Order in respect of Represenatation of Pradeep Kumar Jain & Sons( HUF) in the matter of First Financial Services Limited

WTM/RKA/ISD/ 140 /2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER IN RESPECT OF REPRESENTATION OF PRADEEP KUMAR JAIN & SONS (HUF) – 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”) restrained 152 entities, including Kalakar Commercial Private Limited (hereinafter referred to as “Kalakar”), in the matter of trading in shares of First Financial Services Ltd. 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. Thereafter, SEBI vide its order dated August 25, 2016, inter alia, confirmed the interim directions qua Kalakar alongwith others. 2. Vide letter dated August 29, 2016, Pradeep Kumar Jain & Sons (HUF) has made a representation to SEBI stating, inter alia, as under: (a). Pradeep Kumar Jain & Sons (HUF) with Mr. Pradeep Kumar Jain as Karta is one of the promoters of Parsvnath Developers Limited (hereinafter referred to as “PDL”).

(b). Pradeep Kumar Jain & Sons (HUF) had raised a loan of ₹80 lacs at 15% rate of interest per annum from Kalakar around November 2014 by pledging 8,60,000 equity shares of PDL for meeting its short term business requirement. (c). Post repayment of the aforementioned loan on March 17, 2015, Kalakar expressed its inability in releasing the pledge on such shares in light of the directions issued by SEBI vide interim order passed against various entities including Kalakar. (d). Since, the promoter shares of a listed company are showing pledged for a long time in the public domain without any reason/loan, it is affecting the day to day business of the company.

(e). In view of these submissions, Kalakar be permitted to release the pledge on shares of PDL in favour of pledgor, i.e., Pradeep Kumar Jain & Sons (HUF). 3. The following documents have been submitted by Pradeep Kumar Jain & Sons (HUF) in support of its claim:

Order in respect of Pradeep Kumar Jain & Sons (HUF)

(a). Copy of Loan Agreement and Pledge Agreement; (b). Copy of Pledge master report; (c). Copy of Bank Statement; and (d). Copy of disclosure made by Pradeep Kumar Jain & Sons (HUF)to BSE and as appearing on BSE website under the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 (the Takeover Regulations, 2011). 4. I have carefully considered the submissions of Pradeep Kumar Jain & Sons (HUF) in support of its representation and have perused the relevant documents and material available on record. The limited issue for my consideration, at this stage, is whether the release of the pledge of shares of PDL in favour of the borrower, i.e., Pradeep Kumar Jain & Sons (HUF) by Kalakar (which has been restrained by SEBI from buying, selling or dealing in securities) can be permitted in this case or not.

5. In this regard, I note that Pradeep Kumar Jain & Sons (HUF) had raised a loan of ₹80 lacs from Kalakar by pledging the equity shares of PDL in favour of Kalakar vide separate loan and pledge agreements both dated November 29, 2014. As one of the promoters of PDL, Pradeep Kumar Jain & Sons (HUF) had also made disclosure to BSE in this regard, as required under the provisions of the Takeover Regulations, 2011. The said loan and pledge agreements were executed between these entities prior to the interim order. While the allegations and findings qua Kalakar in the interim order and the order dated August 25, 2016 is a matter of detailed investigation, prima facie, this transaction is not connected to the allegations levelled against Kalakar in the aforesaid orders. I also note that Pradeep Kumar Jain & Sons (HUF) has not been restrained by the interim order or the order August 25, 2016 in the matter of First Financial Services Ltd. 6. In view of the above, I do not have any objection to the release of pledge of shares of PDL by Kalakar Commercial Private Limited in favour of Pradeep Kumar Jain & Sons (HUF) in terms of the loan and pledge agreements dated November 29, 2014. 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: OCTOBER 6th, 2016 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA