following respects:- (a) Not all the subsequent transferors mentioned in Table-2 were recipients of shares from Mr. Karthik Ramakrishnan as mentioned Table-1. For example, Mr. R. Karthik, Mr. Govindkumar H. Varma, Mr. T. Ganpathi Raja, Dwarkesh Restaurant Pvt. Ltd. and Mr. K. Balaraman who were mentioned in the list of subsequent off-market transferors in Table - 2 were not recipient of shares from Mr. Karthik Ramakrishnan as described in Table 1; (b) Shri Vishwanath S Varma was one of the recipients of shares from Mr. Karthik Ramakrishnan as mentioned in Table -1 but his name has not been mentioned in Table 2 amongst the subsequent off-market transferors; (c) The basis of making Mr. Govindkumar H. Varma and Dwarkesh Restaurant Pvt. Ltd. noticees is unclear, since they had not received shares from Mr. Karthik Ramakrishnan.

Further, no SCNs have been issued to Mr. R. Karthik, Mr. T. Ganpathi Raja and Mr. K. Balaraman who were in same position as of Mr. Govindkumar H. Varma and Dwarkesh Restaurant Pvt. Ltd.; (d) Although Mr. S. Natesan and Mr. P Alagar who were the recipients of shares from Mr. Karthik Ramakrishnan as mentioned in Table-1 and were also subsequent off-market transferors as mentioned in Table-2, there are not noticees in the SCNs. 12. The SCNs further vaguely state that some of the transferees, who had received shares from Mr. Karthik Ramakrishnan through off-market and some of them had sold shares in the market. However, there is no data or information at all in the SCNs, as who all transferred shares in the market to public and what quantity was so transferred. Thus, this allegation is not substantiated in the SCNs on the basis of any off loading of shares in the market. 13. It is settled position that for holding a person guilty of having been indulged in fraudulent and unfair trade practices as alleged in this case, the finding must be sustained by a higher degree of proof than that required in any other civil default.

There must be convincing preponderance of probability to support the allegation of fraudulent and unfair trade practices. I am of the view that the SCNs do not suggest fraudulent and unfair dealings by the noticees on the basis of In the matter of Eonour Technologies Limited Page | 11 of 12 preponderance of probability. In the facts and circumstances as observed hereinabove, I find that the charges in the SCNs that Mr. Karthik Ramakrishnan off loaded his 2,17,47,900 shares through the transferees in the Table -1 and induced public to buy shares of the company and other 9 noticees aided and abetted him in off loading his shares are not substantiated. There is no material record to indicate that the off-loading of shares by Mr. Karthik Ramakrishnan to entities as mentioned in Table -1 has resulted in manipulation in the scrip. It is further noted that the SCNs neither contain any material to suggest inducement of trading by public investors on account of any fraudulent device of the noticees nor do they indicate any loss to any investor on account of off-market transfers of shares by Mr. Karthik Ramakrishnan.

14. Admittedly, all the alleged transactions of Mr. Karthik Ramakrishnan were disclosed to the stock exchanges. It is further noted that Mr. Karthik Ramakrishnan has submitted supporting documents showing execution of work orders by the company with several other companies during the investigation period. He has also filed copies of bank statements and consolidated statement to substantiate that substantial portion of funds realised on account of sale of his shareholdings in the company were reinvested directly or through M/s. Justice Holdings into the company or its subsidiaries. The material available on record substantiates his claim that he sold his shareholdings to utilise the sale proceeds in order to solve the company's fund shortage problem and not to cause any loss to uninformed innocent investors as alleged in the SCNs. 15. Considering the above facts and circumstances of the case, I am of the view that there is no need to pass any direction under section 11B of the SEBI Act, 1992 in respect of the Mr. Karthik Ramakrishnan, Mr. Sajjankumar H. Nanwal, Mr. Vishwanath H. Verma, Ms. Sunita S. Nanwal, Mr. Amritlal N Prajapati, Mr. Shalvi Rashmin Vakta, Mr. Murarilal Bholuram Prajapati, Mr. Govind Kumar Varma, Sanghvi Fincap Limited and M/s. Dwarkesh Restaurant Private Limited, as contemplated in the SCNs issued to them.

The SCNs are accordingly disposed of.

Sd/-

DATE: November 09th, 2015 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

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