Order in the matter of Gemstone Investment Limited[SAT Appeal No.:283/2016]

WTM/RKA/EFD-DRA-II/06/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under sections 11(4) and 11B of the SEBI Act, 1992 in the matter of Gemstone Investments Ltd. – in respect of Sl. No. Name of Entity PAN 1. Mr. Bharat Shantilal Thakkar AAZPT9542R 2. Mr. Bipin Jayant Thaker ABYPT4984H 3. Mr. Kishore Chauhan AFPPC9703G 4. Mr. Bhavesh Pabari AKGPP8679N 5. Mr. Prem Mohanlal Parikh ALHPP3489N 6. Mr. Hemant Madhusudan Seth ANOPS8607E 7. Ms. Mala Hemant Seth AZXPS0694J 8. Mr. Ankit Sanchaniya BLNPS3316L 9. Spectrum Chemicals Ltd. AAICS2382L 10. Mr. Anand Kalu Marathe AKWPM0699M 11. Mr. Rajesh Pravin Bhanushali AABPB2744H 12. Mr. Amar Premchand Valmiki AAUPW9971A 13. Mr. Samir Sureshbhai Shah AGEPS0157L 14. Mr. Jignesh C. Shah AIPPS9125H 15. Mr. Pandya Hardik M. ARJPP6330Q 16. Mr. Shalin Kiritkumar Parikh AJAPP5421B 17. Mr. Bhupesh Rathod AACPR3785K 18. Mr. Bipinkumar Gandhi AJHPG6989J

1. Gemstone Investments Ltd. (GIL) is a company listed on Bombay Stock Exchange Limited ("BSE"). Securities and Exchange Board of India ("SEBI"') initiated investigation into the trading in certain scrips including GIL pursuant to the detection of a huge rise in the traded volumes and/or price of the shares of these companies during the years 2008, 2009 and 2010. 2. Upon analysis of the trading activity in the above scrips, it was prima facie observed that certain entities had indulged in creating artificial volume by trading among themselves, in a synchronized manner and also carrying out off-market transfers among themselves for the Order in the matter of Gemstone Investments Ltd.

purpose of meeting settlement obligations of another, thus contributing also to the price rise in these scrips. 3. In view of the above, in order to protect the interests of investors and to preserve the safety and integrity of the market, SEBI passed an interim order dated February 02, 2011 restraining 39 persons/entities including Mr. Bharat Shantilal Thakkar, Mr. Bipin Jayant Thaker, Mr. Kishore Chauhan, Mr. Bhavesh Pabari, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan Seth, Ms. Mala Hemant Seth, Mr. Ankit Sanchaniya, Mr. Amar Premchand Valmiki, Mr. Samir Sureshbhai Shah, Mr. Pandya Hardik M. and Mr. Bipinkumar Gandhi from accessing the securities market and further prohibited them from buying, selling or dealing in securities in any manner whatsoever, till further directions. 4. SEBI initiated an investigation relating to buying, selling or dealing in the shares of the scrip of GIL inter alia to ascertain the violation of the provisions of the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the Rules and Regulations made thereunder. The period of investigation was taken as January 06, 2009 to December 30, 2009 (hereinafter referred to as "investigation period").

Investigation inter alia revealed that – i. Certain connected/related entities had traded significantly in the scrip of GIL during 2008, 2009 and 2010. The relationship/connection between the entities was determined based on at least one of the following parameters: (a) Similarities in the particulars/details in the KYC documents such as common telephone number, addresses, e-mail addresses, etc., (b) Trading activity in terms of buy/sell among the group and the frequency and off-market transfers between them, (c) Fund transfers between the members of the group. ii. On the basis of the said criteria, one group was identified as the "Pabari-Parikh" group ("PP group"). The members of the PP group and the basis of relationship/connection amongst them are as follows: Table 1: Relationship among the PP group entities Sl. No. Client Name KYC Relation Fund Share Movement movement through off market 1. Ra jesh Pravin Entity at sl. nos.1, 16 & - - Bhanushali Narendra Ganatra have common office address. 2. Bh upesh Rathod Introduced entities at sl. With entity at -nos.22, 19, 16, 9 for trading sl.

No. 30 a/c and knows entity at sl. No. 28 3. Sp ectrum Common address as that of - - Chemicals Pvt. Khodiyar Industry (Ramniklal Ltd Patel) who has same address as that of entity at sl.no. 15 who has share and fund movement with entity at sl. no. 16. 4. Am ar Premchand - With entities at With entities at Walmiki sl. Nos. 12, 17, sl. Nos. 16, 7, 16, 11, 18, 26, 11, 12, 24, 27 25, 5. Bh arat Shantilal Entity at sl. no. 16 is his With entities at With entities at Thakkar nephew. sl. nos. 16, 19, sl. nos. 16, 12. Same address with entity at sl. 30. no.16. Entity at sl. no. 16 is his nominee. Joint a/c with entity at sl. no. 16. Business relations with entities at sl. nos. 6, 8, 9, 19, 22, 30, 31. 6. Bi pin Jayant Same Tel. no. with entity at sl. With entity at With entities at Thaker no. 16. sl. no. 16. sl. nos. 8, 16, 19, Business relations with entities 22. at sl. nos. 5, 8, 9, 16, 19, 22, 30, 31. 7. N avneetlal Entity at sl. no. 26 introduced - With entities at Jeevanlal Gandhi him for trading a/c. sl. nos. 4, 11, 20, 21, 24 8. Ch irag Rajnikant Same Tel. no. with entity at With entities at With entity at sl.

Jariwala sl.no.16. sl. nos. 16, 22. no. 6 Sl. no. 16 is his uncle. Business relations with sl. nos. 5, 6, 9, 16, 22, 30, 31. 9. K ishore Chauhan Join a/c with entity at sl. no. 16 With entities at With entities at Entity at sl. no. 16 & 22 are sl. nos. 16, 19, sl. nos. 16, 19, witness for demat a/c. 22. 22, 31. Business relations with entities at sl. nos. 5, 6, 8, 16, 19, 22, 30. 10. M anish Suresh - - - Joshi 11. Sa mir Sureshbhai Entity at sl. No. 7 is his father. - With Entities at Shah Entities at sl. nos. 6, 13, 14, sl. nos. 4, 7, 14, 21, 23, 25, 24 are his clients. 21, 23, 24, 25, Entities at sl. Nos. 4, 12, 15, 26, 27 26, 17, are Paras Chaplot's friend. Entity at sl. no 11 came in touch with Paras Chaplot as a stock broker. 12. M anoj Bhandari - With entities sl. With entities at nos. 4, 11, 26. sl. nos. 4, 5, 16, 30, 9 13. Jig nesh C. Shah Entity at sl. no. 26 introduced - -him for trading a/c. Entity at sl. No. 26 has off market transactions with entities at sl. No. 16 & 22. 14. Sh alin Kiritkumar Entity at sl. no. 11 introduced - With entity at sl. Parikh him for trading a/c and sl.

No. no. 11 11 entered into off market transactions with sl. No. 4 & sl. No. 4 has off market transactions with sl. No. 16.

15. Bi pinkumar - - With entity at sl. Gandhi no. 16. 16. Bh avesh Pabari Entity at sl. no. 5 is his uncle & - With entities at entity at sl. no. 31 is his brother sl. nos. 4, 12, 25, in law. 19, 22, 5, 6, 30, Entity at sl. no. 19 is cousin of 31, 15. entity at sl. no.16 Entities at sl. no. 16 & 22 both directors of Rajnandi Yarns Pvt. Ltd.

Share common Tel. no. with sl. nos. 30, 31, 6. Entity at sl. no. 2 introduced him for trading a/c. Business relations with entities at sl. nos. 6, 8, 9, 19, 22, 28, 30. 17. An and Kalu Entity at sl. no. 4 is witness in With entities at - Marathe nomination form. sl. No. 19, 26, 4. 18. Re kha Bhandari Common contact no. as that of With entities at With Entity at Sunil Bhandari. Sl. Nos. 26, 4. sl. No. 4 Entity at sl. no. 18 is the wife of Sunil Bhandari. 19. Pr em Mohanlal Entity at sl. no. 19 is cousin of With entities at With entities at Parikh entity at sl. no.16. sl. nos. 16, 22, sl. nos. 16, 22, 9, Common email with sl. 30, 19 9. 5, 6, 22, 30, 31. & 31. Entity at sl. no. 22 is nominee of sl. no.19. Business relations with entities at sl. nos. 5, 6, 8, 9, 16, 22, 30, 31. 20. D evendra Suresh Has traded with entities at sl. - - Gupta no. 2, 5, 19 & 30, who all have off market share and fund movement with entity at sl. no. 16. 21. N areshbhai Entity at sl. no. 21 is the client - - Devabhai Patel of Samir Shah, who has off market transfer with Amar Premchand Walmiki and who in turn has off market transfer with sl. no. 16. 22. H emant Entity at sl. nos. 16 & 22 both With entities at With entities at Madhusudan directors of Rajnandi Yarns sl. nos. 16, 19, sl. nos. 16, 19, 9, Sheth Pvt. Ltd. 9. 28, 30, 31, 6, 26. Same email with sl. no. 31. Business relations with entities at 2, 5, 19, 30, 31, 6, 8, 9, & sl.

no. 28 is his wife & entity at sl. no. 29 is his nephew. 23. As hokkumar Entity at sl. no. 11 introduced With entities at With entities at Bhikhalal Parmar him for trading a/c. sl. nos. 26, 11, sl. nos. 11, 25, He knows entity at sl.no. 11 26, who is a stock broker.

24. M anisha Entity at sl. No. 4 entered into - With entities at Navneetlal off market transactions with sl. nos. 4, 11, 7, Gandhi entity at sl. No. 16 & has fund movement with entity at sl. No. 26. 25. Pa ndya Same address with entity at sl. With entities at With entities at Yaminiben M No. 26. sl. nos. 26, 11, sl. nos. 11, 23, Knows entity at sl. No. 11 & 31, 26, entity sl. No. 26 is his relative. 26. Pa ndya Hardik M Having common Tel. no. with With entities at With entities at entity at sl. no. 11. sl. nos. 12, 18, sl. nos. 11, 23, Entity at sl. No. 11 is the 4, 11, 17, 25, 25, 16, 22. promoter of Samir Shah & Co. and sl. No. 26 is one of its employees. Knows entity at sl. No. 11 & entity at sl. No. 25 is his relative. 27. Bh aratkumar Having common Tel. no. with - With entities at Baldevbhai Rameshbhai Parmar. sl. nos. 4, 11. Parmar 28. M ala Hemant Entity at sl. no. 28 is the wife With entities at With Entity at Sheth of entity at sl. no. 22 and entity sl. nos. 16, 19. sl. no. 22. at sl. no. 29 is the nephew.

29. G aurang Ajit Seth Has common address & Tel. - -no. with entity at sl. no. 22. & entities at sl. no. 22 and 16 both directors of Rajnandi Yarns Pvt. Ltd. 30. An kit Sanchaniya Shares Tel. no. with entity at sl. With entities at With entities at no. 19 and also shares Tel. no. sl. nos. 16, 19. sl. nos. 16, 19, with entity at sl. no. 16 who is 22, 8, 31. the nominee for his a/c. Business relations with entities at sl. nos.5, 6, 8, 9, 16, 19, 22, 31. 31. Vi vek Kishanpal Entity at sl. no. 16 is the With entity at With entities at Samant brother in law & shares sl. no. 22. sl. nos. 16, 22, 8, common Tel. no. & entity at 9, 19, 30. sl.no. 16 is the nominee of entity at sl. no. 31 for trading a/c & bank a/c. Shares email with entity at sl. no. 22. Shares email with entity at sl. no. 19. iii. On BSE, the PP group entities including the above mentioned 18 entities i.e., Mr. Bharat Shantilal Thakkar, Mr. Bipin Jayant Thaker, Mr. Kishore Chauhan, Mr. Bhavesh Pabari, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan Seth, Ms. Mala Hemant Seth, Mr. Ankit Sanchaniya, Spectrum Chemicals Ltd., Mr. Anand Kalu Marathe, Mr. Rajesh Pravin Bhanushali, Mr. Amar Premchand Valmiki, Mr. Samir Sureshbhai Shah, Mr. Jignesh C. Shah, Mr. Pandya Hardik M., Mr. Shalin Kiritkumar Parikh, Mr. Bhupesh Rathod and Mr. Bipinkumar Gandhi traded in 49,60,252 shares of GIL, out of which these entities had bought 19,67,956 shares accounting for 39.67% of the total market volume and sold 34,24,824 shares accounting for 69.05% of the total market volume in the scrip traded during the period under investigation. iv.

Several of the trades were synchronised amongst above mentioned 18 entities in the scrip of GIL during the investigation period. It was also observed that out of the total trading of 12,41,518 shares within these entities, the buy and sell orders with respect to 2,56,661 shares accounting for 5.17% of the market volume were placed within a span of one minute. These 2,56,661 shares constituted 13.04% of the total purchases and 7.49% of the total sales of the above mentioned 18 entities. Out of these 2,56,661 shares, the buy and sell orders with respect to 84,749 shares accounting for 1.71% of the total market volume, were placed in such a manner that the difference between placement of orders by buyer and seller was within one minute with the order rate as well as order quantity of buy side and sell side was the same. These 84,749 shares constitute 4.31% of the total purchases and 2.47% of the total sales of the above mentioned 18 entities. v. It was further observed that certain the PP group entities i.e., Mr. Bhabesh Prakash Pabari, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan Sheth and Mr. Vivek Kishanpal Samant also indulged in self trades on the BSE (i.e. buy client as well as the sell client for a given trade was the same resulting in no change of beneficial ownership). vi.

The price volume data analysis revealed that the shares of GIL were traded for 226 trading days during the investigation period on BSE. Out of 226 trading days, the PP group entities, including the above-mentioned 18 entities, traded among themselves on 90 days. It was observed that the volume of trades undertaken by the PP group entities contributed significantly to the daily market volume in the scrip on BSE during the investigation period. PP group entities contributed to 100% of the daily market volume on January 06, 2009 and February 12, 2009. Out of 90 trading days on which the PP group entities traded among themselves, on 44 trading days the trades executed by the PP group entities and contributed to more than 50% of the total market volume in the scrip. vii. Further, it was observed that out of 90 trading days in which the PP group entities traded amongst themselves, on 40 trading days the PP group entities, the above-mentioned 18 entities executed synchronised trades i.e., trades in which both buy and sell orders were placed within a time difference of one minute. The contribution of the PP group entities to the daily market volume in the scrip by executing synchronised trades ranged from 0.06% on February 26, 2009 to 94.89% on April 23, 2009. Out of 40 trading days, on 7 trading days PP group entities contributed more than 50% of the total market volume by placing both buy and sale order within one minute time difference.

Further, it was observed that out of 40 trading days, on 13 trading days the trades executed by the PP group entities were of such a manner that the difference between placement of order by buyer and seller was within one minute with order rate as well as order quantity of buy side and sale side being the same. It was also observed that by executing such trades amongst the group entities, PP group entities contributed significantly to the total market volume in the scrip of GIL ranging from 1.90% on April 02, 2009 to 82.84% on May 27, 2009. It was also observed that on 4 trading days such trades by PP group entities, including the 18 above mentioned entities, contributed more than 50% of the market volume. viii. Out of 5,453 trades during the period under investigation period, 1,364 trades took place at a price less than the Last Traded Price (LTP), 2,875 trades took place at a price equal to LTP and 1,213 trades at a price greater than LTP. Further, it was observed that out of these 5,453 trades, the 31 PP group entities dealing through multiple brokers entered into 1,690 buy transactions.

Out of 1,690 trades 273 trades took place at a price less than LTP (contributing a gross fall in price by ₹ 93.65), 875 trades took place at a price equal to LTP and 541 trades at a price greater than LTP (contributing a gross increasing in price by ₹ 325.75). ix. The PP group entities had indulged in off-market transfer of 23,37,086 shares of GIL amongst themselves during the investigation period. The off-market deals further support the connection among the group. 5. The afore discussed actions on part of the above mentioned 18 entities i.e. execution of synchronized and self trades, creation of artificial volume and price manipulation distorted the market equilibrium and were observed to be fraudulent in nature. Consequently, a Show Cause Notice dated September 19, 2014 (hereinafter referred to as "the SCN") was issued to the above mentioned 18 entities (hereinafter collectively referred to as "the Noticees") calling upon them to show cause as to why suitable directions under section 11B read with section 11(4) of the SEBI Act should not be issued against them for the alleged violation of the provisions of regulations 3 (a), (b), (c), (d), 4(1), 4(2) (a),(b) (e) and (g) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ("PFUTP Regulations").

The provisions of the Regulations alleged to have been contravened by the Noticees 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) ............................................................................................... (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;” 6. Vide separate letters all dated October 07, 2014, Mr. Bharat Shantilal Thakkar, Mr. Hemant Madhusudan Seth, Ms. Mala Hemant Seth, Mr. Bhavesh Pabari and Mr. Bhupesh Rathod had requested for certain documents as detailed below, which were provided to them, vide separate letters dated November 05, 2014. (i) Mr. Bharat Shantilal Thakkar had sought the following documents which were provided to him: a) Copies of his KYC and KYC of Bhavesh Pabari evidencing that they shared common address. b) Copies of his bank statement of Axis Bank Ltd. evidencing transactions with other noticees. c) His letter to SEBI dated 11.07.2012 wherein he had stated that he had business relations with certain other noticees.

(ii) Mr. Hemant Madhusudan Seth had sought the following documents which were provided to him:

a) Details of directors of Rajnadi YarnsPvt. Ltd. evidencing that he and Mr. Bhavesh Pabari were directors. b) Copies of his bank statement of Axis Bank Ltd. evidencing transactions with other noticees. c) His letter to SEBI dated 12.07.2012 wherein he had stated that he had business relations with certain other noticees. (iii) Ms. Mala Hemant Seth had sought the following documents which were provided to her: a) Copies of her bank statement of Axis Bank Ltd. evidencing transactions with other noticees. b) Her letter to SEBI dated 12.07.2012 wherein she had stated that she had business relations with certain other noticees. (iv) Mr. Bhavesh Pabari had sought the following documents which were provided to him: a) Copies of his bank statement of Axis Bank Ltd. evidencing transactions with other noticees b) His letter to SEBI dated 13.07.2012 wherein he had stated that he had business relations with certain other noticees (v) Mr. Bhupesh Rathod had sought the following documents which were provided to him: a) Copies of his bank statement of Axis Bank Ltd. evidencing transactions with other noticees b) His letter to SEBI dated 18.07.2012 wherein he had stated that he had business relations with certain other noticees 7. All the Noticees except Spectrum Chemicals Ltd., Mr. Anand Kalu Marathe, Mr. Rajesh Pravin Bhanushali and Mr. Bipinkumar Gandhi filed their replies to the SCN vide separate letters. As regards, Mr. Kishore Chauhan, it has been brought to my notice that during the adjudication proceedings in the same matter, one Ms. Rupal K. Chauhan, claiming to be wife of Mr. Kishore Chauhan, has informed SEBI that Mr. Kishore Chauhan had passed away on May 29, 2013 and had enclosed a certified copy of the death certificate as issued by the Department of Health and Family Welfare, Government of Gujarat, in support thereof. The replies of the Noticees are summarized as under: (i) Mr. Bharat Shantilal Thakkar vide letter dated April 30, 2015 submitted his reply to the SCN and enclosed a copy of the appeal filed by him against the Adjudication Order passed in the same matter imposing a penalty of ₹ 5,00,000/- on him. He had submitted the following in his reply:

 He aggrieved, as he has been issued six different show cause notices for trading in five scrips.  In the same matter, an order was passed by the Adjudicating Officer (AO) imposing a penalty of ₹ 5,00,000/- on him. He is aggrieved by the said AO order. He is unable to pay the penalty due to the restrain order passed by SEBI.  He has already suffered a prohibition period for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  It has been alleged in the SCN that he shared common address with Mr. Bavesh Pabari. However, on perusal of the KYC may be noticed that his address is on the 3rd floor flat no. 32 and that of Mr. Bhavesh Pabari is 1st floor flat no. 6.  He placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. His trades were delivery based.  His contribution to the total trades undertaken in the scrip during the investigation period was miniscule  He did not undertake off market trades with any other remembers of the group (ii) Mr. Bipin Jayant Thaker vide his letter dated April 30, 2015 submitted his reply to the SCN and enclosed a copy of the appeal filed by him against the Order passed by AO in the same matter imposing a penalty of ₹5,00,000/- on him.

The noticee has submitted following in his reply:  In the same matter an order was passed by the AO imposing a penalty of ₹ 5,00,000/-on him. He is aggrieved by the said AO order and he is unable to pay the penalty due to the restrain order passed by SEBI.  He has already suffered a prohibition period for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  It has been alleged that Mr. Chirag Jariwala introduced him to Arcadia Shares and Stock Brokers Ltd. However, from the KYC it may be seen that he was not the introducer but the witness to the said form.  He placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. His trades were delivery based.  His contribution to the total trades undertaken in the scrip during the investigation period was miniscule (iii) Mr. Bhavesh Pabari vide his letter dated April 30, 2015 submitted his reply to the SCN and enclosed a copy of the appeal filed by him against the Adjudication Order passed in the same matter imposing a penalty of ₹ 5,00,000/- on him.

Further, vide his letters dated May 13, 2015 and August 13, 2015 he made further submissions and written submissions, respectively in the matter. He has submitted the following:  He is aggrieved, as he has been issued six different show cause notices for trading in five scrips.  In the same matter an order was passed by the Adjudicating officer imposing a penalty of ₹ 5,00,000/- on him. He is aggrieved by the said order and he is not able to pay the penalty due to the restrain order passed by SEBI vide the Interim Order.  He has already suffered a prohibition for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  Copies of trade logs and order logs were provided in CD format and there was difficulty to purify the data which was in whole. The action proposed report was not enclosed with the documents provided.  He accepted that he was director in Rajnandi Yarns Private Limited but the decision of investment of Rajnandi Yarns Private Limited was taken in company board meeting and not at an individual level.  He does not have any business relationship with certain other noticees, as alleged.  The documents furnished have failed to provide any documentary evidence to prove the relationship.  It has been alleged in the SCN that he shares address with Bharat Thakkar.

But on a perusal of the KYC may be noticed that the address of Bharat Thakkar is on the 3rd floor flat no. 32 and that of his is 1st floor flat no. 6.  The allegation of common telephone number with other noticees is not established.  Prem Mohanlal Parikh is not his cousin.  He had placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. His trades were delivery based.  His contribution to the total trades undertaken in the scrip during the investigation period was miniscule (iv) Mr. Prem Mohanlal Parikh vide his letter dated April 30, 2015 submitted his reply to the SCN and enclosed a copy of the appeal filed by him against the AO Order passed in the same matter imposing a penalty of ₹ 5,00,000/- on him. He has submitted the following:  In the same matter an order was passed by the AO imposing a penalty of ₹ 5,00,000/-on him. He is aggrieved by the said order. He is unable to pay the penalty due to the restrain order passed by SEBI.  He has already suffered a prohibition period for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  The noticee placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades.

His trades were delivery based.  The noticee’s contribution to the total trades undertaken in the scrip during the investigation period was miniscule  The noticee did not carry put any off market trades in the scrip and he did not have any fund movement with any other noticees.  He is not Bhavesh Pabari’s cousin (v) Mr. Hemant Madhusudan Seth vide his letter dated April 30, 2015 had submitted reply to the SCN and enclosed a copy of the appeal filed by him against the AO Order passed in the same matter imposing a penalty of ₹ 5,00,000/- on him. He had has submitted the following:  In the same matter an AO order was passed imposing a penalty of ₹ 5,00,000/- on him. He is aggrieved by the said order and he is unable to pay the penalty due to the restrain order passed by SEBI.  He has already suffered a prohibition period for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  Copies of trade logs and Order logs were provided in CD format, which was voluminous and difficult to short.

The action proposed report was also not enclosed with the documents shared with him.  He did not deny that he was a director in Rajnandi Yarns Private Limited, but the decision of investment of Rajnandi Yarns Private Limited, was taken in company board meeting and not at an individual level.  The documents shared with him fail to prove the alleged relationship.

 He only had off market transaction with Ms. Mala H. Seth, Mr. Bhavesh Pabari, Mr. Ankit Sanchaniya and Mr. Kishore Chauhan and not with other noticees as alleged. Further, he did not have fund movement with other noticees  He had placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. His trades were delivery based.  His contribution to the total trades undertaken in the scrip during the investigation period was miniscule. (vi) Ms. Mala Hemant Seth vide her letter dated April 30, 2015 had submitted reply to the SCN and had enclosed a copy of the appeal filed by her against the AO Order passed in the same matter imposing a penalty of ₹ 5,00,000/- on her. The noticee has submitted the following:  In the same matter an order was passed by the Adjudicating officer imposing a penalty of ₹ 5,00,000/- on her. She is aggrieved by the said order. She is unable to pay to pay the penalty due to the restrain order passed by SEBI.  She has already suffered a prohibition for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  Copies of trade logs and order logs were provided in CD format, which was voluminous and difficulty to short. The action proposed report was not enclosed with the documents provided.  She has accepted and acknowledged fund movement with some other noticees. Further, she accepted that she is the wife of Mr. Hemant Seth, however, she denies having any business/ professional connection with him and submits that she is living an independent life and is taking her own independent decisions.  She did not have business relationship with other Noticees as alleged and the documents shared with have failed to prove the alleged relationship.  She placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. Her trades were delivery based.  Her contribution to the total trades undertaken in the scrip during the investigation period was miniscule (vii) Mr. Ankit Sanchaniya, vide his letter dated April 30, 2015 submitted his reply to the SCN and enclosed a copy of the appeal filed by him against the AO Order passed in the same matter imposing a penalty of ₹ 5,00,000/- on him. He has made following submissions:

 In the same matter an AO order was passed imposing a penalty of ₹ 5,00,000/- on him. He is aggrieved by the said order and he is unable to pay the penalty due to the restrain order passed by SEBI.  He has already suffered a prohibition for more than four years and does not have any financial means and capacity to take service of legal consultation and represent his case in the present proceedings.  Copies of trade logs and order logs were provided in CD and are voluminous, which he is finding difficult to short. The action proposed report has not been shared with him.  He does not have any business relationship with other Noticees and documents shared with him have failed to prove the alleged relationship.  He might have fund movement and he might have known some of the other noticees but that had nothing to do with his decision to invest in GIL.  He had placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. His trades were delivery based.  His contribution to the total trades undertaken in the scrip during the investigation period was miniscule.  The noticee did not undertake nay off market trades with other noticees in the scrip. (viii) Mr. Bhupesh Rathod vide letter dated April 30, 2015 submitted his reply to the SCN and enclosed a copy of the appeal filed by him against the AO order passed in the same matter imposing a penalty of ₹ 5,00,000/- on him. His submissions are as follows:  In the same matter an AO order was passed, imposing a penalty of ₹ 5,00,000/- on him. He is aggrieved by the said order and he is unable to pay the penalty due to the restrain order passed by SEBI.  He has already suffered a prohibition for a period of more than four years and he does not have any financial means / capacity to take service of legal consultation and represent his case in the present proceedings.  Copies of trade logs and order logs were provided in CD format, which were voluminous and difficulty to short. The action proposed report has not been shared with him.  He did not have business relationship with other Noticees and documents shared with him failed to prove the alleged relationship.

 Although he introduced Mr. Hemant Seth, Mr. Prem Parikh, Mr. Bhavesh Pabari and Mr. Kishor Chauhan for their trading accounts, the said introduction was sought by the broker S.P. Jain Securities Pvt. Ltd. which was a mere formality.  His fund movement with Mr. Ankti Sanchaniya was related to his cloth business.  He placed orders on the system of the stock exchange in the normal course of trading and did not execute synchronized trades. His trades were delivery based.  His contribution to the total trades undertaken in the scrip during the investigation period was miniscule. (ix) Mr. Amar Premchnad Valmiki vide letter dated July 27, 2015 submitted his reply to the SCN and asserted that his contribution was not even one percent of the total volume in the scrip of GIL and therefore was not significant. He further stated that he had not executed any off market trades with any of the entities mentioned in the table. Furthermore, no document was provided to him which could establish his connection with PP group, as alleged. (x) Mr. Samir Sureshbhai Shah, Mr. Jignesh C. Shah, Mr. Pandya Hardik M. and Mr. Shalin Kiritkumar Parikh vide letters dated October 13, 2014 and August 03, 2015 submitted common replies to the SCN, whereby they submitted that they are victims of fraud perpetrated by one Mr. Paras Chaplot and that Mr. Chaplot had lured them so that in exchange of a fixed remuneration per month they had allowed Mr. Chaplot to use their trading and bank accounts.

They further submitted that all transactions in GIL were carried out by Mr. Chaplot and they did not receive any proceeds from the trades. In this respect they had also filed a police complaint and sent a communication to Western Regional Office of SEBI providing details of Mr. Paras Chaplot. 8. An opportunity of personal hearing was granted to the Noticees on May 13, 2015. None of the Noticees appeared for the hearing except Mr. Bhavesh Pabari, who appeared and made his submissions in line with his reply. Another opportunity of hearing was granted to the noticees on July 29, 2015. When Mr. Samir Shah, Mr. Hardik Pandya, Mr. Jignesh Shah and Shalin K. Parikh appeared through its authorised representative Umesh Ved and Associates, and Mr. Amar Premchand Valmiki appeared through its authorised representative, Mr. Vikas Bengani and requested for documents related to his fund movement with other noticees which was provided to him vide letter dated August 04, 2015.

9. I have considered the allegations levelled against the Noticees in the SCN, replies made by the Noticees in response thereto and other material on record. At the outset, I find that in the present proceedings, the principles of natural justice have been duly followed as all the Noticees were given ample opportunity to file their replies/written submissions and also with opportunities of hearing. I now proceed to deal with the present proceedings on merit on the basis of the replies/written submissions of the Noticees on record. 10. One of the common contentions of many the Noticees are that six different SCNs have been sent to them for trading in five scrips and they are aggrieved by the same. In this regard, I note that the interim order in the matter was passed on the basis of prima facie findings in respect of the dealings in the five scrips. Since, the entities involved in the trading in the five scrips were common and the time period (being the subject matter of the preliminary inquiry) was common, a combined interim order was passed. Subsequent to the interim order, a detailed investigation was carried out in the matter focusing on each of the five scrips and it was revealed that separate sub-groups out of the larger groups of entities were involved in the alleged violations in different scrips.

As a result thereof, it was considered viable to issue six different SCNs in order to clearly bring out the role of each and every entity in respect of the alleged manipulation in the said five scrips. Thus, the rationale behind issuing six different SCNs was to ensure clarity and brevity in the SCNs. Considering the above, I don’t find any merit in the above contentions of the Noticees. 11. The Noticees have made a common submission that the action proposed chart had not been provided to them and that the trade logs and order logs were provided in a CD format due to which the Noticees were unable to short / purify the data pertaining to them. I have perused the documents sought by the entities and the documents furnished to them. I note that all such relevant documents that were relied upon in the SCN have been duly provided to the Noticees. Further, due to the voluminous nature of the trade logs and order logs, the same were given through a compact disc. I find that to the contrary of the Noticees' submissions data provided in soft form in a CD is easier to short and to made sense than any in any other form.

I, therefore, am of the view that the relevant documents/material which was relied upon in the SCN in the present proceedings has been provided to the Noticees. In view thereof, I reject the submissions of the Noticees in this regard. 12. I note that to establish connection between the Noticees inter alia constituting PP group, particulars/ details in KYC documents, inter se off-market trading activities and fund transfers have been relied. The Noticees have contested some of the instances i.e., KYC particulars, off-market transactions and fund transfers. Submissions to this effect, have been more specifically dealt in the following paragraphs. 13. Mr. Bharat Shantilal Thakkar in his letter to SEBI dated July 11, 2012 had stated that he had business relations with certain other noticees. It is also noted that he carried out off market transaction with Bhavesh Pabari in the scrip of Spectacle and with Rajnadi yarns Ltd. (company where Bhavesh Pabari was director) in the scrip of GIL. Vide letters to SEBI dated July 13, 2012 both Mr. Bipin Jayant Thaker and Mr. Bavesh pabari had stated that they had business relations with certain other noticees.

Mr. Prem Manoharlal Parikh in his letter to SEBI dated July 12, 2012 had stated that he had business relations with certain other noticees. He also had off market transactions with Mr. Bhavesh Pabari, Raj Nandi Yarns Private Limited, Mr. Kishore Chauhan in GIL and other noticees in the other 4 scrips. Vide letters to SEBI dated July 12, 2012 both Mr. Hemant Madhusudan Seth and Mr. Mala Hemant Seth had stated that they had business relations with certain other noticees. I therefore, am of the view that the submissions that they did not have any business relations with each other cannot be accepted. However, there are other evidences as elaborated in the table no. 1 suggesting relationship of the Noticees amongst themselves and with other PP group entities. 14. Mr. Bhavesh Pabari and Mr. Hemant Madhusudan Seth have contended that though they were directors in Rajnandi Yarns Private Limited, the decision regarding investment of Rajnandi Yarns Private Limited was taken in company's board meeting and not at an individual level. In this regard I note that several off market transactions have been entered into between the PP group entities including the Noticees and Rajnandi Yarns Private Limited the details of which are as under: Table 2 - Fund movement with Raj Nandi Yarns Private Limited Date Client Name Counterparty Client Name Total Quantity 15/02/2010 Kishor Balubhai Chauhan Raj Nandi Yarns Private 24500 Limited 30/04/2010 Ankit R Sanchaniya Raj Nandi Yarns Private 3000 Limited 30/04/2010 Prem Mohanlal Parikh Raj Nandi Yarns Private 3000 Limited 15. It is noted that Mr. Bhavesh Pabari has business relation with Mr. Kishor Balubhai Chauhan.

Moreover, Mr. Bhavesh Pabari and Mr. Kishor Balubhai Chauhan have joint accounts. It is also noted that Mr. Bhavesh Pabari is one of the witnesses for demat account of Mr. Kishor Balubhai Chauhan. Further, as shown in Table no. 1 above, Mr. Bhavesh Pabari and Mr.

Hemant Madhusudan are connected with Mr. Kishor Balubhai Chauha, Mr. Ankit R Sanchaniya and Mr. Prem Mohanlal Parikh and other PP group entities through fund movements, of market transfer of shares and other factors. Therefore, the contention of Mr. Bhavesh Pabari and Mr. Hemant Madhusudan Seth that they had no role in the investment decisions of Rajnandi Yarns Private Limited cannot be accepted. 16. Another Noticee, Ms. Mala Hemant Seth has accepted fund movement with certain Noticees. She has further stated that while it is true that she is the wife of Mr. Hemant Madhusudan Seth, however, she denies having any business/ professional connection with him and submits that she is living an independent life and is taking her own independent decisions. I note that Ms. Mala Hemant Seth also has fund movements and off market transactions with Mr. Bhavesh Pabari and Mr. Prem Mohanlal Parikh. Vide her letter dated July 8, 2012; a copy of which has been provided to her, it has been admitted by Ms. Mala Hemant Seth that the transaction in the securities market in her name were handled by her husband Mr. Hemant Madhusudan Seth.

I, therefore, do not find any merit in her submission noted above. 17. Further, Mr. Bhavesh Pabari has submitted that he and Mr. Bharat Shantilal Thakkar do not share a common address since their flat numbers are different. In this regard, I note that as per their own admission, they live in the same building but on different floors (i.e. 1st and 3rd). Also it is not disputed that Mr. Bhavesh Pabari is the nephew of Mr. Bharat Shantilal Thakkar. Thus, even if the technical argument is accepted, the facts that there is uncle-nephew relation between them and they stay in same building, acutely corroborate the allegation that they are connected. 18. The Noticees have made a common contention that they were not related to each other. Some of the Noticees have submitted that they were not the introducer but the witness in the KYC. Two of the Noticees has rejected that they are cousin of each other. In this regard, I note that the relationship / connection among the PP group entities as illustrated in the SCN has been established on the basis of a multiplicity of factors including family relationship, common address, bank account details, fund movements share transfers in off-market etc. Other than a general denial, the Noticees have not produced any satisfactory material/documents to dispute the inferences regarding their inter-se relationship brought out in SCN.

In my view, it cannot be a mere coincidence that the Noticees while trading inter alia in the scrip of GIL ended up trading amongst each other only and collectively contributed to more than 50% of the total traded volume during the investigation period. Further, the details of the synchronized and self trades among the Noticees were also provided to the Noticees in the SCN in response whereof they have not provided any cogent explanation. In view of the above, I reject the contention of the Noticees in this regard. 19. Mr. Samir Sureshbhai Shah, Mr. Jignesh C. Shah, Mr. Pandya Hardik M. and Mr. Shalin Kiritkumar Parikh have submitted that one Mr. Chaplot had lured them so that in exchange of a fixed remuneration per month they had allowed Mr. Chaplot to use their trading and bank accounts. I note that it is admitted that these Noticees by their free will for a consideration had allowed Mr. Chaplot to use their account, I, therefore find that even if the contention of these noticees are accepted, they cannot plead innocent. I am of the view that in the present circumstances these Noticees cannot escape the consequence of any manipulation done through such accounts.

20. The Noticees have raised another common contention that the transactions carried out by them were genuine and bona fide and the quantities of their transactions were so minuscule that they could not have led to creation of artificial volume and price manipulation in the scrip of GIL. In this regard, I note that the SCN clearly brings out that there have been number of transactions among the Noticees which were synchronized with the orders with identical rates placed within a span of less than one minute. The particulars of the synchronised trades carried out by the Noticees are as under: Table 3 - Synchronized trades by the Noticees. Sl. Client Name Synchronised % of % of Synchronised % of % of No. buy trade synchronised Market sale trade synchronised Market trades to Volume trades to total Volume total buy by sale by client client 1. Spectrum 0 0.00 0.00 10,000 100.00 0.20 Chemicals Pvt. Ltd 2. Amar 7,000 17.11 0.14 15,150 20.43 0.31 Premchand Walmiki 3. Kishore 0 0.00 0.00 4,000 4.35 0.08 Chauhan 4. Samir 6,850 24.46 0.14 0 0.00 0.00 Sureshbhai Shah 5. Bhavesh 37,000 9.36 0.75 1000 0.15 0.02 Pabari

6. Anand Kalu 11,300 21.20 0.23 14,000 130.85 0.28 Marathe 7. Prem 1,600 0.36 0.03 0 0.00 0.00 Mohanlal Parikh 8. Hemant 0 0.00 0.00 600 0.10 0.01 Madhusudan Sheth 9. Mala Hemant 4,000 5.51 0.08 5,000 1.88 0.10 Sheth 10. Ankit 5,000 1.79 0.10 13,000 3.48 0.26 Sanchaniya 84,749 4.31 1.71 84,749 2.47 1.71 *Values below 0.01 has not been mentioned 21. Placing of the sell orders with same counterparties for same quantity of shares at the same price within nil or negligible time difference repeatedly over a period of time is a clear indication that those trades of the Noticees 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, are 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.”

22. I also note that the Noticees executed multiple self trades wherein one or the other Noticee was on either side of the transaction thereby creating artificial volume in the scrip. The details of the self trades executed by the Noticees are as below: Table 4 - Self trades by the Noticees. Sl. Name of the entity Total Total Self % of % % of No of No. buy sell trade Total Total Market Self qty Buy Sell Volume trades 1. Bhabesh Prakash 395464 683133 25233 6.38 3.69 0.51 17 Pabari 2. Prem Mohanlal 449439 554399 56982 12.68 10.28 1.15 19 Parikh 3. Hemant 143503 612700 14322 9.98 2.34 0.29 4 Madhusudan Sheth 4. Vivek Kishanpal 30000 16000 2180 7.27 13.63 0.04 1 Samant 1018406 1866232 98717 9.69 5.29 1.99 41 23. 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.” 24. It is also noted that during the period under investigation, the price of the scrip of GIL opened at ₹ 21.20 and touched a high of ₹ 78.35, i.e. an increase of ₹ 57.15. Further, out of 1,690 buy transaction by PP group entities 273 trades took place at a price less than LTP (contributing a gross fall in price by ₹ 93.65), 875 trades took place at a price equal to LTP and 541 trades at a price greater than LTP (contributing a gross increasing in price by ₹ 325.75). The detail of individual contribution to change in the price of the scrip by entering into buy transaction is placed as under: Table 5 – LTP analysis of PP group entities Sl. Name of the entiy No of no of Gross No of Gross No of Net No. trades trades increase trades fall in trades impact above in price less price at LTP than LTP LTP 1. Rajesh Pravin Bhanushali 0 0 0.00 0 0.00 0 0.00 2. Bhupesh Rathod 3 1 0.30 1 -0.05 1 0.25 3. Spectrum Chemicals Pvt. 0 0 0.00 0 0.00 0 0.00

Sl. Name of the entiy No of no of Gross No of Gross No of Net No. trades trades increase trades fall in trades impact above in price less price at LTP than LTP LTP Ltd 4. Amar Premchand Walmiki 14 2 0.55 0 0.00 12 0.55 5. Bharat Shantilal Thakkar 7 3 1.35 2 -0.40 2 0.95 6. Bipin Jayant Thaker 91 32 24.75 4 -1.55 55 23.20 7. Navneetlal Jeevanlal 2 0 0.00 0 0.00 2 0.00 Gandhi 8. Chirag Rajnikant Jariwala 18 4 1.00 0 0.00 14 1.00 9. Kishore Chauhan 27 12 3.30 5 -2.15 10 1.15 10. Manish Suresh Joshi 0 0 0.00 0 0.00 0 0.00 11. Samir Sureshbhai Shah 42 5 0.75 2 -0.90 35 -0.15 12. Manoj Bhandari 35 9 3.05 3 -2.40 23 0.65 13. Jignesh C. Shah 1 0 0.00 0 0.00 1 0.00 14. Shalin Kiritkumar Parikh 1 0 0.00 1 -0.60 0 -0.60 15. Bipinkumar Gandhi 11 2 0.30 6 -0.45 3 -0.15 16. Bhavesh Pabari 446 184 130.90 104 -30.70 158 100.20 17. Anand Kalu Marathe 17 2 0.35 1 -0.80 13 -0.45 18. Rekha Bhandari 14 2 5.85 0 0.00 12 5.85 19. Prem Mohanlal Parikh 404 129 69.60 71 -28.50 204 41.10 20. Devendra Suresh Gupta 2 1 0.05 0 0.00 1 0.05 21. Nareshbhai Devabhai Patel 4 3 0.50 1 -0.05 0 0.45 22. Hemant Madhusudan Sheth 78 24 9.40 14 -3.55 40 5.85 23. Ashokkumar Bhikhalal 3 1 0.10 1 -0.10 1 0.00 Parmar 24. Manisha Navneetlal Gandhi 14 6 1.40 1 -0.05 7 1.35 25. Pandya Yaminiben M 4 3 5.20 1 -3.50 0 1.70 26. Pandya Hardik M 20 5 3.25 0 0.00 15 3.25 27. Bharatkumar Baldevbhai 5 0 0.00 0 0.00 5 0.00 Parmar 28. Mala Hemant Sheth 70 24 11.50 15 -3.05 31 8.45 29. Gaurang Ajit Seth 26 3 1.60 5 -1.85 18 -0.25 30. Ankit Sanchaniya 259 67 40.70 29 -9.40 163 31.30 31. Vivek Kishanpal Samant 72 17 10.00 6 -3.60 49 6.40 25. In addition to the above, the PP group entities including the Noticees had indulged in off-market transfer of 23,37,086 shares of GIL amongst themselves (during the period January

06, 2009 and December 30, 2009) which further corroborated the connection among them. The details of the off market transactions undertaken by the PP group entities are as under:

Table 6– Off-market transitions of PP group entities in the scrip Sl. Client Name Counter Party Client Name Dr or Total No. Cr Quantity 1 Gandhi Aditi M Samir Sureshbhai Shah D 23370 2 Samir Sureshbhai Shah Gandhi Aditi M C 23370 3 Samir Sureshbhai Shah Shobhnaben R Parmar C 6220 4 Shobhnaben R Parmar Samir Sureshbhai Shah D 6220 5 Hemant Madhusudan Sheth Vivek Kishanpal Samant C 400000 6 Vivek Kishanpal Samant Hemant Madhusudan Sheth D 400000 7 Ankit Rajendra Sanchaniya Hemant M Sheth D 1925 8 Bhavesh Prakash Pabari Hemant Madhusudan Sheth D 29000 9 Bhavesh Prakash Pabari Prem Mohanlal Parikh D 20000 10 Hemant Madhusudan Sheth Bhavesh Prakash Pabari C 29000 11 Hemant Madhusudan Sheth Hemant M Sheth D 42000 12 Hemant M Sheth Ankit Rajendra Sanchaniya C 1925 13 Prem Mohanlal Parikh Bhavesh Prakash Pabari C 20000 14 Prem Mohanlal Parikh Prem Mohanlal Parikh D 42500 15 Bhavesh Prakash Pabari Hemant M Sheth D 13600 16 Hemant M Sheth Bhavesh Prakash Pabari C 13600 17 Hemant M Sheth Kishor Balubhai Chauhan C 22575 18 Kishor Balubhai Chauhan Hemant M Sheth D 22575 19 Mala Hemant Sheth Mala Hemant Sheth. C 30000 20 Mala Hemant Sheth. Mala Hemant Sheth D 30000 21 Bhavesh Prakash Pabari Hemant Madhusudan Sheth D 25000 22 Bhavesh Prakash Pabari Hemant Madhusudan Sheth D 25000 23 Prem Mohanlal Parikh Bhavesh Prakash Pabari D 500 24 Bhavesh Prakash Pabari Bipinkumar Ramniklal Gandhi C 150000 25 Bipinkumar Ramniklal Gandhi Bhavesh Prakash Pabari D 150000 26 Bhavesh Prakash Pabari Prem Mohanlal Parikh C 3749 27 Kishor Balubhai Chauhan Prem Mohanlal Parikh C 6251 28 Prem Mohanlal Parikh Bhavesh Prakash Pabari D 3749 29 Prem Mohanlal Parikh Kishor Balubhai Chauhan D 6251 30 Ankit Rajendra Sanchaniya Hemant Madhusudan Sheth D 14000 31 Bhavesh Prakash Pabari Hemant Madhusudan Sheth D 1350 32 Hemant Madhusudan Sheth Bhavesh Prakash Pabari C 1350 33 Bhavesh Prakash Pabari Raj Nandi Yarns Private Limited D 105028

Sl. Client Name Counter Party Client Name Dr or Total No. Cr Quantity 34 Raj Nandi Yarns Private Limited Bhavesh Prakash Pabari C 105028 35 Hemant Madhusudan Sheth Hemant Madhusudan Sheth C 11346 36 Hemant Madhusudan Sheth Mala Hemant Sheth. C 73579 37 Hemant Madhusudan Sheth Hemant Madhusudan Sheth D 11346 38 Mala Hemant Sheth. Hemant Madhusudan Sheth D 73579 39 Bhavesh Prakash Pabari Raj Nandi Yarns Private Limited C 5000 40 Hemant Madhusudan Sheth Raj Nandi Yarns Private Limited C 19150 41 Raj Nandi Yarns Private Limited Bhavesh Prakash Pabari D 5000 42 Raj Nandi Yarns Private Limited Hemant Madhusudan Sheth D 19150 43 Gaurang Ajit Sheth Gaurang Ajit Sheth C 10400 44 Gaurang Ajit Sheth Gaurang Ajit Sheth D 10400 45 Bhavesh Prakash Pabari Raj Nandi Yarns Private Limited C 14000 46 Hemant Madhusudan Sheth Raj Nandi Yarns Private Limited C 14000 47 Prem Mohanlal Parikh Raj Nandi Yarns Private Limited C 10348 48 Raj Nandi Yarns Private Limited Bhavesh Prakash Pabari D 14000 49 Raj Nandi Yarns Private Limited Hemant Madhusudan Sheth D 14000 50 Raj Nandi Yarns Private Limited Prem Mohanlal Parikh D 10348 51 Bhavesh Prakash Pabari Raj Nandi Yarns Private Limited C 42530 52 Raj Nandi Yarns Private Limited Bhavesh Prakash Pabari D 42530 53 Bhavesh Prakash Pabari Raj Nandi Yarns Private Limited D 4000 54 Hemant Madhusudan Sheth Raj Nandi Yarns Private Limited D 12000 55 Raj Nandi Yarns Private Limited Bhavesh Prakash Pabari C 4000 56 Raj Nandi Yarns Private Limited Hemant Madhusudan Sheth C 12000 57 Prem Mohanlal Parikh Raj Nandi Yarns Private Limited D 4937 58 Raj Nandi Yarns Private Limited Prem Mohanlal Parikh C 4937 59 Raj Nandi Yarns Private Limited Samant Vivek Kishanpal C 11400 60 Samant Vivek Kishanpal Raj Nandi Yarns Private Limited D 11400 61 Kishorbhai B Chauhan Kishor Balubhai Chauhan D 20000 62 Kishor Balubhai Chauhan Raj Nandi Yarns Private Limited D 20000 63 Bipin Jayant Thakar Bipin Jayant Thaker D 12790 64 Ankit R Sanchaniya Raj Nandi Yarns Private Limited D 2500 65 Raj Nandi Yarns Private Limited Ankit R Sanchaniya C 2500 66 Pandya Yaminiben M Pandya Yaminiben M. D 4695 67 Pandya Yaminiben M. Pandya Yaminiben M C 4695 68 Laxman Dhirubhai Parmar Pandya Yaminiben M. C 4695 69 Pandya Yaminiben M. Laxman Dhirubhai Parmar D 4695 70 Hemant Madhusudan Sheth Hemant Madhusudan Sheth D 20000 2337086

26. This large scale trading amongst the PP group entities, which included the Noticees, all of which were synchronized and did not result in change in ownership created an artificial demand in the scrip of GIL and led to a price rise which was misleading and disadvantageous to the genuine investors in the securities market. 27. In view of the above, I find that the Noticees in the present proceedings were related / connected to each other and connived amongst themselves for execution of synchronized and self trades, creation of artificial volume and price manipulation which not only distorted market equilibrium but were also found to be fraudulent in nature. The Noticees have therefore violated the provisions of regulations 3 (a),(b),(c),(d), 4(1), 4(2) (a),(b) (e) and (g) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. 28. The Noticees have submitted 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 order(s) and the Noticees have challenged the said order(s) before SAT.

However, 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 Appeal no. 70 of 2010 – Yashraj Containeurs Ltd. v. 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.” 29. I note that vide the interim order dated February 02, 2011, SEBI had restrained, inter alia, some of the Noticees herein from accessing the securities market and further prohibited them from buying, selling or dealing in securities in any manner whatsoever, till further directions. The directions in the interim order qua these Noticees are still in force. I also note from the material on record that Mr. Kishore Chauhan has passed away on May 29, 2013 and therefore, these proceedings against him have abated and the SCN as against him is disposed of accordingly.

30. It is important to mention that some of the Noticees in the present proceedings, i.e., Mr. Bhavesh Pabari, Mr. Bipin Jayant Thaker, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan Seth, Ms. Mala Hemant Seth, Mr. Ankit Sanchaniya, Mr. Bhupesh Rathod, Mr. Bipinkumar Gandhi and Mr. Bharat Shantilal Thakkar against whom the allegations leveled in the SCN have been established, have already been restrained by SEBI vide order dated May 13, 2015 (in the matter of dealings in the shares of Goldstone Technologies Limited) from accessing the securities market and have been further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner for a period of 5 years. Further, in respect of Mr. Bhavesh Pabari, Mr. Bipin Jayant Thaker, Mr. Kishore Chauhan, Mr. Prem Mohanlal Parikh, Mr. Hemant Madhusudan Seth, Ms. Mala Hemant Seth, Mr. Ankit Sanchaniya and Mr. Bharat Shantilal Thakkar against whom the allegations leveled in the SCN have been established, have been also restrained by SEBI vide order dated June 29, 2015 (in the matter of dealings in the shares of LGS Global Limited) from accessing the securities market and have been further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner for a period of 6 years.

It is noteworthy that the said restraint has been imposed on these Noticees for indulging in fraudulent and manipulative acts in violation of the PFUTP Regulations as has been found in the present case. In my view, repeated fraudulent acts and delinquent behavior 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 demeanor of the erring Noticees sternly and take appropriate actions for effective deterrence. 31. In view of the above and considering the repetitive nature of the default by the Noticees, 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 table below:

Sl. No. Name of Entity PAN Period 1. Mr. Bharat Shantilal Thakkar AAZPT9542R 7 Years 2. Mr. Bipin Jayant Thaker ABYPT4984H 7 Years 3. Mr. Bhavesh Pabari AKGPP8679N 7 Years 4. Mr. Prem Mohanlal Parikh ALHPP3489N 7 Years 5. Mr. Hemant Madhusudan Seth ANOPS8607E 7 Years 6. Ms. Mala Hemant Seth AZXPS0694J 7 Years 7. Mr. Ankit Sanchaniya BLNPS3316L 7 Years 8. Spectrum Chemicals Ltd. AAICS2382L 6 Years 9. Mr. Anand Kalu Marathe AKWPM0699M 6 Years 10. Mr. Rajesh Pravin Bhanushali AABPB2744H 5 Years 11. Mr. Amar Premchand Valmiki AAUPW9971A 6 Years 12. Mr. Samir Sureshbhai Shah AGEPS0157L 6 Years 13. Mr. Jignesh C. Shah AIPPS9125H 6 Years 14. Mr. Pandya Hardik M. ARJPP6330Q 6 Years 15. Mr. Shalin Kiritkumar Parikh AJAPP5421B 6 Years 16. Mr. Bhupesh Rathod AACPR3785K 7Years 17. Mr. Bipinkumar Gandhi AJHPG6989J 7 Years

32. The period of prohibition already undergone by the Noticees who were debarred/restrained pursuant to the interim order dated February 02, 2011, shall be taken into account for the purpose of computing the period of prohibition imposed in this order. Further, it is clarified that the restraint/prohibition imposed on the Noticees hereinabove shall run concurrently with the restraint/prohibition imposed by SEBI vide order dated May 13, 2015, June 29, 2015 and January 4, 2016 in the matters of dealings in the shares of Goldstone Technologies Limited, LGS Global Limited and Well Pack Papers and Containers Limited respectively. 33. This order shall come into force with immediate effect. A copy of this order shall be served on all recognized stock exchanges and depositories to ensure that the directions given in the above paragraph are complied with.

Sd/-

DATE: January 4th, 2016 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA