Order in the matter of Ankur Commercial Ltd

1. On noticing unusual price rise in the shares of Ankur Commercial Limited (hereinafter referred to as the Company) during the period between April 10, 2001 and July 13, 2001 at the Delhi Stock Exchange Limited (hereinafter referred to as DSE), the Securities and Exchange Board of India (hereinafter referred to as SEBI) had conducted an investigation into the trading in the shares of the Company for the aforesaid period. The finding of the investigation inter alia suggested that the Company and their promoter directors namely Mr. Arvind Kumar Kabra, Mr. Ajay Kumar Kabra and Mrs. Rukmani Devi Maheshwari in nexus with Vikas Holding Private Limited (hereinafter referred to as VHPL) were instrumental in artificially increasing the share price of the Company from Rs. 3.00/- on April 10, 2001 to Rs. 86.70/- on July 13, 2001. In view of the above, it was alleged that the Company along with its aforesaid promoter directors contravened the provisions of Regulation 4(a) & (b) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 (hereinafter referred to as the PFUTP Regulations). Thereafter, a show cause notice dated October 27, 2004 was issued to the Company and its promoter directors namely Mr. Arvind Kumar Kabra, Mr. Ajay Kumar Kabra and Mrs. Rukmani Devi Maheshwari, requiring them to show cause as to why they should not be restrained from accessing the securities market and prohibit them from dealing in the securities market for an appropriate period. For the sake of convenience, the aforesaid persons shall be collectively referred to as the noticees and individually by their respective names. Subsequently, the Company filed a reply dated November 5, 2004. Thereafter, an opportunity for hearing was provided on December 12, 2008 and also on June 24, 2009. However, none of the noticees appeared on the said dates. In the totality of the facts and circumstances of the case, I do not consider it necessary to provide a further opportunity to the noticees and the present proceeding is being considered on the basis of the show cause notice issued to the noticees, the reply of the Company dated November 5, 2004 and other material available on record.

2. The only issue for consideration is whether the noticees had violated Regulation 4(a) & (b) of the PFUTP Regulations, as alleged in the show cause notice. The fact that the share price of the Company had increased from Rs.3.00 on April 10, 2001 to Rs. 86.70 on July 13, 2001 is not in dispute. The investigation conducted by SEBI observed that the price of the scrip increased by 2790% in a period of just 27 trading sessions with a very thin volume of 6100 shares. It was observed that one of the stock brokers, namely VHPL had traded in the shares of the Company substantially and that its trades had accounted for 54% of the total volume traded in the shares of the Company at DSE during the relevant period. The investigation conducted by SEBI found that Mrs. Vijay Laxmi Kabra was one of the Directors of VHPL and is the wife of Mr. A.K.Kabra (Director of the Company). It was also alleged that VHPL had played an active role in the price rise of various companies such as Hunt Commercial Limited (hereinafter referred to as Hunt Commercial) and Rohit Agro Limited (hereinafter referred to as Rohit Agro). It is noted that the said companies have interlinkages through common registered office as well as common or related directors with VHPL. It also came to light that the above mentioned companies including Vikas and the Company have the same compliance officer, viz Mr. Amit Khetan. It was alleged that signature of Mrs. Sunita Devi (one of the clients of VHPL) was the same as that Mrs. Sunita Kabra (Director of VHPL) in the records of DSE, wherein she had signed as a Director of VHPL.

3. I note that the surveillance report of DSE supports the findings of SEBI investigations which established the linkages between the Company and VHPL, when it was found that they had common auditors viz M/s G.Dinesh Narayan & Co and directors who are related. I note that VHPL had traded in the shares of the Company during the relevant period. The present show cause notice issued to the Company and its directors also mentioned about the connection between VHPL and the Company. These facts are not disputed. The contention of the Company is that, neither it nor any of its directors traded in its own scrip during the relevant period as alleged. It also stated that the price rise in their scrip has not benefited them in any way and that no motive can be established to allege any unfair trade practice on their part. From the linkages mentioned in the show cause notice, it is noted that VHPL had close nexus with the Company. On the basis of this nexus, it is alleged that the artificial trading in the shares of the Company was carried out at the behest of the Company inter alia in order to induce the general investors to trade in the shares of the Company. Though it is alleged so, there is nothing in the show cause notice to link the Company with the artificial trading resulting in manipulation. In the absence of sufficient material in the show cause notice to substantiate the fact that the trading of VHPL was done at the behest of the Company, I am of the view that the Company is entitled for a benefit of doubt in the matter. Accordingly, I dispose of the show cause notice dated October 27, 2004, issued to the Company and its directors namely, Mr. Arvind Kumar Kabra, Mr. Ajay Kumar Kabra and Mrs. Rukmani Devi Maheshwari, as ordered hereinbelow.

4. In view of the foregoing, I, in exercise of powers conferred upon me under Section 11B of the Securities and Exchange Board of India Act, 1992 read with Regulations 11 and 13 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, hereby dispose of the show cause notice dated

October 27, 2004 issued to Ankur Commercial Limited and its promoter directors namely Mr. Arvind Kumar Kabra, Mr. Ajay Kumar Kabra and Mrs. Rukmani Devi Maheshwari, without any directions.

DR. K.M.ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: MARCH 23, 2010