Order in the matter of Dhyana Finstock Ltd[SAT Appeal No.:241/2016]

UNDER SECTION 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN THE MATTER OF DHYANA FINSTOCK LIMITED

1. Dhyana Finstock Ltd. {hereinafter referred to as "Dhyana", "the company"} was incorporated on February 17, 1995. The equity shares of the company were listed on Ahmedabad Stock Exchange (ASE) in 1996. With effect from June 12, 2014, the equity shares of Dhyana are listed and admitted to dealings on the BSE in the list of "Trade for Trade" Group Securities. The first trade on BSE took place on June 13, 2014. 2. Bombay Stock Exchange Limited ("BSE") received complaints from several investors on July 28, 2015 stating that they have entered into buy trades in Dhyana on July 27, 2015 based on the stock tips received through SMS. The investors alleged price manipulation / fraud and requested to carry out investigation in the securities of the company and to withhold/annul/cancel the pay-out for trading carried out in the securities of the company on July 27, 2015. 3. On conducting an analysis in the said scrip for trades executed on July 27, 2015, BSE observed:  The investors complained that they bought Dhyana Finstock on July 27, 2015 based on stock tips received through SMS's and after that they cannot sell stock on the same day because of the scrip being in trade to trade segment. Further, on the next day the scrip opened at the lower circuit.  It was observed that, on July 27, 2015, large numbers of orders were placed in the system as compared to previous 5 trading days. Prima facie, buy orders placed were based on message appearing on website BSEbull.in & spam messages on "stockAxis.com" websites. Most of the sell orders were placed early in the morning trades.  On July 28, 2015, at www.stockaxis.com it was displayed that some unauthorized entity is using sender id "StAxis" and sent fraudulent investment advice to the investors.  Dhyana got listed in BSE on June 13, 2014 under Direct Listing mode from ASE. At that time equity capital of the company was ₹9.42 crore consisting of 94,26,100 equity Order in the matter of Dhyana Finstock Ltd.

shares of ₹10/- each which included 64,25,000 equity shares of ₹10/- each issued under a preferential allotment to 49 entities on November 30, 2013 i.e. prior to listing on BSE. These shares were under lock-in till November 30, 2014.

 On July 27, 2015, the market price of the equity shares of Dhyana moved from ₹.396.00 to ₹.405.70 i.e. an increase of 2.45 %. The applicable circuit filter on trading of the security was 5%.  Total traded volume on July 27, 2015 was 3,32,951 shares as compared to one month’s average of 10,714 shares.  Top 10 net sellers on July 27, 2015 accounted for 47.83% of total market volume. Top net buyers and sellers are mainly from Ahmedabad.  6 of the preferential allottees have altogether net sold 53,289 shares on July 27, 2015 which accounted for 16.72% of total market volume. 4. To BSE prima facie, the case appeared as that of misuse of stock exchange system to generate fictitious Long Term Capital Gains ("LTCG") where buyers were also lured to buy in the scrip to give exit to few shareholders/ preferential allottees. Hence, as a pre-emptive measure, pending investigation and in the interest of the investors, BSE proposed, inter-alia, to withhold the pay-out in the securities of the company for trading carried out on July 27, 2015 due on July 29, 2015. 5. The Open, High, Low and Close price of the securities of the company on July 27, 2015 is as follows: Co. Share Price Movement Sensex Movement Particulars Price Date Index Date Open 396 July 27, 2015 28117.65 July 27, 2015 High 406 July 27, 2015 28117.65 July 27, 2015 Low 396 July 27, 2015 27529.57 July 27, 2015 Close 405.7 July 27, 2015 27561.38 July 27, 2015 Volume 332951 shares NA

6. It was observed that on the first day of listing at BSE, i.e. June 12, 2014 equilibrium price was not established as there were no sell orders in the system. However, on June 13, 2014 equilibrium price was established at ₹. 251. As per data provided by ASE, there was no trading in the scrip on ASE during the last decade prior to listing on BSE.

7. An illustration of price/volume movement in the scrip of Dhyana since listing at BSE up to July 27, 2015 (herein referred as "examination period") is given below: Chart: I – Price Volume Movement in the scrip of Dhyana Total Volume Close Price 332951 450 350000 400 405.7 300000 350 360.9 250000 300 250 200000 200 150000 150 100000 100 50000 50 0 0 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 n 3 u 1 J - - n 8 u 2 J - - l 3 u 1 J - - l 8 u 2 J - - g u 2 A 1 - - g u 7 A 2 - - p 1 e 1 S - - p 6 e 2 S - - t c 1 O 1 - - t c 6 O 2 - - v o 0 N 1 - - v o 5 N 2 - - c e 0 D 1 - - c e 5 D 2 - - n 9 a 0 J - - n 4 a 2 J - - b 8 e 0 F - - b 3 e 2 F - - r a 0 M 1 - - r a 5 M 2 - - r p 9 A 0 - - r p 4 A 2 - - y a 9 M 0 - - y a 4 M 2 - - n 8 u 0 J - - n 3 u 2 J - - l 8 u 0 J - - l 3 u 2 J - -

8. It is observed from the chart above that the average traded volume in the scrip during the period after expiry of lock-in (on December 01, 2014) up to July 27, 2015 (herein after referred to as "Post Lock in period ") increased by 362% i.e. an increase from 5,277 shares to 24,376 shares compared to that during lock-in period (i.e. from June 13, 2014- November 30, 2014) (herein after referred to as "Lock in period "). 9. While the rise in the price of the Dhyana of 43%, from June 13, 2014 (first date of trading) to July 27, 2015 does not look significant, it needs to be seen in the backdrop of the high base of ₹251 at which it got listed despite no trading history in the last decade prior to listing on BSE. Further, the company did not earn any income from operations during FY 2014-15, entire income was on account of 'other income'. The company has no fixed assets in FYs ended 2013 and 2014. The PE ratio of the company was 2141.67 compared to industry PE of 24.13. During the examination period there was no material corporate announcement made by Dhyana. Thus, the price and volume in scrip of Dhyana during the examination period was not supported by its fundamentals or any other genuine factor and appeared very suspicious.

10. From the Annual Reports of Dhyana for FY 2012-13, 2013-14 and FY 2014-15, it was observed that the company is in the business to provide financial advisory and helping the business and corporate world to avail finance. Its financial highlights are given below: FY 2012-13 2013-14 2014-15 Revenue* 0.2 2.01 0 Other income* 1.13 11.3 16.76 PAT* 0.95 3.65 3.35 EPS 0.32 0.71 0.32 Fixed Assets* 0 0 0.09 *In ₹. million

11. As on March 31, 2014, the company had a share capital of 94,26,100 equity shares of ₹ 10 each. The promoter holding in the company at that time was 4,20,000 shares of ₹ 10 each representing 4.46% of the share capital. Prior to listing on BSE, the company had made preferential allotment of 64,25,000 equity shares of ₹10/- each on November 30, 2013 to 49 allottees aggregating ₹6.42 cr. These shares were locked-in for a period of 1 year in compliance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

12. As on March 31, 2015, the promoter and directors of the company are as under:

Table 1- Directors and Promoters of Dhyana as per annual report for FY 2014-15 Name PAN Designation Harshadkumar Patel AGMPP7021Q Non Executive Director Rajeshkumar Theophilbhai Christie AKAPC0179L Promoter-Executive Director Pinakin Dahyabhai Makwana APJPM5729E Non Executive Director Pritesh Patel AJIPP7200L Non Executive Director Priyanka Nrupesh Tripathi AHVPT3728L Non Executive Director Purvesh Nareshbhai Chauhan AHKPC9950A Non Executive Director Jaratal Mayaben Ashokbhai AOCPJ0760Q Promoter Ashokbhai G Jaratal AOCPJ0735R Promoter Priti Jayakarbhai Christian AQBPC1558Q Promoter Aneelkumar Albertbhai Patel ALOPP2057M Promoter Shaluben Nikeshbhai Shah BPCPS1154K Promoter

13. Immediate action was warranted to protect the interest of investors and also the integrity of the securities market considering:

a. The abnormal and unprecedented rise in volume on July 27, 2015, b. Several complaints from investors alleging receipt of SMS/Calls inducing them to buy shares of the company c. Prima facie, suspicion on these SMS being sent fraudulently by unauthorized entities d. Steep fall in the price of the scrip on the very next day touching the lower price band trapping the investors who bought on the previous day. e. Background of the company including no trading history at ASE, weak financials and suspicious price-volume pattern post listing at BSE. 14. Based on the above, SEBI acceded to the request of BSE to withhold the pay-out of securities and funds for the trades executed on July 27, 2015 as an immediate measure since the pay-out of securities and funds for July 27, 2015 was due on July 29, 2015. The purpose of the entire exercise was to ensure that the securities/funds were not disposed off by the alleged perpetrators of fraud/manipulation, if any. 15. As part of the inquiry, BSE, on 29th July 2015, conducted a surprise inspection at the registered office of M/s Dhyana Finstock i.e. 12/3, Ajanta Complex, 4th Floor, A Wing, Asram Road, Above Oswal Restaurant, Income Tax, Ahmedabad, Gujarat – 380 014, where it was observed that premises was closed.

However, at the entrance of the premises it was displayed that company also has corporate office on the 5th floor address on the same premises at No.24. On visiting at Room No. 24, it was observed that there was no name board displayed at the said premises. Mr. Rajeshkumar Christy, Director of the company who present at the time of visit informed that they are into financing activities. Further, there were five to six other persons sitting in the office. After discussion with BSE officials, Mr. Christy opened the registered office on the 4th floor. The registered office was empty premises without any furniture or office equipment no operation was found to be carried out from said registered office. From visit to the aforementioned sites it was revealed that company exists at the corporate office, however, they could not provide any documents to show that any operation activities are carried out from said office. 16. BSE vide its notice dated December 18, 2015, informed trading members of the exchange that - "It is noticed that there has been substantial increase in manipulation/abrupt movement in the prices of securities wherein common modus operandi is through the route of preferential allotment.

While the Exchange, from time to time, has taken requisite steps to detect and contain such instances, it is felt necessary that further pre-emptive measures should be adopted to curtail misuse of the Exchange’s system.

…………………….. In furtherance of aforesaid course of action and as a preventive measure, trading in the securities of companies shall be suspended satisfying the parameters of the Exchange which includes preferential allotment done in past few years; pursuant to the provisions of Rules, Bye-laws and Regulations of the Exchange (Bye-law 21)."

17. Dhyana was one of the companies which, was suspended by BSE pursuant to the said notice w.e.f. December 24, 2015. Subsequently, as a part of process of revocation of suspension of the company, BSE sought an Auditor certificate from Dhyana duly supported by the documents relied upon, with regard to the preferential issue(s) made by the company. The company submitted the Auditor Certificate and certain supporting documents w.r.t. preferential issue(s), however, these documents were found to be not as per requirement prescribed by the Exchange. Thereafter, despite repeated reminders to the company to submit all the requisite documents along with other additional documents, the company failed to submit the same. The matter of non-cooperation by Dhyana was discussed by BSE in their Disciplinary Action Committee (DAC) and referred the matter to SEBI for necessary action.

Analysis of Trade Order Log of July 27, 2015 of M/s Dhyana Finstock by BSE:

18. The analysis of examination of July 27, 2015 conducted by BSE revealed the following:  32 entities ("Net sellers") net sold 3,18,971 shares on July 27, 2015. The details are as under: Table 2- Details of Net Sellers on July 27, 2015 Sr Client name Net Weighted Total buy Qty bought Category (Preferential No sold Average qty during from Allottees Allottee/Co. Qty Sell Rate Examinati Post Lock in Connected/Exit on Period Period Provider/Others) 1 Ankit shah 30000 397 0 0 Preferential allottee 2 Jyotiben shah 16289 403.4 0 0 Preferential allottee 3 Shailesh 1750 400.2 0 0 Preferential Allottee & Baldevbhai connected / related to Patel the company 4 Harshaddkuma 1750 400.2 0 0 Preferential Allottee & r Baldevbhai connected / related to patel the company

Sr Client name Net Weighted Total buy Qty bought Category (Preferential No sold Average qty during from Allottees Allottee/Co. Qty Sell Rate Examinati Post Lock in Connected/Exit on Period Period Provider/Others) 5 Ramilaben 1750 400.2 0 0 Preferential Allottee & Baladevbhai connected / related to Patel the company 6 Baldevbhai 1750 400.2 1750 1750 Preferential Allottee, Shankerlal Patel connected / related to the company & Exit Provider 7 Jayshreeben 17576 400.35 122939 109836 Connected / related to Shah the company & Exit Provider 8 Gautamsingh 16379 401.65 77985 38277 Connected / related to Zala the company & Exit Provider 9 Birju 14910 402.77 20910 19910 Connected / related to Pravinchandra the company & Exit Sanghvi Provider 10 Hiral Manish 13650 403.58 26350 21950 Connected / related to the company & Exit Provider 11 Hiteshkumar 13000 402.75 48260 41333 Connected / related to Mahipatlal the company & Exit Patel Provider 12 Manish Shah 12675 403.72 32675 32675 Connected / related to the company & Exit Provider 13 Ronak 12620 403.27 51345 45420 Connected / related to Nayankumar the company & Exit Shah Provider 14 Rohitkumar 12157 402.89 44930 40320 Connected / related to Shantilal Shah the company & Exit Provider 15 Kiritbhai Shah 11160 401.12 113640 103113 Connected / related to the company & Exit Provider

Sr Client name Net Weighted Total buy Qty bought Category (Preferential No sold Average qty during from Allottees Allottee/Co. Qty Sell Rate Examinati Post Lock in Connected/Exit on Period Period Provider/Others) 16 Fancy 9905 400.1 10905 7765 Connected / related to Augustine the company & Exit Christian Provider 17 Taru Pallav 7500 403.49 241900 135413 Connected / related to Projects Private the company & Exit Limited Provider 18 Pranatpal 7500 404.47 313923 238368 Connected / related to Tradelink the company & Exit Private Limited Provider 19 Ankit 11000 404.5 40088 8130 Connected / related to Rajeshbhai the company & Exit Rajput Provider 20 Naranbhai 10000 402.38 63800 58400 Connected / related to Panchal the company & Exit Provider 21 Jignesh Shah 10000 402.84 17260 11000 Exit provider 22 Hareshkumar P 10000 402.6 121954 97001 Connected / related to Patel the company & Exit Provider 23 Chandrikaben 10000 401.48 66755 52510 Connected / related to Panchal the company & Exit Provider 24 Rinkeshkumar 10000 403.28 61520 50119 Connected / related to Panchal the company & Exit Provider 25 Gaurang 8550 404.5 41319 10782 Connected / related to Pathak the company & Exit Provider 26 Jayshree 8400 401.33 72530 62419 Connected / related to Kishorbhai the company & Exit Dholakia Provider 27 Kishorbhai 8400 401.33 56290 51950 Connected / related to Sonabhai the company & Exit Dholakiya Provider

Sr Client name Net Weighted Total buy Qty bought Category (Preferential No sold Average qty during from Allottees Allottee/Co. Qty Sell Rate Examinati Post Lock in Connected/Exit on Period Period Provider/Others) 28 Anilbhai 8400 400.3 35490 29290 Connected / related to Bhalabhai Baria the company & Exit Provider 29 Shalomiben 8400 400.3 32089 14754 Connected / related to Anilbhai Bariya the company & Exit Provider 30 Rajendra 11000 404.5 20085 0 Others/ Connected / Dahyalal related to the company Pathak 31 Niravkumar 1250 400.3 0 0 Others/ Connected / Surendrakumar related to the company Shah 32 Palakben 1250 400.3 1318 0 Others/ Connected / Niravkumar related to the company Shah Total 3,18,971 17,36,260 12,82,485 Out of the above 32 net sellers on July 27, 2015:  29 entities were observed to be connected to the company in this order and form part of "Dhyana group" (Table 3).  6 entities were preferential allottees.  24 Entities are Exit Providers to Preferential Allottees.  6 of the preferential allottees have altogether net sold 53,289 shares which accounted for 16.02% of total market volume.  Baldevbhai Shankerlal Patel, one of preferential allottee also bought 1750 shares on July 27, 2015 from Ankit Shah, who is also a preferential allottee.  Exit Providers are those who have bought shares from the preferential allottees during the period December 01, 2014- July 27, 2015 (Post lock in period). Order Log Analysis as on July 27, 2015: 19. On analysing the sell and buy orders on July 27, 2015 it was further observed that: a) Large numbers of orders were placed in the system as compared to previous 5 trading days. Total 3,157 buy orders placed for 5,48,327 shares and 308 sell orders were placed for 5,19,646 shares.

b) Majority of sell orders i.e. 70.92% of the total sell orders in the system were placed mainly during time patch 09:00 am to 10:30 am and 61.46% of total buy orders in the system were placed during time patch 11:00 am to 12:00 pm. c) Based on the various investor complaints, it appeared that buy orders placed were based on messages on www.bsebull.in & spam messages on StockAxis.com websites. Investors have also complained that they have received calls from certain numbers. The stock tips mentioned as 11 am to be the time for placing the buy orders. 20. On analyzing clients' KYCs & bank statement and trading details of net sellers on July 27, 2015, following entities were found to be connected / related to the Company. The particulars of the shortlisted group (hereinafter referred to as the "Dhyana group") and the basis of relationship/connection amongst them are as under: Table 3- Particulars of Shortlisted Entities Forming Part of Dhyana Group Sr Traded Qty. on 27 Jul 2015 Client Name Basis of Connection Category No Qty Bought Qty Sold Promoter- Executive Director of Dhyana Finstock Ltd, Rajeshkumar Theophilbhai Christie is a Parin shareholder cum Director in Parin 1 Infrastructure Infrastructure Pvt Ltd. Another Exit provider 960 Pvt Ltd director and shareholder of Parin Infrastructure Pvt Ltd, Priti Jayakarbhai Christian is a promoter of Dhyana Finstock Ltd. Mainak Comtrade Pvt Ltd & Parin Infrastructure Pvt Ltd have Mainak common Director viz. Priti 2 Comtrade Pvt Exit provider Jayakarbhai Christian. Further, Priti Ltd Jayakarbhai Christian is also Promoter of Dhyana Finstock Ltd. 8000 Preferential As per bank statement there are Allottee, Baldevbhai various fund transaction with connected / 3 Shankerlal 1750 Mainak Comtrade Pvt. Ltd.Also related to the Patel preferential Allottee. company & Exit Provider

Sr Traded Qty. on 27 Jul 2015 Client Name Basis of Connection Category No Qty Bought Qty Sold Preferential As per bank statement there are Shailesh Allottee & various fund transaction with 4 Baldevbhai connected / 1750 Mainak Comtrade Pvt. Ltd.Also Patel related to the preferential Allottee. company Preferential As per bank statement there are Harshaddkum Allottee & various fund transaction with 5 ar Baldevbhai connected / 1750 Mainak Comtrade Pvt. Ltd. Also Patel related to the preferential Allottee. company Preferential As per bank statement there are Ramilaben Allottee & various fund transaction with 6 Baladevbhai connected / 1750 Mainak Comtrade Pvt. Ltd. Also Patel related to the preferential Allottee. company Connected / As per bank statement there are Jayshreeben related to the 7 various fund transaction with Shah company & Mainak Comtrade Pvt. Ltd. Exit Provider 17576 Connected / As per bank statement there are Gautamsingh related to the 8 various fund transaction with 16379 Zala company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Birju As per bank statement there are related to the 9 Pravinchandr various fund transaction with 14910 company & a Sanghvi Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are related to the 10 Hiral Manish various fund transaction with 13650 company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Hiteshkumar As per bank statement there are related to the 11 Mahipatlal various fund transaction with 13000 company & Patel Mainak Comtrade Pvt. Ltd. Exit Provider

Sr Traded Qty. on 27 Jul 2015 Client Name Basis of Connection Category No Qty Bought Qty Sold Connected / As per bank statement there are related to the 12 Manish Shah various fund transaction with 12675 company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Ronak As per bank statement there are related to the 13 Nayankumar various fund transaction with 12620 company & Shah Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are Rohitkumar related to the 14 various fund transaction with 12157 Shantilal Shah company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are Kiritbhai related to the 15 various fund transaction with 11160 Shah company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Fancy As per bank statement there are related to the 16 Augustine various fund transaction with 9905 company & Christian Mainak Comtrade Pvt. Ltd. Exit Provider Mainak Comtrade Pvt Ltd and Taru Pallav Projects Pvt Ltd, have Taru Pallav common Director viz. Michael Connected / Projects James Christian. Further, another related to the 17 7500 Private director of Taru Pallav Projects company & Limited Pvt. Ltd. viz. Priti Jayakarbhai Exit Provider Christian also Promoter of Dhyana Finstock Ltd. Pranatpal Parin Infrastructure Pvt. Ltd. & Connected / Tradelink Pranatpal Tradelinks Pvt. Ltd. have related to the 18 7500 Private common Director viz. Hitesh company & Limited Chinubhai Shah. Exit Provider Connected / Ankit As per bank statement there are related to the 19 RAjeshbhai various fund transaction with 11000 company & Rajput Mainak Comtrade Pvt. Ltd. Exit Provider

Sr Traded Qty. on 27 Jul 2015 Client Name Basis of Connection Category No Qty Bought Qty Sold Connected / As per bank statement there are Naranbhai related to the 20 various fund transaction with 10000 Panchal company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are Hareshkumar related to the 21 various fund transaction with 10000 P Patel company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are Chandrikaben related to the 22 various fund transaction with 10000 Panchal company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are Rinkeshkuma related to the 23 various fund transaction with 10000 r Panchal company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / As per bank statement there are Gaurang related to the 24 various fund transaction with 8550 Pathak company & Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Jayshree As per bank statement there are related to the 25 Kishorbhai various fund transaction with 8400 company & Dholakia Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Kishorbhai As per bank statement there are related to the 26 Sonabhai various fund transaction with 8400 company & Dholakiya Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Anilbhai As per bank statement there are related to the 27 Bhalabhai various fund transaction with 8400 company & Baria Mainak Comtrade Pvt. Ltd. Exit Provider Connected / Shalomiben As per bank statement there are related to the 28 Anilbhai various fund transaction with 8400 company & Bariya Mainak Comtrade Pvt. Ltd. Exit Provider

Sr Traded Qty. on 27 Jul 2015 Client Name Basis of Connection Category No Qty Bought Qty Sold Others/ Rajendra As per bank statement there are Connected / 29 Dahyalal various fund transaction with 11000 related to the Pathak Mainak Comtrade Pvt. Ltd. company Others/ Niravkumar As per bank statement there are Connected / 30 Surendrakum various fund transaction with 1250 related to the ar Shah Mainak Comtrade Pvt. Ltd. company Others/ Palakben As per bank statement there are Connected / 31 Niravkumar various fund transaction with 1250 related to the Shah Mainak Comtrade Pvt. Ltd. company Total 8,960 2,62,682

21. The table below gives the profit earned by Dhyana Group entities who were net sellers on July 27, 2015 : Table 4- Profit made by Dhyana Group entities who net sold on July 27, 2015: Sr Client Name Allotted Gross Buy Gross Sell Net Net Profit No Qty Purchase Rate Sale Rate Purchase Sale 1 Jayshreeben #N/A 0 0 17576 400.35 0 17576 1047758.09 Shah 2 Gautamsingh #N/A 0 0 16379 401.65 0 16379 997694.03 Zala 3 Birju Sanghvi #N/A 0 0 14910 402.77 0 14910 924852.39 4 Hiral Manish #N/A 0 0 13650 403.58 0 13650 857806.95 5 Hiteshkumar #N/A 0 0 13000 402.75 0 13000 806078 Patel 6 Manish Shah #N/A 0 0 12675 403.72 0 12675 798271.5 7 Ronak Shah #N/A 0 0 12620 403.27 0 12620 789179.08 8 Rohitkumar #N/A 0 0 12157 402.89 0 12157 755557.55 Shah 9 Ankit Rajput #N/A 0 0 11000 404.5 0 11000 701360 10 Baldevbhai 150000 1750 397.5 3500 400.2 0 1750 687599.5 Patel*# 11 Shailesh Patel# 150000 0 0 1750 400.2 0 1750 682850 12 Harshaddkumar 150000 0 0 1750 400.2 0 1750 682850 Patel#

Sr Client Name Allotted Gross Buy Gross Sell Net Net Profit No Qty Purchase Rate Sale Rate Purchase Sale 13 Ramilaben 150000 0 0 1750 400.2 0 1750 682850 Patel# 14 Kiritbhai Shah #N/A 0 0 11160 401.12 0 11160 673829.64 15 Rinkeshkumar #N/A 0 0 10000 403.28 0 10000 625400 Panchal 16 Hareshkumar #N/A 0 0 10000 402.6 0 10000 618600 Patel 17 Naranbhai #N/A 0 0 10000 402.38 0 10000 616400 Panchal 18 Chandrikaben #N/A 0 0 10000 401.48 0 10000 607400 Panchal 19 Fancy Christian #N/A 0 0 9905 400.1 0 9905 587970.71 20 Gaurang #N/A 2450 397 11000 404.5 0 8550 563523 Pathak* 21 Dholakia #N/A 0 0 8400 401.33 0 8400 508939.2 Kishor 22 Dholakiya S #N/A 0 0 8400 401.33 0 8400 508939.2 23 Anilbhai Baria #N/A 0 0 8400 400.3 0 8400 500304 24 Shalomiben #N/A 0 0 8400 400.3 0 8400 500304 Bariya 25 Pranatpal #N/A 0 0 7500 404.47 0 7500 477990 Tradelink Private Limited 26 Taru Pallav #N/A 0 0 7500 403.49 0 7500 470632.5 Projects Private Limited 27 Rajendra #N/A 0 0 11000 404.5 0 11000 7.0136 Pathak 28 Niravkumar #N/A 0 0 1250 400.3 0 1250 74450 shah 29 Palakben Shah #N/A 0 0 1250 400.3 0 1250 74450 Total 17823846.35 # Allottees *Entities with squared off position 22. The following formula is used while calculating the profit of the net sellers as on July 27, 2015: 1. For allottees = (Weighted avg sell rate of respective allottee on Jul 27, 2015 - Rate of preferential allotment) * Net Sell qty on Jul 27, 2015.

2. For other entities = (Weighted avg sell rate on Jul 27, 2015 - Weighted avg rate during period Jun 13, 2014 to Jul 24, 2015) * Net Sell qty on Jul 27, 2015. 3. For entities which have squared off position = profit calculated as per point no 1 & 2 + {(weighted avg sell rate - weighted avg buy rate) * squared off qty on Jul 27, 2015}.

23. More than 100 investors have lodged complaints with the Exchange / SEBI, inter alia informing that they have entered into buy trades in the securities of the company based on messages appearing on website bsebull.in & spam messages on stockAxis.com websites. The complainants requested to withhold/ cancel the pay out for trades done on July 27, 2015.

24. Some of the examples of SMSs received are as under:

A) SMS Text from Bsebull.in and information provided by Complainants:

Quote: "I got number of SMS from BSEBull for last couple of days and said that buy this stock on 27/07/2015 @ 11: 00 AM and it will go/hit 4 continuous upper circuit".

 "Dear Customer, 100% Real Insider News Based Operator Calls For 15-20% Profit In 2 Days Holding In BSE cash segment. no advance pay - register on www.BSEBULL.in."

 "Good Evening! 8 Days To Go. BSE BULL OPERATOR Call Coming On 27th July 2015. We Have Started Calling, Soon You Will Get Call Of Our Executive. www.BSEBULL.in"

 "Our JACKPOT Call Coming In Just Few Minute So Be Ready To Trade. New Members, We Request You To Trade Honestly As Per Your Registered Quantity.www.BSEBULL.in."

 "If You Are Not Allowed To Buy DHYANAFIN(538450) then please call your broking house head office and buy from there, anyhow just buy it, don't miss.www.BSEBULL.in."

B) SMS Text from StAxis:

The SMS text received from StAxis read as under:

 "Premium HNI Call. Buy DHYANAFIN(538450) Above 400 With Stop Loss 396 For Intraday Target 415 And 480+ By Thursday(30 July) 100% Loss Recovery Call So Don''t Miss."

C) SMS Text from HBJCAP:

The SMS text received from HBJCAP read as under:

 "Premium HNI Call. Buy DHYANAFIN(538450) Above 400 With Stop Loss 396 For Intraday Target 415 And 480+ By Thursday(30 July) 100% Loss Recovery Call So Don't Miss."

 "JACKPOT Buy DHYANAFIN(538450) @400-405 With Stop Loss 396 For TARGET 480+ By Thursday(30 July) So Buy And Hold Till Thursday, Buy Quickly www.BSEBULL.in."

25. SEBI called for Call Data Records (CDR) from telecom operators about the entities who used the afore mentioned sender id's to send SMS's. Based on the information received it was found that:

 SMSs were sent to investors from July 18, 2015 to July 27, 2015 by using the sender id's BSEBull, StAxis and HBJCAP.

 The SMSs were aimed to entice the recipient of SMSs to buy the Dhyana Shares on July 27, 2015 at 11:00 A.M onwards.

 Multiple telecom operators were used to send the SMSs.

26. Based on information furnished by telecom operators, telemarketers and aggregators involved in the process of sending bulk SMSs the originator of SMS was found to be common in case of two telecom operators whose platform was used for sending SMSs. From the customer application form furnished to SEBI, the details of this entity are as under: Customer Name- Ravi Makwana Company Name- Shubh Investment Designation- Managing Partner Office Address - 117, Navcar Center, Waghavadi Road, Bhavnagar, Gujarat. Registered E-mail-info@bsebull.in 27. The inspection of the address of Shubh Investment furnished by telecom service provider revealed that there was no such address in Gujarat. Moreover, the phone number of the Shubh Investment as provided by telecom service provider was also not reachable. 28. Based on the information furnished to SEBI it was found that  Shubh Investment, as a bulk SMS sender used sender id's viz, "StAxis".  Sender Id "StAxis" was used by Adskaro (an unregistered telemarketer) on behalf of Opulent Investment Adviser Private Limited (Opulent), a registered investment adviser with SEBI (registration no INA000002462) using IP address 103.231.41.201.  Shubh Investment was not sending SMSs on behalf of Opulent.

 The IP address used by Shubh Investment to send SMSs was different as used by Adskaro to send the SMSs. Opulent had lodged a complaint with Cyber Cell, Mumbai for fake SMS being sent by using their sender id and hacking of their database of subscribed members. Further, they have also lodged a similar complaint dated 27 July 2015 with SEBI. It has been submitted by the telecom operator that same Sender Id can be used by two customers and it can also be used from two different IP addresses as happened in this case.

29. Findings of BSE show that the website www.bsebull.in was created only recently and same was shown to have been registered in Pakistan. The registrar of the website was found to be GoDaddy.com LLC. BSE has filed a complaint with the Cyber Crime Investigation Cell, Mumbai for fraudulent misuse of the term BSE. BSE has issued notice to the owner of the domain name at their email address infobsebull@gmail.com and to Godaddy, the registrar. SEBI also wrote letter to Cyber Crime Investigation Cell seeking information relating to websites-www.bsebull.in and www.stocktips.in.

30. On analyzing trading pattern of buyers on July 27, 2015, BSE found inter alia that except for 7 buyers all the other buyers (2088) had traded in the scrip Dhyana only on one day i.e. July 27, 2015 during the entire Examination Period.

31. Thus, since July 2015 several fraudulent SMS were circulated among investing public with the effect of inducing them to buy the shares of Dhyana. In the influence of SMS tips investors placed buy orders on July 27, 2015 at price ranging from ₹ 396-₹ 406 resulting in purchase of 3,18,971 shares from the net sellers.

Analysis of Trading during the period June 13, 2014- July 27, 2015 of M/s Dhyana Finstock by BSE: 32. On June 13, 2014, the first day of listing at BSE, during Special Pre Open Session (SPOS) conducted for the scrip, company related entity Gautamsingh Zala was first to place buy order for 1500 shares @ ₹. 251 which accounted for 38.46% of total buy order quantity placed above ₹ 251.

33. It was observed that within a short period of listing at BSE a significant increase in the price of the scrip was registered which continued during and after the period of lock in on the shares allotted to the preferential allottees. Considering the fact that prior to listing on BSE from ASE, no trading occurred in the scrip of Dhyana, the price volume behaviour of the scrip post listing at BSE appeared unjustified and the trading in the scrip was analyzed in two patches as detailed below.

34. On analysis of trading activity in the scrip, it was observed that during the Examination Period, Dhyana group entities were primarily involved in pushing the price up during Patch 1 (when the volume in the scrip was very low) by contributing to positive LTP and thereafter acting as buyer in Patch 2 in order to provide exit to preferential allottees/Company related entities and in the process creating artificial volume. The modus operandi during the period is discussed in subsequent paragraphs.

Patch 1: Lock in Period (from June 13, 2014 to November 28, 2014):

35. During Patch 1 which was also lock in period of preferential allotment, the price of the scrip opened at ₹ 251 and closed at ₹ 355. During this period, the scrip was traded with an average volume of 5277 shares per day and total volume of 5,75,235 shares in 109 trading days. It was observed that price of the scrip was influenced by certain entities belonging to Dhyana Group who were found to be net buyers during this period.

Table 5- Contribution to Volume by Dhyana Group Entities in Patch 1: Vol% - Net Trd Clnt Pan Client Name Net Trd Vol Gr Buy Value Vol/ Mkt Net AADCT4840M Taru Pallav Projects Pvt. Ltd. 69384 20987610 12.07% Pranatpal Tradelinks Private AAFCP5109D Limited 45839 15463886 7.98% BLSPP1179H Gaurang Pathak 31750 9523880 5.53% AAIPZ3605N GautamSingh Zala 20152 6030377 3.51% ACKPP8546L Rajendra Dahyalal Pathak 20085 6969744 3.50% AAGCM5750N Mainak Comtrade Pvt. Ltd. 11403 4006329 1.98% BFMPP8817G Hareshkumar P Patel 10150 3555200 1.77% Parin Infrastructure Private AAGCP6796D Limited 7410 2624550 1.29% Total 216173.00 69161576.00 37.625%

36. It was observed that in Patch I, out of a total of 269 instances of trades establishing new high price in the scrip, Dhyana group entities established new high price on 103 instances (38.29% to total instances). The positive LTP contribution of these entities was 33.27%. The details of contribution to price rise by these entities during Patch 1 are as under:

Table 6- Contribution to price rise in Patch 1 by Connected Entities:

% of Pos LTP Contri of Pos No. of Total the Client as a Contri Clnt Pan Clnt Name Instances Instances buyer (in Rs.) (in %) Pranatpal Tradelinks AAFCP5109D Private Limited 29 10.78 % 51 12.08% Taru Pallav Projects Pvt. AADCT4840M Ltd. 27 10.04 % 35.5 8.41% BLSPP1179H Gaurang Pathak 12 4.46 % 13 3.08% AAIPZ3605N Gautam Singh Zala 10 3.72 % 11 2.6% ASWPR1312C Ankit Rajeshbhai Rajput 11 4.09 % 15 3.55% ACKPP8546L Rajendra Dahyalal Pathak 9 3.35 % 10 2.37% BFMPP8817G Hareshkumar P Patel 5 1.86 % 5 1.18% Total 103 38.29 % 140.5 33.27 %

Patch 2: Post Lock in Period (From December 01, 2014 to July 27, 2015):

37. During Patch 2, the price of the scrip opened at ₹ 351 and closed at ₹ 405.7. During this period, the scrip was traded with an average volume of 24,376 shares per day and total volume of 39,97,754 shares in 164 trading days.

38. On analysis of trading activity during Patch 2, Dhyana group entities were found to be the net buyers to the preferential allottees and thereby created artificial demand for the supply of shares from preferential allottees.

39. It was observed that after release of lock-in, entities of Dhyana group had bought substantial shares of the Dhyana from the preferential allottees. A snapshot of such trading is as following:- Table 7: - Trading by entities of Dhyana Group and Preferential allottees Scrip Name Dhyana No. of shares sold by Preferential Allottees (A) 3167410 (A) as % of total shares allotted 60.62% No. of shares bought by Dhyana Group from Preferential Allottees 18,22,678

40. It was observed that 57.54% shares were bought by Dhyana Group from the preferential allottees. The details of counter parties for sale transactions by preferential allottees are provided in Annexure A.

41. It is observed that 39 preferential allottees made a collective profit of a ₹ 107.43 crores on a collective investment of ₹ 5.22 Crore, a whopping return of approximately 2060 % on their investment in a period of 20 months (including the lock in period of the shares allotted in the preferential allotment). This profit was obtained in a stock where the fundamentals/financials of the company do not justify the price. It is evident from the above analysis of Patch 2 that the entities of Dhyana Group provided a hugely profitable exit to the allottees. The profit/gain earned by the allottees during Patch 2 is given below:

Table: 8- Profit made by the Preferential Allottees: Sr. Name Shares Shares Sell Rate Gross Sell Profit in Cr No. Allotted Sold Value 1 Manish B Shah 150000 150000 356.963 53544450 5.20 2 Rupal M Shah 150000 150060 338.206 50751192.36 4.93 3 Kalpesh Ugarchand Gadhecha 200000 200000 362.904 72580800 8.70 4 Sanjay P Shah 150000 150000 347.284 52092600 5.06 5 Bhavini S Shah 75000 12000 360 4320000 0.42 6 Zahir Farooq Hawa 50000 29000 334.121 9689509 0.94 7 Farooq Kasam Hawa 50000 50000 347.458 17372900 1.69 8 Noorbanu Farooq Hawa 50000 50000 346.78 17339000 1.68 9 Azim Farooq Hawa 50000 50000 351.324 17566200 1.71 10 Kumar A 150000 18500 355 6567500 0.64 11 M Mathivanan 150000 66791 343.979 22974701.39 2.23 12 Raj Rattan 100000 100000 325.733 32573300 3.16 13 Uttam Chunnilal Jain 50000 50000 334.168 16708400 1.62 14 Reenu Jain 50000 50000 334.157 16707850 1.62 15 Sanjay Nandlalbhai Parelia 150000 2850 334.1 952185 0.09 Huf 16 Gunjan Rajendra Patel 150000 18595 351.883 6543264.385 0.64 17 Baldev S Patel 150000 61675 347.169 21411648.08 2.02 18 Shaileshkumar Baldevbhai 150000 31681 359.154 11378357.87 1.11 Patel 19 Harshadkumar B Patel 150000 75690 343.4 25991946 2.52 20 Ramilaben B Patel 150000 37669 360.149 13566452.68 1.32 21 Ankit Mahendrabhai Shah 150000 109000 352.969 38473621 3.74 22 Jyotiben Mahendrabhai Shah 450000 323289 348.501 112666539.8 10.94 23 Manharbhai Vallabhbhai 200000 200000 338.271 67654200 6.57 Vaghani 24 Mahesh V Vaghani 200000 200000 338.026 67605200 6.56 25 Haresh Bhikhabhai Vaghani 200000 200000 338.487 67697400 6.57

Sr. Name Shares Shares Sell Rate Gross Sell Profit in Cr No. Allotted Sold Value 26 Sanjay Bhikhabhai Vaghani 200000 200000 337.517 67503400 6.55 27 Chetna H Chandan 100000 77650 351.211 27271534.15 2.65 28 Pradipkumar Harakchand 100000 40650 354.534 14411807.1 1.40 Doshi 29 Dilipkumar Manilal Chokshi 300000 99800 338.763 33808547.4 3.28 30 Jayprakash Maneklal Patel 100000 100000 331.815 33181500 3.22 31 Ashwinkumar K. Patel 50000 9500 338.463 3215398.5 0.31 32 Rajesh Pukhraj Raka (Huf) 100000 41400 336.19 13918266 1.35 33 Mohit Airen 100000 36945 339.105 12528234.23 1.22 34 Alok Gupta 100000 37865 338.96 12834720.4 1.25 35 Gaurav Manoj Agrawal 100000 42250 338.81 14314722.5 1.39 36 Ashok Kumar Sethi 100000 43650 342.416 14946458.4 1.45 37 Kantilal Amulkhdas Vohera 100000 13200 363.273 4795203.6 0.47 38 Kantilal Amulkhdas Vohera 100000 1000 362.5 362500 0.04 Huf 39 Suresh Chinde Gowda 150000 36700 337.545 12387901.5 1.20 Total 5225000 3167410 1090209411 107.43

42. The four private limited companies which form part of Dhyana group are engaged in various kinds of businesses and their details are given in the following table:

Table: 9- Details of Private Corporate Bodies in Dhyana Group: Name of Private E-mail Share Capital (In Rs Shareholders Company Lakhs) Mainak Comtrade ssshah.ca@gma 1,00,000 (10,000 equity VishalBhai Vinodray Mistry Pvt. Ltd il.com shares of ₹ 10 each) Hitesh Hasmukhbhai Parekh Parin Infrastructure altus.fin@gmail 1,00,000 (10,000 equity Priti Jayakarbhai Christian Pvt. Ltd. .com shares of ₹ 10 each) Rajeshkumar Theophilbhai Christie Pranatpal Tradelinks altus.fin@gmail 1,00,000 (10,000 equity Sandeep Vinodchandra Dave Pvt. Ltd. .com shares of ₹ 10 each) Hitesh Chinubhai Shah Tarupallav Projects altus.fin@gmail 1,00,000 (10,000 equity Michael James Christian

Name of Private E-mail Share Capital (In Rs Shareholders Company Lakhs) Pvt. ltd. .com shares of ₹ 10 each) Priti Jayakarbhai Christian Note: Names appearing in bold are directors or promoters of Dhyana

43. The directors/shareholders of Mainak Comtrade Pvt. Ltd. and Taru Pallav Projects Pvt. Ltd. were found to be director/promoter of Dhyana. Further, the flow of funds among the afore mentioned private corporate bodies were observed from their bank statements and the same is given in the following chart:

Mainak Comtrade Pvt. Ltd.

Parin Taru Pallav Infrastructure Pvt. Projects Pvt. Ltd. Ltd. Ltd

P ranatpal Tradelinks Pvt Ltd

44. On analysis of bank statement of Dhyana group entities, it is found that the afore mentioned four private corporate bodies gave funds to other entities of Dhyana group. The pictorial presentation of fund flow is as follo wing:

Note: As given in the Table 3 Director of Taru Pallav Projects Pvt. Ltd. and Mainak Comtrade Pvt. Ltd. is Promoter in Dhyana Finstock Ltd. Parin Infrastructure Pvt. Ltd. shared common director with Dhyana Finstock Ltd.

45. Further, in some of the instances it was observed that Dhyana group entities/ Exit Provider received money and immediately transferred to their trading members to purchase shares of Dhyana from preferential allottees in order to give exit to them. The instances of the same are given below: A) Exit Provider- Taru Pallav Projects Pvt. Ltd.: Funds Received Funds Transferred Received from Date of Transferred to Date of Entity Receipt Amount Broker Transfer Amount Mainak Comtrade Bansal Finstock Pvt. Pvt. Ltd 01-May-15 2500000 Ltd 01-May-15 2500000 Mainak Comtrade Bansal Finstock Pvt. Pvt. Ltd 01-May-15 2000000 Ltd 01-May-15 2000000 B) Exit Provider-Pranatpal Tradelinks Private Limited: Name of Funds Received Funds Transferred Exit Receipt from Date of Transferred to Date of Provider Entity Receipt Amount Broker Transfer Amount Mainak Comtrade Pvt. Bansal Finstock Ltd 08-May-15 2000000 Pvt. Ltd 08-May-15 2000000 Mainak Pranatpal Mainak Comtrade Pvt. Tradelinks Comtrade Pvt. Ltd (DCB A/c) 2800000 Pvt. Ltd Ltd (Yes Bank Bansal Finstock A/c) 27-Jul-15 6300000 Pvt. Ltd 27-Jul-15 3500000 Parin Infrastructure Bansal Finstock Pvt. Ltd. 05-Feb-15 180000 Pvt. Ltd 05-Feb-15 180000

C) Exit Provider-Parin Infrastructure Private Limited: Name of Funds Received Funds Transferred Exit Receipt from Date of Transferred to Date of Amount Amount Provider Entity Receipt Broker Transfer Parin Mainak Infrastruct Comtrade Pvt. 07-Apr-15 2200000 Bansal Finstock 07-Apr-15 2200000 ure Pvt. Ltd Pvt. Ltd

Name of Funds Received Funds Transferred Exit Receipt from Date of Transferred to Date of Amount Amount Provider Entity Receipt Broker Transfer Ltd. Taru Pallav Projects Private 11-Mar-15 2600000 Bansal Finstock 11-Mar-15 2600000 Limited Pvt. Ltd Pranatpal Tradelinks Pvt. 29-Jan-15 200000 Bansal Finstock 29-Jan-15 1800000 Ltd Pvt. Ltd

D) Exit Provider-Gautamsingh Zala: Funds Received Funds Transferred Received from Date of Transferred to Date of Entity Receipt Amount Broker Transfer Amount Mainak Comtrade Prudent Broking Pvt. Ltd 16-May-15 1000000 Services Pvt. Ltd. 16-May-15 1000000 Vidisha Tradelinks Prudent Broking Pvt. Ltd. 05-Jun-15 1000000 Services Pvt. Ltd. 05-Jun-15 1000000 Parin Infrastructure Prudent Broking Pvt. Ltd. 09-Jun-15 1000000 Services Pvt. Ltd. 09-Jun-15 1000000 Taru Pallav Projects Prudent Broking Pvt. Ltd. 06-Jul-15 900000 Services Pvt. Ltd. 06-Jul-15 900000

E) Exit Provider-Jayshree Kiritkumar Shah: Funds Received Funds Transferred Received from Transferred to Date of Entity Date of Receipt Amount Broker Transfer Amount Mainak Comtrade Pvt. Prudent Broking Ltd 27-Jan-15 2000000 Services Pvt. Ltd. 27-Jan-15 2000000 Mainak Comtrade Pvt. Ltd 400000 Pranatpal Tradelinks Pvt. Prudent Broking Ltd. 23-Jul-15 600000 Services Pvt. Ltd. 23-Jul-15 1000000

F) Exit Provider Naranbhai J Panchal: Funds Received Funds Transferred Received from Transferred to Date of Entity Date of Receipt Amount Broker Transfer Amount Taru Pallav Projects Pvt. Ltd. 10-Mar-15 2000000 Jhaveri Securities Ltd. 10-Mar-15 2000000 Mainak Comtrade Pvt. Ltd 12-Mar-15 1000000 Jhaveri Securities Ltd. 12-Mar-15 1000000 Pranatpal Tradelinks Pvt. Ltd. 12-Jun-15 1500000 Jhaveri Securities Ltd. 12-Jun-15 1500000

46. From the copy of the special resolutions dated August 29, 2013, passed under section 81(1A) of the Companies Act, 1956 as submitted to Ahmedabad Stock Exchange (ASE) it is noted that Dhyana had disclosed to its shareholders and public that the purpose of aforesaid fund raising through preferential allotment was to meet following requirements:  To achieve long term plans of the company and to meet the funding requirements including but not limited to investment for meeting its business requirement.  To fund ongoing capital expenditure/or for the repayment of its long term debt an d working capital requirements in order to improve its project capacity and enhance infrastructure facilities. 47. From the details regarding use of funds received from preferential allotment as furnished by the company it was observed that funds received through preferential allotment were largely given to various companies as finance for business development and earning interest income and some part of proceeds were also used for purchase of furniture and fixtures and for hire purchase land and developments. Further, the copies of loan agreement with the parties to whom the funds have been given by Dhyana for various purposes were sought from the company. However, the company fail to submit any documentary evidence w.r.t. loan given as claimed by them. After, repeated reminders, it was submitted by Dhyana that they have not executed any loan agreements with the parties to whom they have provided loans.

48. It is matter of common knowledge that in a private placement, wherein allotment is made to select persons or group of persons on one -to-one basis, the issuer and their promoters/ directors have connection on account of acquaintance and familiarity. Thus, it is safely inferred that preferential allottees, Dhyana and its promoters/directors had prior understanding, arrangement and purpose. 49. From the above facts and circumstances it can reasonably be inferred that the preferential allottees acting in concert with Dhyana group have misused the stock exchange system to generate fictitious long term capital gains ("LTCG") so as to convert their unaccounted income into accounted one with no payment of taxes as LTCG is tax exempt. I prima facie find that the above modus operandi helped the concerned entities to pay a lower rate of tax on account of LTCG and helped them to show the source of this income to be from legitimate source i.e. stock market. 50. From the above, it prima facie also appears that the exit providers to preferential allottees, after buying shares from preferential allottees also dumped the shares to unsuspecting investors who were induced into buying the shares of Dhyana in the influence of SMS tips.

51. In the present matter, the facts and circumstances as brought out hereinabove, when seen holistically, indicate high preponderance of probability of manipulative intention. From the aforesaid observations of preliminary inquiry it is inter alia noted that :- a) The scrip was listed on BSE from ASE at a price of ₹ 251 which is not justifiable considering there was no trading in the scrip on during the last decade prior to listing on BSE and poor financials of the company.

b) Company connected entities was instrumental in establishing equilibrium price at BSE on June 13, 2014 in the SPOS. c) Prior to listing on BSE, the company was listed on ASE and had made preferential allotment of 64,25,000 equity shares of ₹.10/- each on November 30, 2013 which were under lock-in on till November 30, 2014. d) During lock-in period (Patch 1) Dhyana group entities contributed 33.27% to price rise of the scrip. e) Since December 01, 2014 i.e. after expiry of lock-in period of shares issued to preferential allottees the traded volume increased. The average volume during post lock-in period (patch 2) increased by 362% as compared to average traded volume during the lock-in period (patch 1).

f) The rise in price and volume during the examination period was not justified by any genuine factors. g) During Patch 2, out of the 49 preferential allottees, 39 allottees exited and sold 31,67,410 shares and have in aggregate made profit of ₹.107.43 crores. 6 Preferential Allottees sold 53,289 shares on July 27, 2015 itself and have made profit of ₹21.65 crores. h) Of the shares sold by preferential allottees, 18,22,678 shares representing 57.54% shares were bought by Dhyana Group. Of the total purchase (23,03,449 shares) bought by Dhyana group, 18,37,121 shares were bought by them from the preferential allottees representing 80%. i) Certain private corporate bodies connected to each other and to Dhyana were observed to have given funds to Exit providers. Some of these exit providers were immediately transferring the funds to trading members for purchase of shares of Dhyana. j) Since July 2015 several SMS were circulated among investing public to the effect of inducing them to buy the shares of Dhyana specially highlighting to make "Jackpot "profit on July 27, 2015. k) In the influence of SMS tips investors placed buy orders on July 27, 2015 at price ranging from ₹ 396-₹ 406 resulting in purchase of 3,18,971 shares from the net sellers. l) The 29 Net sellers who were part of Dhyana group have sold 2,62,682 shares on July 27, 2014 representing 82.35% of total shares bought by the investors in the influence of SMSs. m) The SMS sent and website BseBull.in used for sending SMS/call have been found to be fake/fraudulent in nature. Opulent Investment Adviser Private Limited (Opulent), a registered intermediary under SEBI (Investment Adviser) Regulations, 2013, to whom said SMS is attributed has denied sending the same. Further, the website BseBull.in have been found to be created recently only for the purpose of inducing investors to trade in the said scrip.

n) Based on information furnished by telecom operators, telemarketers and aggregators involved in the process of sending bulk SMSs the originator of SMS was found to be Shubh Investment, which was not traceable. Further, Ravi Makwana, was shown as the Managing Partner of Shubh Investment. At this stage no connection could be established between him and the ex-Director of Dhyana i.e. Pinakin Dahyabhai Makwana.

o) Thereby, ultimately shares acquired through preferential allotment and/or purchased to give exit to preferential allottees were sold to gullible investors by inducing them to buy shares through sending fraudulent/fake SMS. From July 28, 2015, the price of Dhyana started crashing. 52. Dhyana was listed on ASE till June 12, 2015 and I observe that there was no trading in the scrip during the period of listing at ASE. Further, a preferential allotment was made to certain entities prior to listing at BSE. At the time of listing at BSE the said shares issued to preferential allottees were under lock in. On expiry of lock in a spurt in the volume of Dhyana at BSE was observed and it is found that these preferential allottees sold their shares aggregating to 31,67,410 shares and making a profit of ₹107.43 Crore. Considering its prior trading history and its financials, the listing of Dhyana at a price of ₹ 251/- at BSE, and subsequent rise in price and volume especially in the light of role played by Dhyana Group in the price rise as brought out above, in my view, are reasonable grounds to conduct an investigation into the price and volume movement in the scrip of Dhyana during the period.

53. From the above facts and circumstances it is prima facie observed that the preferential allottees acting in concert with Dhyana group have misused the stock exchange system to generate fictitious long term capital gains ("LTCG") so as to convert their unaccounted income into accounted one with no payment of taxes as LTCG is tax exempt. I prima facie find that the above modus operandi helped the concerned entities to pay a lower rate of tax on account of LTCG and helped them to show the source of this income to be from legitimate source i.e. stock market. 54. Considering the above, I am of the prima facie view that the preferential allotment was used as a tool for implementation of the dubious plan, device and artifice of Dhyana group and allottees. One could argue that in the order to make LTCG, the preferential allottees in question could have bought in secondary market and waited for a year before selling the shares. In the instant case, probably the preferential allotment route was preferred over secondary market route because the share capital of Dhyana prior to preferential allotment was very small i.e. 30,01,100 equity shares (face value ₹ 10) to accommodate the required fictitious LTCG.

As such the capital expansion through preferential allotment provided much bigger source to the persons involved in terms of volume and price manipulation to facilitate the whole operation. 55. Since prior to the trading in its scrip during the Examination Period, Dhyana did not have any business or financial standing in the securities market, in my view, the only way it could have increased its share value is by way of market manipulation. In this case, it is noted that the traded volume and price of the scrip increased substantially only after Dhyana group and allottees started trading in the scrip. Dhyana group entities were trading in the scrip above the LTP and their trades resulted into artificial increase in price. Thus these groups of entities manipulated the price of the scrip during the Examination Period. I further note that, Dhyana group entities and allottees traded amongst themselves as substantiated by their trading details given in Table 7 and Annexure A. There was no change in the beneficial ownership of the substantial number of traded shares as the buyers and sellers both were part of the common group and were acting in league/concert to provide LTCG benefits to the allottees.

I prima facie find that Dhyana group and allottees used securities market system to artificially increase volume and price of the scrip for making illegal gains to and to convert ill-gotten gains into genuine one. 56. I am of the considered view that the schemes, plan, device and artifice employed in this case, apart from being a possible case of money laundering or tax evasion which could be seen by the concerned law enforcement agencies separately, is prima facie also a fraud in the securities market in as much as it involves manipulative transactions in securities and misuse of the securities market. The manipulation in the traded volume and price of the scrip by a group of connected entities has the potential to induce gullible and genuine investors to trade in the scrip and harm them. 57. It is relevant to note that in this case apart from misusing stock exchange mechanism for bogus LTCG the investors were lured to buy shares of Dhyana at an unjustified price with the bait of stupendous profits. I observe that large numbers of investors lodged complaints with the BSE / SEBI alleging that they have entered into buy trades based on certain messages from "StAxis".

I note that the said SMS id belongs to Opulent, a registered intermediary under SEBI (Investment Adviser) Regulations, 2013. I also note that Opulent in their clarification to SEBI, informed that the aforesaid advice was provided by some unauthorized entity using the SMS sender id "StAxis" and not provided by them. Opulent had lodged a complaint with Cyber Cell, Mumbai for fake SMS being sent by using their sender id and hacking of their database of subscribed members. Further, they have also lodged a similar complaint dated 27 July 2015 with SEBI. I further note that the investors also complained that they have entered into buy trades based on certain messages appearing on website bsebull.in & spam messages on stockAxis.com websites. Findings of BSE show that the website www.bsebull.in was created only recently and same was shown to have been registered in Pakistan. Since the name of BSE was used by BSEBull, BSE filed a complaint with the Cyber Crime Investigation Cell, Mumbai for fraudulent misuse of the term BSE. In this case, prima facie, a fraud was perpetrated by use of identity of a SEBI registered investment advisor, which shows the vicious intent behind the act.

58. The fraud acquires larger magnitude when seen in the circumstances as brought out hereinabove. The facts and circumstances discussed indicate a scheme, device and artifice to dump shares on July 27, 2015 in a pre-planned manner i.e.by sending fraudulent SMS to investors. This event completed the chain of events which started with the preferential allotment in Dhyana followed by listing at BSE and alleged price manipulation by Dhyana Group. Subsequent price crash in Dhyana also indicates presence of an artificial interest in the scrip during the period post listing at BSE which fizzled out with the dumping of shares completing the classic pump and dump chart of price and volume movement. In the facts and circumstances, I have reasonable ground to believe that net sellers who were either preferential allottees themselves or had purchased shares of preferential allottees at a high price during the examination period, may have availed the services of some unscrupulous elements to send the SMS and thereafter dumped the shares of Dhyana so acquired on unsuspecting investors by employing a scheme of sending fake SMS inducing them to buy in the scrip.

Further scrutiny/examination/investigation is required to establish the connection of SMS sender with the entities who have dumped the shares on July 27, 2015 and the role of company or any other entity in the scheme. 59. As such the acts and omissions of Dhyana group and allottees are ‘fraudulent’ as defined under regulation 2(1)(c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘PFUTP Regulations’) and are in contravention of the provisions of Regulations 3(a), (b), (c) and (d) and 4(1), 4(2)(a), (b), (e) (g) and (r) thereof and section 12A(a), (b) and (c) of the Securities and Exchange Board of India Act, 1992. In the process the net sellers who have been identified as "preferential allottees"/"exit providers"/ have made unlawful gains by employing a device, artifice scheme which is fraudulent in terms of regulation 2(1)(c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘PFUTP Regulations’) and are in contravention of the provisions of regulations 3(a), (b), (c) and (d) and 4(1), 4(2)(a), (b), (e), (g) and (r) thereof and section 12A(a), (b) and (c) of the Securities and Exchange Board of India Act, 1992. The said regulations are reproduced hereunder:- SEBI ACT Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control.

"12A. No person shall directly or indirectly— (a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder;

(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stock exchange; (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made there under;" PFUTP REGULATIONS, 2003 "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.

4. Prohibition of manipulative, fraudulent and unfair trade practices (1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely:- (a) indulging in an act which creates false or misleading appearance of trading in the securities market; (b) dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; ……………………………………………………………………………………… (e) any act or omission amounting to manipulation of the price of a security; ………………………………………………………………………………………. (g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security; …………………………………………………………………………………………… (r) planting false or misleading news which may induce sale or purchase of securities.

60. I also note that Dhyana did not cooperate with the BSE in respect of measures required for revocation of its suspension. Further, SEBI also found their attitude lackadaisical while seeking information in respect of the preferential allotment. I note that the directors of Dhyana during the relevant time, being in control of the day to day affairs of Dhyana had the knowledge of its acts and omissions. They were also under an obligation to ensure that the acts and transactions of Dhyana were not in violation of any of the applicable provisions of SEBI Regulations or other applicable laws. I, therefore, prima facie find that Rajeshkumar Theophilbhai Christie, Harshadkumar Patel, Pinakin Dahyabhai Makwana, Pritesh Patel, Priyanka Nrupesh Tripathi and Purvesh Nareshbhai Chauhan were responsible for Dhyana's acts and omissions in this case. 61. Niravkumar Surendrakumar Shah (PAN-APMPS5755B) and Palakben Niravkumar Shah (PAN- BKSPS8111B) though appearing to be connected to entities in Dhyana Group from analysis of their bank statements as brought out in Table 3, there is no evidence at this stage to suggest their direct involvement in the scheme.

Their possible role and involvement in the scheme in question need to be investigated further. 62. I am of the opinion that a detailed investigation of the entire scheme employed in this case is necessary to find out the role of Dhyana Group/ any other entity therein; role and connection amongst / with the company of the entities, including Dhyana Group/ net sellers; role and connection of the entities involved in sending SMS and calling investors to lure them to purchase shares of Dhyana with the promoters or directors of the company/net sellers/ Dhyana Group and the ultimate owners of funds used for manipulating the price of the scrip. Further, while SEBI would investigate into the probable violations of the securities laws, the matter may also be referred to other law enforcement agencies such as Income Tax Department, Enforcement Directorate and Financial Intelligence Unit for necessary action at their end as may be deemed appropriate by them. 63. I further note the sale proceeds of trades of July 27, 2015 amounting to `13,38,27,975/- are on account of prima facie fraudulent trades and the pay out with regard to those trades is at present withheld by BSE.

The whole scheme involving these transactions is under examination/investigation. I am of the view that, as a protective measure and in order to prevent the use of such sale proceeds in any manner by the sellers in such trades, the said sale proceeds should continue to be withheld by BSE till further orders. 64. In view of the foregoing, in order to protect the interest of investors and the integrity of the securities market, I, in exercise of the powers conferred upon me in terms of Section 19 read with Section 11(1), 11 (4) and Section 11B of SEBI Act, 1992, pending investigation and passing of final order in the matter, hereby direct as following:– a) BSE shall withhold the pay-out of funds for the trades executed on July 27, 2015 and keep the same in interest bearing escrow account. b) BSE shall release the securities to the buyers for the trades executed on July 27, 2015. c) Following persons/entities are restrained from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions:- S. NO. NAME OF THE ENTITY PAN COMPANY 1 Dhyana Finstock Limited AABCP8561B DIRECTORS AND PROMOTERS OF DHYANA 2 Harshadkumar Patel AGMPP7021Q 3 Rajeshkumar Theophilbhai Christie AKAPC0179L 4 Pinakin Dahyabhai Makwana APJPM5729E 5 Pritesh Patel AJIPP7200L 6 Priyanka Nrupesh Tripathi AHVPT3728L 7 Purvesh Nareshbhai Chauhan AHKPC9950A 8 Jaratal Mayaben Ashokbhai AOCPJ0760Q 9 Ashokbhai G Jaratal AOCPJ0735R 10 Priti Jayakarbhai Christian AQBPC1558Q 11 Aneelkumar Albertbhai Patel ALOPP2057M 12 Shaluben Nikeshbhai Shah BPCPS1154K PREFERENTIAL ALLOTTEES 13 Ankit Mahendrabhai Shah ANTPS6591E 14 Jyotiben Mahendrabhai Shah ANHPS8282Q 15 Manish B Shah AAIPM4715G 16 Rupal M Shah AAEPR5198J 17 Kalpesh Ugarchand Gadhecha ABTPG3143L 18 Sanjay P Shah AMIPS4672G 19 Bhavini S Shah AEVPB8830Q 20 Zahir Farooq Hawa AAAPH2776E 21 Farooq Kasam Hawa AAAPH2775H 22 Noorbanu Farooq Hawa AAAPH8271Q 23 Azim Farooq Hawa AAAPH2774G 24 Kumar A AAEPK1457D

S. NO. NAME OF THE ENTITY PAN 25 M Mathivanan AAEPM4368F 26 Raj Rattan ADXPR0831L 27 Uttam Chunnilal Jain AAFPJ3365A 28 Reenu Jain AEYPJ8903R 29 Sanjay Nandlalbhai Parelia Huf AATHS5168J 30 Gunjan Rajendra Patel BFPPP4718F 31 Manharbhai Vallabhbhai Vaghani ABOPV3650L 32 Mahesh V Vaghani AAWPV3196N 33 Haresh Bhikhabhai Vaghani ABPPV4917M 34 Sanjay Bhikhabhai Vaghani AABPV4486G 35 Chetna H Chandan AHGPC9842D 36 Pradipkumar Harakchand Doshi AAHPD4722B 37 Dilipkumar Manilal Chokshi AAKPC1264A 38 Jayprakash Maneklal Patel ABCPP1959N 39 Ashwinkumar K. Patel AGAPP9577F 40 Rajesh Pukhraj Raka (Huf) AAFHR7898G 41 Mohit Airen ABXPA1053F 42 Alok Gupta ACHPG2799K 43 Gaurav Manoj Agrawal AQMPA9216A 44 Ashok Kumar Sethi AGTPS5503P 45 Kantilal Amulkhdas Vohera ACHPV3687R 46 Kantilal Amulkhdas Vohera Huf AAFHK8045N 47 Suresh Chinde Gowda AHVPG4424G DHYANA GROUP 48 Parin Infrastructure Pvt Ltd AAGCP6796D 49 Mainak Comtrade Pvt Ltd AAGCM5750N 50 Baldevbhai Shankerlal Patel ACIPP5953F 51 Shailesh Baldevbhai Patel AOEPP2788Q 52 Harshaddkumar Baldevbhai Patel AOKPP9234R 53 Ramilaben Baladevbhai Patel AUHPP8735C 54 Jayshreeben Shah BQMPS6009Q 55 Gautamsingh Zala AAIPZ3605N 56 Birju Pravinchandra Sanghvi ALLPS1169E 57 Hiral Manish AZQPM9451N

S. NO. NAME OF THE ENTITY PAN 58 Hiteshkumar Mahipatlal Patel APOPP1463R 59 Manish Shah BFOPS3849R 60 Ronak Nayankumar Shah FKQPS0981B 61 Rohitkumar Shantilal Shah EHJPS4683H 62 Kiritbhai Shah AWRPS2401E 63 Fancy Augustine Christian AOSPC1308R 64 Taru Pallav Projects Private Limited AADCT4840M 65 Pranatpal Tradelink Private Limited AAFCP5109D 66 Ankit Rajeshbhairajput ASWPR1312C 67 Naranbhai Panchal AMQPP0054P 68 Hareshkumar P Patel BFMPP8817G 69 Chandrikaben Panchal BXQPP2080R 70 Rinkeshkumar Panchal BYCPP1543E 71 Gaurang Pathak BLSPP1179H 72 Jayshree Kishorbhai Dholakia AMLPD5973G 73 Kishorbhai Sonabhai Dholakiya ANHPD1507F 74 Anilbhai Bhalabhai Baria BWMPB2794M 75 Shalomiben Anilbhai Bariya BWMPB3400Q 76 Rajendra Dahyalal Pathak ACKPP8546L

65. This order shall come into force with immediate effect. BSE is directed to ensure that all the above directions are strictly enforced. 66. The persons/entities against whom this Order is passed may file their objections, if any, within twenty one days from the date of this order and, if they so desire. They may also indicate in their replies whether they wish to an opportunity of personal hearing before the Securities and Exchange Board of India, on a date and time to be fixed on a specific request, received from the said persons/entities.

Sd/- Date: June 1, 2016 RAJEEV KUMAR AGARWAL Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Annexure A- Shares purchased by Dhyana Group as Exit Provider/Counterparties to Preferential Allottees As a % of sales Qty bought from by Pref. Counterparty Name Preferential Allottees allottees Mainak Comtrade Pvt. Ltd. 327268 10.33 Pranatpal Tradelink Private Limited 238368 7.53 Parin Infrastructure Private Limited 223925 7.07 Taru Pallav Projects Private Limited 135413 4.28 Jayshreeben Kiritkumar Shah 109836 3.47 Kiritbhai Shantilal Shah 103113 3.26 Hareshkumar P Patel 97001 3.06 Dholakia Jayshree Kishor 62419 1.97 Naranbhai J Panchal 58400 1.84 Chandrikaben Naranbhai Panchal 52510 1.66 Kishorbhai Sonabhai Dholakiya 51950 1.64 Rinkeshkumar N Panchal 50119 1.58 Ronak Nayankumar Shah 45420 1.43 Hiteshkumar Mahipatlal Patel 41333 1.30 Rohitkumar Shantilal Shah 40320 1.27 Gautamsingh Shivsingh Zala 38277 1.21 Manish Shah 32675 1.03 Anilbhai Bhalabhai Baria 29290 0.92 Hiral Manish 21950 0.69 Birju Pravinchandra Sanghvi 19910 0.63 Shalomiben Anilbhai Bariya 14754 0.47 Gaurang Pathak 10782 0.34 Ankit Rajeshbhai Rajput 8130 0.26 Fancy Augustine Christian 7765 0.25 Baldevbhai Shankerlal Patel 1750 0.06 Total 1822678 57.54