Order in the matter of Atlanta Infrastructure and Finance Limited

Under Sections 11(1), 11(4) and 11B (1) of the Securities and Exchange Board of India Act, 1992 In respect of: S. No. Name of the Noticee PAN 1. Mr. Manish Manubhai Raja ADDPR2448D 2. Pari Stock Trading Private Limited AACCP5452E 3. Mr. Pavan Anilbhai Gandhi AIZPG9121H 4. Ms. Pritiben Anil Gandhi ACIPG8956D 5. Mr. Dharmesh Narendrakumar BJHPS1840P Solanki 6. Mr. Girishkumar Prabhudas AIPPR8860G Ruparel 7. Mr. Amrutlal Jivandas Gandhi AGGPG3301E 8. Ms. Dipti Darshanbhai Parmar AUHPP1427H

In the matter of Atlanta Infrastructure and Finance Limited (The aforesaid entities are hereinafter individually referred to by their respective names/Noticee nos. and collectively as “Noticees”, unless the context specifies otherwise)

BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted an investigation into the trading activities in the scrip of Atlanta Infrastructure and Finance

Order in the matter of Atlanta Infrastructure and Finance Limited

Limited (hereinafter referred to as “AIFL / Company”), for the period from August 2, 2010 to January 6, 2015 (hereinafter referred to as “Investigation Period”). The Investigation Period was divided into several patches based on the price movement witnessed in the scrip of the Company, however, for the purpose of the instant proceedings, the relevant patches during which the allegations of violations were noticed were Patch-2 and Patch- 6 of the Investigation Period. It was observed that the shares of the Company witnessed a price fall from ₹48.00 to ₹16.60 during the period from February 26, 2013 to July 9, 2013 (hereinafter referred to as “Patch–2”) and price rise from ₹4.30 to ₹14.57 during the period from September 3, 2014 to December 22, 2014 (hereinafter referred to as “Patch-6”). 2. The investigation conducted by SEBI initially identified a group of 29 connected entities (hereinafter referred to as “Group entities”), who had traded in AIFL scrip and their inter se connection was noticed on the basis of their UCC details, off market transactions, physical share transfers, financial transactions and MCA data etc. It was further observed that out of the said 29 entities, the alleged manipulative trades in AIFL scrip were executed by 8 entities viz:- Mr. Manish Manubhai Raja, M/s. Pari Stock Trading Private Limited, Mr. Pavan Anilbhai Gandhi, Ms. Pritiben Anil Gandhi, Mr. Dharmesh Narendrakumar Solanki, Mr. Girishkumar Prabhudas Ruparel, Mr. Amrutlal Jivandas Gandhi and Ms. Dipti Darshanbhai Parmar (Noticees no. 1 to 8), which did not appear to be genuine trades executed in normal course of dealing in securities and therefore, those 8 entities were alleged to have engaged in manipulating the price of the scrip of AIFL and thereby creating a misleading appearance of trading in the shares of the Company, through their trading in the scrip during Patch-2 and Patch-6 of the Investigation Period. SHOW CAUSE NOTICE, HEARING AND REPLIES 3. Based on the aforesaid findings during the Investigation, a common Show Cause Notice dated February 14, 2018 (hereinafter referred to as “SCN”) was issued to Noticees asking them to show cause as to why necessary directions under Sections 11(1), 11(4) and 11(B) of the SEBI Act, 1992 (hereinafter referred to as “SEBI Act, 1992”) shall not be issued

Order in the matter of Atlanta Infrastructure and Finance Limited against them for violation of provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003”). I note that the SCN sent through Speed Post was duly delivered on all of the Noticees except Noticees no. 4, 6 and 7 as the SCN’s were returned with reason undelivered. Subsequently, service delivery of SCN was attempted through Affixture on the last known address of Noticees no. 4, 6 and 7. The details of the service of SCN through affixture is tabulated below: Noticee Affixture Date Affixture Address no. 4 26/10/2018 C-702, Sadguru Vatika, Airport, Road, Rajkot, Gujarat-360001 6 25/10/2018 A/6, Nasib Apartment, Behind Police Quarters, Heera Baug, Ambavadi, Ahmedabad, Gujarat-380006 7 29/10/2018 Anil-10 Station Plot, Gondal, Gujarat, 360311

4. From the records, I note that Noticee no. 8 has submitted a written reply dated April 27, 2018 in response to the SCN raising therein the following points: a) That she is not part of the alleged 29 connected Group entities and she is also not connected to Noticee no. 3 (Mr. Pavan Gandhi) as has been alleged in the SCN and has enclosed copy of her KYC document to substantiate that she has not mentioned/ disclosed the address “10 Station Plot Gondal Dist Rajkot” as her address in the KYC documents executed by her. b) That she has not engaged in manipulation of the price of the scrip of AIFL. Considering the fact that only one trade executed by her resulting in contribution of ₹1.10 of negative LTP in the shares of the Company has been attributed to her, for which she has been wrongly charged with violation of provisions of PFUTP Regulations, 2003 in the SCN.

Order in the matter of Atlanta Infrastructure and Finance Limited

5. All the Noticees were provided with an opportunity of personal hearing on May 7, 2019. The husband of Noticee no. 8 attended the hearing on May 7, 2019 on her behalf and stated that he had executed the trades on behalf of his wife (Noticee no. 8) in the scrip of AIFL and that such trades were executed based on the tips received by him through ‘sms’ and that the trades were not done with any intention of manipulating the market. He also denied any connection of Noticee no. 8 with other Noticees, particularly with Noticee no. 3, as alleged in the SCN. 6. I note from the records that a letter dated May 2, 2019 has been addressed by the daughter of Noticee no. 4, informing that Noticee no. 4 has expired on May 16, 2018 in support of which, she has enclosed a death certificate. Noticee no. 1 vide letter dated May 6, 2019 had requested for another date of hearing. The Authorized Representative of Noticee no. 5 vide letter dated April 24, 2019 has submitted that Noticee no. 5 did not receive the SCN, hence has requested for a copy of SCN along with necessary annexures with a further request for adjournment of the hearing.

Accordingly, a copy of SCN with Annexures were dispatched to the Noticee no. 5 on June 10, 2019. However, no reply from him has been received till date. I also note that Noticee no. 2 has submitted written replies, vide letters dated July 1, 2019 and July 15, 2019. Also, Noticees no. 3 and 7 have submitted their written replies, vide letters dated June 24, 2019 and July 9, 2019 respectively, inter-alia, requesting for another opportunity of personal hearing. 7. Keeping in view the aforesaid requests from the Noticees, in the interest of natural justice, another opportunity of personal hearing was provided to all the remaining Noticees no. (1 to 7) on August 7, 2019. I note that the hearing notices were duly served upon all the Noticees. For instance, hearing notice was served upon Noticee no. 1 through emails dated July 15, 2019 and August 06, 2019 on email id (manishmorbi@yahoo.com) provided by the Noticee no. 1. Similarly, for Noticee no. 6, as the SCN returned undelivered through Speed Post, the hearing notice was served through paper publication and same was published in Newspaper Sandesh- Ahmedabad Edition dated July 31, 2019. On the said hearing date, a Order in the matter of Atlanta Infrastructure and Finance Limited common Authorized Representatives for Noticees no. 2, 3 and 7 attended the personal hearing on their behalf and after making his oral presentations, requested some more time to give written response to some of the queries raised before me during the hearing.

The Authorized Representative has submitted that Noticees no. 3 and 7 are not related to Noticee no. 2 and that they are also not related to the promoters of the Company (AIFL). Subsequently, Noticees no. 3 and 7 vide letters dated August 8, 2019 and August 28, 2019 respectively, have enclosed their trading details for the years 2009-2016 to substantiate their pleadings that they were regular traders in the market. I find that Noticee no. 1, 5 and 6 have neither filed any replies to the SCN nor have responded to the notice of Personal hearing despite repeated opportunities having been offered to them. After perusing the written and oral submissions of Noticees no. 2, 3 and 7, I find that they have made several common contentions and pleadings, which need to be highlighted as under: a) That Adjudication Proceedings have also been initiated against them for the same set of violation as alleged in the present proceedings. b) That delay in issuing SCN in 2018 has caused prejudice to them as they do not recollect the reasons for investment and sale of shares thereof. The SCN is erroneous and does not explain as to how conducting the present proceedings will help in protection of the interest of investors and the integrity of the Securities Market. c) That power to issue directions under Section 11B of the SEBI Act, 1992 is not available for retrospective application and even the nature of proposed direction is not specified in the SCN.

The SCN must set out the circumstances requiring such drastic use of power belatedly as no prima facie case has been made to warrant issue of such directions of serious consequences. d) That Noticee no. 2 (Pari Stock Trading Pvt. Ltd.) has been amalgamated with Kharisara Palace Pvt. Ltd. They had acquired 1,40,000 shares of the Company in the year 2009 and were further allotted 5,00,000 shares by way of preferential allotment in 2010 and remained invested in AIFL for about 3 years and sold the shares in 2013. Noticee no. 2 has

Order in the matter of Atlanta Infrastructure and Finance Limited denied being part of any group as alleged in the SCN and also has denied having any connection with the counterparty seller (Noticee no. 5). It has been submitted that the SCN has attributed a miniscule contribution of negative LTP of ₹0.40 through its 6 trades, out of the total market negative LTP observed in the scrip. e) That the Noticee no. 3 was allotted 3,50,000 shares of the Company in preferential allotment in 2010 and after remaining invested for more than 2 years, he sold these shares in 2013. He further bought shares of the Company AIFL in 2014 and is still holding 2,18,975 shares of the Company. His trading’s contribution to total market negative LTP of the scrip was a miniscule 0.47%. f) Noticee no. 3 has denied having any connection with Noticee no. 8 (as alleged in the SCN) as the address ‘10 Station Plot’ is a big area of commercial and residential units and their family house at ‘Anil, 10 Station Plot, Gujarat’ is 50 years old hence, connecting him with Noticee no. 8 based on the address ‘10 Station Plot’ is erroneous. g) That Noticee no. 7 bought shares of the Company during 2010-2013, took deliveries, remained invested and sold shares in 2014 on 100% delivery basis. He is still holding 7,52,500 shares of the Company. He has been trading for several decades and is still holding shares of different companies. The contribution to total market negative LTP of the scrip by his trading in the scrip was a miniscule 1.03%. Noticee no. 7 has denied having any connection with the counterparty buyer to his trades (Noticee no. 1) and has submitted that he does not know Noticee no. 5 as the mobile number shown to be the basis for connection between them does not actually belong to him. Further on the whole, he has suffered losses in the investments made by him in the scrip of the Company. h) That they were not part of any Group as alleged in the SCN. However, Noticee no. 3 has acknowledged that he is the grandson of Noticee no. 7 and Noticee no. 4 was his mother, yet stressed that their trading was independent of such connection and his trades ought to be analyzed in isolation.

Order in the matter of Atlanta Infrastructure and Finance Limited

CONSIDERATION OF ISSUES AND FINIDNGS: 8. Based on the afore-stated allegations in the SCN, I find the only issue that requires consideration in the matter is: Whether in the facts and circumstances of the case, the Noticees have violated provisions of Regulations 3 (a), (b), (c), (d), 4 (1) and 4 (2) (a), (e) of PFUTP Regulations, 2003. 9. Before proceeding to examine the aforesaid question on merit, it would be proper to refer to the relevant provisions of the PFUTP Regulations, 2003 which have been allegedly violated by the Noticees, and the same are quoted below as under: - PFUTP Regulations, 2003 3. Prohibition of certain dealings in securities No person shall directly or indirectly— a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder; (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under; (c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange; (d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under. 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.

Order in the matter of Atlanta Infrastructure and Finance Limited (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; ……………………. (e) any act or omission amounting to manipulation of the price of a security; ……………………. 10. The investigation conducted by SEBI revealed that the first trade in the scrip of AIFL during Patch-2 was executed at ₹48.00 and last trade was executed at ₹16.60, thereby registering a fall of ₹31.40 in the scrip price. It was observed that a total no. of 62 trades executed in the scrip amongst Noticees no. 1 to 8 during Patch-2 had caused a negative variation of ₹25.35 to the last traded price (hereinafter referred to as “LTP”) which constituted 21.72% of total market negative LTP of ₹116.70/- observed in the scrip during Patch-2 of the Investigation Period. The details of such 62 trades are tabulated below: Table-1 Seller Name Manish Manubhai Pari Stock Trading Pavan Anilbhai Total Raja Private Limited Gandhi % of % of % of % of total total total total No. market No. market No. market No. market LTP LTP LTP LTP of negati of negati of negati of negati impa impa impa impa trade ve LTP trade ve LTP trade ve LTP trade ve LTP ct ct ct ct s of s of s of s of ₹116.7 ₹116.7 ₹116.7 ₹116.7 Buyer Name 0 0 0 0 Pritiben Anil - 47 -20.40 - - 0.00% - - 0.00% 47 -20.40 17.48% Gandhi 17.48% Dharmesh Narendraku 1 -0.35 -0.30% 6 -0.40 -0.34% - - 0.00% 7 -0.75 0.64% mar Solanki Girishkumar Prabhudas 3 -1.35 -1.16% - - 0.00% - - 0.00% 3 -1.35 1.16% Ruparel Manish Manubhai - - 0.00% - - 0.00% 2 -0.55 -0.47% 2 -0.55 0.47% Raja

Order in the matter of Atlanta Infrastructure and Finance Limited

Seller Name Manish Manubhai Pari Stock Trading Pavan Anilbhai Total Raja Private Limited Gandhi % of % of % of % of total total total total No. market No. market No. market No. market LTP LTP LTP LTP of negati of negati of negati of negati impa impa impa impa trade ve LTP trade ve LTP trade ve LTP trade ve LTP ct ct ct ct s of s of s of s of ₹116.7 ₹116.7 ₹116.7 ₹116.7 Buyer Name 0 0 0 0 Amrutlal Jivandas 2 -1.20 -1.03% - - 0.00% - - 0.00% 2 -1.20 1.03% Gandhi Dipti Darshanbhai 1 -1.10 -0.94% - - 0.00% - - 0.00% 1 -1.10 0.94% Parmar Grand Total 54 -24.40 20.91% 6 -0.40 0.34% 2 -0.55 0.47% 62 -25.35 21.72% 11. On a perusal of the table-1 above, I note that these entities (Noticees no. 1 to 3) had sold shares while the other five entities (Noticees no. 4 to 8) have acted as buyer, whereas Noticee no. 1 (Mr. Manish Manubhai Raja) has executed trades both as a buyer as well as seller. SCN proceeds on the allegations that these Noticees through the 62 trades, as noted above, have together contributed to a market negative LTP, which was 21.72% of the total market negative LTP seen during Patch-2 of the Investigation Period. Analysis of these 62 trades revealed that on most of the occasions, the buyer-Noticees were placing buy orders at a price lower than the previously traded price while the seller-Noticees were placing sell orders at the prevailing buy order price or lesser than the prevailing buy order price and as a result, the pending buy orders got matched and executed. 12. It is noted from table-1 above that out of the 62 trades referred to above, in 47 trades, shares were bought by Noticee no. 4 (Ms. Pritiben Anil Gandhi) during Patch-2 which contributed to a substantial 17.48% of total market negative LTP and the counter party seller for all of her 47 trades was none other than Noticee no. 1 (Mr. Manish Manubhai Raja). Thus while the trades executed by these 8 Noticees cumulatively have accounted for 21.72 % of total market negative LTP of the scrip, the 47 trades executed between Noticee no. 1 and 4 together were the major contributors (17.48%) to total market negative LTP of the scrip

Order in the matter of Atlanta Infrastructure and Finance Limited during Patch-2 of the Investigation Period and have accounted for 80% of the total alleged negative LTP in the SCN. Further, on a perusal of the trade log pertaining to the details of the aforesaid alleged manipulative trades executed by the Noticees no. 1 and 4, it is observed that these two Noticees have substantially contributed to the fall in the price in the scrip of the Company from the period of April 8, 2013 to June 14, 2013. For better understanding of their trades some of the trades executed by these two Noticees are analyzed further in the table below: Table-2 TR TRA ORD CP_O AD DE_ ORDE CP_OR TRAD LTP ER_L CP_ORD ORDER RDER TRADE_DA CLIENT CP_CLIE EI TIM R_LM DER_L E_RAT _RA MRA ER_LMR _LMQT _LM TE NAME NTNAME D E TIME MTIME E TE TE ATE Y QTY PRITI MANISH ANILBH 100 11:40 11:28:4 08/04/2013 MANUBH 11:40:32 23.65 -0.3 23.65 23.5 2280 5000 AI 1 :32 4 AI RAJA GANDHI PRITI MANISH ANILBH 100 11:40 11:26:3 - 08/04/2013 MANUBH 11:40:32 23.6 23.6 23.5 5000 5000 AI 2 :32 8 0.05 AI RAJA GANDHI PRITI MANISH ANILBH 100 11:41 11:26:3 - 08/04/2013 MANUBH 11:41:22 23.6 23.6 23.5 5000 500 AI 7 :22 8 0.05 AI RAJA GANDHI PRITI MANISH ANILBH 100 09:53 09:45:4 - 10/04/2013 MANUBH 09:53:13 24 24 23.7 500 500 AI 1 :13 9 0.15 AI RAJA GANDHI PRITI MANISH ANILBH 100 09:53 09:27:5 - 10/04/2013 MANUBH 09:53:15 23.95 23.95 23.7 100 100 AI 2 :15 8 0.05 AI RAJA GANDHI PRITI MANISH ANILBH 100 09:41 09:32:4 - 11/04/2013 MANUBH 09:41:58 24.55 24.55 24.55 500 200 AI 1 :58 5 0.05 AI RAJA GANDHI PRITI MANISH ANILBH 100 09:56 09:45:5 15/04/2013 MANUBH 09:56:04 25.2 -0.8 25.2 25.2 50 50 AI 8 :04 9 AI RAJA GANDHI PRITI MANISH ANILBH 101 11:34 11:18:4 15/04/2013 MANUBH 11:34:22 25.15 -0.8 25.15 25 10 25 AI 1 :22 2 AI RAJA GANDHI PRITI MANISH ANILBH 101 11:34 11:18:4 - 15/04/2013 MANUBH 11:34:22 25.1 25.1 25 25 25 AI 2 :22 5 0.05 AI RAJA GANDHI

Order in the matter of Atlanta Infrastructure and Finance Limited

PRITI MANISH ANILBH 100 09:31 09:29:5 17/04/2013 MANUBH 09:31:06 24.55 -0.2 24.55 24.55 200 100 AI 1 :06 1 AI RAJA GANDHI PRITI MANISH ANILBH 100 09:19 09:17:0 18/04/2013 MANUBH 09:19:15 24.15 -0.4 24.15 24.1 100 150 AI 1 :15 2 AI RAJA GANDHI PRITI MANISH ANILBH 100 09:19 09:16:3 - 18/04/2013 MANUBH 09:19:15 24.1 24.1 24.1 200 150 AI 2 :15 6 0.05 AI RAJA GANDHI

13. It can be seen from the table-2 above that Noticee no. 1 and Noticee no. 4 have consecutively executed their trades and have thereby contributed to negative LTP of the scrip of AIFL. There is no reasonable explanation available on record to suggest as to why these two Noticees have engaged in executing such manipulative trades. For example-on April 8, 2013, Noticee no. 4 had placed a buy order in the scrip of AIFL at 11:28:44 for ₹23.65 and Noticee no. 1 has matched the said buy order by placing a sell order at 11:40:32 for ₹23.5 and the resultant trade was executed at 11:40:32 for ₹23.65 contributing to a negative LTP of ₹0.3. Similarly, in another trade executed on April 15, 2013, a buy order was placed by Noticee no. 4 at 09:45:59 for ₹25.2 which was followed by a sell order placed by Noticee no. 1 at 09:56:04 for ₹25.2 resulting in execution of trade at 09:56:04 at ₹25.2. Further, on April 18, 2013, a buy order was placed by Noticee no. 4 at 09:17:02 and Noticee no. 1 matched the said buy order within a few minutes at 09:19:15 resulting in execution of the trade between them at 09:19:15 which contributed to a negative LTP of ₹0.4. These were not just few isolated or solitary instances of trades between them as these two Noticees have engaged in executing as many as 47 such trades posing as buyer and seller respectively. By trading in this manner, both of them have matched each of their orders within a gap of few minutes thereby contributing to the fall in the price of the scrip of the Company. I note that Noticee no. 1 has not submitted any reply on merits in his defense while Noticee no. 4 is now deceased. Considering the fact that the Company did not have very strong fundamentals or financial performance during the relevant period, there is no explanation available on record to justify the manner on which,

Order in the matter of Atlanta Infrastructure and Finance Limited the aforesaid trades in the scrip of the Company were executed by Noticees no. 1 and 4 over a considerable period of time. The pattern of trading exhibited by the two Noticees and the number of trades relentlessly executed by them for contributing to negative LTP cannot be accepted as genuine trades. The trading pattern followed by the Noticees no. 1 and 4 shows that they did not have any bona-fide intention to trade in the scrip as the series of such trades executed by them with each other, which triggered a steady fall in the price of the AIFL scrip can’t be held as trades executed with any bonafide motive or as genuine trades executed by ordinary investors in due course of dealings in the Securities Market. Under the circumstances, from the trading pattern and frequency of matching of trades between the Noticees no. 1 and 4, it is visible that their trades were executed with an intention to decrease the scrip price by deliberately placing orders at a lower price than the last traded price (LTP) and in the process also to create a misleading appearance of trading and volumes to entice other investors of securities market to trade in the scrip.

I, therefore, hold that these two Noticees i.e. Noticees nos. 1 and 4 had engaged in price manipulation of the scrip of the Company by acting in concert and have contributed substantially to the total market negative LTP of the scrip and thereby have also created a misleading appearance of trading in the scrip by executing 47 such manipulative trades between themselves, during Patch-2 of the Investigation Period. 14. Moving on to the other Noticees, I have examined the trades executed by them viz: Noticee no. 2, 3, 5, 6, 7 and 8 during the Patch-2 of the Investigation Period, as highlighted in table-1 above and find that their individual contribution to market negative LTP as alleged in the SCN ranges from 0.34% to 1.16%. It is also noted that the number of trades executed by the above noted Noticees ranged from 1 to 7 trades per person while the trades executed commutatively by them together accounted for only 4.24% out of the 21.72% market negative LTP contributed by all the 8 Noticees together. It shows that the negative LTP contribution by the trades executed by these six Noticees individually, during Patch-2 were Order in the matter of Atlanta Infrastructure and Finance Limited very small and not substantial, when compared to the contribution made by Noticees no. 1 and 4 to the market negative LTP of the scrip as discussed in the preceding paragraph.

15. The inter se connections drawn between these Noticees as presented in a tabular chart in the annexure-1 enclosed to the SCN have also been perused from which I note that Noticees no. 3 is the grandson of Noticee no. 7 and Noticee no. 3 is the son of Noticee no. 4. While the Noticees no. 3 and 7 have acknowledged in their written replies their relationship with each other and their relationship with Noticee no. 4, they have also stressed on the fact that being adult and regular traders in the securities market, trading done by all of them were independent of each other as the same were executed out of their own wisdom and decision. It has also been submitted that the SCN also does not proceed to make any allegations in the nature that their trades were motivated and influenced by the decision of other Noticees. 16. They have further denied the charge of manipulation levelled against them in the SCN and have refuted any connection with the counterparty buyer/seller to their trades. They have contended that their miniscule trading or alleged small negative LTP contribution to the price of the AIFL scrip cannot be held as sufficient to cause any price manipulation in the scrip of the Company.

These three Noticees have also denied that the mobile number that has been taken to be the basis for holding connection between Noticees no. 3, 4, 5 and 7, ever belonged to them. I note that Noticee no. 8 has denied any connection with Noticee no. 3 during the hearing. It has also been submitted by Noticee no. 3 that the so called common address held to be the point of connection between them, i.e.’10 Station Plot’ is a huge plot of land comprising several units and hundreds of houses that are located on this piece of plot, hence, it would not be reasonable to allege any link amongst them, one based on the said common location which is too large an area to be used as a proof to establish any connection amongst them. I have also perused the KYC documents enclosed by Noticee no. 8 with her written reply to substantiate that the address “10 Station Plot Gondal Dist. Rajkot” has not been mentioned by her in her KYC documents.

Order in the matter of Atlanta Infrastructure and Finance Limited

17. I note that Noticees no. 1, 5 and 6 have not submitted any reply on merits in the present proceedings. On the whole, as far as inter-se connections amongst the Noticees are concerned, I find that although some of the Noticees have denied having any connection with other Noticees, the prima facie evidence that is available in SCN, especially in the tabular presentation in annexure-1 to the SCN gives a reasonably fair picture about the possible inter-se connectedness existing amongst different Noticees, by virtue of their common address, email ids, off-market transfer, common phone numbers etc. It has been vehemently argued that assuming without admitting the existence of inter-se connectedness amongst the Noticees, the same cannot be held to be the sole factor to declare that the trades executed by all the Noticees were manipulative and responsible for creating artificial volume & trade in the scrip, more particularly when the alleged individual contribution to the –LTP by many Noticees were very minimal. It has further been submitted that the allegations deserve to be tested on a reasonably stronger evidence.

It has been submitted that the allegations lack merit, more so when Noticee no. 7 was holding more than 7.00 lack shares, whereas others Noticees subscribed to the shares under the preferential allotment. Based on the above, the Noticee no. 2, 3, and 7 have contended that in the absence of any strong evidence of their nexus with counter parties to their trades to demonstrating that trades were executed after prior meeting of minds, mere incidence of matching of order with the same counter party on a few occasions would not be sufficient to establish the alleged trades as manipulative and fraudulent. The Noticees have further argued that as the allegations pertain to price fall, it requires a closer examination of attending circumstances pertaining to the number, frequency and exact nature of the trades executed by the Noticees and stronger proof, in order to attribute the motive to them and to hold such trades to be manipulative or artificial trades executed only for pulling down the price of the scrip. 18. As noted from the details of the trades executed by the Noticees, which have been presented in the table no. 1 above, the Noticees no. 2, 3, 5, 6, 7, & 8 have executed very few trades and their respective individual contributions to price fall of the stock of AIFL was Order in the matter of Atlanta Infrastructure and Finance Limited miniscule.

From the materials available on record, it is observed that Noticee no. 3, 6, 7, & 8 have executed only 2, 3, 2 and 1 trades respectively whereas Noticee no. 2 & 5 have executed 6 and 7 trades respectively during the Patch-2 of the Investigation Period. While Noticee no. 2, through its 6 trades is alleged to have caused a price fall of only ₹0.40, Noticee no. 3 has been alleged to have brought down the price of the scrip by ₹0.55 only. Similarly, Noticee no 5, 6, 7, & 8 had executed trades in variation of only ₹0.75, ₹1.35, ₹1.20 and ₹1.10 respectively, resulting in a very negligible amount of negative LTP in the scrip. I note that initially 29 entities were identified to be as suspected entities, however, based on the outcome of the investigation, trades of only 8 Noticees were suspected to be not genuine trades executed in the scrip of AIFL and therefore, the instant proceedings were initiated against the aforementioned 8 Noticees. 19. As discussed above, the afore-stated Noticees have vehemently disputed and denied having any trading connection with each other and Noticee no. 8 has also furnished her KYC document to support here dispute to the alleged connection with other Noticees as attributed to her in the SCN.

Having considered the materials on record, the submissions made by the Noticees and the frequency and volume of trades executed by them that are alleged to have caused price fall in the scrip, I find that notwithstanding their inter se relation as alleged in the SCN, the trades executed by these Noticees are very few in number and very small in volume. Therefore, the contribution to negative LTP of the scrip resulting from their trades was too meagre and not material enough to be held as having created any artificial or misleading trade volume so as to have negative impact on the price of the scrip. Moreover, the fact that the Noticees are still holding substantial quantities of shares of the Company, in my view, the trades executed by the Noticees no. 2, 3, 5, 6, 7 and 8 do not contain sufficient evidence to be held as manipulative or fraudulent so as to create a misleading appearance in trading in the scrip of the Company or to mislead the market during Patch-2 of the Investigation Period. Therefore, I find that the above 6 Noticees deserve a benefit of doubt from the allegations made in the SCN, since, based on the material available and their

Order in the matter of Atlanta Infrastructure and Finance Limited contribution to the negative LTP of the scrip, it would be difficult to sustain the charges against them made in the SCN. I note that Noticees no. 2, 3, and 7 have also raised some objection to the instant proceedings on technical grounds, such as delay in initiating the proceedings and the SCN not indicating the kind of direction proposed to be issued against them. In my considered view, these objections are frivolous and don’t cause any prejudice to the interest of Noticees. 20. I note that Patch-6 of the Investigation Period witnessed price rise in the shares of the Company from ₹4.30 to ₹14.57, thereby registering an increase of ₹10.27, in the market price of the scrip. It is alleged that Noticee no. 6 (Mr. Girishkumar Prabhudas Ruparel) has contributed ₹30.83 positive market LTP (i.e. 26.31% of the total market positive LTP of ₹117.16/-) through his 304 buy trades and ₹16.66 to net positive LTP through 2026 buy trades. Details of the trades executed by Noticee no. 6 in Patch-6 of the Investigation Period are tabulated below: Table-3 LTP analysis in Patch-6 LTP Diff. = % of All trades LTP Diff. > 0 LTP Diff. < 0 0 Positive LTP to Sr. No No No No PAN Buyer Name LTP QTY LTP QTY LTP QTY Total no. of of of QTY of imp trade imp trade impa trade Market trad trad tra traded tra act d act d ct d Positive es es des des LTP Girishkumar AIPPR 16.6 23084 202 30.8 54548 - 26180 15011 153 1 Prabhudas 304 188 26.31% 8860G 6 08 6 3 8 14.17 7 13 4 Ruparel

21. It is observed that out of 304 trades executed by Noticee no. 6, orders for 59 trades were first placed by buyer (Noticee no. 6) in the range of 50 to 25000 shares. The orders for remaining 245 trades (out of 304 trades) were placed first by sellers with whom the Noticee (as a buyer) matched his buy orders and those matched trades resultantly contributed to Order in the matter of Atlanta Infrastructure and Finance Limited

23.83% of total market positive LTP of the scrip. The details of these 245 trades where orders were first placed by sellers are as under: Table-4 Range of buy orders No of Qty Total Total Sell LTP % of Positive LTP to quantity trades traded buy orders impact Total Market Positive orders quantity LTP (₹117.16) quantity Less than sell orders 141 393907 479482 4416188 16.81 14.35% quantity More than sell orders 88 67413 394977 79150 9.16 7.82% quantity Same as sell orders 16 24841 27805 27805 1.95 1.66% quantity Grand Total 245 486161 902264 4523143 27.92 23.83%

22. It is observed from table-4 above that in 141 trades buy orders were placed for less quantities of shares than the pending sell order quantities. However, buy orders in 88 trades were placed for more quantities than the pending sell order quantities, while buy orders in 16 remaining trades were placed for quantities equal to the pending sell order quantities. Interestingly, it is also seen that the maximum contribution to the total market positive LTP (i.e. 14.35%) of the scrip was caused through the above noted 141 trades of Noticee no. 6, wherein, the buy orders placed was for far less quantities than the pending sell order quantities. The pending sell order quantities for these 141 trades were found to be approx. 9.21 times higher than the buy order quantities. Day-wise summary of these 141 trades are as under: Table-5 Number of Traded Buy order Pending sell LTP % of Positive LTP to Total Trade Date trades Quantity quantity order quantity Impact (₹) Market Positive LTP (₹ 117.16) 03-Sep-14 1 100 100 1000 0.19 0.16% 10-Sep-14 2 200 210 10200 0.04 0.03% 11-Sep-14 1 1500 1500 1850 0.09 0.08% 12-Sep-14 2 900 900 20000 0.20 0.17% 15-Sep-14 1 5000 5000 10000 0.30 0.26% 16-Sep-14 4 5350 5350 40000 0.71 0.61% 19-Sep-14 4 6900 8000 53000 0.17 0.15% 22-Sep-14 2 200 200 11000 0.08 0.07%

Order in the matter of Atlanta Infrastructure and Finance Limited

Number of Traded Buy order Pending sell LTP % of Positive LTP to Total Trade Date trades Quantity quantity order quantity Impact (₹) Market Positive LTP (₹ 117.16) 23-Sep-14 3 200 250 1100 0.24 0.20% 26-Sep-14 4 9100 9100 18000 0.91 0.78% 29-Sep-14 1 1000 1000 4000 0.12 0.10% 30-Sep-14 3 3800 6500 36000 0.24 0.20% 07-Oct-14 1 2000 2000 5100 0.15 0.13% 08-Oct-14 2 1125 1225 6300 0.14 0.12% 09-Oct-14 4 300 350 5000 0.35 0.30% 13-Oct-14 8 4500 6500 24300 0.46 0.39% 14-Oct-14 2 1920 2010 4300 0.36 0.31% 16-Oct-14 7 3330 3430 25225 0.47 0.40% 17-Oct-14 1 25 25 250 0.30 0.26% 20-Oct-14 6 2910 3060 46100 0.55 0.47% 21-Oct-14 2 100 100 200 0.22 0.19% 07-Nov-14 1 100 100 1000 0.10 0.09% 10-Nov-14 1 2000 3100 4000 0.02 0.02% 11-Nov-14 3 402 402 700 1.04 0.89% 14-Nov-14 4 26800 50000 267000 0.35 0.30% 17-Nov-14 1 100 100 1000 0.20 0.17% 18-Nov-14 5 1850 1950 80000 0.28 0.24% 19-Nov-14 7 3800 6450 297700 0.64 0.55% 20-Nov-14 8 15350 24300 121200 0.56 0.48% 21-Nov-14 1 1900 1900 1950 0.21 0.18% 26-Nov-14 1 7900 7900 8000 0.55 0.47% 28-Nov-14 1 9900 9900 50000 0.02 0.02% 03-Dec-14 1 500 500 1000 0.14 0.12% 08-Dec-14 2 20100 20200 129900 0.21 0.18% 09-Dec-14 4 3700 4100 16000 0.29 0.25% 10-Dec-14 1 1400 1400 15000 0.04 0.03% 11-Dec-14 3 49450 49500 159900 1.56 1.33% 12-Dec-14 2 150 150 2337 0.33 0.28% 15-Dec-14 4 35255 35500 285000 1.07 0.91% 16-Dec-14 2 20000 20000 33500 0.72 0.61% 17-Dec-14 4 19500 19600 1210000 0.49 0.42% 18-Dec-14 7 31824 33024 276890 0.69 0.59% 19-Dec-14 8 47590 75400 902686 0.50 0.43% 22-Dec-14 9 43876 57196 228500 0.51 0.44% Total 141 393907 479482 4416188 16.81 14.35%

23. As can be seen from the table-5 above, in spite of there being large quantities of pending sell orders, Noticee no. 6 continued to place buy orders for less quantities on various trading days during the afore-stated period. Further the trade log as annexed to the SCN indicates that the Noticee No. 6 has placed his buy orders at the prevailing sell order price or even for more than the prevailing sell order price and this continuous chasing of the pending sell orders led to execution of his trades at prices higher than the last traded prices. It is Order in the matter of Atlanta Infrastructure and Finance Limited glaringly visible from the trade log that the Noticee was chasing the sell orders every time and in all his 141 trades as highlighted above, the Noticee has placed his buy orders only after the respective sell orders have entered into the exchange trading system and the prices at which he placed his buy orders were either equal to or more than that of the ask price of the sellers as a result of which, the Noticee has ensured that his buy orders always match those higher than LTP pending sell orders.

It leaves no doubt that, but for the buy orders placed by Noticee no. 6 only to match the existing pending sell orders, those 141 LTP increasing trades would not have been executed on those trading days. It is further evident from the fact that in certain instances, the time difference between the sell orders and the buy orders (of the Noticee) was in the range of 2 hours to 5 hours. Therefore, even if the sell orders were available at price higher than LTP, such orders would have remained unexecuted, had the Noticee not matched these sell orders by placing his matching buy orders or instead placed his buy orders as a prudent buy investor for less prices. 24. It can also be seen from the annexure -3 to SCN (containing details of trades executed by Noticee no. 6 during Patch-6) that the Noticee has exhibited such a trading pattern in the manner described above over a period of three months. Such a pattern of trading was repeated by Noticee no. 6 on 141 instances spread over 44 trading days out of the 72 trading days of Patch-6 and in this manner, his contribution to market positive LTP creation was ₹16.81 in the scrip of AIFL.

Such a pattern of trading exhibited by Noticee no. 6 in the AIFL scrip over a considerably long period without any rationale or without being supported by any market driven justification such as strong fundamentals of the Company or any major event in the affairs of the Company, constrains me to observe that the conduct of the said Noticee has not been that of a fair and of honest investor in the securities market. The trading pattern displayed by the Noticee over such a long period, during which he placed and executed his orders over and above the LTP on a continuous basis, cast serious aspersion on the bona-fide intention on part of the Noticee no. 6 to buy the shares of the Company. The said Noticee has traded in the said scrip against the established norms of a normal prudent buyer.

Order in the matter of Atlanta Infrastructure and Finance Limited

25. The Noticee, through his trades as highlighted above has deliberately contributed to the price rise in the scrip consistently, higher than the LTP and one can reasonably conclude that his trades were aimed to manipulate the scrip price. From the trading pattern of the Noticee, it is ostensibly evident that the through his LTP contributing trades the Noticee has clearly played with the established market mechanism during the relevant period. The very fact that there was a total contribution to market positive LTP of ₹117.16, in the scrip, gives an impression that the contribution of ₹30.83 made by the Noticee to the said total market positive LTP of the scrip is quite substantial amount, which cannot be ignored as the same has ultimately contributed substantially to the price rise in the scrip of the Company. The peculiar pattern of trading adopted by the Noticee, makes it impossible to hold that the trades of the Noticees were fair and non-manipulative and were executed by him as an ordinary investor/trader in the Securities Market. 26. The Noticee no. 6 has not submitted any reply to the allegations levelled against him in the SCN, hence, there is nothing on record available before me to provide any justification for the aforesaid pattern of trading exhibited by the Noticee over a considerable time period.

It may be noted that through his 141 trades as highlighted above the Noticee has purchased 3.93 lacs shares over a period of 3 months, when the corresponding sell quantities available in the exchange trading system for purchase aggregated to 44.10 lacs. There is no explanation available before me as to why the Noticee no. 6 had resorted to such types of buy orders continuously on 141 occasions for smaller quantities of shares, if he truly desired to acquire large quantities of shares of the Company, when sell orders quantities available before him was large enough to accommodate his entire demand for the shares of AIFL through a few trades only. Similarly, no explanation is available on record to justify as to why he continued to trade deliberately in this staggered manner to mark up the price and to contribute to positive LTP creation in the scrip, if he was a genuine buyer and had bona-fide intentions to buy the scrip in large quantities. It is a settled business norm that a buyer always wishes to buy at lower price, whereas in the instant proceedings, the Noticee has always been seen as Order in the matter of Atlanta Infrastructure and Finance Limited buying scrip over LTP on continuous basis.

Therefore, from the unique and strange trading pattern displayed by the Noticee no. 6, wherein he placed buy orders in the scrip of AIFL over a prolonged period in variation to the LTP in the scrip, sans any market fundamentals of the Company and from his uncanny eagerness to buy the scrip above the LTP on a frequent basis the Noticee does not give the impression of a normal trading behavior. Keeping in view, the aforesaid discussions and my observations thereon, I hold that the trades executed by Noticee no. 6 during Patch-6 are nothing but unfair and manipulative trades driven by an ulterior motive to artificially raise the price of the scrip against market fundamentals of the scrip and also to create a misleading appearance of trading in the scrip to lure the other market participants and innocent investors. 27. At this juncture, it may be noted that the Hon’ble Securities Appellate Tribunal (hereinafter referred to as “SAT”) in the matter of Ketan Parekh v. SEBI (Appeal No. 2 of 2004 decided on 14.07.2006) had an occasion to deal with the propriety of non-genuine trades in which, the relevant observation of the Hon’ble SAT is as under: “............Any transaction executed with the intention to defeat the market mechanism whether negotiated or not would be illegal.

Whether a transaction has been executed with the intention to manipulate the market or defeat its mechanism will depend upon the intention of the parties which could be inferred from the attending circumstances because direct evidence in such cases may not be available. The nature of the transaction executed, the frequency with which such transactions are undertaken, the value of the transactions, whether they involve circular trading and whether there is real change of beneficial ownership, the conditions then prevailing in the market are some of the factors which go to show the intention of the parties. This list of factors, in the very nature of things, cannot be exhaustive. Any one factor may or may not be decisive and it is from the cumulative effect of these that an inference will have to be drawn.” 28. The Hon’ble Supreme Court in the case of SEBI v. Rakhi Trading Pvt. Ltd., (2018) 13 SCC 753 has appreciated that fairness, integrity and transparency are the hallmarks of the stock market in India and the stock market is not a platform for any fraudulent or unfair trade

Order in the matter of Atlanta Infrastructure and Finance Limited practice. Hon’ble Court has further observed that “The SEBI Act, 1992 was enacted to protect the interest of the investors in securities. Protection of interest of investors should necessarily include prevention of misuse of the market.” 29. To sum up the foregoing discussions on the trades executed by the Noticees and my observations thereon, considering the unusual & unfair trading pattern and the frequency with which trades were placed by the Noticee no. 1 and 4 during the Patch-2 and by Noticee no. 6 during the Patch-6 of the Investigation Period and other attending circumstances, I am convinced to hold that these three Noticees were not acting as a genuine traders and had no bona fide intention to deal in the shares of AIFL. As pointed out above, Noticees no. 1 and 4 had indulged in executing 47 trades with each other consistently during Patch-2 of the Investigation Period resulting in to a cumulative negative LTP contribution of ₹20.40 which constituted 17.48% to total market negative LTP. Similarly, in-spite of getting sufficient sell orders / offers with abundant quantities of shares being available in the market, Noticee no. 6 deliberately placed buy orders for smaller quantities of shares of AIFL in each of his transactions and deliberately executed 141 trades during Patch-6 of the Investigation Period, thereby contributing to a market positive LTP of ₹16.81, which constituted 14.35% to total market positive LTP in the said scrip.

Also, the Noticee no. 6 has made an overall contribution of ₹30.83 to the market positive LTP of the scrip through his total number of 304 trades in the scrip as highlighted at para 20-21 of the order. Such trades executed by the Noticees no. 1 and 4 in Patch-2 and by Noticee no. 6 in Patch-6 are found to be glaringly manipulative and misleading, and are against fundamental principles of the market mechanism hence, the trades executed by the above noted 3 Noticees in the two patches were evidently executed not only to create a misleading appearance of trading in the scrip of AIFL but also to manipulate the price of AIFL scrip for reasons best known to them. I therefore hold that the trading behavior of the above noted three Noticees viz: Noticee no. 1, 4 and 6 in the scrip of AIFL has been ill-motivated, manipulative and fraudulent in nature and is unacceptable as Order in the matter of Atlanta Infrastructure and Finance Limited the same is in gross violation of Regulations 3 (a), (b), (c), (d) and 4 (1), 4 (2) (a), (e) of SEBI PFUTP Regulations, 2003. 30. To conclude, in terms of my observations at paragraph no. 13-18 of the order, the present proceedings qua Noticees no. 2, 3, 5, 7 and 8 stand disposed of without any direction.

Further, considering the fact that the Noticee no. 4 has expired on May 16, 2018, the instant proceeding against her now stands abated and accordingly, the SCN issued against the Noticee no. 4 is disposed of without any direction. 31. However, the abnormal and malicious trading pattern exhibited by the Noticees no. 1, and 6 in the AIFL shares amount to gross market-abuse as the same was clearly directed at manipulating the price of the AIFL scrip and to mislead the investors of Securities Market about the trading in the said scrip. Such trades tantamount to misuse of the Securities Market platform in breach of enshrined principles of transparency and integrity of Securities Market. DIRECTIONS 32. In view of the above discussions and findings with respect to the violations of provisions of PFUTP Regulations, 2003 committed by the Noticees no. 1 and 6 as alleged in the SCN, I in exercise of powers conferred upon me under Sections 11(1),11(4),11B(1) read with Section 19 of the Securities and Exchange Board of India Act, 1992, in order to protect the interest of investors and the integrity of the Securities Market and to meet the ends of justice, hereby restrain the Noticee no. 1 (Mr.

Manish Manubhai Raja) and Noticee no. 6 (Mr. Girishkumar Prabhudas Ruparel) from accessing the Securities Market and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly in any manner, for a period of 1 year from the date of this order. It is clarified that during the period of restraint, the existing holding of securities, including units of mutual funds, of the Noticees (Noticees no 1 and 6), shall remain frozen.

Order in the matter of Atlanta Infrastructure and Finance Limited

33. Obligation of the aforesaid Noticees (Noticee no. 1 and 6) in respect of settlement of securities, if any, purchased or sold in the cash segment of the recognized stock exchange(s), as existing on the date of this Order, can take place irrespective of the restraint/prohibition imposed by this Order, in respect of pending transactions, if any. Further, all open positions, if any, of the aforesaid Noticees in the F&O segment of the stock exchange, are permitted to be squared off, irrespective of the restraint/prohibition imposed by this Order. 34. The Order shall come into force with the immediate effect. 35. A copy of this order shall be forwarded to the Noticees, all the recognized stock exchange, depositories and registrar and transfer agents for ensuring compliance with the above directions. -Sd- S.K. MOHANTY DATE: NOVEMBER 27, 2020 WHOLE TIME MEMBER PLACE: MUMBAI SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the matter of Atlanta Infrastructure and Finance Limited