Order in the matter of dealing in the scrip of ASCL

UNDER SECTIONS 11 AND SECTION 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992, READ WITH REGULATION 11 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) REGULATIONS, 2003. In respect of:

Sl. No. Name of the Noticees PAN Order Number 1. Mr. Sunil Kumar Mehta ACEPM8838L 43/2014 2. Ms. Usha Mehta ABQPM3248M 44/2014 3. Mr. Jitendra Mannalal Jain AIMPJ2936J 45/2014 4. Mr. Sandeep Jain AHIPJ9777E 46/2014 5. Mr. Suresh Hanswal ABPPH6308A 47/2014 6. Mr. Pradesh Bandhu Nimawat AEGPN3200B 48/2014 7. Mr. Manish Mathur AIVPM4384J 49/2014 8. Mr. Bhanwarlal Paliwal AGFPP5392P 50/2014 9. Mr. Dilip S. Rathore BEPFS2860J 51/2014 10. Mr. Ajay Roongta AAVPR5584R 52/2014 11. Mr. Arun Manohar Sakpal BMXPS3773C 53/2014

In the matter of dealing in the scrip of Asian Star Company Limited.

Appearances: For the Noticees: Sl. No. Name of the Noticees Authorized Representative 1. Mr. Sunil Kumar Mehta Mr. Rajesh Khandelwal 2. Ms. Usha Mehta Mr. Rajesh Khandelwal 3. Mr. Jitendra Mannalal Jain None 4. Mr. Sandeep Jain Mr. Rajeev Kumar

Order in the matter of dealing in the scrip of Asian Star Company Limited.

5. Mr. Suresh Hanswal None 6. Mr. Pradesh Bandhu Nimawat In Person 7. Mr. Manish Mathur In Person 8. Mr. Bhanwarlal Paliwal Mr. Manish Chhangani, Mr. Shubhadip Choudhuri 9. Mr. Dilip S. Rathore None 10. Mr. Ajay Roongta Mr. Anshul Vyas 11. Mr. Arun Manohar Sakpal None

For SEBI: Mr. Santosh Kumar Shukla, Joint Legal Adviser Mr. Jeevan Sonparote, General Manager Mr. Lamber Singh, Assistant General Manager

1. The shares of Asian Star Company Limited (hereinafter referred to as “ASCL” or “the company”) are listed at Bombay Stock Exchange (hereinafter referred to as “BSE”). Securities and Exchange Board of India (hereinafter referred to as “SEBI”) initiated investigations on the basis of alerts generated by Integrated Market Surveillance Systems with respect to synchronized and reversal trades in the scrip of ASCL during the period October 10, 2008 to November 20, 2008 (hereinafter referred to as the “investigation period”). 2. The investigation revealed that:

(a). During the investigation period, the daily average volume in the scrip of ASCL had increased substantially. The price of the scrip went up from `1,101.55/- on October 10, 2008 to `1,306.15/- on November 20, 2008 (18.57% rise in 28 trading days). During the same period, BSE Sensex had fallen by 19.73% (i.e., from 10,527.85 to 8,451.01). Subsequent to the investigation period the price of the scrip started falling and closed at `905/- on January 30, 2009. (b). There had neither been price sensitive news/announcement by ASCL nor substantial improvement in its financial results which could have supported such price rise in its shares. On the contrary, on October 16, 2008, ASCL declared its results for the quarter ending September 30, 2008 which showed decline in its net profit from `1,106.59 lakhs to `1,064.39 lakhs as compared to the same quarter of the previous year. (c). Mr. Sunil Kumar Mehta (Mr. Sunil Mehta), Ms. Usha Mehta (Mother of Mr. Sunil Mehta), Mr. Sandeep Jain, Mr. Jitendra Mannalal Jain (Mr. Jitendra Jain), Mr. Suresh

Hanswal, Mr. Pradesh Bandhu Nimawat (Mr. Pradesh Nimawat), Mr. Bhanwar Lal Paliwal (Mr. Bhanwar Paliwal), Mr. Dilip Rathore, Mr. Arun Manohar Sakpal (Mr. Arun Sakpal), Mr. Narendra Sanghi, M/s. Meen Been Elastomers Ltd. (M/s. Meen Been), Mr. Alpesh G. Dand, Ms. Manisha Mardia, Mr. Bharat C. Jain, Mr. Rajneesh Jain, Mr. Manish Mathur, the COO of Triveni Management Consultancy Pvt. Ltd. (Triveni - a stock broker and member of BSE), and Mr. Ajay Roongta were linked/connected with each other through Mr. Sunil Mehta and Mr. Ajay Roongta. All these entities are hereinafter referred to as the "Mehta Group entities". (d). During the investigation period, the Mehta Group entities had, amongst themselves, entered into substantial trades in the scrip of ASCL that were in the nature of synchronized, structured and circular trades and which resulted in creation of artificial volume and affected the price of the scrip of ASCL. They indulged in non-delivery based transactions in the scrip and were also found to be reversing their trades, intra-day, in a peculiar set pattern. The Mehta Group entities entered into synchronized trades (less than one minute difference between buy and sell orders) in the scrip amongst themselves and also in structured trades (not only time of buy and sell order was within one minute but the order price and order quantity were also matching).

Such synchronized/structured trades amongst these entities formed significant proportion to the total traded volume in the scrip of ASCL during the investigation period. (e). It was observed that the Mehta Group entities dealt in synchronized and structured trades which accounted for significant percentage of the total market volume both in terms of quantity traded as well as number of trades in the scrip of ASCL. Daily net trade had remained insignificant. The Mehta Group entities also indulged in circular trading and reversal of trades which were also synchronized with regard to time, price and quantity. In approximately 54% to 100% of their daily traded volume, the time difference between buy and sell orders was less than one minute, and 25% to 72% of their daily traded volume were perfectly synchronised and matched with regard to price, quantity and time (the time difference between buy and sell order was below one minute). (f). It was further observed that when the synchronized/structured trading were undertaken by the Mehta Group entities price of the scrip was going up even though Sensex was going down.

It was noted that the Mehta Group entities consistently placed order at prices higher than the Last Traded Price (LTP). There were total 1050 such instances when the Mehta Group entities executed trades in the scrip at a price more than `5/- above the LTP. The price of the scrip has substantially increased when the Mehta Group entities were undertaking synchronized/structured trades in the scrip.

(g). There were extensive fund flows amongst the Mehta Group entities. It was observed that Mr. Sunil Mehta, Mr. Suresh Hanswal, Mr. Pradesh Nimawat, Mr. Ajay Roongta and Triveni were financing the trades of the various Mehta Group entities. It was observed that during August 2008 to January 2009, Mr. Sunil Mehta had received more than `1 crore in cash in his various bank accounts, of which `45,68,600/- was received during the investigation period. The funds received by the Mehta Group entities were transferred inter se amongst themselves or to various stock brokers, through whom the respective entities were dealing in the scrip of ASCL, to meet the pay-in obligations of the respective entity for its trades and this trend continued even after the investigation period. (h). Such fund transfer amongst the Mehta Group entities is illustrated in the following table: Table 1: Instances of fund flow amongst the Mehta Group entities Date Cheque Amount Name of Account details of the person Name of Account details of person No (`) person of who paid person who who received who paid received 08/09/08 421089 100000 Anjana Account no.-1822100000957 Jitendra Jain Account no.-1821000069637 Mehta HDFC Kandivali HDFC Kandivali 08/09/08 867016 100000 Jitendra Account no.-1821000069637 B P Equities Account no.-600340018334 Jain HDFC Kandivali Goregaon 13/09/08 861556 884500 Triveni Account no.-602320016191 Jitendra Jain Account no.-1821000069637 HDFC Kandivali 13/09/08 867019 200000 Jitendra Account no.-1821000069637 NA Self Cash Withdrawal Jain HDFC Kandivali 13/09/08 867018 200000 Jitendra Account no.-1821000069637 Anjana Account no.-1822100000957 Jain HDFC Kandivali Mehta HDFC Kandivali 13/09/08 867017 105000 Jitendra Account no.-1821000069637 Usha Mehta Account no.-1821000063096 Jain HDFC Kandivali HDFC Kandivali 13/09/08 880703 100000 Ajay Account no.-1821000018868 Arun Sakpal Roongta HDFC Kandivali 17/09/08 867020 380000 Jitendra Account no.-1821000069637 Triveni Jain HDFC Kandivali NA 19/09/08 NA 25000 Ajay Cash Deposit Mumbai Narendra Account no.- 502010005292 Roongta Sanghi Union Bank Jaipur 20/09/08 NA 75000 Ajay Rungta Narendra Account no.35502010005292 Cash Deposit Sanghi Union Bank Jaipur 27/09/08 102499 90000 Narendra Account no.-535502010005292 Nirmal Bang Sanghi Union Bank Jaipur Axis Bank Hawa Sarak Jaipur 06/10/08 NA 250000 NA Cash Deposit Jitendra Jain Account no.-1821000069637 HDFC Kandivali 06/10/08 867023 150000 Jitendra Account no.-1821000069637 B P Equities Account no.-600340018334 Jain HDFC Kandivali 07/10/08 867022 100000 Jitendra Account no.-1821000069637 Emkay Account no.-602340027250 Jain HDFC Kandivali 15/10/08 NA 50000 Cash Deposit Arun Sakpal Account no.-126101206935 Canara Bank Borivali

17/10/08 948746 50000 Arun Sakpal Account no.-126101206935 Arcadia NA Canara Bank Borivali 23/10/08 NA 100000 NA Cash Deposit Sunil Mehta Account no.-1821000057910 HDFC Kandivali 27/10/08 NA 20000 NA Cash Deposit Suresh Account no.-1191000085001 Hanswal HDFC Udaipur 27/10/08 NA 500000 NA Cash Deposit Sunil Mehta Account no.-1821000057910 HDFC Kandivali 27/10/08 NA 300000 NA Cash Deposit Sunil Mehta Account no.-1821000057910 HDFC Kandivali 29/10/08 42305 50000 Suresh Account no.-50104000083322 Swastika NA Hanswal IDBI Udaipur 29/10/08 42109 20000 Suresh Account no.-1191000085001 Arcadia NA Hanswal HDFC Udaipur 29/10/08 861588 300000 Triveni Account no.-602320016191 Jitendra Jain Account no.-1821000069637 HDFC Kandivali 29/10/08 867025 300000 Jitendra Account no.-1821000069637 Sunil Mehta Account no.-1821000057910 Jain HDFC Kandivali HDFC Kandivali 03/11/08 918750 50000 Sunil Mehta Account no.-1821000057910 Suresh Account no.-1191000085001 HDFC Kandivali Hanswal HDFC Udaipur 05/11/08 970852 50000 Sunil Account no.-1821000057910 Suresh Account no.-1191000085001 Mehta HDFC Kandivali Hanswal HDFC Udaipur 05/11/08 42112 50000 Suresh Account no.-1191000085001 Anagram Hanswal HDFC Udaipur Capital NA 05/11/08 42110 50000 Suresh Account no.-1191000085001 Swastika Account no.-362320009377 Hanswal HDFC Udaipur 12/11/08 315476 50000 Pradesh Account no.-97010100109277 Swastika Account no.-362320009377 Nimawat Axis Bank Udaipur 20/11/08 43836 25000 Sunil 1191000054229 Jitendra Jain Account no.-1821000069637 Mehta HDFC Udaipur HDFC Kandivali 24/11/08 779801 120000 Sunil Account no.-1191000057218 Triveni 602320016191 Mehta HDFC Udaipur 27/11/08 953055 25000 Jitendra Account no.-1821000069637 Emkay NA Jain HDFC Kandivali 03/12/08 NA 100000 Cash Deposit Suresh Account no.-1191000085001 Hanswal HDFC Udaipur 03/12/08 42116 100000 Suresh Account no.-1191000085001 Anagram NA Hanswal HDFC Udaipur Capital (i).

From the instances of fund transfers amongst the Mehta Group entities it is noted that:- (i) On September 08, 2008, Ms. Anjana Mehta (wife of Mr. Sunil Mehta) transferred `1,00,000/- vide cheque no. ‘421089’ to bank A/c no. ‘1821000069637’ of Mr. Jitendra Jain who transferred the said amount on the same date to BP Equities towards his pay-in obligations. (ii) On September 19, 2008, `25,000/- was deposited in cash in the bank A/c no. ‘535502010005292’ of Mr. Narendra Sanghi. On September 20, 2008, Mr. Ajay Roongta deposited `75,000/- in the Union Bank of India, Jaipur A/c no. ‘535502010005292’ of Mr. Narendra Sanghi. On September 27, 2008, Mr.

Narendra Sanghi paid `90,000/- vide cheque no. ‘102499’ from his Union Bank of India, Jaipur A/c no. ‘535502010005292’ to his stock broker Nirmal Bang Securities towards his pay-in-obligations. (iii) On October 06, 2008, Mr. Jitendra Jain received cash deposit of `2,50,000/- in his account and on the same day he transferred `1,50,000/- to BP Equities vide cheque no. ‘867023’ and he transferred `1,00,000/- to Emkay Global Financial Services Ltd. (“Emkay”) on October 07, 2008, vide cheque no. ‘867022’. (iv) On October 29, 2008, vide cheque no. ‘861588’, Mr. Jitendra Jain received `3,00,000/- from Triveni (though already there was `13,51,920.84/- debit in his ledger account). The same amount was transferred on the same day to bank A/c no. ‘1821000057910’ of Mr. Sunil Mehta vide cheque no. ‘867025’. (v) On November 03, 2008 Mr. Sunil Mehta transferred `50,000/- to Mr. Suresh Hanswal vide cheque no. ‘918750’ and on November 05, 2008 Mr. Suresh Hanswal transferred the said amount to Anagram vide cheque no. ‘42112’ towards his pay-in obligations. (vi) On November 05, 2008, Mr. Sunil Mehta transferred `50,000/- to Mr. Suresh Hanswal vide cheque no. ‘970852’.

On the same day, Mr. Suresh Hanswal paid the said amount to Swastika (HDFC, Indore account no – ‘362320009377’) vide cheque no. ‘42110’ towards the pay-in obligation of Mr. Sandeep Jain. (vii) Cheque no. ‘315476’ dated November 12, 2008 (as drawn from Mr. Pradesh Nimawat's Axis Bank, Udaipur A/c no – ‘097010100109277’) for `50,000/- was deposited in the bank account of Mr. Sandeep Jain’s stock broker Swastika. Cheque no. ‘42305’ dated October 29, 2008 (from Mr. Suresh Hanswal's IDBI Bank, Udaipur A/c no. – ‘050104000083322’) for `50,000/- was also deposited in the bank account of Mr. Sandeep Jain’s stock broker Swastika. (viii) On November 20, 2008, Mr. Sunil Mehta transferred `25,000/- to Mr. Jitendra Jain vide cheque no. ‘43836’ and on November 27, 2008, Mr. Jitendra Jain transferred the same amount to Emkay vide cheque no. ‘953055’ towards his pay-in obligation. (j). It was observed that Mr. Sunil Mehta had orchestrated the manipulation in the traded volume and price of the scrip in collusion with Mr. Pradesh Nimawat, Mr. Suresh Hanswal, Mr. Ajay Roongta and Mr. Manish Mathur. (k).

Triveni was dealing directly through the trading accounts of some of the Mehta Group entities, namely, Mr. Bharat Jain, M/s. Meen Been, Mr. Dilip Rathore, Mr. Bhanwarlal

Paliwal, Mr. Alpesh Dand and Ms. Manisha Mardia and such trades contributed substantially in creation of artificial volume in the scrip. (l). As COO of Triveni, Mr. Manish Mathur was helping in manipulation in the scrip through the accounts of the Mehta Group entities who were clients of Triveni. He alongwith Mr. Ajay Roongta and Mr. Sunil Mehta acted as major connecting link between the Mehta Group entities who were trading in the scrip amongst themselves in manipulating manner to create artificial volume in the scrip. As COO of Triveni, he had orchestrated manipulation in the scrip in connivance with his friend Mr. Sunil Mehta by directly dealing in the accounts of some of the clients of Triveni who were also part of the Mehta Group entities and also by financing their trading in the scrip through Triveni. (m). Mr. Ajay Roongta was though not directly dealing in the scrip, he had acted as link between the Mehta Group entities and had financed the transactions of Mr. Narendra Sanghi and Mr. Arun Sakpal. 3. Pursuant to the investigation, SEBI initiated adjudication proceedings against the Mehta Group entities and also their stock brokers.

It was observed that there were three categories of entities who were indulging in manipulation during the investigation period; viz:- (i) the entities who operated on their own, used their own funds and themselves placed orders with the stock broker; (ii) the entities who operated their own account and/or funded the transactions of others, used the trading accounts of others to orchestrate manipulation in the scrip of ASCL; and (iii) the entities who were name lenders, i.e., whose trading accounts were being used by others for manipulation. 4. It was noted that the last two types of entities are serious threat to the safety and integrity of the securities market. Therefore, the proceedings under sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (the “SEBI Act”) read with regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent Unfair Trade Practices relating to Securities Market) Regulations, 2003 (the “PFUTP Regulations”) were also initiated against Mr. Sunil Mehta, Ms. Usha Mehta, Mr. Jitendra Jain, Mr. Suresh Hanswal, Mr. Pradesh Nimawat, Mr. Sandeep Jain, Mr. Bhanwar Paliwal, Mr. Dilip Rathore, Mr. Manish Mathur, Mr. Ajay Roongta and Mr. Arun Sakpal and separate show cause notices (SCNs) each dated March 09, 2011 were issued to them.

These 11 entities are hereinafter collectively referred to as the "noticees" or by their respective names.

5. The allegations and the violations charged in SCNs issued to respective noticees are listed in the following table :-

Table 2: List of charges against the noticees

Sl. Name of the Allegation Violation No. entity 1. Mr. Sunil Mehta Executed circular/reversal synchronized trades with the Regulations 3(a), (b), other stock brokers and clients to manipulate the market (c) and (d) and 4(1), in the ASCL scrip, created artificial volume and 4(2) (a) and (g) of the influenced the price of the scrip as well. PFUTP Regulations. 2. Ms. Usha Mehta Executed circular/reversal synchronized trades with Regulations 3(a), (b), other stock brokers and clients to manipulate the market (c) and (d) and 4(1), in the ASCL scrip, created artificial volume and 4(2) (a) and (g) of the influenced the price of the scrip. PFUTP Regulations. 3. Mr. Jitendra Jain Executed circular/reversal synchronized trades with Regulations 3(a), (b), other stock brokers and clients to manipulate the market (c) and (d) and 4(1), in the ASCL scrip, created artificial volume and 4(2) (a), (b), (e) and (g) influenced the price of the scrip. of the PFUTP Regulations 4. Mr. Sandeep Jain Executed synchronized trades in concert with other stock Regulations 3(a), (b), brokers and clients to manipulate the market in the (c) and (d) and 4(1), ASCL scrip, created artificial volume and influenced the 4(2) (a) and (g) of the price of the scrip.

PFUTP Regulations. 5. Mr. Suresh Executed synchronized trades in concert with other stock Regulations 3(a), (b), Hanswal brokers and clients to manipulate the market in the (c) and (d) and 4(1), ASCL scrip, created artificial volume, influenced the price 4(2) (a) and (g) of the of the scrip and funded the trades of Mr. Sandeep Jain. PFUTP Regulations. 6. Mr. Pradesh Executed synchronized trades in concert with other stock Regulations 3(a), (b), Nimawat brokers and clients to manipulate the market in the (c) and (d) and 4(1), ASCL scrip, created artificial volume and influenced the 4(2) (a), (b), (e) and (g) price of the scrip. of the PFUTP Regulations. 7. Mr. Manish As COO of Triveni, he was helping manipulation in the Regulations 4(1), 4(2) Mathur scrip through the accounts of Mehta Group entities who (e) of the PFUTP were clients of Triveni. He alongwith Mr. Ajay Roongta Regulations and Mr. Sunil Mehta acted as major connecting link between Mehta Group entities who were trading in the scrip amongst themselves in manipulating manner to create artificial volume in the scrip. As COO of Triveni, he had orchestrated manipulation in the scrip in connivance with his friend Mr. Sunil Mehta

Sl. Name of the Allegation Violation No. entity by directly dealing in the accounts of some of the clients of Triveni who were also part of the Mehta Group entities and also by financing their trading in the scrip through Triveni. 8. Mr. Bhanwar Executed circular/reversal synchronized trades with Regulations 3(a), (b), Paliwal other stock brokers and clients to manipulate the market (c) and (d) and 4(1), in the ASCL scrip, created artificial volume, influenced 4(2) (a), (b), (e) and (g) the price of the scrip and funded the trades of Mr. of the PFUTP Sandeep Jain. Regulations 9. Mr. Dilip Executed circular/reversal synchronized trades with Regulations 3(a), (b), Rathore other stock brokers and clients to manipulate the market (c) and (d) and 4(1), in the ASCL scrip, created artificial volume and 4(2) (a), (b), (e) and (g) influenced the price of the scrip. of the PFUTP Regulations 10. Mr. Ajay Provided funds to the connected entities Mr. Narendra Regulations 4(1), 4(2) Roongta Sanghi and Mr. Arun Sakpal for trading in the scrip of (d) & (e) of the ASCL. PFUTP Regulations. 11. Mr. Arun Sakpal Executed synchronized trades in concert with other stock Regulations 3(a), (b), brokers and clients to manipulate the market in the (c) and (d) and 4(1), ASCL scrip, created artificial volume and influenced the 4(2) (a), (b), (e) and (g) price of the scrip. of the PFUTP Regulations 6. The provisions of the regulations alleged to be contravened by the Mehta Group entities are reproduced hereunder:

Regulation 3. Prohibition of certain dealings in securities “3. No person shall directly or indirectly a) buy, sell or otherwise deal in securities in a fraudulent manner; 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. Regulation 4. Prohibition of manipulative, fraudulent and unfair trade practices

4. (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; c) .................................................................................................................................... d) paying, offering or agreeing to pay or offer, directly or indirectly, to any person any money or money’s worth for inducing such person for dealing in any security with the object of inflating, depressing, maintaining or causing fluctuation in the price of such security; e) any act or omission amounting to manipulation of the price of a security; f)................................................................................................ g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security;” 7. In the SCNs the noticees are alleged to be connected/related with each other on the basis of fund transfers amongst them as illustrated above and several other factors as described in the following Table: Table 3: Basis of connection amongst the noticees and other clients Sl.

No. Entity Basis of connection with other entities 1. Mr. Sunil Mehta (a). Ms. Usha Mehta is mother of Mr. Sunil Mehta (b). Admittedly, Mr. Sunil Mehta was operating the trading 2. Ms. Usha Mehta account of Ms. Usha Mehta and has a joint bank account (HDFC, Kandivali Branch, Bank account No- 01821000063096) with her. 3. Mr. Jitendra Jain (c). Mr. Sunil Mehta was also jointly operating the trading account of Mr. Jitendra Jain where both he and Mr. Jitendra Jain were placing orders. (d). Mr. Sunil Mehta shares the telephone number (9322123257) with Ms. Usha Mehta and Mr. Jitendra Jain (according to the KYC details of Mr. Sunil Mehta with Emkay) and with Mr. Pradesh Nimawat (as disclosed in the KYC details of Mr. Sunil Mehta with First Global). (e). As per his KYC details with the stock broker Emkay, he shares email-id of Mr. Sunil Mehta. (f). As per his KYC details with the stock broker BP Equity,

Mr. Jitendra Jain and Mr. Sunil Mehta have common telephone number – ‘9322123256’ and common communication address at “Evershine Millenium Park, EMP 47, Flat no. 1804, Thakur Village, Kandivali (E), Mumbai, Maharashtra, 400101”. This telephone number and the communication address belong to Mr. Sunil Mehta. (g). Mr. Jitendra Jain had entered into banking transactions with Mr. Sunil Mehta, Ms. Usha Mehta, Ms. Anjana Mehta (wife of Mr. Sunil Mehta), Mr. Gopal Lal Mathur (father of Mr. Manish Mathur) and Triveni, while he had no pay in/out obligation at the relevant time towards Triveni. (h). Admittedly, Mr. Sunil Mehta knows Mr. Jitendra Jain 4. Mr. Sandeep Jain (a). Mr. Jitendra Jain introduced Mr. Sandeep Jain to the stock broker Swastika. (b). As mentioned in the KYC document of Mr. Sandeep Jain with Swastika, his correspondence address is the same as that of Mr. Suresh Hanswal and Mr. Pradesh Nimawat. (c). Mr. Suresh Hanswal and Mr. Pradesh Nimawat have deposited cheques towards the pay in obligation of Mr. Sandeep Jain. (d). Admittedly, Mr. Pradesh Nimwat and Mr. Sandeep Jain are friends. 5. Mr. Suresh Hanswal and (a). Mr. Suresh Hanswal and Mr. Pradesh Nimawat are partners in “Siddhi Shares” (a sub-broking firm) and share the same 6. Mr. Pradesh Nimawat office in Udaipur. (b). They introduced Ms. Usha Mehta, Mr. Sunil Mehta and Mr. Jitendra Jain to stock broker Arcadia. (c). Admittedly, Mr. Suresh Hanswal is a friend of Mr. Sunil Mehta and Mr. Jitendra Jain. (d). Mr. Suresh Hanswal had, admittedly, dealt in the scrip of ASCL on the advice of Mr. Sunil Mehta. (e). Mr. Pradesh Nimawat had submitted before the Investigating Authority (IA) that his account with First Global was opened by Mr. Sunil Mehta with his consent and he does not remember whether the trading in the said account was done by him or Mr. Sunil Mehta. (f). Mr. Suresh Hanswal had received funds from Mr. Sunil Mehta for the purpose of trading in the scrip of ASCL. (g). KYC details of Mr. Pradesh Nimawat with First Global contains the email-id of Mr. Sunil Mehta. (h). Mr. Sunil Mehta introduced Mr. Pradesh Nimawat to the stock broker Bakliwal Financial Services Ltd. (Bakliwal). (i). In the KYC with Bakliwal, the address of Mr. Pradesh

Nimawat is same as that of Mr. Sunil Mehta. (j). Admittedly, Mr. Sunil Mehta knows Mr. Suresh Hanswal and Mr. Pradesh Nimawat. 7. Mr. Manish Mathur (a). Mr. Manish Mathur was Chief Operating Officer (COO) of Triveni during the investigation period and thereafter. (b). Admittedly, Mr. Sunil Mehta and Mr. Manish Mathur are friends. (c). Fund flow was observed between Mr. Sunil Mehta, Ms. Seema Mathur (wife of Mr. Manish Mathur) and Mr. Gopal Lal Mathur (father of Mr. Manish Mathur). 8. Mr. Bhanwar Paliwal His trading account with Triveni was opened by Mr. Sunil Mehta. 9. Mr. Dilip Rathore Mr. Dilip Rathore had trading account with Triveni. He had transferred funds to Triveni through cheques. 10. Mr. Ajay Roongta Mr. Ajay Roongta admitted that Mr. Sunil Mehta used to visit Bakliwal branch where Mr. Arun Sakpal alongwith three other employees was employed. 11. Mr. Arun Sakpal (a). Mr. Arun Sakpal used to work in the same branch of Bakliwal where Mr. Ajay Roongta was the branch manager. (b). Mr. Ajay Roongta had provided funds to Mr. Arun Sakpal. 12. Mr. Narendra Sanghi (a). Mr. Narendra Sanghi has admitted before IA that he is a friend of Mr. Ajay Roongta.

(c). Mr. Ajay Roongta was found to have transferred funds to Mr. Narendra Sanghi which was utilized by Mr. Narendra Sanghi towards his pay in obligations. 13. Mr. Bharat Jain and (a). Mr. Bharat Jain is the client of Triveni and was found to have entered into huge synchronized and structured 14. M/s Meen Been transactions with Mr. Sunil Mehta, Ms. Usha Mehta, Mr. Jitendra Jain, Mr. Sandeep Jain, M/s Meen Been, Mr. Suresh Hanswal, Mr. Arun Sakpal, Mr. Narendra Sanghi. (b). During investigation period, both Mr. Bharat Jain and Mr. Sunil Mehta had dealt across 31 scrips wherein 25 out of these 31 scrips were common. (c). The replies of Mr. Bharat Jain and M/s Meen Been filed before SEBI are identical. M/s Meen Been stated that the reply was prepared by the broker Triveni because trading in M/s Meen Been's account was done by Triveni. (d). M/s Meen Been has admitted before IA that they had only communicated the exposure limit to Triveni while it was Triveni who was buying selling or dealing in the shares of the company on its behalf. 14. Mr. Alpesh Dand Mr. Alpesh Dand has admitted before the IA that Triveni was dealing through his trading account as he had allowed Triveni to deal in the scrip under the overall limit of `1,50,000/-.

15. Ms. Manisha Mardia (a). Ms. Manisha Mardia has also admitted before the IA that Triveni suggested her to invest in the scrip. (b). Ms. Manisha Mardia decided the overall exposure limits while the actual buy and sell was done by Triveni on its own terminal. 16. Mr. Rajnish Jain Mr. Rajnish Jain has admitted before the IA that he knows Mr. Sunil Mehta through common friend Mr. Ajay Roongta who introduced him to Bakliwal.

8. While some of the aforementioned noticees replied to the respective SCNs issued to them, the others did not submit any reply as mentioned in the following table:

Table 4: Replies of the noticees.

Sl. No. Name of the noticee Date of reply 1 Mr. Sunil Mehta March 29, 2011 2 Ms. Usha Mehta January 29, 2013 3 Mr. Jitendra Jain No reply 4 Mr. Sandeep Jain April 05, 2011 5 Mr. Suresh Hanswal August 13, 2011 6 Mr. Pradesh Nimawat August 14, 2011 7 Mr. Manish Mathur April 07, 2011 8 Mr. Bhanwarlal Paliwal March 28, 2011 9 Mr. Dilip Rathore April 06, 2011 10 Mr. Ajay Roongta March 29, 2011 11 Mr. Arun Sakpal No reply

9. An opportunity of personal hearing was granted to the noticees on January 17, 2012 when all the noticees (except Mr. Arun Sakpal, Mr. Dilip Rathore, Mr. Suresh Hanswal and Mr. Jitendra Jain) appeared in person or through their authorised representatives and made submissions. Mr. Pradesh Nimawat filed his written submissions on January 27, 2012 by way of an affidavit dated January 21, 2012.

10. During the personal hearing on January 17, 2012, it was brought to my notice that during separate investigations undertaken by SEBI, for the period March 01, 2009 to September 20, 2009 and July 01, 2009 to December 15, 2009, in trading in shares of 12 scrips viz., Allcargo Global Logistics Ltd. (Allcargo), KSL & Industries Ltd. (KSL), Mavens Biotech Ltd. (Mavens), Panoramic Universal Ltd. (Panoramic), Rasi Electrodes Ltd. (Rasi), Sat Industries Ltd. (SIL), Ushdev International Ltd. (Ushdev), KBS Capital Management Limited (KBS), Lotus Eye Care Hospitals Ltd. (Lotus), MVL Ltd. (MVL) and Anil Products Ltd. (APL), it has been revealed that Mr. Sunil Mehta had orchestrated the manipulation through the trading account of front entities like Ms. Usha Mehta, Ms. Anjana Mehta, Mr. Jitendra Jain and Ms. Seema Mathur and with the help of his associate like Mr. Manish Mathur and Mr. Ajay Roongta. It was further noted that separate proceedings were initiated by SEBI with regard to manipulations in these scrips. However, certain facts revealed during this investigation and in the instant proceedings were deemed relevant for determining the conduct and relation/connection amongst Mr. Sunil Mehta, Mr. Manish Mathur and Mr. Ajay Roongta.

Accordingly, by way of separate supplementary show cause notices each dated January 23, 2012, Mr. Manish Mathur, Mr. Ajay Roongta and Mr. Sunil Mehta were provided additional facts and they were informed that the violations, if any, by them for entering into alleged manipulative transactions in the said 12 scrips would be dealt separately without prejudice to the instant proceedings. The additional facts provided to these noticees are inter alia as under: A. Mr. Sunil Mehta- I. It was informed to him that during the above investigation with regard to the trades in the 12 scrips he had admitted the following - (a). His trading in the accounts of Ms. Usha Mehta and Ms. Anjana Mehta during the period March 01, 2009 to September 20, 2009 and July 01, 2009 to December 15, 2009. (b). That he was placing orders in the trading account of Ms. Usha Mehta, Ms. Anjana Mehta and Ms. Seema Mathur, with stock broker Emkay and he received contract notes on their behalf and on behalf of Mr. Jitendra Jain from Emkay. (c). That he deposited cash in the bank accounts of Ms. Anjana Mehta, Ms. Usha Mehta and Mr. Jitendra Jain.

(d). That various cash/cheque deposit slips, vouchers for demand drafts favoring Mr. Bharat Jain, cheques issued, etc. from the bank account of Mr. Jitendra Jain were bearing his handwriting. This is also corroborated by a report dated July 23, 2011 of the Handwriting Analysis Report of Truth labs, Hyderabad. (e). That he had also accepted having deposited cash in the account of Mr. Jitendra Jain. II. He was also informed that during the personal hearing held on January 17, 2012, Mr. Pradesh Nimawat had submitted that his trading accounts in Mumbai were opened without his consent and knowledge and the same were misused by Mr. Sunil Mehta.

B. Mr. Manish Mathur- The above investigation with regard to the trades in the 12 scrips had revealed that :- a. He had entered into synchronized/structured trades with Mr. Sunil Mehta and his related entities in many other scrips including in the scrips of Allcargo, ASCL, KSL, Mavens, Panoramic and Ushdev through the stock broker Emkay during the period March 01, 2009 to September 20, 2009 and July 01, 2009 to December 15, 2009. b. Circular trades/manipulative trades across number of scrips for number of days were observed between Mr. Manish Mathur and the group clients related to him including Mr. Jitendra Jain, Ms. Renu Paliwal (daughter-in-law of Mr. Bhanwar Paliwal) and Ms. Anjana Mehta. c. Mr. Manish Mathur had admitted that he was managing the trading account his wife Ms. Seema Mathur who was trading through the stock broker Emkay. Synchronized/structured trades through the trading account of Ms. Seema Mathur with the Mehta Group entities were observed in many scrips including in the scrips of Allcargo, ASCL, APL, KSL, MVL, Panoramic, SIL and Ushdev through the stock broker Emkay during the period March 01, 2009 to September 20, 2009 and July 01, 2009 to December 15, 2009. d. Similar manipulative trades across number of scrips for number of days were also observed between Ms. Seema Mathur and group clients related to her including Mr. Jitendra Jain, Ms. Renu Paliwal and Ms. Anjana Mehta. Ms. Seema Mathur was also found to be engaged in circular trading across various scrips. e. Such type of transactions cannot be a coincidence and cannot happen in a repeated manner in a number of scrips over a long period of time unless the counterparties are known to each other and there is meeting of minds. f. Further, instances of fund transfers involving Ms. Seema Mathur, Ms. Anjana Mehta and the stock broker Emkay were observed. g. Mr. Sunil Mehta has accepted before the IA that he was placing orders on behalf of Ms. Seema Mathur through the stock broker Emkay. Mr. Sunil Mehta had also accepted contract notes meant for Ms. Seema Mathur.

C. Mr. Ajay Roongta- It was observed during the investigation in the matter of synchronized trading in 12 scrips including the scrips of Allcargo, ASCL, KSL, Mavens, Panoramic and Ushdev during the period March 01 to September 20, 2009 and July 01, 2009 to December 15, 2009 that :- a. Mr. Ajay Roongta was trading through the stock broker Kantilal Chaganlal Securities Ltd. b. Mr. Ajay Roongta was engaged in circular trading across various scrips. Similar manipulative trades across number of scrips for number of days were observed between Mr. Ajay Roongta and clients related to him including Mr. Jitendra Jain. Such type of transactions cannot be a coincidence and cannot happen in a repeated manner in a number of scrips over a long period of time unless the counterparties are known to each other and there is meeting of minds. c. Further, instances of fund transfers involving Mr. Ajay Roongta, Ms. Anjana Mehta and Mr. Jitendra Jain were observed.

11. Mr. Ajay Roongta and Mr. Sunil Mehta filed their replies to the supplementary show cause notice vide their letters dated February 17, 2012 and February 23, 2012, respectively. Mr. Manish Mathur filed reply to the supplementary show cause notice vide his letter dated February 27, 2012 and sought another opportunity of personal hearing. Accordingly, another opportunity of personal hearing was granted to Mr. Manish Mathur on March 28, 2012 when he appeared and made oral submissions on the lines of his written replies. Subsequently, it was brought to my notice that the telephone numbers of Mr. Sunil Mehta and Ms. Usha Mehta mentioned in the respective SCNs issued to them were also incorrect. Therefore, the correct telephone numbers relied upon in the SCN issued to them were provided to them and they were given another opportunity to file additional replies. However, they did not file any additional reply despite service of notice on them in that regard.

12. In the above facts and circumstances, another opportunity of personal hearing was given to these noticees on September 11, 2013. In reply to the notice of hearing so provided, Ms. Usha Mehta and Mr. Sunil Mehta submitted that they do not need any further opportunity of personal hearing and requested that their earlier replies/submissions be treated as final. Mr. Pradesh Nimawat appeared on the scheduled date and reiterated the submissions made vide his reply dated August 14, 2011 and affidavit dated January 21, 2011. Mr. Sandeep Jain, through his advocate, requested for another date of the personal hearing which was provided to him on November 27, 2013. Mr. Sandeep Jain, vide email dated November 27, 2013 sent through one Mr. Rajiv Kumar, informed that the matter may be decided on the basis of his written replies. He subsequently filed his written submissions vide his letter dated December 02, 2013. Except these entities, other entities neither appeared for personal hearing on September 11, 2013 nor did they seek any time in that regard.

13. Mr. Jitendra Jain and Mr. Arun Sakpal neither filed their replies to the SCNs issued to them nor did they avail the several opportunities of personal hearings granted to them. I find that sufficient opportunities have been granted to them and they are not keen to avail the same. In view of these facts and circumstances, I deem it appropriate to decide the matter in respect of the SCNs issued to them ex parte on the basis of material available on record.

14. It is noted that Mr. Sunil Mehta, Ms. Usha Mehta, Mr. Sandeep Jain, Mr. Suresh Hanswal, Mr. Ajay Roongta, Mr. Pradesh Nimawat, Mr. Manish Mathur, Mr. Bhanwar Paliwal, and Mr. Dilip Rathore have inter alia made following submissions:

I. Mr. Sunil Mehta: a. He has admitted that he placed all the orders in the trading accounts of his mother Ms. Usha Mehta. b. He has also sought opportunity to cross-examine Mr. Suresh Hanswal and Mr. Pradesh Nimawat. c. He has denied entering into synchronized/structured transactions. He has submitted that he was not aware of the transactions carried out by others in the scrip. No adverse inference should be drawn from the fact of sharing of common facilities for the sake of convenience and economy between friends. d. Mr. Sunil Mehta has submitted that Mr. Jitendra Jain, Mr. Suresh Hanswal, Mr. Pradesh Nimawat, Mr. Ajay Roongta and Mr. Manish Mathur are his friends. He lends money to/borrow money from his friends and he may have executed transactions as 'friendly transfers' of funds with his friends Mr. Jitendra Jain, Mr. Suresh Hanswal, Mr. Gopal Lal Mathur and Ms. Seema Mathur wife of Mr. Manish Mathur. e. He has further submitted that he and his family members have been borrowing money from/lending money to Mr. Jitendra Jain. SEBI is drawing adverse inference in respect of a few instances where he had made cash deposits in the trading account of Mr. Jitendra Jain at his specific requests. f. He has contended that matching of trades between his own trading account and accounts of Ms. Usha Mehta, Mr. Jitendra Jain is merely a co-incidence. g. Mr. Sunil Mehta has contended that he was not aware that Mr. Jitendra Jain had given Mr. Sunil Mehta's email-id, in his KYC details with the stock broker Emkay.

However, he has admitted that he used to place orders in Mr. Jitendra Jain's trading account under instructions of Mr. Jitendra Jain when he was unable to place orders in his account because of 'technical difficulties'. h. He has, however, denied that he had advised Mr. Suresh Hanswal to deal in the scrip. He has also denied he traded on behalf of Mr. Pradesh Nimawat. He has further denied that that Mr. Pradesh Nimawat’s account with the stock broker First Global was opened by him with his consent. He has contended that Mr. Pradesh Nimawat’s allegations that he had not signed the papers with regard to his trading account, trades in his account being done without his knowledge and that he did not receive any communication, email, or post, are afterthought. He has claimed that contract notes, ledgers, account statements, etc. were sent by post/email to Mr. Pradesh Nimawat.

i. He has admitted that he had suggested Mr. Bhanwar Paliwal (father of his friend Mr. Madhusudan Paliwal) to open trading account with Triveni. j. He has admitted that he placed all the orders in the trading accounts of his wife Ms. Anjana Mehta. Further, he received contract notes on their behalf with their consent. But has claimed that he did not receive contract notes on behalf of Ms. Seema Mathur and Mr. Jitendra Jain and has submitted that occasionally, the contract notes meant for Ms. Seema Mathur and Mr. Jitendra Jain were sent to him by the concerned stock broker and he used to inform them on receipt of contract notes which they used to collect from him. k. He has contended that he was not provided with copies of relevant documents relied upon in the SCN and has submitted that he reserves his comments on the 'Handwriting Analysis Report' of Truth Labs, Hyderabad annexed to SEBI’s letter dated January 23, 2012 as the same is just an expert opinion and has not been tested by cross examination of the expert. l. Mr. Sunil Mehta has further contended that it is bad in law to color and influence the investigation in respect of one scrip by alleged observations and inferences on the facts and various circumstances specific to the other scrips. m. Relying upon the order of the Hon'ble Securities Appellate Tribunal (SAT) dated October 10, 2010 in the matter of Appeal No. 70 of 2009 in Rakhee Trading Pvt. Ltd. vs SEBI, he has contended that there are innumerable factors that influence the price of the scrip and the same cannot be linked to the Sensex.

II. Ms. Usha Mehta-has submitted that she being the mother of Mr. Sunil Mehta, shares common telephone number with him and that her trading account was being operated by Mr. Sunil Mehta with her consent. III. Mr. Sandeep Jain: a. He had also contended that he was not provided with the copies of relevant documents relied upon in the SCN such as copies of contract notes issued by Swastika, copies of ledger accounts with Swastika, copies of complete bank account statements of Swastika, the Investigation Report, copies of statements of the Mehta Group entities. b. He has sought cross-examination of the director of Swastika and the IA. c. He opened his trading account no. “UD178” with Indiabulls Securities Ltd. (hereinafter referred to as “Indiabulls”) and “UD058” with Arcadia through Mr. Pradesh Nimawat. His trading account no. “UD2101” with the broker Swastika was opened without his knowledge. He has not done any trading through this trading account. d. Swastika had requested him to sign consent letters for acceptance of third party cheques but he did not sign those letters and kept them.

Mr. Suresh Hanswal and Mr. Pradesh

Nimawat asked him to sign two letters. One letter was for closure of account while the other was for normal trading in the scrip of ASCL. He signed those two letters. Mr. Suresh Hanswal, Mr. Pradesh Nimawat and Swastika notarized the said letter in order to implicate him in the matter. He had once received a call from Swastika, Indore branch, informing him that from his trading account “UD2101” some manipulative trading has been done. After enquiring from Swastika he came to know that Mr. Suresh Hanswal and Mr. Pradesh Nimwat used to trade through his account. e. Mr. Suresh Hanswal and Mr. Pradesh Nimawat have done fraudulent trading in his account no. “UD2101” without his knowledge. He has filed FIR against Mr. Suresh Hanswal, Mr. Pradesh Nimawat and Swastika (a copy of the FIR has been annexed with his reply). f. He never deposited any cheque in his trading account no. “UD2101” with Swastika and was surprised to see cheques for a total of `6,50,000/- deposited by Mr. Suresh Hanswal and Mr. Pradesh Nimawat in this trading account. g. He submitted a compact disc claiming to contain his and his brother’s conversation with Mr. Suresh Hanswal, Mr. Pradesh Nimawat and Swastika.

It has further claimed that in the said CD Mr. Suresh Hanswal and Mr. Pradesh Nimawat have admitted to have traded in the ASCL scrip from the trading account of Mr. Sandeep Jain. IV. Mr. Suresh Hanswal: a. He had executed only jobbing transactions for 62,136 shares of ASCL on BSE. He was not aware of the transactions carried out by other noticees and denied entering into synchronized/structured transactions with them as alleged in the SCN issued to him. b. He had given cheques to Swastika at the request of Mr. Sandeep Jain. c. He has denied that the trading in Mr. Sandeep Jain's account has been done by him or Mr. Pradesh Nimawat as alleged. d. He did not receive any amount from Mr. Sunil Mehta towards pay-in obligations of Mr. Sandeep Jain, himself or any other person. e. He received `50,000/- from Mr. Sunil Mehta on November 03, 2008 and November 05, 2008 for his personal use. f. He lends and borrows money to/from his friends as and when the need arises and may have executed bank account transactions with his friends Mr. Jitendra Jain, Mr. Sunil Mehta, Mr. Pradesh Nimawat and Mr. Sandeep Jain. g. He is not aware that Mr. Ajay Roongta provided funds to Mr. Arun Sakpal. h. In his submissions, he has placed reliance on the order of the Hon'ble SAT dated October 10, 2010 in the matter of Appeal No. 70 of 2009 in Rakhee Trading Pvt. Ltd. v.

SEBI and has contended that the price of a scrip can be influenced due to innumerable factors and linking the same to the Sensex is incorrect. V. Mr. Pradesh Nimawat: a. Mr. Pradesh Nimawat has contended that he had not opened trading account with the stock broker First Global and the documents for opening the demat accounts through the stock broker were not signed by him. According to him, the trading account might have been opened illegally in his name by using documents from the drawer in his office. b. He executed jobbing transactions and dealt with only 9265 shares of ASCL on BSE. c. He had given cheques to Swastika at the request of its client Mr. Sandeep Jain. d. He lends and borrows money to/from his friends as and when the need arises and may have executed bank account transactions with his friends Mr. Jitendra Jain, Mr. Sunil Mehta, Mr. Suresh Hanswal and Mr. Sandeep Jain. e. He is not related to Mr. Bharat Jain and has not entered into any synchronized and structured transactions with Mr. Bharat Jain. f. He has used his own funds for trading and has not received any amount from Mr. Sunil Mehta. g. As a sub-broker, he had received cash deposits in his account from his clients. h. He has denied financing Mr. Sandeep Jain for manipulative transaction. i. He has relied upon the order of the Hon'ble SAT dated October 10, 2010 in the matter of Appeal No. 70 of 2009 in Rakhee Trading Pvt. Ltd. vs SEBI and contended that the price of a scrip can be influenced due to innumerable factors and linking the same to the Sensex and co-relating them is incorrect.

VI. Mr. Manish Mathur: a. He had requested SEBI to provide him all relevant details and documents including the statements made by Mr. Bhanwar Paliwal, M/s Meena Been, Mr. Alpesh Dand and others. b. He denied that he had opened the trading accounts of various people which were provided to Mr. Sunil Mehta for the purpose of manipulation in the scrip. c. He stated that the statement of Mr. Sunil Mehta that Mr. Manish Mathur had introduced Ms. Renu Paliwal to Triveni when he was COO of Triveni and therefore on this ground presuming and assuming his alleged involvement in the matter by SEBI is totally a figment of imagination and without application of mind. VII. Mr. Bhanwar Paliwal: a. He has submitted that he is 73 years old retired vice-principal of a school and is dependent on his pension and some income from interest for his livelihood and earns less than `2 lakh in a year.

b. He was known to Mr. Sunil Mehta through his son Mr. Madhusudan Paliwal, who was his friend. He had opened his trading account with Triveni through Mr. Sunil Mehta on his advice. c. He has further submitted that he had never indulged in any kind of trading in the securities market and was unaware about any trades in his trading account with Triveni in the scrip of ASCL. d. He has denied knowing any other entity connected to the Mehta Group entities. He has denied knowing Mr. Jitendra Jain who signed as introducer in his KYC form with Triveni. He has also denied having lent his account to Mr. Sunil Mehta for some unknown consideration. e. He also sought opportunity of cross-examination of Mr. Sunil Mehta. f. Relying upon the order of the Hon'ble SAT dated September 16, 2010 in the matter of Appeal No. 158 of 2008 in R.K. Global Shares and Securities Ltd. v. SEBI, he has contended that the charge of executing fraudulent trades is indeed a serious charge and cannot be established on mere suspicion and should have a firmer ground to stand upon. VIII. Mr. Dilip Rathore: a. He had never traded in share market. b. He had never opened any trading account with Triveni. c. He does not have any demat account. d. His business partner, Mr. Mukesh, had borrowed money from him to invest.

IX. Mr. Ajay Roongta: a. He knew Mr. Sunil Mehta through Mr. Manish Mathur. b. Mr. Arun Sakpal was one of the four employees working in the branch of Bakliwal where he was working as the branch manager and as such knew Mr. Arun Sakpal. c. Mr. Narendra Sanghi and he hail from the same city and have friendly relations spanning over last 18 years. d. He has sought the opportunity of cross-examination of Mr. Narendra Sanghi in respect of his statement before the IA that Mr. Ajay Roongta might have advised him for trading in the scrip of ASCL. Mr. Rajnish Jain has been an acquaintance through some distant relatives. e. He has not done any manipulative trading in his account and he is not a name lender. f. The fact that price of the scrip was increasing when Sensex was decreasing during the investigation period does not have any bearing on the matter as the price of any illiquid scrip would increase/decrease at a higher rate than the price of a liquid scrip. g. The alleged financial transactions with Mr. Narendra Sanghi and Mr. Arun Sakpal were not intended for any alleged securities market manipulation as transaction with Mr.

Narendra Sanghi was in the nature of loan and with Mr. Arun Sakpal in the form of financial assistance. h. The money lent to Mr. Narendra Sanghi was not significant enough to cause any market manipulation of whatsoever nature. The loan taken by Mr. Narendra Sanghi was repaid in the form of 1625 equity shares of Net4India Limited and the financial assistance to Mr. Arun Sakpal till date has not been repaid. i. He has contended that conclusions relating to synchronized trades can only be drawn on the basis of material on record and preponderance of probability. He has placed reliance on the order of the Hon'ble Supreme Court in the matter of M.V. Bijlani v. UOI(2006) 5 SCC 88 in support of his submission. j. He has also contended that creation of false market and price manipulation is a very serious offence and the allegations should not only be based on facts but also be backed by preponderance of probability. In this regard, he has relied on the order of the Hon'ble Supreme Court in the matter of Sterlite Industries Ltd. v. SEBI (2001) 34 SCL 485. k. Relying upon the order of the Adjudicating Officer in respect of M/s Girigopal Investments (Prop.

Shri Yasin Shah) in the matter of Shri Yaax Pharma and Cosmetics Ltd. [Adjudication Order No. SD/AO/10/2011], he has contended that the meeting of minds is necessary pre-requisite to allege synchronized manipulative transactions and as there is no evidence on record that there is meeting of minds between him and the alleged market manipulators, the allegations made in the SCN do not stand the test of proof beyond doubt. l. As far trading in the scrip of Allcargo is concerned, he decided to take benefit out of the momentum of the said stock by trading intra-day as the scrip was a liquid scrip doing high daily turnover during the period April 01, 2009 to September 30, 2009. During the said period, Allcargo also came out with numerous positive announcements. As regards trading in the scrip of KSL is concerned, he decided to trade based on positive announcements and declaration of dividend by the company. 15. I have carefully considered the SCNs issued to the respective noticees, their replies/ submissions and the relevant material available on record. I note that the individual SCNs to all the noticees have been issued on the basis of same facts, same set of transactions in the same scrip, during the same investigation period.

I further note that the common charge of alleged price and volume manipulation in the ASCL scrip by all the noticees who are alleged to be connected/related to each other has been leveled against them on the basis of alleged concerted synchronised/structured and circular trading amongst themselves in the scrip of ASCL and inter-linked financing transactions amongst them and other entities. In view of the nature of alleged transactions, connections/relations and other attendant facts and circumstances of this case, I deem it appropriate to deal the SCNs issued to all the eleven noticees herein by way of this common order. 16. I have also taken note that the allegation against Mr. Sunil Mehta, Mr. Manish Mathur and Mr. Ajay Roongta with regard to their trades in the 12 scrips, namely, Allcargo, KSL, Mavens, Panoramic, Rasi, SIL, Ushdev, KBS, Lotus, MVL, APL and ASCL during separate investigations undertaken by SEBI, for the period March 01, 2009 to September 20, 2009 and July 01, 2009 to December 15, 2009, were subject matter of another proceedings which have been disposed of by the order dated September 06, 2013. In the instant proceedings, the additional facts/material furnished to Mr. Sunil Mehta, Mr. Manish Mathur and Mr. Ajay Roongta vide separate supplementary show cause notices each dated January 23, 2012 are being relied upon for the limited purpose of corroborating the connection amongst these noticees and their conduct.

17. Before dealing with the merits of the instant case, I deem it necessary to deal with the preliminary issues raised by some of the noticees in their respective replies/submissions. I note that during the instant proceedings, some of the noticees had asked for the relevant details/documents based on which SCNs were issued to them. With regard to the contentions of Mr. Sunil Mehta in this regard, I note that the documents such as the details of fund transfer among various the Mehta Group entities and the copies of the KYC documents, etc. were provided to Mr. Sunil Mehta alongwith the SCN issued to him. Vide letter dated September 21, 2011, SEBI inter alia provided the 'Handwriting Analysis Report' of Truth Labs, Hyderabad corroborating the fund transfers by him during the investigation relating to 12 scrips as stated in the supplementary show cause notice. Certain additional documents relevant in the instant proceedings were provided to him vide SEBI's letter dated September 22, 2011. He was also afforded opportunity of inspection of documents relied upon in the SCN issued to him which he did not avail.

I further note that copies of all relevant documents/material relied upon in the respective SCN were furnished to Mr. Pradesh Nimawat and Mr. Suresh Hanswal alongwith the respective SCNs and vide letter dated September 22, 2011. 18. I note that vide letter dated December 19, 2011, Mr. Sandeep Jain had sought certain additional documents like copies of contract notes issued by Swastika, copies of ledger accounts with Swastika, copies of complete bank account statements of Swastika, relevant extract of the Investigation Report, copies of statements of the Mehta Group entities. I note that the contract notes and ledger statement with the stock broker Swastika have not been relied upon in the SCN issued to Mr. Sandeep Jain, hence the question of furnishing the copies thereof to him does not arise. I note that the relevant details such as date, amount, cheque number, bank account number, etc. with regard to fund transfers between Mr. Sandeep Jain and Swastika were provided to Mr. Sandeep Jain alongwith the SCN. In my view, these details are sufficient to enable Mr. Sandeep Jain to submit his reply and the complete bank account statements of Swastika that contained financial transactions with other parties also need not be provided to him.

19. As regards the contention of Mr. Sandeep Jain for furnishing of the extract or copy of the Investigation Report, I note that the Investigation Report is not evidence relied upon in the SCN issued to the noticees. The findings of the Investigation Report have been narrated in the respective SCNs which are self contained document containing all the allegations and charges against the noticees. The SCNs clearly mentions the provisions of law alleged to have been violated by him and the basis of charges against him. In my view, no prejudice would be caused to Mr. Sandeep Jain if the Investigation Report or its extract is not provided to him. In this regard, I note that in the case of M/s. Haryana Financial Corporation vs. Kailashchand Ahuja [2008(9)SCC31] the Hon'ble Supreme Court had observed that -"the theory of reasonable opportunity and principle of natural justice have been evolved to uphold the rule of law and to assist the individual to indicate his just rights. Whether, in fact, prejudice has been caused to an employee or not on account of denial to him of the report has to be considered on the facts and circumstances of each case.

Even in cases where procedural requirements have been complied with, action cannot be ipso facto illegal or void, unless it is shown that non-observance has prejudicially affected the delinquent." 20. With regard to the request of Mr. Manish Mathur for furnishing relevant documents to him, I note that SEBI vide its letter dated June 20, 2011 had clarified to him that all the relevant details and documents had already been provided to him alongwith the SCN issued to him. I further note that an opportunity of inspection of the documents relevant to Mr. Manish Mathur was also provided to him and on August 26, 2011 when he had inspected and received the copies of relevant documents. Further, during personal hearings, he has admitted to have received and inspected all the relevant documents relied upon against him in the instant proceedings. 21. I further note that Mr. Sunil Mehta, Mr. Sandeep Jain and Mr. Ajay Roongta have also sought the opportunity of cross-examination of certain entities. Mr. Sunil Mehta has sought opportunity of cross-examination of the handwriting expert from Truth labs, Hyderabad who had confirmed that the handwriting on the cash deposit slips in the accounts of the noticees and cheques issued to the stock brokers of the noticees are the same and belongs to Mr. Sunil Mehta.

It is pertinent to mention that the said handwriting expert Report is relevant for the separate investigation relating to 12 scrips and the findings of that investigation are relied upon in the supplementary show cause notice in the instant case for the limited purpose of corroborating the connection of Mr. Sunil Mehta with other entities. I further note that during the separate investigation in trading in said 12 scrips, Mr. Sunil Mehta had admitted to his handwriting on the cash deposit slips. I, therefore, am of the view that request of cross-examination of the handwriting expert in the instant proceedings is irrelevant and unfounded. 22. I further note that Mr. Sunil Mehta has also sought opportunity to cross-examine Mr. Suresh Hanswal and Mr. Pradesh Nimawat. It is admitted position that Mr. Sunil Mehta, Mr. Suresh Hanswal and Mr. Pradesh Nimawat are friends. Further, they have neither denied the fund flow amongst them nor the impugned transactions. In view of these facts, the statements of Mr. Suresh Hanswal and Mr. Pradesh Nimawat are not being relied upon against Mr. Sunil Mehta and as such there is no infirmity in these proceedings if opportunity of cross-examination of Mr. Suresh Hanswal and Mr. Pradesh Nimawat has not been provided to Mr. Sunil Mehta.

23. Mr. Sandeep Jain has sought cross-examination of the director of Swastika and the IA. I note that no statement of director of Swastika has been relied upon in the instant proceedings. I further note that the SCN has been issued to Mr. Sandeep Jain on the basis of the findings of the IA as recorded in the Investigation Report. The relevant findings of the Investigation Report have been incorporated in the SCN issued to Mr. Sandeep Jain and all the relevant documents in support of allegations in the SCN have been provided to Mr. Sandeep Jain. In my view the principles of natural justice have been duly complied with and the question of opportunity to cross-examine IA does not arise at all. 24. With regard to request of Mr. Ajay Roongta to cross-examine Mr. Narendra Sanghi, I find that Mr. Ajay Roongta and Mr. Narendra Sanghi are admittedly friends and they have not denied the fund flow amongst them. In view of these facts, the statement of Mr. Narendra Sanghi is not being relied upon in the instant proceedings and as such the question of cross-examination of Mr. Narendra Sanghi by Mr. Ajay Roongta does not arise.

25. Having dealt with the preliminary submissions of the noticees as above, I now proceed to deal with their submissions with regard to their alleged role and concerted transactions in the scrip of ASCL as alleged in the respective SCNs. I note from the respective SCNs that out of the 11 noticees, transactions in the scrip of ASCL during the investigation period was executed in the trading account of the 9 noticees by different stock brokers as described in the following table:

Table 5: Client details and dealing stockbroker

Sl. No. Entity Client Code Stock Broker/Sub-broker 1. Mr. Sunil Mehta GG009 B P Equities Pvt. Ltd. ( “BP Equities”) 2. Ms. Usha Mehta USHAMEH1; India Infoline Ltd. (“India Infoline”) MB2504 3. Mr. Sandeep Jain UD2101 Swastika Investment Ltd. ( “Swastika”) 4. Mr. Suresh Hanswal 26900469 Ms. Aruna Bhandari, Sub-broker of Anagram Capital Ltd. (“Anagram”) 5. Mr. Pradesh MU1110018 First Global Stock Broking Pvt. Ltd. (“First Nimawat Global”) 6. Mr. Arun Sakpal RC240 Ratnakar Shetty, Sub-Broker of Arcadia Share and Stock Brokers Pvt. Ltd. (“Arcadia”); 7. Mr. Jitendra Jain GG008 BP Equities; and IB08A01 Emkay 8. Mr. Bhanwar 3601 Triveni Paliwal 9. Mr. Dilip Rathore 2124 Triveni 10. Mr. Manish No trading from his trading account during the investigation period Mathur* 11. Mr. Ajay Roongta** No trading from his trading account during the investigation period * As COO of Triveni and close friend of Mr. Sunil Mehta, Mr. Manish Mathur helped in the manipulative trading of the Mehta Group entities. ** It has been alleged that Mr. Ajay Roongta was though not directly dealing in the scrip, he had acted as link between the abovementioned entities and also financed their transactions. 26. The counterparties to the trades executed in the trading account of the above 9 entities, were from amongst the Mehta Group entities as described in the following table alongwith percentage of their traded volume in the scrip during the investigation period: Table 6: Details of individual trades of the entities

Sl. Entity Counterparties % of trading volume with the No. connected counterparties 1. Mr. Sunil Mr. Sandeep Jain, Mr. Jitendra Jain, Mr. Buy trades - 298760 shares; 93.30% of Mehta Bharat Jain, Ms. Usha Mehta, M/s Meen total buy quantity

Been, Mr. Arun Sakpal, Mr. Suresh Sell trades - 297248 shares; 92.83% of Hanswal, Mr. Dilip Rathore, Mr. total sell quantity. Bhanwar Paliwal, Mr. Narendra Sanghi, Mr. Alpesh Dand, Mr. Manisha Mardia, and Mr. Pradesh Nimawat 2. Ms. Usha Mr. Sunil Mehta, Mr. Sandeep Jain, Mr. Buy trades - 123135 shares; 86.08% of Mehta Jitendra Jain, Mr. Bharat Jain, M/s Meen the total buy quantity and Been, Mr. Suresh Hanswal, Mr. Dilip Sell trades - 139459 shares; 97.50% of Rathore, Mr. Alpesh Dand and Mr. the total sell quantity Rajnish Jain. 3. Mr. Mr. Sunil Mehta, Mr. Sandeep Jain, Mr. Buy trades - 3,68,455 shares; 94.41% of Jitendra Bharat Jain, Mr. Usha Mehta, M/s Meen the total buy quantity; and Jain Been, Mr. Arun Sakpal, Mr. Suresh Sell trades - 361221 shares; 92.56% of Hanswal, Mr. Dilip Rathore, Mr. total sell quantity. Bhanwar Paliwal, Mr. Narendra Sanghi, Mr. Alpesh Dand, Mr. Manisha Mardia and Mr. Pradesh Nimawat 4. Mr. Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Buy trades - 329868 shares; 92.99% of Sandeep Bharat Jain, Ms. Usha Mehta, M/s Meen total buy quantity and Jain Been, Mr. Arun Sakpal, Mr. Suresh Sell trades - 326488 shares; 92.03% of Hanswal, Mr. Dilip Rathore, Mr. total sell quantity.

Bhanwar Paliwal and Mr. Narendra Sanghi 5. Mr. Mr. Sandeep Jain, Mr. Sunil Mehta, Mr. Buy trades - 60,909 shares; 98.03% of Suresh Jitendra Jain, Mr. Bharat Jain, Ms Usha the total buy quantity and Hanswal Mehta, Mr. Arun Sakpal, Mr. Dilip Sell trades - 59,712 shares; 96.10% of the Rathore, Mr. Bhanwar Paliwal and Mr. Total sell quantity Alpesh Dand 6. Mr. Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Buy trades - 5265 shares (56.83%) of Pradesh Sandeep Jain, Mr. Bharat Jain, M/s the total buy quantity; and Nimawat Meen Been, Ms. Manisha Mardia Sell trades – 9265 shares (100%) of the total sell quantity 7. Mr. Mr. Sunil Mehta, Mr. Jitendra Kumar Buy trades - 56090 shares; 98.12% of Bhanwar Jain, Mr. Sandeep Jain, Mr. Suresh total buy quantity and Paliwal Hanswal, and Mr. Arun Sakpal Sell trades (56392 shares; 98.65% of the Total sell quantity. 8. Mr. Dilip Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Buy trades - 59038 shares; 99.66% of the Rathore Sandeep Jain, Ms. Usha Mehta, Mr. total buy quantity and Arun Sakpal, Mr. Suresh Hanswal and Sell trades - 58963 shares; 99.53% of Mr. Narendra Sanghi total sell quantity.

9. Mr. Arun Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Buy trades - 73,906 shares; 92.23% of Sakpal Sandeep Jain, Mr. Bharat Jain, M/s total buy quantity and Meen Been, Mr. Suresh Hanswal, Mr. Sell trades - 69,947 shares; 87.29% of Dilip Rathore, Mr. Bhanwar Paliwal and total sell quantity. Mr. Narendra Sanghi

From the above Table, it is observed that the trades amongst the Mehta Group entities formed the bulk of transaction in the scrip of the company during the investigation period. Most of these trades were in the nature of synchronized/structured trades as alleged in the SCNs and discussed in later part of this order. 27. On careful consideration of the basis/factors mentioned in Table 3 above, I note that Mr. Bhanwar Paliwal has been alleged to be connected with other noticess on the basis that his trading account with Triveni was opened by Mr. Sunil Mehta. Mr. Bhanwar Paliwal has submitted that he was known to Mr. Sunil Mehta through his son Madhusudan Paliwal, who were friends and his trading account with Triveni was opened by Mr. Sunil Mehta. Mr. Sunil Mehta has also admitted that he was a friend of Mr. Madhusudan Paliwal, son of Mr. Bhanwar Paliwal, for the last 10-15 years and that he had suggested Mr. Bhanwar Paliwal to open his trading account with Triveni whose COO, Mr. Manish Mathur was also his friend. I note that before the IA, on May 19, 2010, Mr. Sunil Mehta had accepted introducing Mr. Madhusudan Paliwal to Triveni.

It is noted that Mr. Jitendra Jain a friend of Mr. Sunil Mehta had signed as introducer in the KYC forms relating to trading account of Mr. Bhanwar Paliwal with Triveni. The material available on record do not suggest connection of Mr. Bhanwar Paliwal with other noticees except Mr. Sunil Mehta and these facts and circumstances indicate that it was Mr. Sunil Mehta who, acting in concert with Triveni, opened, operated and controlled the trading account of Mr. Bhanwar Paliwal and undertook the impugned transactions in his trading account. 28. I note that there is no allegation in the SCN that Mr. Bhanwar Paliwal had placed any order to Triveni or he had received any funds from third party or transferred funds to Triveni or any other entity. Even the material available on record does not suggest so. The charge against Mr. Bhanwar Paliwal in the SCN issued to him is that 'he lent his trading account to Mr. Sunil Mehta for some unknown consideration'. The basis of this charge is the suspicion that a very old, retired person with meager income and suffering from multiple illnesses having no knowledge and no intention of trading in securities market would open trading account with the stock broker situated in a far of city.

I do not find anything on record that suggests that Mr. Bhanwar Paliwal might have received any consideration in lieu of alleged lending of his trading account to Mr. Sunil Mehta. The facts and circumstances as discussed above indicate that trading account of Mr. Bhanwar Paliwal, with Triveni was opened by Mr. Sunil Mehta and he had not deliberately lent his trading account to be used by Mr. Sunil Mehta for manipulation in the scrip of ASCL. I note that in the appeal filed by Mr. Bhanwar Paliwal against the adjudication order dated November 02, 2012 that was passed on the same set of facts and allegations, the Hon'ble SAT has exonerated Mr. Bhanwar Paliwal in view of its following findings on facts- “29. ....., it is seen that appellant is 73 years old retired vice-principal of a school and is dependent on his pension and some income from interest for his livelihood and earns less than `2 lac in a year. Appellant was known to Sunil Mehta and Sunil Mehta had opened appellant’s trading account with Triveni and appellant has denied knowing any other entity connected to Mehta Group. Appellant knew Sunil Mehta through his son Madhusudan Paliwal, who were friends.

Nothing is on record, except statement of appellant that he happened to know Sunil Mehta, through whom his trading account was opened with Triveni. Hence, it may be concluded that appellant is not linked to any other entity of Mehta Group, except Sunil Mehta.

30. A perusal of account of appellant for period March 23, 2002 to August 9, 2009 does not reveals any payment / receipt for his dealing in scrip of ASCL or any other scrip during this period. A perusal of his statement of account in State Bank of Bikaner & Jaipur shows that credits of `5,17,419 and debit of `5,28,390 during this period i.e. for 6 years and 4 months, which shows that he is a person of meagre income / expenditure. 31. Regarding reporting of authorized operation of appellant’s trading account by Sunil Mehta, for which it has been concluded by AO that appellant aided / abetted trading from his account by Sunil Mehta and he is equally liable for manipulation of scrip of ASCL and hence violative of PFUTP Regulations; it may be stated that such unauthorised operation of trading account has not been reported in most of the cases, especially since Sunil Mehta was friend of appellant’s son and appellant was most likely to be unaware of consequences of merely signing for opening of his trading account and that he being a resident of Udaipur, he would have to travel to Mumbai (where unauthorised operation in his account took place) and a person of 73 years is generally not expected to do so. Hence, non-reporting of unauthorized operation of trading account is not conclusive evidence of appellant being a willing party for manipulation in scrip of ASCL and for being convicted and imposition of penalty of ` 5 lakh on him.” 29. In view of the facts and circumstances of the case and considering the above findings, I give benefit of doubt to Mr. Bhanwar Paliwal as regards his alleged complicity in the manipulation in the scrip is concerned.

30. Considering the factors described in Table 3 above and details of undisputed fund transfers amongst several Mehta Group entities, I note that the noticees other that Mr. Bhanwar Paliwal are apparently related/connected to each other on the basis of relationship, common addresses, e-mails, telephone numbers, fund transfer, etc. However, some of the noticees have disputed those factors/basis of connections/relation amongst the Mehta Group entities.

In this regard, I note that the Hon'ble SAT has, in many cases such as Classic Credit Ltd. vs. SEBI (SAT Appeal no. 68/2003, Order dated December 8, 2006), Classic Credit Ltd. vs. SEBI (SAT Appeal no. 76/ 2003, Order dated January 9, 2007) and Veronica Financial Services Ltd. vs. SEBI (SAT Order dated August 24, 2012), held that connection/relations can be established on the basis of such factors. It also pertinent to mention here that during separate investigation in the trading of 12 scrips including ASCL as stated in the supplementary show cause notices, Mr. Manish Mathur and Mr. Sunil Mehta were trading in the account of Ms. Seema Mathur for the purpose of carrying out the manipulations in the said 12 scrips. During that investigation also Mr. Manish Mathur, Mr. Sunil Mehta, Mr. Ajay Roongta and Mr. Jitendra Jain were found to be connected inter alia on the basis of their concerted manipulative trading and inter se transfer of funds in/from the accounts of Ms. Seema Mathur, wife of Mr. Manish Mathur and Ms. Anjana Mehta, wife of Mr. Sunil Mehta. 31. Admittedly, Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Suresh Hanswal, Mr. Pradesh Nimawat, Mr. Ajay Roongta and Mr. Manish Mathur are friends.

Mr. Sunil Mehta has also admitted that he suggested Mr. Bhanwar Paliwal, father of his friend Mr. Madhusudhan Paliwal, to open trading account with Triveni. He has also admitted that he traded in his own trading account and operated the trading account of his mother, Ms. Usha Mehta and placed all orders in her trading account. As regards the allegation of placing order in the trading account of Mr. Jitendra Jain, he has claimed to have placed orders in the trading account of Mr. Jitendra Jain under his instructions when he was unable to place orders because of technical difficulties. 32. Admittedly, Mr. Sunil Mehta and Mr. Jitendra Jain are friends. I note that they were also connected to each other on the basis of the common address (EMP-47, Flat No-1804, Thakur Complex, Kandivali), telephone number (9322123256), email-ids (mehta_sunil@yahoo.co.in and sunil.mehta@indiacapitalmarkets.com), and joint bank account (A/c no. ‘1821000064427’, HDFC Bank, Kandivali branch). I further note that the confirmation of the trades done during the day by the stock broker BP Equities in the trading account of Mr. Jitendra Jain was being provided by calling him on this mobile number and physical contract notes were being issued at the address mentioned in KYC form.

The said mobile number and address belong to Mr. Sunil Mehta. It is further noted that Mr. Jitendra Jain was an e-broking client of the stock broker Emkay and digital contract notes were being sent at the email-id mentioned in his KYC form. The said email-id was found to be common to Mr. Jitendra Jain and Mr. Sunil Mehta. I further note that though the annual income of Mr. Jitendra Jain, as disclosed in his KYC forms with the stock broker Emkay, was less than `1 lakh, the large exposures were taken in his trading account in the scrip of ASCL. Thus, the extent of exposure taken and trading done in Mr. Jitendra Jain's trading account were not commensurate with his disclosed annual income. I further note that Mr. Jitendra Jain was having huge fund flow in his bank accounts, including through huge cash deposits, by way of giving funds to and taking funds from Mr. Sunil Mehta and his wife Ms. Anjana Mehta. 33. In view of the above, I find that Mr. Sunil Mehta operated the trading accounts of Ms. Usha Mehta, Mr. Jitendra Jain and Mr. Bhanwar Paliwal and placed orders in the scrip of ASCL as alleged in the SCNs himself directly from his own trading account and from the trading accounts of these noticees.

I further find that except Mr. Bhanwar Paliwal all these noticees connived with Mr. Sunil Mehta and knowingly allowed use of their trading account by Mr. Sunil Mehta for the purpose of alleged manipulations. 34. In the above regard, it is pertinent to note that while dismissing the appeal filed by Mr. Sunil Mehta against the order of the adjudicating officer imposing monetary penalty on him for the alleged manipulations, the Hon’ble SAT, vide its order dated November 13, 2013, also confirmed the inter se connection, fund transfers amongst the Mehta Group entities and mala fide acts and conduct of Mr. Sunil Mehta, alongwith other Mehta Group entities, in manipulation of volume and price of the scrip of ASCL during the investigation period. The relevant extract of the said order of the Hon’ble SAT is reproduced hereunder: “In view of clear findings by Learned Adjudicating Officer, all the pleas and explanations of appellant clearly emerge as not applicable or worth consideration or need elaborate explanation to conclude that pleas of appellant do not held. Enquiry and subsequent adjudication on conduct of appellant, proves beyond reasonable doubt that scrip of ASCL was manipulated in terms of volume and price, which created false volumes and price rise of scrip through various activities of all connected entities of Mehta Group and Sunil Mehta was the brain behind these manipulations.

Since he not only carried out manipulation in scrip of ASCL in his own account, but also in account of others in Mehta Group and supplied pay-in obligations of other entities of Mehta Group by providing necessary funds. Appellant was the brain behind Mehta Group and was directing most of the action of the Group, which engaged in manipulation of volumes of ASCL scrip for creating artificial volumes through reversal, synchronization and structured trades in the scrip. Appellant, operated trading account of his mother, Usha Mehta, Jitendra, his wife, Anjana Mehta, Gopal Lal Mathur, and transactions in these accounts were executed to manipulate volumes in scrip of ASCL and also its price. Appellant also advised his friend Suresh, another entity of Mehta Group, to transact in scrip of ASCL. Thus appellant himself indulged in manipulations in scrip of ASCL in his own account and operated / accounts of other entities of Mehta Group for carrying out manipulations in scrip of ASCL, as well as advised Mehta Group members to execute manipulation in company’s scrip. Entities of Mehta Group were divided into five groups and each group traded through one broker and all activities of all entities of Mehta Group for dealings in ASCL, were executed through these brokers were formed to the controlling total market volume of ASCL scrip and 87.83% of market volume was synchronized traded between Mehta Group entities, and 44.95% of market volume was structured trade by these group entities and all synchronized and structured trading was carried out by five brokers acting on behalf of Mehta Group entities.

Appellant entered into large number of synchronized trades with other entities of Mehta Group and placed orders at prices higher than LTP in 145 times out of 1050 instances, when price increased by more than 5 in single order. Appellant was responsible for individual trading volume of 16.22% of market buy/sell volume, which was significant, and when seen together Mehta Group, proves his active participation in manipulation of volume / price of scrip of ASCL during IP. Extensive flow of funds flow appears between appellant and other Mehta Group entities. From details of funds transfers to and from appellants various bank accounts to other Mehta Group entities’ accounts, it is seen that `45,68,600/- were deposited into appellant’s various bank accounts during IP and more than 100 lac were transferred to different trading entities, who utilized these funds to meet their pay-in-obligations. Thus, appellant was not only executing trades on behalf of himself and some other entities, but was also funding these transactions of other entities for their trades in ASCL. It is, thus, clear that appellant indulged in manipulation of scrip of ASCL and created artificial volume and manipulated price of ASCL scrip during IP and thus violated provisions of Regulations 3(a), (b), (c) & (d) and 4(1), 4(2) (a), (b), (e) & (g) of PFUTP Regulations and in view of these violations, which have been substantiated, the appeal of appellant does not succeed.” 35. It is further noted that during separate investigation in trading in 12 scrips as mentioned above it was revealed that the cheques issued by Mr. Jitendra Jain to the stock brokers had been signed by Mr. Sunil Mehta.

Further, during that investigation, Mr. Sunil Mehta had admitted to signing those cheques and this fact has been confirmed in the Handwriting Expert Analysis by Truth Labs, Hyderabad. In his reply to the supplementary show cause notice, Mr. Sunil Mehta has admitted that he used to receive contract notes occasionally on behalf of Ms. Seema Mathur, wife of Mr. Manish Mathur. These facts and circumstances further corroborate the finding that Mr. Sunil Mehta was the mastermind behind the alleged manipulations in the trading in ASCL scrip and he acting in league and concert with Mr. Manish Mathur and other Mehta Group entities indulged in manipulative trading in the scrip not only during the investigation that is subject matter of these proceedings but also during the other investigation as mentioned hereinabove. 36. Admittedly, Mr. Sandeep Jain did not trade in the scrip of ASCL and he had not funded trades of other noticees. He has contended that his trading account no. “UD2101” with the stock broker Swastika was opened without his knowledge and that Mr. Suresh Hanswal and Mr. Pradesh Nimawat have done fraudulent trading in his account no. “UD2101”.

He has claimed that at the insistence of Mr. Suresh Hanswal and Mr. Pradesh Nimawat he had signed two letters - one for closure of account and the other for normal trading in the scrip of ASCL, and these letters were notarized by them in order to implicate him in the matter. In this respect, he has claimed that he filed the FIR against Mr. Suresh Hanswal, Mr. Pradesh Nimawat, Mr. Jitendra Jain and Swastika. 37. I note that Mr. Sandeep Jain had entered into broker-client agreement with Swastika on July 16, 2008. He had authorized Swastika to deliver the contract notes, any statements or other information on his email-id ‘ud2101_sandeep@swastika.co.in’ as mentioned in his KYC with Swastika. The contract notes with regard to the impugned trades in the scrip of ASCL in the trading account of Mr. Sandeep Jain were being electronically sent to him at this email-id. Mr. Sandeep Jain has not been able to disprove the fact of signing the broker-client agreement with Swastika and that this e-mail did not belong to him. His claim that he refused to sign the consent letter suggested by Swastika for acceptance of third party cheque is not acceptable as the copy of purported letter relied upon by Mr. Sandeep Jain is an unauthenticated print out on a plain paper.

He has, on the other hand, admitted that he had signed the two consent letters including one for trading in the scrip of ASCL. His claim of getting to know about manipulative trading by Mr. Suresh Hanswal and Mr. Pradesh Nimawat in his account on receipt of a call from Swastika, in my view, is not plausible in view of these facts and circumstances. 38. Mr. Sandeep Jain has also contended that he never deposited any cheque in his trading account no. “UD2101” with Swastika and was surprised to see cheques for a total of `6,50,000/- deposited by Mr. Suresh Hanswal and Mr. Pradesh Nimawat in this trading account. I find that Mr. Sandeep Jain did not take any action against Swastika, Mr. Suresh Hanswal and Mr. Pradesh Nimawat even when he became aware about their manipulative trades in his trading account as claimed by him. The FIR as claimed by him was filed on March 10, 2011 after the personal hearing before the adjudicating officer in the same matter was over and when he was confronted with impending penalty. In my view, Mr. Sandeep Jain getting to know about the manipulative trading in his account only after receiving a call from Swastika is cooked up story and filing of an FIR is an afterthought.

The CD relied upon by him cannot be relied upon as voice samples of Mr. Suresh Hanswal and Mr. Pradesh Nimawat are not available and its digital contents cannot be verified. I note that both Mr. Pradesh Nimawat and Mr. Sandeep Jain had admitted before the IA that they are known to each other as friends. I further note that, in order to meet the pay-in obligations for the trades in the trading account of Mr. Sandeep Jain the funds were received in the account of his stock broker Swastika, from Mr. Suresh Hanswal and Mr. Pradesh Nimawat the entities connected to Mr. Sunil Mehta who in turn had provided funds to them.

39. I, therefore, find that Mr. Sandeep Jain has not been able to furnish any plausible explanation to establish his claims on the basis of any cogent evidence. I further find that the facts and circumstances in this case clearly establish that Mr. Sandeep Jain had knowingly lent his name and allowed trading in his account and thus the impugned trades in his trading account were done with his knowledge and connivance. 40. I note that though Mr. Suresh Hanswal is a partner in a sub-broking firm but he opened the trading account with another stock broker, Anagram and operated it for impugned transaction in the scrip of ASCL. Mr. Suresh Hanswal has admitted that he dealt in the scrip of ASCL on the advice of Mr. Sunil Mehta. However, Mr. Sunil Mehta has denied that he advised Mr. Suresh Hanswal to deal in the scrip. I note that during the investigation period, Mr. Suresh Hanswal had traded in 17 scrips wherein Mr. Sunil Mehta had also traded during the investigation period. Mr. Suresh Hanswal had introduced Mr. Sunil Mehta and Ms. Usha Mehta and Mr. Jitendra Jain to the stock broker Arcadia.

From the KYC details of Mr. Suresh Hanswal, I note that his disclosed annual income was `1,00,000/- to `1,50,000/-over last few years. However, from his bank account statement, it is observed that he had entered into large financial transactions beyond his disclosed financial capacity. It is also noted that Mr. Suresh Hanswal had received funds from Mr. Sunil Mehta and had transferred the funds so obtained to the respective stock brokers for meeting his and Mr. Sandeep Jain’s pay-in obligations. These facts and circumstances clearly establish that Mr. Suresh Hanswal and Mr. Sunil Mehta were acting in league/concert and that Mr. Sunil Mehta was the brain behind the transactions of Mr. Suresh Hanswal in the scrip of ASCL. 41. From the trade and order log it is noted that 14 buy trades for 5265 shares and 21 sell trades for 9265 shares from the trading account of Mr. Pradesh Nimawat during the investigation period were synchronized trades with the Mehta Group entities. Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Sandeep Jain, Mr. Bharat C. Jain, M/s Meen Been, Ms. Suman Jain and Ms. Manisha Mardia were the counterparties to the trades done in Mr. Pradesh Nimawat's trading account.

Out of this entire buy trades (9265 shares) and sell (9265 shares) quantity, 5265 shares amounting to 56.83% of total buy quantity and entire sell quantity was concentrated between these counterparties. 42. Mr. Sunil Mehta has denied that trading account of Mr. Pradesh Nimawat with First Global was opened by him and that he traded on behalf of Mr. Pradesh Nimawat. I note that the KYC details of Mr. Pradesh Nimawat with stock broker First Global contained contact details such as email-id, postal address and telephone number which belonged to Mr. Sunil Mehta. In his statement before the IA, Mr. Pradesh Nimawat had stated that his account with First Global was opened by Mr. Sunil Mehta with his consent and that he does not remember whether the trading in the said account was done by himself or by Mr. Sunil Mehta. His signature in the KYC forms and his statement before the IA was in Hindi. However, in these proceedings, Mr. Pradesh Nimawat has admitted that he executed jobbing transactions in 9265 shares of ASCL on BSE but he has denied having opened any trading account with First Global.

He has claimed in his submissions/ affidavit that the documents used for opening the trading account through First Global do not bear his signature and the same might have been opened by illegally obtaining documents kept in his office and that he signs only in English. 43. I note that Mr. Pradesh Nimawat has changed his stand from that he had taken before the IA with regard to opening of his trading account with the stock broker First Global. But has failed to disprove that he had received funds from Mr. Sunil Mehta as alleged in the SCN. He had rather admitted before the IA that he borrowed funds from Mr. Sunil Mehta for the purpose of trading. I, therefore, find that Mr. Pradesh Nimawat is connected with Mr. Sunil Mehta. I further note that Mr. Pradesh Nimawat has tried to mislead in these proceedings by making inconsistent submissions and taking shifting stands. I, therefore, do not find his submissions reliable and acceptable. In view of the fact that Mr. Pradesh Nimawat was having common email-id, postal address and telephone number as that of Mr. Sunil Mehta, giving consent for opening his trading account and receiving funds from Mr. Sunil Mehta for the purpose of trading it can safely be inferred that Mr. Sunil Mehta was controlling and operating the trading account of Mr. Pradesh Nimawat with First Global with the knowledge and connivance of Mr. Pradesh Nimawat.

44. It is observed that apart from entering into financing transactions with other Mehta Group entities as discussed hereinabove, Mr. Sunil Mehta had also entered into financing transactions, during the relevant time, with Triveni, its COO Mr. Manish Mathur, his father Mr. Gopal Lal Mathur and his wife Ms. Seema Mathur. Further, Triveni, in collusion with Mr. Sunil Mehta and others, executed trades in the trading accounts of the Mehta Group entities as described in the following table:- Table 7: Summary of trades of the Mehta Group entities and other three clients trading through Triveni Name of the Purchased Sold Synchronized for Mehta Structured for Mehta group Client group Qty % of total Qty Qty % of total Qty Qty % of total Qty % of total Qty traded during traded during Purchased purchased investigation investigation Qty during during period period investigation investigation period period

Dilip Rathore 59242 3 59242 3 59038 99.66 25371 42.83 Bhawarlal Paliwal 57162 2.9 57162 2.9 56070 98.09 21062 36.85 Bharat Jain 160099 8.11 160099 8.11 158802 99.19 60778 37.96 Meen Been 116300 5.89 116300 5.89 115590 99.39 43146 37.10 Alpesh Dand 16217 0.82 16217 0.82 16174 99.73 9312 57.42 Manisha 15628 0.79 15628 0.79 15317 98.01 7112 45.51 Total 424648 21.51 424648 21.51 420991 99.14 166781 39.28

45. It is noted that Mr. Manish Mathur started working as COO of Triveni since August 2006. Incidentally, the manipulation in the scrip started during September 2006 when Triveni was the major stock broker for trading in the scrip. It has been observed during the investigation that Mr. Sunil Mehta solicited clients for Triveni. It is admitted fact that Mr. Manish Mathur, the COO of Triveni, is a friend of Mr. Sunil Mehta. It has been alleged in the SCN issued to Mr. Manish Mathur that Triveni had close nexus and connection with Mehta Gropu entities viz; Mr. Bharat Jain, M/s Meen Been, Mr. Alpesh Dand and Ms. Manisha Mardia. Further, the counterparties to the above transactions of Triveni were one or the other entity from amongst the Mehta Group entities. I also note that all the counterparties for the trades of M/s Meen Been, Mr. Alpesh Dand and Ms. Manisha Mardia were actually related to Triveni (through Mr. Sunil Mehta and Mr. Manish Mathur). Further, Triveni also executed trades directly from trading accounts of Mr. Bhanwar Paliwal and Mr. Dilip Rathore. 46. During the personal hearing, Mr. Sunil Mehta has claimed to be unaware that Mr. Bharat Jain was a client of Triveni.

I note that a Demand Draft for `6,00,000/-, was issued in favour of Mr. Bharat Jain from the bank account of Mr. Jitendra Jain on the application made by Mr. Sunil Mehta. This financing transaction had happened prior to the date when Mr. Sunil Mehta and Mr. Bharat Jain had given statements on oath before the IA and when Mr. Sunil Mehta was reasonably expected to be aware of the purpose for which he was applying for the Demand Draft in favour of Mr. Bharat Jain and who Mr. Bharat Jain was. I further note that Mr. Sunil Mehta and Mr. Bharat Jain were counterparties in synchronized trades in the scrip of ASCL for a number of days and on numerous occasions. From these facts, it can reasonably be inferred that Mr. Sunil Mehta was not only aware of Mr. Bharat Jain's transactions in the scrip through Triveni but was actively involved in the their trades in concerted manner. 47. It has been further observed that there were extensive fund flow between Triveni and Mr. Jitendra Jain, another Mehta Group entity. Further substantial funds transfers have been observed from Mr. Sunil Mehta, Mr. Jitendra Jain to Mr. Gopal Lal Mathur, father of Mr. Manish Mathur.

Admittedly, Mr. Manish Mahtur was operating the bank account of his wife

Ms. Seema Mathur and his father Mr. Gopal Lal Mathur. I further note that an amount of `2,50,000/- was paid in the account of Mr. Gopal Lal Mathur (father of Mr. Manish Mathur) vide cheque number ‘953054’ dated October 22, 2008 from the bank account of Mr. Jitendra Jain. Further, vide cheque number ‘918738’ dated October 23, 2008, Mr. Sunil Mehta deposited `1,60,000/- into the account of Mr. Gopal Lal Mathur. In this regard, Mr. Manish Mathur has claimed that these funds were received as friendly loans from “one of the clients of Triveni” and that that the amount was returned in cash. However, Mr. Manish Mathur failed to specify the said client of Triveni and did not know anything about his so-called friend from whom he had taken such huge amount as 'friendly loan' without any interest and documentations. Further, Mr. Manish Mathur did not submit any documentary proof in support of his claims. I, therefore, do not agree with these submissions of Mr. Manish Mathur. These fund transfers in the account of Mr. Gopal Lal Mathur indicate the role played by Mr. Manish Mathur in manipulations in the ASCL scrip through the trading accounts of the clients of Triveni as alleged in the SCN.

I note that the SCN has spelt out various reasons for the role of Triveni and its COO Mr. Manish Mathur. However, Mr. Manish Mathur has not made any plausible explanation in his reply with regard to the allegations and charges levied against him in the SCN and the basis thereof. In the facts and circumstances of this case as brought out in the SCN issued to Mr. Manish Mathur, I find that, he being the COO of Triveni, orchestrated, aided and abetted the manipulation in the scrip of ASCL during the investigation period by directly dealing in the accounts of the clients in connivance with his close friend Mr. Sunil Mehta. 48. It is relevant to mention here that the Hon’ble SAT has also, vide its order dated October 31, 2013 in the appeal filed by Mr. Manish Mathur against the order of the adjudicating officer imposing monetary penalty on him for the alleged manipulations, confirmed the connection of Mr. Manish Mathur with the Mehta Group entities and his mala fide acts and conduct alongwith other Mehta Group entities, in manipulation of volume and price of the scrip of ASCL during the investigation period.

The relevant extracts of the findings of Hon'ble SAT are reproduced hereunder: “First of all it is seen that appellant has been linked to Mehta Group, primarily since many entities who traded in shares of ASCL, executed synchronized / structured trades with entities viz. Suresh, Jitendra, Sandeep, Pradesh, Sunil, Usha, Bharat, Arun, Narendra, Meen Been, Dilip, Bhanwar, Alpesh, Manisha, Rajnish and these entities were found to be linked with each other through appellant, Sunil Mehta, Ajay Roongta and together form a group which is referred as Mehta Group. The relationship has also been elaborated in so many words in para 10 (supra).

Second evidence of connection of appellant with Mehta Group is from the fact that _ 2.5 lakh were paid in account of Gopal Lal Mathur on October 22, 2008, father of appellant, from account of Jitendra Jain and Sunil Mehta paid `1.6 lakh to Gopal Lal Mathur on October 23, 2008. These amounts were received by Gopal Lal Mathur within IP and Manish Mathur submitted that he operated account of Gopal Lal Mathur and got friendly loans from clients of Triveni viz. Sunil Mehta and Jitendra Jain. Third and the last evidence to prove connection of Manish Mathur with Mehta Group is amount of `3 lakh transferred from appellant’s wife’s account (Seema Mathur’s account) to account of Sunil Mehta on three different occasions for meeting pay-in obligation of Sunil Mehta during personal hearing, which was later denied by Manish Mathur on February 28, 2011. Regarding the first evidence of linking Manish Mathur to Mehta Group, it is stated that entities who executed synchronized / structured trades in ASCL scrip during IP are linked to each other through appellant, Sunil Mehta and Ajay Roongta. In the paras 10(c)(i) to 10(c)(xxiv) and other narrations of linkages and trades it is seen that Manish Mathur, Seema Mathur and Gopal Lal Mathur are known to Sunil Mehta, since they are friends for long and had received and given money (flow of friends) to each other in some instances; and that Manish Mathur knew Ajay Roongta, since appellant introduced Ajay Roongta and Sunil Mehta.

Appellant also knew Jitendra Jain, since appellant’s father received money from Jitendra Jain. Other entities of Mehta Group, namely, Bharat, Meen Been, Dilip, Bhanwarlal knew appellant, since appellant was CEO of Triveni and these entities executed trade in scrip of ASCL through Triveni during IP, which were in nature of synchronized / structured, circular trades. This is direct, and indisputable proof of connection of appellant with these entities, since being appellant was CEO of Triveni, and named entities, named above in this para, entered into synchronized / structured, circular trades in scrip of ASCL during IP through Triveni. Apart from this appellant is and had known Sunil Mehta for long and had also known Jitendra Jain and Ajay Roongta and who had given money to Sunil Mehta through his wife and that father of appellant had received money from Jitendra Jain and Sunil Mehta; which links appellant to other members of Mehta Group, apart from Sunil Mehta, Ajay Roongta and Jitendra Jain. Next, we deal with amounts transferred by Sunil Mehta and Jitendra Jain to account of Gopal Lal Mehta, father of appellant.

From details of such transfer in impugned order, it is seen that `2.5 lakh were received by Gopal Lal Mathur from Jitendra Jain on January 22, 2008 and `1.15 lakh, ` 1.60 and `2.25 lakh (total `5.00 lakh) were received by Gopal Lal Mathur from Sunil Mehta, on October 23, 2008. It may be noted that `5 lakh were received by Gopal Lal Mathur from Sunil Mehta within IP, while `2.5 lakh were received from Jitendra Jain after IP. Jitendra Jain’s amount was repaid by Gopal Lal Mathur from December 2009 to December 2010, from his own account. Regarding amount due of `5 lakh to Sunil Mehta, the same was re-paid from Axis Bank and HDFC Bank account and from some adjustment from appellant’s wife’s viz. Seema Mathur account. HDFC account held by Gopal Lal Mathur, while Axis Bank account is in name of Seema Mathur which shows that appellant lives with his father or vice versa and joint family’s accounts were utilized in making repayments to amounts to Sunil Mehta. It may be noted that purpose of receiving amount of `5 lakh by Gopal Lal Mathur was to purchase a car on occasion of his 50th marriage anniversary and in fact a car was purchased by some Mathur on October 23, 2008 (full name of purchaser is not clear but billing was in name of Mr. Mathur) at cost of ` 8.76 lakh.

It may also be mentioned that repayment to Sunil Mehta is after receipt of SCN by appellant. Hence, it is a fact that father of appellant, received money from Sunil Mehta and Jitendra Jain, to the extent of `7.5 lakh, for whatever purpose; but this clearly shows appellant or his relatives were receiving money from entities of Mehta Group, receipt / purpose of which was not documented and which was returned only when SCN had been issued to appellant. Amount of `3 lakh was transferred to account of Sunil Mehta from account of Seema Mathur (wife of appellant), but date of this transfer is not readily available on three different days as per AO, appellant had stated that this amount was given to Sunil Mehta for making his pay-in obligation during his personal hearing, but same was denied by appellant in his reply on February 28, 2011. It is further stated by AO that no documentary evidence has been provided by appellant, establishing that this `3 lakh given to Sunil Mehta by Seema Mathur, was a loan. In reality, it is a fact that Seema Mathur has provided `3 lakh to Sunil Mehta, but whether it is finance or loan accommodation, is not clear.

This accommodation of `3 lakh to Sunil Mehta by Seema Mathur, may be at instance of appellant.” 49. I note that in the trading account of Mr. Dilip Rathore with Triveni total 59242 shares of ASCL were bought and same quantity was sold. Out of these 59242 shares, 59038 shares were bought and 58864 shares were sold in synchronized manner. Out of these synchronised transactions, 25371 shares were bought and 28380 shares sold in structured manner wherein the time difference between buy and sell order was less than one minute. All the transaction in the trading account of Mr. Dilip Rathore were executed by the stock broker Triveni who is connected to the Mehta Group entities and in all these transactions the counterparties were the Mehta Group entities viz. Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Sandeep Jain, Ms. Usha Mehta, Mr. Arun Sakpal and Mr. Suresh Hanswal, and Mr. Narendra Sanghi who was trading in the scrip on behalf of another Mehta Group entity, namely Mr. Ajay Roongta. 50. Mr. Dilip Rathore has submitted that neither does he have any demat account nor does he deal in the shares and as such he never traded in the scrip of ASCL.

From the material available on record it is noted that the depositories have also confirmed that Mr. Dilip Rathore never had any demat account. However, the fact remains that trades had been undertaken in his trading account through stock broker Triveni who is expected to follow all requirements with regard to account opening of a client and trading on his behalf. It is worth noting that on being questioned in this regard by the IA about the veracity of these trades Triveni failed to submit any evidence such as KYC details of Mr. Dilip Rathore, proof of payment of funds for the transactions and proof that the orders were placed by Mr. Dilip Rathore himself. It is also pertinent to note that the counterparties to the trades placed from trading account of Mr. Dilip Rathore were the Mehta Group entities who, in turn, were connected to Triveni through its COO, Mr. Manish Mathur, and Mr. Sunil Mehta. Further, Triveni executed/allowed trading in Mr. Dilip Rathore's trading account without any KYC, without receiving any funds for the purpose of trading and most blatantly operated trading account of a client who even did not have a demat account.

These facts and circumstances clearly suggest that these transactions could not have happened without the full support and connivance of Mr. Manish Mathur and Triveni with Mr. Sunil Mehta who was brain behind the manipulative transactions. 51. From the account statements submitted by Triveni, I note that Mr. Dilip Rathore had transferred funds to Triveni on October 01, 2007 and October 05, 2007. The impugned trades occurred one year later during the period October-November, 2008. There is no allegation that Mr. Dilip Rathore had himself entered into the impugned transactions and the material available on record also does not suggest so. I note that the charge against Mr. Dilip Rathore is on the following basis as recorded in the SCN issued to him - "Your non-cooperation in investigation shows that you might have yourself allowed trading in your name for some consideration ...". It is admitted fact that Mr. Dilip Rathore did not have any demat account at the relevant time and impugned transaction in his trading account have been executed by Triveni at the stock exchange. The charge of fraudulent trading and manipulation has been leveled on Mr. Dilip Rathore on the basis that he might have allowed trading in his account for some consideration since he did not cooperate with investigation.

Although there is nothing on record to prove that he might have lent his trading account for some consideration or might have received any consideration for lending his trading account to Triveni for the manipulation in the scrip, Mr. Dilip Rathore has not given any plausible and acceptable reason for transfer of funds to Triveni during October 2007. I note that vide order dated November 09, 2012 a penalty of `2 lakh has been imposed by the adjudicating officer upon Mr. Dilip Rathore for his role in the manipulation in the scrip in the same set of facts and violations as alleged in the instant SCN. Considering these facts and circumstances and mitigating factors, I do not find any need to issue any further direction against Mr. Dilip Rathore as contemplated in the SCN. 52. Mr. Ajay Roongta had not himself traded in the scrip of ASCL during the investigation period. However, it has been observed during investigations that his role was crucial in connecting the Mehta Group entities in a group and in orchestrating manipulation in the scrip of ASCL through different entities. Mr. Ajay Roongta used to work with Triveni till May 2005. Subsequently, his position was occupied by Mr. Manish Mathur.

Further, as stated in the KYC of Mr. Rajnish Jain with Bakliwal, Mr. Ajay Roongta was introducer of Mr. Rajnish Jain. He introduced Mr. Sunil Mehta to various stock brokers including Bakliwal where he was working as the Branch Manager from December 2006 to July 2008. During the same period, another noticee, Mr. Arun Sakpal was also working in the same branch of Bakliwal. During the investigation period, Mr. Arun Sakpal was trading through Mr. Ratnakar Shetty who was sub-broker of Arcadia. Mr. Ajay Roongta also knew Mr. Ratnakar Shetty and used to trade through him. 53. I note that the charge against Mr. Ajay Roongta is that he had provided funds to the Mehta Group entities viz; Mr. Narendra Sanghi and Mr. Arun Sakpal which they used to meet their pay-in obligations with regard to their trades in the scrip during the investigation period. It is admitted fact that Mr. Manish Mathur is the common friend of Mr. Ajay Roongta and Mr. Sunil Mehta. It is also admitted fact that Mr. Ajay Roongta and Mr. Narendra Sanghi are friends. It has been observed during investigations that Mr. Ajay Roongta had provided funds of `1,00,000/- on September 19/20, 2008 to Mr. Narendra Sanghi which was used by him towards his pay-in obligation for trading in the scrip of ASCL.

Mr. Ajay Roongta has claimed that the said amount was given to Mr. Narendra Sanghi as a friendly loan in lieu of which he had received 1625 shares of Net4India Ltd. from Mr. Narendra Sanghi. I note that the shares of Net4India Ltd. were transferred to the account of Mr. Ajay Roongta on April 22, 2009 which is almost seven months after the said amount was transferred by him to Mr. Narendra Sanghi. It is noted that the total value of 1625 shares of Net4India Ltd. on that day was `97,256.25/- as against the amount of `1,00,000/-. In view of the same, I find that this submission of Mr. Ajay Roongta is nothing but just an afterthought. 54. Mr. Ajay Roongta has also admitted that he knew Mr. Arun Sakpal as a fellow employee working in a branch of Bakliwal. Mr. Ajay Roongta had paid `1,00,000/- to Mr. Arun Sakpal which was utilized for meeting his pay-in obligation to Arcadia. However, Mr. Ajay Roongta has claimed that this was financial assistance to Mr. Arun Sakpal on humanitarian grounds and has not been returned till date. I note Mr. Ajay Roongta has made contradictory statements in this regard during investigations and during the present proceedings in as much as he has admitted in his statement before the IA that, out of the amount financed by him to Mr. Arun Sakpal, `20,000/- was returned in cash.

I, therefore, do not find any credence in the submissions made by Mr. Ajay Roongta with respect to the fund transfers to Mr. Arun Sakpal. 55. Mr. Ajay Roongta has further submitted that the amount funded by him was not significant enough to cause manipulation in the market and that he never knew that the funds are to be used by the concerned entities to meet their pay-in obligations. However, the basis of the instant proceedings is the fraudulent and manipulative trades of the entire Mehta Group entities and not the trades of the individual entities. In the instant case, Mr. Ajay Roongta knows all the parties to the transactions, has financial transactions with them and apparently funded the transactions of Mr. Arun Sakpal and Mr. Narendra Sanghi in the scrip of ASCL. Mr. Arun Sakpal and Mr. Narendra Sanghi to whom Mr. Ajay Roongta transferred funds to meet their pay‐in obligation were found to be executing synchronized and structured trades with the other entities of the Mehta Group entities. The complicity of Mr. Ajay Roongta in the whole manipulation can be observed from the funding transactions he had with Mr. Narendra Sanghi, Mr. Jitendra Jain, Ms. Anjana Mehta and Mr. Arun Sakpal during the investigation period.

The acts and conduct of Mr. Ajay Roongta squarely fall under the prohibitions contained in the provisions of regulation 4(1) and 4(2)(d) and (e) of the PFUTP Regulations. 56. I note that the charge against the Mehta Group entities have been leveled in the SCNs on the basis of synchronized/structured trades, circular trades, self-trades and reversal of trades. The issues for consideration are whether those trades led to creation of artificial volumes and price manipulation in the scrip of ASCL as alleged in the SCNs. The issues can be decided on examination of the facts and circumstances of the case and relevant regulations applicable thereon. It has been alleged in the SCNs that synchronized trades amongst the Mehta Group entities formed significant proportion to the total traded volume in the scrip of ASCL during the investigation period. In 50% to 99% of their daily executed trades, the time difference between buy and sell orders was less than one minute and 25% to 70% of their daily executed trades were perfectly synchronised and matched with regard to price, quantity and time (the time difference between buy and sell order was below one minute).

Instances of synchronized/structured trades amongst the Mehta Group entities as alleged in the SCNs are described in the following tables: Table 8: Instances of synchronized trades among the Mehta Group entities* (time difference less than less than one minute)

Trade Date Trade Trade Trade Trade Diff Buy Sell Buy Sell Buy Sell Buy Order Sell Order Time Order Order No Time Qty Price from Client Client Order Order Order Order Time Time diff Price qty diff (`) LTP(` Qty Qty Rate ` Rate ` (in diff ` ) sec) 10/10/08 1 10:09:21 500 1240 0 GG0 UD21 500 500 1240 1240 10:09:20 10:09:20 0 0 0 08 01 10/10/08 2 10:18:27 499 1238 -2 UD2 MDN 499 500 1238 1238 10:18:27 10:18:26 1 0 -1 101 010 10/10/08 36 11:16:31 999 1126 1 IB08 MDN 999 100 1126 1126 11:16:30 11:16:31 1 0 -1 A01 010 0 10/10/08 44 11:20:47 950 1121 1 IB08 USHA 950 950 1121 1121 11:20:46 11:20:45 1 0 0 A01 MEH1 13/10/08 41 10:37:00 480 1265 0 4014 UD21 480 500 1265 1265 10:37:00 10:37:00 0 0 -20

15/10/08 1 9:56:33 250 1290 - 369 UD21 250 500 1290 1290 9:56:31 9:56:33 2 0 -250 23.9 01 16/10/08 1 9:57:03 500 1300 20 2124 IB08A 500 500 1300 1300 9:57:03 9:57:03 0 0 0 01 20/10/08 60 11:00:40 350 1250 2 RC24 UD21 350 350 1250 1250 11:00:40 11:00:37 3 0 0 0 01 23/10/08 13 10:33:09 244 1276 -23 MU1 4014 250 244 1276 1276 10:33:09 10:33:08 1 0 6 1100 18 11/10/08 44 10:50:16 250 1318 6 3601 GG00 250 250 1318 1318 10:50:15 10:50:15 0 0 0 9 11/10/08 161 12:45:27 500 1324 15.5 3601 IB08A 500 500 1324 1324 12:45:27 12:45:27 0 0 0 01 11/10/08 162 12:45:42 700 1323 -1 3601 UD21 700 700 1323 1323 12:45:41 12:45:41 0 0 0 01

* Clients Code: RC240: Arun Sakpal, 26900469: Suresh Hanswal, 2124: Dilip Rathore, MB2504: Usha Mehta, MU1110018: Pradesh Nimawat, BV501: Rajnish Jain, UD2101: Sandeep Jain, IB08A01: Jitendra Jain, GG009: Sunil Mehta, 369: Bharat Jain, USHAMEH1: Usha Mehta, 4014: Meen Been Elastomers, 3601: Bhanwar Paliwal, GG008: Jitendra Jain, MDN010: Narendra Sanghi, 371: Suman Jain, 2754: Alpesh Dand and 3626: Manisha Mardia Table 9: Instances of synchronised/structured trades among the Mehta Group entities (perfectly synchronised and matched with regard to price, quantity and time)* Trade Trad Trade Trade Trade Diff Buy Sell Buy Sell Buy Sell Buy Order Sell Order Ti Order Orde Date e Time Qty Price from Clien Clien Order Order Order Order Time Time me Price r qty No (`) LTP t t Qty Qty Rate (`) Rate ` diff diff (`) diff (`) (in sec) 10/10/08 1 10:09:21 500 1240 0 GG008 UD2 500 500 1240 1240 10:09:20 10:09:20 0 0 0 101 10/10/08 45 11:21:0 300 1121 0 IB08 USH 300 300 1121 1121 11:21:01 11:21:01 0 0 0 1 A01 AME H1 10/10/08 51 11:27:1 1000 1120 1 MD IB08 1000 1000 1120 1120 11:27:09 11:27:09 0 0 0 0 N010 A01 13/10/08 87 11:40:1 185 1310 -1 4014 USH 200 200 1310 1310 11:40:15 11:40:18 03 0 0 8 AME H1 13/10/08 89 11:41:0 700 1313 - 4014 IB08 700 700 1313 1313 11:41:06 11:41:06 0 0 0 7 7.8 A01 13/10/08 23 14:39:5 700 1307 0 369 IB08 700 700 1307 1307 14:39:51 14:39:51 0 0 0 7 1 A01 05/11/08 28 10:42:5 500 1334 0 2124 UD2 500 500 1334 1334 10:42:53 10:42:53 0 0 0 3 101 05/11/08 18 12:23:3 500 1325 -1 RC2 IB08 500 500 1325 1325 12:23:38 12:23:38 0 0 0 5 9 40 A01 05/11/08 19 12:25:2 500 1328 -1 RC2 UD2 500 500 1328 1328 12:25:23 12:25:23 0 0 0 2 4 40 101 06/11/08 40 10:44:2 250 1321 -18 2690 2124 250 250 1321 1321 10:44:21 10:44:20 1 0 0 1 0469 06/11/08 43 10:45:2 250 1326 -5 2690 GG0 250 250 1326 1326 10:45:25 10:45:21 4 0 0

5 0469 09 06/11/08 59 11:19:2 250 1325 -12 2690 GG0 250 250 1325 1325 11:19:20 11:19:19 1 0 0 0 0469 09

*Clients Code: RC240: Arun Sakpal, 26900469: Suresh Hanswal, 2124: Dilip Rathore, MB2504: Usha Mehta, MU1110018: Pradesh Nimawat, BV501: Rajnish Jain, UD2101: Sandeep Jain, IB08A01: Jitendra Jain, GG009: Sunil Mehta, 369: Bharat Jain, USHAMEH1: Usha Mehta, 4014: Meen Been Elastomers, 3601: Bhanwar Paliwal, GG008: Jitendra Jain, MDN010: Narendra Sanghi, 371: Suman Jain, 2754: Alpesh Dand and 3626: Manisha Mardia. 57. It is noted that around 87.83% of the total market volume and 72.33% of the total number of trades were contributed by the synchronized trades amongst the Mehta Group entities and 44.95% of the total market volume and 30.65% of the total number of trades were contributed by the structured trades done by the Mehta Group entities. Further, the daily net trade in the scrip had remained insignificant during this period. The details of such volume contribution is enumerated in the following table: Table 10: Synchronised and Structured Trades by the Mehta Group entities as percentage of traded volume Date Market Number Synchronized Trades (C) Structured Trades (D) Net Net Close to Close to Volume of Trades Vol.

Vol. Close Close (A) (B) % of (ASCL) (Sensex) Volume As % Number As % Volume As % Number As % Total of A of B of A of B 10/10/08 75840 217 74086 97.69 168 77.42 36271 47.83 82 37.79 609 0.8 -12.86 -7.07 13/10/08 79751 270 78443 98.36 183 67.78 29621 37.14 62 22.96 989 1.24 18.77 7.42 14/10/08 76101 236 67677 88.93 145 61.44 19873 26.11 45 19.07 10 0.01 -0.64 1.54 15/10/08 75671 272 67253 88.88 241 88.60 21123 27.91 54 19.85 9 0.01 -1.02 -5.87 16/10/08 78110 232 77874 99.70 196 84.48 32478 41.58 77 33.19 67 0.09 -2.25 -2.11 17/10/08 84475 354 72551 85.88 231 65.25 25124 29.74 69 19.49 61 0.07 -0.6 -5.73 20/10/08 76012 332 75009 98.68 248 74.70 48361 63.62 152 45.78 221 0.29 6.49 2.48 21/10/08 76572 273 66303 86.59 222 81.32 41283 53.91 135 49.45 37 0.05 -0.62 4.5 22/10/08 76027 257 60469 79.54 180 70.04 36668 48.23 107 41.63 7 0.01 -2.82 -4.81 23/10/08 77647 233 57669 74.27 169 72.53 38175 49.16 109 46.78 16 0.02 0.87 -3.92 24/10/08 79267 273 75803 95.63 206 75.46 34310 43.28 90 32.97 128 0.16 -9.22 10.96 27/10/08 78049 321 58679 75.18 213 66.36 35037 44.89 100 31.15 N.A N.A 10.83 -2.2 27/10/08 16553 42 8900 53.77 18 42.86 7900 47.73 16 38.10 195 1.18 1.12 5.86 29/10/08 77436 272 59567 76.92 203 74.63 36363 46.96 124 45.59 40 0.05 0.98 0.4 31/10/08 76105 325 75828 99.64 297 91.38 37909 49.81 103 31.69 26 0.03 0.77 8.22 03/11/08 77837 334 63339 81.37 192 57.49 32852 42.21 95 28.44 201 0.26 -0.29 5.62 04/11/08 77532 289 53991 69.64 205 70.93 18787 24.23 45 15.57 28 0.04 -1.31 2.84 05/11/08 79442 333 69956 88.06 267 80.18 43387 54.61 115 34.53 43 0.05 0.36 -4.81 06/11/08 81835 319 76397 93.35 274 85.89 53942 65.92 153 47.96 9 0.01 -0.37 -3.81 07/11/08 80304 337 77240 96.18 262 77.74 58070 72.31 167 49.55 28 0.03 -0.97 2.36 10/11/08 78217 363 71420 91.31 275 75.76 51061 65.28 145 39.94 38 0.05 0.61 5.74 11/11/08 77834 342 50261 64.57 186 54.39 24577 31.58 72 21.05 10 0.01 -0.33 -6.61 12/11/08 58973 334 44575 75.59 160 47.90 14307 24.26 42 12.57 128 0.22 -1.44 -3.08 14/11/08 56468 358 53404 94.57 249 69.55 29285 51.86 83 23.18 30 0.05 -1.33 -1.58 17/11/08 55811 347 54553 97.75 214 61.67 24221 43.40 79 22.77 200 0.36 3.15 -1.01

18/11/08 55199 316 54241 98.26 253 80.06 23528 42.62 64 20.25 31 0.06 -0.42 -3.81 19/11/08 55106 304 54357 98.64 265 87.17 20264 36.77 63 20.72 18 0.03 0.02 -1.83 20/11/08 36045 246 34141 94.72 159 64.63 12647 35.09 44 17.89 105 0.29 -0.36 -3.68 Grand Total 1974219 8131 1733986 87.83 5881 72.33 887424 44.95 2492 30.65 3284 0.17 18.57 -19.73

58. It is noted that the individual synchronized/structured transactions of the entities in Mehta Group entities had also contributed substantially to the total traded volume in the scrip as described in the following table: Table 11: Details of individual trades of the Mehta Group entities Client Total Total % of % of Entity’s Buy Sell Entity’s Buy Qty Sell Buy Qty Sell Qty Total Total presence in Quantity in Quantity in presence in in Quantity Mkt Buy Mkt Number of synchronize synchroniz Number of structured in Qty Sell Qty Synchroniz d trades with ed trades structured trades structured during during ed trades the group with the trades with with the trades the the with the (Synchroniz group the group group with the period period group ed buy qty (Synchroni (buy side + (Structure group on the on the (buy side + as % of A) zed sell qty sell side) d buy qty (Structure exchang exchan sell side) as % of B) as % of d sell qty e ge A) as % of B)

Sunil Mehta 320224 320224 16.22% 16.22% 1653 291585 293568 831 152626 138319 (847+806) (91.06%) (91.68%) (419+412) (47.66%) (43.19%) Jitendra 335081 335081 16.97% 16.97% 1539 314338 302400 990 181642 165216 through (783+756) (93.81%) (90.25%) (518+472) (54.21%) (49.31%) Emkay Jitendra 55177 55183 2.8% 2.8% 203 52681 54785 121 29567 23760 through BP (104+99) (95.48%) (99.28%) (67+54) (53.59%) (43.6%) Equities Jitendra 1742 367019 357185 1111 211229 188976 Total 390258 390264 19.77% 19.77% (887+855) (94.05%) (91.52%) (585+526) (54.13%) (48.42%) Arun Sakpal 80131 80131 4.06% 4.06% 377 74514 71947 273 49337 46305 (193+184) (92.99%) (89.79%) (140+133) (61.57%) (57.79%) Suresh 62136 62136 3.15% 3.15% 458 60884 59712 254 40890 36449 Hanswal (239+219) (97.99%) (96.09%) (131+123) (65.81%) (58.66%) Pradesh 9265 9265 0.47% 0.47% 35 5265 9265 21 3265 5765 Nimawat (14+21) (56.83%) (100%) (9+13) (35.24%) (62.22%) Usha Mehta 143041 143041 7.25% 7.25% 419 120934 137759 239 49009 68528 (185+234) (84.54%) (96.31%) (92+147) (34.26%) (47.91%) Dilip 59242 59242 3% 3% 399 59038 58864 155 25371 28380 Rathore (216+183) (99.66%) (99.36%) (80+75) (42.83%) (47.91%) Sandeep Jain 354745 354751 17.97% 17.97 2074 337981 330257 1038 181431 164993 % (1145+929) (95.27%) (93.09%) (550+488) (51.14%) (46.51%) Bhanwarlal 57162 57162 2.9% 2.9% 367 56070 56087 129 21062 28522 Paliwal (161+206) (98.09%) (98.12%) (56+73) (36.85%) (49.90%) 59. From the above instances of synchronised transactions, I find that the Mehta Group entities had placed buy and sell orders for the same number of shares, for the same price and at almost the same time and thus had indulged in synchronized/structured transactions.

I further find that that these synchronised/structured transactions amongst the connected clients of the Mehta Group entities had contributed substantially to the daily traded volume in the scrip which was an illiquid one. 60. I further note that the Mehta Group entities indulged in synchronized circular transactions amongst themselves and also indulged in reversal of trades. Some of these trades of the Mehta Group entities is enumerated hereunder in the form of schematic diagram:- Schematic Diagram of Reversal/Synchronised/Circular Trading among the Mehta Group entities Date October 10, 2008 2000 Shares in 4 trades Trade Time- 12:29:20, 12:29:28, 12:29:39, 12:29:47 Jitendra Jain GG008 Usha Mehta USHAMEH1 Trade Time-13:19:19, 13:19:29

1000 Shares in 2 trades Trade Time-10:09:21, 10:35:20 Sandeep Jain Jitendra Jain GG008 UD2101

1000 Shares -2 Trades 1000 Shares -2 Trades Rajnish Jain Trade Time- 12:56:56, 12:57:27 B V 5 0 1 Trade Time – 12:12:31, 12:40:51

Date October 13, 2008 500 Shares in 1 trade Trade Time-12:42:16 Meen Been 4014 Narendra Sanghi MDN010

500 Shares -1 Trade 500 Shares -1 Trade Jitendra Jain Trade Time- 13:03:57 I B 0 8 A 0 1 Trade Time- 12:38:46

600 Shares in 1 trade Trade Time-15:01:00 Narendra Sanghi Bharat Jain 369 MDN010

600 Shares -1 Trade 600 Shares -1 Trade Jitendra Jain Trade Time- 15:03:57 Trade Time- 15:01:53 IB08A01

October 23, 2008 300 shares -1 Trade, Trade Time- 12:19:25 Arun Sakpal RC240 Meen Been 4014

300 Shares -1 Trade Trade Time- 12:22:04 300 Shares -1 Trade Trade Time- 13:58:01 Jitendra Jain 300 Shares -3 Trades IB08A01 Sandeep Jain UD2101 1044 9 Trade Time- 10:22:05, 12:41:57, 12:42:19

October 24, 2008 500 shares -1 Trade, Trade Time- 12:42:57 Pradesh Nimawat MU1110018 Manisha Mardia 3626

500 Shares -1 Trade Trade Time- 12:43:51 300 Shares-1 Trade Trade Time- 13:08:52 200 Shares -1 Trade Trade Time- 13:09:37 Sandeep Jain S u n il M e h t a G G 0 0 9 200 Shares -1 Trades UD2101 Trade Time- 15:24:35

October 27, 2008 250 Shares in 1 trade Trade Time- 15:02:23 Jitendra Jain Manisha Mardia IB08A01 250 Shares in 1 trade; Trade Time-15:02:44 3626

November 06, 2008 250 Shares in 1 trade Trade Time-10:40:28 Dilip Rathore 2124 Suresh Hanswal 26900469

250 Shares -1 Trade 250 Shares -1 Trade Trade Time- 10:45:25 Trade Time- 11:12:41 Sunil Mehta GG009

November 07, 2008 500 shares -1 Trade, Trade Time- 09:57:42 Alpesh Dand Sandeep Jain 2754 UD2101

500 Shares -1 Trade Trade Time- 12:00:14 500 Shares -1 Trade Trade Time- 09:57:12 Arun Sakpal RC240 Sunil Mehta GG009 500 Shares -1 Trades; Trade Time- 12:03:04

November 11, 2008

300 shares -1 Trade, Trade Time- 10:27:33 Suresh Sandeep Jain Hanswal UD2101 26900469

300 Shares -1 Trade Trade Time- 10:25:01 300 Shares -1 Trade Trade Time- 12:20:08 Bhanwarlal Paliwal Sun il Mehta GG009 3601 300 Shares -2 Trades Trade Time – 10:49:19, 10:49:49 61. From the transactions of the Mehta Group entities it is noted that the connected clients had indulged in reversal of trades on several occasions in the manner:- A>B>A which created artificial volume in the scrip as those trades did not result in transfer of beneficial ownership of shares traded by them. As such, these transactions were fictitious and manipulative. Such transactions adversely affect the market as held by the Hon'ble SAT in its order dated March 22, 2010 in Appeal no. 163/2009 - in the matter of Galaxy Broking Ltd. vs SEBI as under: ".............Reverse trades are fictitious and do not transfer the beneficial ownership in the traded scrip and they are meant only to increase the volumes on the screen of the exchange which generates investor interest. It is on account of such trades and increase in volumes that the lay investors get trapped.................. Synchronised, circular and reverse trades adversely affect the market particularly, the innocent investors." 62. Further, a clear pattern of circular trading is evident in the trades amongst the Mehta Group entities in the manner:- A>B>C>D>A or with similar pattern with different combination of the Mehta Group entities. In the instant case, the bulk of such transactions was amongst the Mehta Group entities with almost the same set of counterparties. Placing of the sell orders with same counterparties for same quantity of shares at the same price within nil or too negligible time difference repeatedly over a period of time are clear indication that those trades of the Mehta Group entities were synchronised/structured. In this regard, the following observations of the Hon’ble SAT in its order dated July 14, 2006 in the matter of Ketan Parekh vs. Securities and Exchange Board of India, is worth mentioning :

“.......... A synchronised transaction will, however, be illegal or violative of the Regulations if it is executed with a view to manipulate the market or if it results in circular trading or is dubious in nature and is executed with a view to avoid regulatory detection or does not involve change of beneficial ownership or is executed to create false volumes resulting in upsetting the market equilibrium. 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.” 63. In this case, I note that several synchronized transactions amongst these three connected entities of Mehta Group were in the nature of self–trade wherein one or the other entity was on either side of the transaction. Certain instances of such synchronised/structured self-trades are given in the following table:

Table 12: Some instances of self-trades of Mr. Sunil Mehta in the accounts of Ms. Usha Mehta and Mr. Jitendra Jain as his counterparty Trade Trad Trade Tr Trad Buy Client Sell Client Buy Sell Buy Sell Buy Sell orde Date e Time ad e Orde Order Orde Orde Order Order r No. e Price r Qty Qty r r Time Time time Qt (`) Rate Rate diff y (`) (`) (sec) 10/10/08 45 11:21:01 30 1121 IB08A01 USHAMEH1 300 300 1121 1121 11:21:01 11:21:01 0 0 15/10/08 129 12:56:10 85 1294 GG008 USHAMEH1 850 850 1294 1294 12:56:10 12:56:10 0 0 16/10/08 28 10:16:52 75 1250 USHAME IB08A01 750 750 1250 1250 10:16:51 10:16:51 0 0 H1 16/10/08 106 11:52:37 75 1262 GG008 USHAMEH1 750 750 1262 1262 11:52:37 11:52:37 0 0 17/10/08 46 10:48:12 50 1265 USHAME GG008 500 500 1265 1265 10:48:11 10:48:11 0 0 H1 17/10/08 138 11:58:52 15 1262 USHAME IB08A01 150 150 1262 1262 11:58:52 11:58:52 0 0 H1 20/10/08 29 10:28:51 50 1250 IB08A01 GG009 500 50 1250 1250 10:28:51 10:28:51 0 21/10/08 15 10:37:26 50 1325 IB08A01 GG009 500 500 1325 1325 10:37:25 10:37:25 0 0 21/10/08 16 10:37:36 20 1325 IB08A01 GG009 200 200 1325 1325 10:37:35 10:37:35 0 0 22/10/08 7 10:04:25 30 1332 GG009 IB08A01 300 300 1332 1332 10:04:25 10:04:25 0 0

Trade Trad Trade Tr Trad Buy Client Sell Client Buy Sell Buy Sell Buy Sell orde Date e Time ad e Orde Order Orde Orde Order Order r No. e Price r Qty Qty r r Time Time time Qt (`) Rate Rate diff y (`) (`) (sec) 22/10/08 21 10:35:27 50 1310 GG009 USHAMEH1 500 600 1310 1310 10:35:27 10:35:27 0 0 23/10/08 1 10:00:24 50 1275 IB08A01 GG009 50 50 1275 1275 10:00:23 10:00:23 0 18/11/08 243 13:38:50 54 1316 IB08A01 GG009 550 545 1316 1316 13:38:49 13:38:49 0 5 18/11/08 286 14:44:24 40 1307 GG009 IB08A01 400 410 1307 1307 14:44:23 14:44:23 0 0 18/11/08 287 14:44:27 10 1307 GG009 IB08A01 10 410 1307 1307 14:44:26 14:44:23 3 18/11/08 303 15:12:27 40 1307 GG009 IB08A01 400 400 1307 1307 15:12:26 15:12:26 0 0 18/11/08 207 14:01:43 49 1310 GG009 IB08A01 490 500 1310 1310 14:01:43 14:01:43 0 0 20/11/08 228 14:54:23 29 1315 IB08A01 GG009 300 299 1315 1315 14:54:23 14:54:23 0 9

64. The above self-trades clearly did not involve change in beneficial ownership of traded shares and were, therefore, illegal. It is relevant to mention that with regard to the nature and effect of self-trades the Hon’ble SAT, in the matter of M/s. Jayantilal Khandwala & Sons Pvt. Ltd. vs. SEBI (Appeal no. 24 of 2011 decided on June 8, 2011), has held that : “one cannot buy and sell shares from himself. Such transactions are obviously fictitious and meant only to create false volumes on the trading screen of the exchange.” 65. In this case, admittedly, the scrip in question is an illiquid one. It is noted that the synchronized/structured, circular, self-transactions amongst the connected entities were continuously and regularly repeated over a period of time during the investigation period. The pattern of synchronized/structured, circular, self-trading and reversal of trading amongst the Mehta Group entities in an illiquid scrip when Mr. Sunil Mehta with the aid of Mr. Manish Mathur and Mr. Ajay Roongta was himself operating the trading accounts of the involved parties and placing orders therein cannot be merely a coincidence. Apart from such trading, Mr. Sunil Mehta also funded Mehta Group entities for their pay-in obligations. Such transactions cannot be mere coincidence and cannot happen in a repeated manner over a long period of time amongst the same set of entities unless the counterparties are known to each other and there is meeting of minds amongst the trading entities. In the facts and circumstances of this case, I find that the transactions impugned in the SCNs were under a pre-meditated and well thought out manipulative device of Mr. Sunil Mehta acting in concert with Mr. Manish Mathur and other Mehta Group entities to create artificial volumes in the scrip of ASCL through manipulative, illegal and fictitious trades.

66. It further noted that the Mehta Group entities consistently placed order in the scrip at prices higher than the Last Traded Price (“LTP”). There were total 1050 such instances when the Mehta Group entities executed trades in the scrip at a price more than `5/- above the LTP as listed in the following table: Table 13: Instances of LTP increase by the Mehta Group entities Sl. No. Entity Number of Instances 1. Mr. Sunil Mehta 145 2. Ms. Usha Mehta 45 3. Mr. Sandeep Jain 181 4. Mr. Suresh Hanswal 24 5. Mr. Pradesh Nimawat 5 6. Mr. Arun Sakpal 17 7. Mr. Jitendra Jain 174 8. Mr. Bhanwar Paliwal 59 9. Mr. Dilip Rathore 53 67. Out of these 1050 instances, on approximately 703 occasions the Mehta Group entities executed trades in the scrip at a price above the LTP by more than `5/- in single order. Few instances of such trades by the Mehta Group entities are given in the following table: Table 14: Details of price increase by the Mehta Group entities Trade Trade Trade Trade Trade Diff Buy Sell Buy Sell Buy Sell Buy Order Sell Order Ti Order Orde Date No Time Qty Price from Clie Clie Order Order Order Order Time Time me Price r qty (`) LTP nt nt Qty Qty Rate Rate ` diff diff (`) diff (`) (`) (in sec) 10/10/08 14 10:35:2 500 1,170 44 GG0 UD2 500 500 1,170 1,170 10:35:19 10:35:20 1 0 0 0 08 101 10/10/08 34 11:15:1 950 1,125 35 MD UD2 1,000 950 1,125 1,125 11:15:10 11:15:10 0 0 50 1 N010 101 10/10/08 18 14:57:0 850 1,112 5.1 USH UD2 1,000 850 1,112 1,112 14:57:09 14:57:09 0 0 15 2 9 0 AME 101 0 H1 13/10/08 22 10:15:1 500 1,274 24 IB08 USH 500 500 1,274 1,274 10:15:16 10:15:16 0 0 0 7 A01 AME H1 13/10/08 22 14:34:3 750 1,318 5 IB08 369 750 750 1,318 1,318 14:34:36 14:34:35 1 0 0 4 6 A01 16/10/08 1 09:57:0 500 1,300 20 2124 IB08 500 500 1,300 1,300 09:57:03 09:57:03 0 0 0 3 A01 17/10/08 26 13:22:4 850 1,245 5 GG0 IB08 850 1,000 1,245 1,245 13:22:44 13:22:44 0 0 - 1 4 09 A01 15 0

Trade Trade Trade Trade Trade Diff Buy Sell Buy Sell Buy Sell Buy Order Sell Order Ti Order Orde Date No Time Qty Price from Clie Clie Order Order Order Order Time Time me Price r qty (`) LTP nt nt Qty Qty Rate Rate ` diff diff (`) diff (`) (`) (in sec) 20/10/08 14 12:37:0 279 1,330 5 RC2 UD2 279 279 1,330 1,330 12:37:04 12:37:04 0 0 0 9 4 40 101 22/10/08 23 10:36:1 585 1,324 14 4014 IB08 585 600 1,324 1,324 10:36:16 10:36:16 0 0 -15 7 A01 22/10/08 63 11:43:5 300 1,318 6 4014 RC2 300 300 1,318 1,318 11:43:54 11:43:55 1 0 0 5 40 23/10/08 11 10:32:2 250 1,299 22 GG0 MU1 250 250 1,299 1,299 10:32:25 10:32:25 0 0 0 6 09 1100 18 23/10/08 51 11:19:1 249 1,320 19. 4014 MU1 249 250 1,320 1,320 11:19:14 11:19:14 0 0 -1 4 90 1100 18 24/10/08 22 14:36:2 500 1285 25 MU1 369 500 500 1285 1285 14:36:22 14:36:21 1 0 0 3 2 1100 18 06/11/08 20 12:53:5 300 1,332 10 2690 369 300 300 1,332 1,332 12:53:58 12:53:58 0 0 0 5 9 0469 06/11/08 25 13:31:4 1 1,330 5 2690 UD2 3 1 1,330 1,330 13:31:49 13:31:46 3 0 2 9 9 0469 101 10/11/08 44 10:50:1 250 1,318 6 3601 GG0 250 250 1,318 1,318 10:50:15 10:50:15 0 0 0 6 09 10/11/08 60 10:58:3 475 1,329 7 3601 UD2 475 475 1,329 1,329 10:58:30 10:58:25 5 0 0 1 101 10/11/08 63 10:59:4 300 1,326 10 3601 IB08 300 300 1,326 1,326 10:59:46 10:59:47 1 0 0 8 A01 68. I note that by artificial and manipulated trades with huge volume and at a price significantly above the LTP, the Mehta Group entities pushed up the price of the scrip. One basic premise that underlies trading on the stock exchanges is that the clients conform to standards of transparency and ethical behavior and do not indulge in fraudulent, manipulative and unfair trade practices while dealing in securities. The very fact that the Mehta Group entities executed several trades in an illiquid scrip like ASCL at a price higher than the LTP and constantly placed orders above the LTP by as much as `5/- and above shows the manipulative intent of the Mehta Group entities to artificially manipulate the price of the scrip through fraudulent and manipulative trading in concerted manner.

69. In this case, the price of the scrip had increased by 18.57% when the Mehta Group entities were indulging in synchronized, structured, circular, reversal of trades and self-trades and consistently placing the orders over the LTP, while during the same period Sensex fell down by 19.73%. Relying upon the order dated October 10, 2010 of the Hon’ble SAT in the matter of Rakhee Trading Pvt. Ltd., Mr. Sunil Mehta, Mr. Suresh Hanswal and Mr. Pradesh Nimawat have contended that the price of a scrip can be influenced by innumerable factors and linking and co-relating the same to the Sensex is incorrect. I have perused the said judgment wherein the Hon'ble SAT has held that the assumption that the movement in NIFTY Options in Futures and Options, and Cash segments should be in harmony with the movement of NIFTY Index in cash segment is fallacious. In my view, reliance of these noticees on this judgment is misplaced as the charge of price manipulation on them has been leveled upon them on the basis of their manipulative transactions as discussed hereinabove and no assumption as observed in the said judgment has been drawn in the instant case.

70. In view of the facts and circumstances as mentioned above, I find that all the noticees except Mr. Bhanwar Paliwal have created artificial volume and manipulated the price of the scrip of ASCL and contravened the provisions of regulation 3 and 4 of the PFUTP Regulations as alleged in the respective SCN.

71. I note that based on the same set of facts and transactions as in the instant case monetary penalties were imposed against the noticees by the adjudicating officer vide his separate orders. While Mr. Jitendra Jain, Mr. Dilip Rathore, Mr. Ajay Roongta and Mr. Arun Sakpal did not file any appeal against the orders of the adjudicating officer, Mr. Sunil Mehta, Ms. Usha Mehta, Mr. Sandeep Jain, Mr. Suresh Hanswal, Mr. Pradesh Nimawat, Mr. Manish Mathur and Mr. Bhanwar Paliwal challenged the respective orders of the adjudicating officer before the Hon’ble SAT. Those appeals have either been withdrawn or dismissed by Hon'ble SAT on merits, except the one filed by Mr. Bhanwar Paliwal wherein the Hon’ble SAT has set aside the order of the adjudicating officer and exonerated him of the charges of involvement in the alleged manipulation in the ASCL scrip. I further note that none of the noticees have paid the monetary penalty imposed by the adjudicating officer and upheld by the Hon'ble SAT to date. I also note that SEBI has filed prosecution under section 24 of the SEBI Act against such entities.

72. As found hereinabove, the case against Mr. Bhanwar Paliwal is not made out and in view of facts and circumstances stated in SCN issued to Mr. Dilip Rathore and charge leveled against him, it is deemed appropriate not to issue further directions against him.

73. I am satisfied that the contraventions as found in this case are grave and have the potential to disturb the market integrity and disturb the fair, equitable and efficient functioning of the securities market. In the instant case, the proceedings under sections 11 and 11B of the SEBI Act have been initiated against the noticees in addition to the adjudication proceedings against them as the charges against the entities are grave and have larger implications on the safety and integrity of the securities market. In my view, for the serious contraventions as found in the instant case, monetary penalty alone would not be sufficient to safeguard the market integrity. In this regard, the following observations of the Hon’ble SAT in the order dated December 02, 2010, in the matter of Appeal no. 70 of 2010 – Yashraj Containeurs Ltd. vs SEBI are worth mentioning:

“.... we cannot resist observing that in view of the serious allegations made against the appellants which stand established during the course of the adjudication proceedings, the Securities and Exchange Board of India (for short the Board) should not have been content with initiating only adjudication proceedings against the appellants in which only a monetary penalty could be levied. This is a fit case where the Board should have considered initiating proceedings under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 for issuing appropriate directions against the appellants to protect the integrity of the market and the interests of the investors............................................................ This is, indeed a very serious market illegality/irregularity and, in our view, imposing a monetary penalty alone on the company and its promoters will not meet the ends of justice. We are constrained to make these observations because the lenient view taken by the Board does not, in our opinion, protect the integrity of the market and not even the interest of the investors which is its primary duty.

This kind of a lenient view will not be a deterrent for others and would send a wrong signal that the delinquent could continue with their nefarious activities by paying a monetary penalty.” 74. As mentioned hereinabove, in addition to their role and involvement in the manipulation of volume and price of scrip of ASCL during the investigation period that is subject matter of instant proceedings, Mr. Sunil Mehta, Mr. Jitendra Jain, Mr. Ajay Roongta, Mr. Suresh Hanswal, Mr. Manish Mathur and Ms. Usha Mehta have also been again found to have indulged in manipulative trading in the scrip of ASCL and eleven other scrips, namely, Allcargo, KSL, Mavens, Panoramic, Rasi, SIL, Ushdev, KBS, Lotus, MVL and APL. Vide order dated September 6, 2013 these noticees have been restrained by SEBI from accessing the capital market and prohibited from buying, selling or otherwise dealing in the securities market for varying periods. It has been further found that Mr. Manish Mathur, and Mr. Ajay Roongta, acting hand-in-glove with Mr. Sunil Mehta, had themselves directly traded and indulged in manipulative synchronized/structured trades in the scrip of ASCL and several other scrips like Allcargo, KSL, Mavens, Panoramic, and Ushdev during the other investigation period.

It is thus noted that the noticees in the instant case, who are also debarred by the order dated September 06, 2013, have repetitively indulged in manipulations in the scrip of ASCL and have also manipulated the volumes and prices of several other scrips. In my view, repeated fraudulent acts and delinquent behaviour of the erring noticees does not bode well for the integrity, orderly development and smooth functioning of the securities market. It, therefore, becomes incumbent to deal with contraventions, digression and demeanour of the erring noticees sternly and take appropriate actions for effective deterrence.

75. Considering the above, I, in order to protect the interest of investors and the integrity of the securities market, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 read with sections 11 and 11B thereof and regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 hereby restrain the following entities from accessing the securities market and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for the period as mentioned in the following table:

Table 15: List of noticees and directions Sl. No. Noticee PAN Period 1 Mr. Sunil Kumar Mehta ACEPM8838L 5 years 2 Ms. Usha Mehta ABQPM3248M 5 years 3 Mr. Jitendra Mannalal Jain AIMPJ2936J 5 years 4 Mr. Sandeep Jain AHIPJ9777E 3 years 5 Mr. Suresh Hanswal ABPPH6308A 5 years 6 Mr. Pradesh Bandhu Nimawat AEGPN3200B 5 years 7 Mr. Manish Mathur AIVPM4384J 5 years 8 Mr. Ajay Roongta AAVPR5584R 5 years 9 Mr. Arun Manohar Sakpal BMXPS3773C 5 years 76. With regard to the noticees who are undergoing debarment/restraint/prohibition pursuant to the order dated September 6, 2013, the directions in the said order and the directions in the instant order shall run consecutively. 77. A copy of this order shall be served on all recognized stock exchanges and depositories to ensure that the direction given in the above para are complied with. 78. This order shall come into force with immediate effect.

DATE: MAY 27th, 2014 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA