Order in respect of Spectrum Chemicals Pvt. Ltd., Mr. Hardik M Pandya, Ms. Falguni Chirag Thakkar and Mr. Shalin K Parikh in the matter of Crazy Infotech Ltd.

Under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 in respect of Spectrum Chemicals Pvt. Ltd. (now known as Vidhya Jewellers Pvt. Ltd.) (PAN: AAICS2382L), Mr. Hardik Maheshbhai Pandya (PAN:ARJPP6330Q), Ms Falguni Chirag Thakkar (PAN: ABMPT4202C) and Mr. Shalin Kiritkumar Parikh (PAN: AJAPP5421B) in the matter of dealings in the scrip of Crazy Infotech Ltd. 1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") and Bombay Stock Exchange (BSE) conducted investigation into buying, selling and dealing in the scrip of Crazy Infotech Ltd. (hereinafter referred to as "Crazy Infotech"), for various periods between August 2005 to August 2007, on observing spurt in the price of the scrip.

2. On the basis of the Report submitted by BSE, SEBI conducted a detailed investigation into the buying, selling and dealings in the scrip of Crazy Infotech Ltd. during the period from April 1, 2005 to December 31, 2007 (hereinafter referred to as " Period-I") and during the period January 1, 2008 to June 30, 2008 (hereinafter referred to as "Period-II") in order to ascertain any instances of contravention of provisions of SEBI Act, 1992 or any Rules/Regulations made thereunder.

2.1 During the Investigation Period –I, it was observed that, i. During the period January 21, 2004 to March 31, 2005, the price of the scrip was in the range from, ` 0.57 to `2.76/- with daily average volume of 16,270 shares and three months prior to the investigation period i.e from January 1, 2005 to March 31, 2005, the price of the scrip was in the range from `1.64 to `2.74/-. However, it was observed that during the investigation period (i.e. from April 1, 2005 to December 31, 2007), price of the scrip increased from `1.99 to reach a high of `268/- on September 28, 2007 and later closed at `255.80 on December 31, 2007. After the investigation period, price of the scrip fell sharply to close at `21.5/- on March 27, 2008. It was also noted that there were no major corporate announcements during the said periods.

ii. Investigation found that a group of 823 connected entities (connected through common telephone number, address, off market transaction, bank transactions and hereinafter collectively referred to as "connected entities" and individually by their names) were trading in the scrip during the investigation period in the manner of circular/reversed and synchronized trades among themselves. Some of the connected entities were also found to have indulged in self trades during the investigation period. Details of these 823 connected entities along with their trading details during the investigation period and details of connections amongst a few of these entities were already given in the respective Show Cause Notices (SCN) issued to them.

iii. The total traded volume in the scrip of Crazy Infotech during the investigation period was 2,92,46,282 shares. The aforesaid connected entities traded on 566 days out of 653 days on which the scrip was traded on the exchange (BSE) during the investigation period. They traded among themselves for 66,57,790 shares i.e. 22.73% of traded volume in the market. They were involved in trades for 2,14,07947 shares on either buy side or sell side or both sides of same trades accounting for around 73.07% of the total traded volume of 2,92,46,282 shares. The aforesaid group of connected entities were also observed to be transferring shares through off-market transactions/trades among themselves during the investigation period. On analyzing the pattern of transactions executed by the connected entities, it was found that these connected entities had indulged in self trades and also traded in circular/ reversal/ synchronized/ structured pattern, creating artificial volume and price rise in the scrip of Crazy Infotech.

iv. Out of the entire 823 connected entities identified by the investigation (Paragraph No. 2.1 (ii) above), 780 entities were found to have either traded individually on 10 or less number of instances during the 653 days on which the scrip was traded on the exchange (BSE) during the investigation period, or traded on more than 10 instances but bought/sold less than 75,000 shares in market and/or off-market. On the basis of the said criteria, SEBI issued administrative warning to the aforesaid 780 entities in May 2011, advising the entities to be careful in future and to be more vigilant, in the manner they execute trades, so that their trades do not compromise market integrity in any manner. Adjudicating proceedings were initiated against one of the entities, viz. Arcadia Share & Stock Brokers Pvt. Ltd.

v. Out of the remaining 42 entities, 37 entities were alleged to have traded in both market and off-market segments and bought/sold at least 75,000 or more shares in market and/or in off-market during the investigation period in circular/reversal,/synchronized/ structured trades in connivance with other connected entities, which resulted in artificial volumes and rise in price of the scrip of Crazy Infotech. The remaining 5 entities were found to have indulged only in off-market transactions and were an important off-market link between the other connected entities trading in market, thereby completing the circular pattern of trading among themselves and creating artificial volume in the market.

vi. SEBI issued separate SCNs dated November 7, 2012 against the aforesaid 42 entities for their alleged indulgence in manipulative and fraudulent trades in the nature of circular/reversal trades, in connivance with other connected entities, creating artificial volumes and impacting the price in the scrip of Crazy Infotech during the Period-I, thereby violating Regulation 3 (a), 4(1), 4(2)(a), (b), (e) & (g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as "PFUTP Regulations, 2003").

vii. Subsequently, SEBI, passed a common Order on February 10, 2015 against the 41 entities, under Section 11 and 11B of the SEBI Act. The proceedings against the remaining one entity was abated on account of his death. Vide the aforesaid Order, SEBI warned the 41 entities to be cautious in the conduct of their dealings as participants in the securities market and restrained 8 of them from accessing the securities market, directly or indirectly, for a period of two years for indulging in self-trades in the scrip of Crazy Infotech during Period-I.

Period-II-

2.2 On completing investigation into the trading in the scrip of Crazy Infotech for the period from April 1, 2005 to December 31, 2007 (Period-I), SEBI conducted further investigation in the scrip of Crazy Infotech during the Investigation Period –II (i.e January 1, 2008 to June 30, 2008). It was observed that, i. During the period, January 1, 2008 to March 31, 2008, the price of the scrip opened at `262.5 on January 1, 2008, reached a high of `268.95 on the same day and later fell sharply to close at `21.5 on March 27, 2008. The prices were near lower circuit filter prices on certain days during the investigation period. The volumes in the scrip varied with a few days of high volumes followed by days of low volumes. Average daily volume was 71,241 shares during this period of 3 months. During this period, totally 42,74,454 shares were traded.

ii. On March 28, 2008, the price of the scrip was adjusted on account of subdivision /split up of equity share of `10/- to `1/- per share. During the period from March 28, 2008 to June 30, 2008, the price of the scrip opened at `2.25 (on March 28, 2008), reached a high of `8.45 on May 21, 2008 and later fell to close at `3.77 on June 30, 2008. The prices were near higher/lower circuit filter prices on certain days during the investigation period. The volumes in the scrip varied with a few days of high volumes followed by days of low volumes. Average daily volume was 4,39,919 shares during this period of 3 months. During this period, totally 27,71,4889 shares were traded. It was also noted that there were no major corporate announcements during the said periods.

iii. The investigation conducted by SEBI, during the Period-II, observed circular/reversal/synchronized patterns of trades and also off market transactions in the scrip of Crazy Infotech (similar to those which were observed during the investigation Period-I (by 823 connected entities)), by a group of 95 entities. It was further found that these 95 entities included, 38 entities of the 823 connected entities (of Period-I) and a newly identified group of 57 more inter-connected entities. Out of the said newly identified 57 connected entities, 56 entities were found to be connected with 823 connected entities and with each other through off-market transactions observed during Period-II. The remaining one entity, viz. Spectrum Chemicals Pvt. Ltd. had the same address as that of Khodiyar Industries Ltd. and Cardioid Marketing Pvt. Ltd. who were part of the inter-connected group of 823 entities.

iv. The said 57 newly identified connected entities totally bought 2,25,144 shares and sold 27,17,218 shares in the market and received 7,68,288 shares and transferred 4,53,799 shares in off-market during the investigation period-II. Out of the 57 newly identified entities, who were found to have traded during Period-II, SEBI issued administrative warning in May 2012 to 53 entities as they had indulged in buying/selling of less than 75,000 shares in market and/or off-market.

v. The remaining 4 entities viz. Spectrum Chemicals Pvt. Ltd. (Spectrum Chemicals), Mr. Hardik Maheshbhai Pandya (Hardik Pandya), Ms Falguni Chirag Thakkar (Falguni Thakkar) and Mr. Shalin Kiritkumar Parikh (Shalin Parikh) (hereinafter collectively referred to as “Noticees” and individually by their respective names) were found to have traded, in the scrip of Crazy Infotech significantly, during the entire period of investigation, i.e Period-I and/or Period II, in circular/reversal and synchronized pattern, in market and off-market, in concert with other inter-connected entities, creating artificial volume and price rise in the scrip of Crazy Infotech and later alleged to have dumped the shares in the market at the artificially inflated prices to earn huge profit.

2.3 SEBI issued a common SCN dated November 7, 2012, against the 4 Noticees to show cause as to why suitable directions under Section 11& 11B of the SEBI Act, 1992 read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as "PFUTP Regulations, 2003"), including a direction to restrain them from accessing the securities market and prohibit from buying, selling or dealing in securities for a particular duration should not be passed against them for the violation of the provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

2.4 The aforesaid Noticees are alleged to have indulged in manipulative and fraudulent trades in the nature of circular/reversal trades, in connivance with other connected entities, creating artificial volumes and impacting the price in the scrip of Crazy Infotech during both the investigation periods (Period-I and Period-II), thereby violating Regulation 3 (a), 4(1), 4(2)(a), (b), (e) & (g) of PFUTP Regulations, 2003. The relevant provisions alleged to have been violated by the Noticees are reproduced below for reference purpose,

PFUTP Regulations, 2003

3. Prohibition of certain dealings in securities No person shall directly or indirectly— (a) buy, sell or otherwise deal in securities in a fraudulent manner; 4. Prohibition of manipulative, fraudulent and unfair trade practices (1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely:— (a) indulging in an act which creates false or misleading appearance of trading in the securities market; (b) dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; (e) any act or omission amounting to manipulation of the price of a security; (g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security; 2.5 The four Noticees, viz. Spectrum Chemicals, Hardik Pandya, Falguni Thakkar and Shalin Parikh submitted their reply, vide letters dated January 30, 2014, December 6, 2012 and December 5, 2012.

2.6 Pursuant to this, Noticees were given an opportunity for personal hearing before me on February 5, 2014. The Noticees availed the opportunity of hearing granted to them on February 5, 2014 and made their respective submissions before me. Subsequent to this, another opportunity of hearing was granted to them on May 8, 2015. On May 8, 2015, three of the Noticees availed the opportunity granted to them. Spectrum Chemicals did not appear for hearing.

2.6.1 Following inter alia were the submissions (written and oral) made by the Noticees, i. Spectrum Chemicals in its reply to the SCN, vide letter dated January 30, 2014 and e-mail dated February 06, 2014 and the written submissions dated February 17, 2014 submitted that, • They did not execute any trades in the scrip of Crazy Infotech through any broker. They enclosed their DP account statements and bank account statements in order to substantiate its contention that it has not made any payments to the Brokers (through whom they were alleged to have been transacted in the shares of Crazy Infotech). • SEBI has not provided copy of investigation Report.

ii. Hardik Pandya vide letter dated December 5, 2012, made the following submissions:

• "I have opened Demat Accounts and allowed their use by third parties against monetary consideration which gave me other income for some period, • I came to know that my accounts were given for third party use on the instructions of Mr. Paras Chaplot, a market operator having his base at Mumbai. • I was advised by my well wisher broker Mr. Samir S Shah to provide my demat accounts for such use. • I got a sum of Rs.4000/- ( Rupees Four Thousand Only) per month for this use during the aforesaid period" iii. Falguni Thakkar and Shalin Parikh vide separate letters dated December 5, 2012 submitted that: • " On the advice of some well wishers I opened demat account and allowed its use by third parties against monetary consideration which gave me other income for some period, • I have opened Demat Accounts and allowed their use by third parties against monetary consideration which gave me other income for some period, • I came to know that my accounts were given for third party use on the instructions of Mr. Paras Chaplot, a market operator having his base at Mumbai. • I was advised by my well wisher broker Mr. Rakesh Patel to provide my demat accounts for such use. • I got a sum of Rs.4000/- ( Rupees Four Thousand Only) per month for this use during the aforesaid period". iv. During the personal hearing granted to the Noticees on February 5, 2014 Mr. Gokulbhai Rakesh Patel appeared on behalf of Falguni Thakkar and admitted that the alleged trades were not executed by Falguni Thakkar and those trades were executed by him using her demat account. Similarly, during the hearing held on February 5, 2014 Shalin Parikh appeared and submitted that it was Mr. Gokulbhai Rakesh Patel, who had executed the alleged transactions in his account. During the subsequent hearing held on May 8, 2015, Mr. Gokulbhai Rakesh Patel appeared on behalf of Falguni Thakkar and Shalin Parikh and admitted that the alleged trades were executed by him on behalf of them.

3. I have carefully examined the SCN issued against each Noticees, their replies, oral and written submissions made before me during the hearing along with the documents submitted therewith. In the next few paragraphs, the charges vis-à-vis each Noticee will be examined in the light of the findings of the investigation, the replies filed by the Noticees and the submissions made before me during the personal hearing. 3.1 The Noticees herein are part of the 57 newly identified inter-connected group of entities who were found to have traded (both in market and off market) in the scrip of Crazy Infotech during the Period-II in circular/ reversed and synchronized pattern, along with the 38 entities (entities mentioned in Paragraph No.2.2 (iii) above). The Noticees were also found to have traded significantly in circular/reversed and synchronized pattern during the Period-I. 3.2 On analyzing the data given in the SCNs issued to the Noticees along with the Annexures therein, the following are observed, • Spectrum Chemicals (Noticee No.1) and Hardik Pandya (Noticee No. 2) were amongst the seven entities who were found to have indulged in both buying and selling of shares in the market in synchronized and circular pattern during Period-II along with other connected entities. Spectrum Chemicals was also alleged to have indulged in self trades during the period I and II. • Falguni Thakkar (Noticee No.3) and Shalin Parikh (Noticee No.4) were amongst the group of entities, who were found to have involved in off-market transactions with other connected group entities during Period-II. • All the aforesaid four Noticees were also alleged to have traded significantly during Period-I along with other connected entities in synchronized and circular/reversed pattern resulting in artificial volume and price in the scrip of Crazy Infotech.

Connection/relation amongst the Connected Entities:

3.3 The SCN alleges that 56 out of 57 newly identified entities including the Noticees, viz. Hardik Pandya, Falguni Thakkar and Shalin Parikh were connected with 823 connected entities and with each other through off-market transactions observed during Period-I. The Noticee, viz. Spectrum Chemicals had same address as that of the entities, Khodiyar Industries Ltd. and Cardioid Marketing Pvt. Ltd. who were part of the 823 connected entities.

Market and Off-market Transactions by Noticees-

3.4 As has been observed earlier, during Period –II, the aforesaid 57 newly identified entities including the Noticees herein totally bought 2,25,144 shares and sold 27,17,218 shares in the market and these entities received 7,68,288 shares and transferred 4,53,799 shares in off-market. They were also found to have traded significantly in the previous investigation period (Period-I) and counter-parties to most of the trades were connected group entities. It was alleged that during both the investigation periods, their trades were mainly in the nature of circular, synchronized and reversal in nature, contributing to artificial volume and price rise generated in the scrip of Crazy Infotech.

3.5 As per the SCN, the market and off market transactions entered into by the Noticees during Period-I and Period II are as follows:

Buy Sell Investi Mkt Mkt gation within Off-within Off- Period Mkt group Synchronised* mkt Mkt group Synchronised* mkt Spectrum Chemicals I 12,51,890 6,97,057 1,29,824 0 9,21,501 2,93,540 1,36,866 0 II 1,79,039 87,807 56,840 0 15,99,018 7,977 5,022 0 Hardik I 3,14,919 3,09,580 3,08,575 0 3,14,849 3,13,756 3,09,717 0 Pandya II 7,500 0 0 5,070 2,500 0 0 5070 Falguni 1,69,499 1,47,454 1,39,300 0 1,69,499 1,65,450 1,65,425 Thakkar I 0 II 0 0 - 17,621 12,669 7,669 - 4,952 Shalin 2,09,544 1,93,201 1,78,177 0 2,01,864 1,91,318 1,84,963 0 Parikh I II 0 0 - 7,680 0 0 - 7,680 * The time difference between placement of buy order and sell order was less than 60 seconds in synchronized trades

3.6 In view of the connection alleged against the entities, the SCN alleges that the trades executed by the connected entities including the Noticees, were mainly in the manner and pattern of reversal, circular and synchronized in nature, in collusion with each other. All of these transactions alleged to have resulted in the artificial volume and price rise in the scrip of Crazy Infotech.

3.7 The allegations are dealt under the following paragraphs.

Circular/ Reversal and Synchronized Trades by the Noticees a. It is observed from the SCN, that the Spectrum Chemicals has traded significantly in Period -I and II in circular/reversed and synchronized pattern with no intention to transfer beneficial ownership of shares and counterparties to most of their trades were connected group entities. As regards, the trades executed by Hardik Pandya, it was stated in the SCN that the trading of Hardik Pandya was not significant during Period-II. However, during Period-I, Hardik Pandya had traded significantly, along with the connected entities.

b. From the various instances of trading pattern executed by Spectrum Chemicals and Hardik Pandya reproduced in the SCN, which were alleged to be circular/reversed and synchronized trades and from the details in respect of the connection amongst the entities including the Noticees, as alleged in the SCN, it is observed that the SCN does not specifically explain the connection/relation amongst the Noticees and the counterparties of their trades, which are alleged to be in the manner of reversed/ circular and synchronized transactions. Moreover, the connection amongst certain entities in the group alone cannot be a decisive factor to determine the collusion amongst all the connected entities including the Noticees herein as the SCNs do not contain specific data indicating the specific role/contribution of the Noticees to the volume and price generated through the alleged reversals/circular trades in the scrip. It is also relevant to note that administrative warning has been issued to 780 entities (out of the 823 connected entities) of Period-I and 53 entities (out of 57 newly identified connected entities) of Period-II.

c. For instance, from the details of circular/reversal and synchronized trades alleged to have been executed by Spectrum Chemicals during Period-I and Period-II (as given in the SCN), it is seen that the counterparties to the trades of Spectrum Chemicals were Mr. Hemant M Shah, Mr. Kapil Kumar M Jain, Mr. Basant Kumar Bangur, Mr. Bhikhalal Prahladrai Agarwal, Mr. Gokulbhai Patel Rakesh and Mr. Vipin Maneklal Kudar. Similarly, the counterparties to the trades executed by Hardik Pandya were Mr. Gokulbhai Patel Rakesh, Mr. Mayank Navnitbhai Gandhi and Ms. M. Gandhi Aditi. It is however, observed that SCN does not provide sufficient material to prove that these entities are connected/related to Spectrum chemicals and Hardik Pandya and that they have colluded amongst themselves to manipulate the price and volume in the scrip of Crazy Infotech.

d. As regards, the trades executed by Falguni Thakkar and Shalin Parikh, it is observed that the SCN alleges that the said Noticees traded significantly during Period -I and the counter parties to most of the trades were group entities only. It is however, observed from the SCN that their trading during the Period II was not significant compared to their trading during the Period I.

e. SCN cites a few instances of trades alleged to be in the nature of circular/reversal executed by Falguni Thakkar and Shalin Parikh in both market and off market. It is however, observed that SCN does not provide sufficient material evidence to prove that these entities are connected/related to by Falguni Thakkar and Shalin Parikh and that they have colluded amongst themselves to manipulate the price and volume in the scrip of Crazy Infotech.

Price Manipulation by Noticees- f. The SCN issued to the Noticees alleges that as per the analysis of Last Traded Price (LTP), the trades of Noticees had impacted/led to rise in price in the scrip of Crazy Infotech. In this regard, it is pertinent to note that rise in price of the scrip is alleged as a result of the transactions alleged in the SCN as reversed/ circular and synchronized trades. However, as mentioned earlier, in the absence of sufficient material in the investigation report suggesting connection amongst the entities, the nature of trades executed by the Noticees cannot be conclusively determined as reversed/circular and synchronized with pre-meditated intention to artificially inflate the price and volume in the scrip. Further, the counter parties to many transactions, belong to the group of entities against whom SEBI has already issued an administrative warning.

3.8 To sum up, the trades of the Noticees, as per the SCNs, largely, fall under the category of self trades, reversal/circular/synchronized trades and off market transactions. It is observed that even though the SCN cites a few instances of reversed/circular trades executed by the Noticees with the entities alleged to have been connected with each other, it does not provide for sufficient material to prove the connection/relation between the Noticees and the said connected entities. Further, the trades are spread across the entire investigation period and the counterparties to the trades executed by the Noticees include the 823 connected entities of Period I and 57 newly identified entities of Period II and also some non-connected entities. In this regard, it is relevant to note that out of the 823 entities alleged to have been connected to each other and have traded concertedly in the scrip during the Period-I (in both market and off market, creating artificial volume and price rise), 780 entities were given an administrative warning by SEBI and out of the 57 newly identified entities (including the Noticees), alleged to have been connected with each other and have traded concertedly during the Period-II, 53 entities were given an administrative warning by SEBI. In this regard, it is observed that eventhough such a course of action was adopted by SEBI in order to filter data and identify the main entities involved in the alleged manipulation, the fact that the counter parties to many of the trades (alleged to be synchronized and reversed trades) executed by the Noticees include entities against whom administrative warning had been issued by SEBI, cannot be ignored.

3.9 The SCN narrates instances of unusual trading pattern amongst the connected entities including the Noticees casting doubt on the intent of the Noticees, in respect of the impugned transactions. It is also noted that the Noticees, viz. Hardik Pandya, Falguni Thakkar and Shalin Parikh admitted that they allowed third parties to use their demat accounts. Hardik Panday and Shalin Parikh submitted that they allowed third parties to use them against monetary consideration of Rs. 4000/- per month. It is thus, clear that the aforesaid Noticees permitted their accounts to be used by third parties in return of monetary benefit. In view this, they cannot avoid the responsibility for misuse of their accounts by third parties. The Hon'ble Securities Appellate Tribunal in Rahul H. Shah Vs. SEBI (Appeal No. 83 of 2012 decided on May 11, 2012) observed that name lending "is a fraudulent activity and requires to be curbed for maintaining the sanctity of the securities market". However, considering the large number of transactions involving many entities, spread over many days during the investigation period, coupled with the fact that 780 of the 823 connected entities and 53 out of 57 entities who had allegedly indulged in reversal/circular/synchronized trades during both the investigation period, have been issued administrative warning by SEBI, I am of the view that, for the sake of uniformity,

Noticees, viz. Mr. Hardik Maheshbhai Pandya, Mrs. Falguni Chirag Thakkar and Mr. Shalin Kiritkumar Parikh also be afforded the same treatment.

3.10 In view of the discussions above, I am constrained to observe that a warning would be reasonable for the Noticees viz. Mr. Hardik Maheshbhai Pandya, Mrs. Falguni Chirag Thakkar and Mr. Shalin Kiritkumar Parikh in respect of the reversed/circular and synchronized, and the off market transactions alleged to have executed by the aforesaid Noticees in the scrip of Crazy Infotech.

Self-trades by Spectrum Chemicals

3.11 In addition to the reversal/circular and synchronized trades, the Noticee, viz. Spectrum Chemicals was found to have indulged in self trades for several days during the investigation period. As per the SCN, Spectrum Chemicals has indulged in self trades for 6,571 shares, (where Spectrum Chemicals was on both buy and sell sides).

i. Copy of trade and order log data provided by BSE indicate that Spectrum Chemicals have traded in the scrip of Crazy Infotech on BSE during the period of investigation through the stock broker, Ami Stock and Share Brokers Pvt. Ltd.

ii. Spectrum Chemicals in its reply to the SCN, vide e-mail dated February 06, 2014 and written submissions vide letter dated February 17, 2014 (pursuant to the personal hearing granted on February 5, 2014), submitted that they have not executed any trades in the scrip of Crazy Infotech through any broker. They also furnished the copies of their demat account statement with MPSE Securities Ltd., Indore and bank account statement with UTI Bank, Indore Branch for the period from March 1, 2005 to February 28, 2007 and Axis Bank, Indore for the period from February 28, 2007 to January 30, 2014 in order to substantiate its contention that they have not made any payments to the Broker through whom they are alleged to have transacted in the shares of Crazy Infotech and has not made any transactions in the scrip of Crazy Infotech through the said broker during the period of investigation.

iii. In order to ascertain whether the alleged transactions were indeed carried out by Spectrum Chemicals, the materials/documents such as the details of demat accounts of Spectrum Chemicals, statements of transactions executed by Spectrum Chemicals during the period of investigation through the demat account, etc. obtained from the depositories (NSDL and CDSL) have been analyzed. It is observed from the information provided by NSDL, vide letter dated June 19, 2013 that no demat account is found to be held in the name of Spectrum Chemicals with any of the depository participants (DP) of NSDL. CDSL, vide e-mail dated May 19, 2015 stated that Spectrum Chemicals had only one demat account with its DP, viz. MPSE Securities Ltd. On analysing the data/information such as demat account details and statement of transactions pertaining to aforesaid demat account of Spectrum Chemicals from the date of account opening (November 23, 2004) to date of closure (September 21, 2013) forwarded by CDSL, it is observed as under:

a) The spectrum Chemicals has only one demat account with the depository participant of CDSL, viz. MPSE Securities Ltd., b) The statement of transactions pertaining to the aforesaid demat account for the period November 23, 2004 to September 21, 2013 forwarded by CDSL, indicates that Spectrum Chemicals had not executed any transactions in the scrip of Crazy Infotech during the period of investigation.

3.12 Considering the above and also in absence of any other material on record to indicate that the alleged transactions were executed by Spectrum Chemicals, I am of the view that the charge against Spectrum Chemicals has not been clearly established. In view of this, I am inclined to give benefit of doubt to Spectrum Chemicals in respect of the charges alleged against Spectrum Chemicals.

Order- 4. In view of the forgoing, I, in exercise of the powers conferred upon me by virtue of Section 19 read with Section 11 and 11B of the SEBI Act, 1992 and Regulation 11 of the PFUTP Regulations, 2003, hereby- i. warn the Noticees, viz. Mr. Hardik Maheshbhai Pandya (PAN:ARJPP6330Q), Ms Falguni Chirag Thakkar (PAN: ABMPT4202C) and Mr. Shalin Kiritkumar Parikh (PAN: AJAPP5421B) to be cautious in their future dealings and exercise due care and diligence in the conduct of their dealings as participants in the securities market (for the reasons mentioned at Paragraph No. 3.9 above),

5. This Order shall come into force with immediate effect.

6. The copy of the said Order shall be forwarded to the concerned Stock Exchanges and Depositories.

Place: Mumbai S. RAMAN Date: June 17, 2015 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA