Order in the matter of Kamal J Katkoria

WTM/PS/191/IVD/MAR/2016 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 In the matter of front running transactions of Mr. Kamal Jitendra Katkoria In respect of Mr. Kamal Jitendra Katkoria [PAN: AHCPK7426P] 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) had investigated the trading activities of one Mr. Kamal Jitendra Katkoria (hereinafter referred to as ‘Kamal’)’, which had revealed that he had indulged in front running the trades of his employer Mr. Colin P. Shah (hereinafter referred to as ‘Colin’) during the period of January 01, 2010 to December 31, 2010, and had earned ₹37,99,818. On completion of the investigation, a show cause notice was issued alleging that Kamal had traded ahead of the trades of Colin based on the prior knowledge and had executed matched trades. It was also alleged that such trading had created artificial volume in the market. Vide the said show cause notice, Kamal was called upon to show cause as to why directions under Sections 11(1), 11(4) and 11B of the SEBI Act, 1992 (hereinafter referred to as SEBI Act) should not be issued against him for the violation as alleged including disgorging the alleged ill-gotten gains of ₹37,99,818.

2. During the course of proceedings, Kamal on December 17, 2013, had pleaded that he should not be disgorged the entire alleged profits as the trades were for the benefit of Colin. He further claimed that all the profits earned by him on account of such trades including those which he had undertaken directly was extorted by Colin. As the submissions were made orally, he was granted seven days’ time for making the submissions by way of an affidavit. However, Kamal had failed to submit such an affidavit.

3. Upon considering the case on merits, SEBI vide order dated May 26, 2014, found that Kamal had indulged in fraudulent transactions by way of placing orders ahead of Colin’s orders based on the prior knowledge about Colin’s trades and restrained him from accessing the securities market and also prohibited him from buying, selling and otherwise dealing in the securities market, directly or indirectly, in any manner whatsoever for a period of three years.

The said order also observed that the role of Kamal in the impugned transaction is established and the probable role of Colin has not been examined in the investigation. While observing the above, the order directed that “in view of the statement of the Noticee during investigation and also during the hearing, the ill-gotten gain, if any, of the Noticee cannot be computed with certainty at this stage. I, therefore, find that the role of Colin in the impugned transactions and profit, if any, earned by him also need to be investigated. It also needs to be ascertained, by further investigation in the matter, as to how much ill-gotten profit the Noticee earned on account of his trades”.

4. In compliance with the directions, SEBI conducted investigation for ascertaining the role of Colin in front running transactions and to ascertain the ill-gotten profits earned by Kamal. The findings of the same are as under: a. Role of Colin in front running transactions: - Kamal vide his letters dated March 13, 2012 and March 26, 2012, had stated that he had placed orders on behalf of Colin by using the e-mail account of Colin. He also stated that Colin used to call Kamal in the morning and used to instruct him to buy/ sell shares, on his behalf. Accordingly, Kamal used to inform the broker or send e-mail from the e-mail account of Colin to the broker. It was further stated by him that some of the transactions were done by Colin himself. He had also stated that in certain cases, he had traded before Colin (where he got to know about Colin’s trading plan) and squared off later and earned some profit. Kamal during the course of personal hearing before the Competent Authority had claimed that all the profits earned by him on account of such trades including those which he had undertaken directly was extorted by Colin.

- For ascertaining the role of Colin in the transactions, SEBI had issued summons dated August 07, 2014, to Colin, while asking for the details of amounts received by him from Kamal. Colin vide his letter dated September 01, 2014, had replied to the summon and submitted that neither he nor his company namely Kama

Schachter Jewelry Pvt. Limited or any of his related entities/ directors/ shareholders have taken any money from Kamal. The statements of Colin and Mr. Pradeep Shah (the erstwhile CFO of Colin’s company Kama Schachter Jewelry Pvt. Limited) were also recorded during the course of investigation.

- The statements of Colin and Pradeep Shah were compared with the submissions made by Kamal vide his letters dated March 13, 2012 and March 26, 2012, which revealed that Kamal used to place orders on behalf of Colin and had indulged in front running the trades of Colin without his knowledge.

- During the personal hearing before the Competent Authority, Kamal had pleaded that he is a person of meagre means. In this regard, during the investigation, an analysis of Kamal’s bank account for an extended period i.e. January 01, 2010 to December 31, 2012 was carried out. The analysis revealed that the bank balances of Kamal was not commensurate with his annual income. Kamal had entered in some large financial transactions with some broking entities with whom he did not have trading accounts. Upon enquiry, the broking entities informed that the financial transaction was either loan taken from Kamal or refund of the loan taken by Kamal.

- Further, an analysis and comparison of income tax returns of Kamal for the financial years 2009-10 and 2010-11 revealed that his assets had increased substantially in the financial year 2010-11. Further, no fund flow was revealed from/ to Colin to/ from the bank account Kamal or his wife Ms. Jagruti Katkoria, except from regular payments towards salary. The analysis of bank statements revealed no instances of extortion of money by Colin from Kamal or sharing of any profit in the front running transactions.

- An examination of the property documents of Kamal (i.e. Flat no. 302, Building no-1, C-wing, Mody Park, Pruthvi Classique, Iraniwadi, Kandiwali (West) Mumbai) revealed that the ‘Agreement for Sale’ was dated July 08, 2010 and the same was in the name of Kamal and his wife. A perusal of the ‘share certificates’ of the said flat revealed that Kamal had transferred his shares in the aforesaid flat in favour of his mother, Ms. Saroj Katkoria, vide ‘gift deed’ dated November 08, 2013. The transfer of shares was approved on September 29, 2014 in the Annual General Meeting of the society where the flat was situated. No other transfer of the subject flat was observed during the years of 2010 - 2014. The chronology of events in respect of the trades and the flat are summarised, as follows: TABLE A Date/ Period Nature/ description of Event January 01, 2010 to Front running by Kamal and earning an ill-gotten gain of December 31, 2010 ₹37,99,818 July 08, 2010 Purchase of flat from ill-gotten gains having address at Kandiwali (West) Mumbai August 08, 2013 Show cause notice was issued to Kamal by SEBI October 11, 2013 Opportunity of personal hearing to Kamal (The letter was sent twice however the same had returned undelivered with remark ‘refused to accept’ and ‘unclaimed’. November 08, 2013 The shares of the aforesaid flat were transferred by Kamal to his mother vide a gift deed. November 12, 2013 Kamal submitted reply to the SCN dated August 08, 2013 stating that “due to some family problem he was out of town and hence he could not reply to the SCN earlier”. December 17, 2013 Personal hearing before the Competent Authority. From the above, it can be said that Kamal had never sold his flat rather he had transferred his share of flat to his mother on receipt of the SCN. During the course of investigation. On enquiry, it was revealed that Kamal was staying in the said flat till July 2015. Therefore, the claim of Kamal regarding selling of flat and extortion of money was found to be totally false and a mere afterthought to mislead SEBI.

- The bank account statement of Kamal was also analysed during the course of investigation from where the pay-in and pay-out for the stock broking transactions were done. It was observed that the flat was sold to Kamal for ₹15,00,000 and the entire payment was made by him only. The relevant transactions from Kamal's bank account are as follows: TABLE B Sr. Date Amount Debit/ Balance Remarks No. Credit 1 June 18, 2010 - - 18,970.56 Balance in Kamal's Account 2 June 19, 2010 1,15,777.74 Credit 1,34,638.30 Amount received from Share broker Satco Securities 3 June 19, 2010 91,844,.45 Credit 2,26,482.75 Amount received from Share broker Satco Securities 4 June 24, 2010 2,00,000.00 Credit 3,56,552.75 Amount received from Share broker Satco Securities

5 June 25, 2010 1,09,631.23 Credit 4,66,183.98 Amount received from Share broker Satco Securities 6 July 10, 2010 1,00,000 Debit 3,43,245.98 Cheque no. 594520: Amount paid pursuant to ‘Agreement for sale’ dated July 08, 2010 for the flat 7 July 14, 2010 1,00,000 Credit 3,61,798.25 Amount received from Share broker Satco Securities 8 July 20, 2010 1,00,000 Credit 4,43,298.25 Amount received from Share broker Satco Securities 9 July 23, 2010 4,00,000 Debit 38,521.25 Cheque No. 594525: Amount paid pursuant to ‘Agreement for sale’ dated July 08, 2010 for the flat 10 July 23, 2010 2,00,000 Credit 2,38,521.25 Amount received from Share broker Satco Securities 11 Aug 03, 2010 8,00,000 Credit 10,92,954.25 Received money from three entities on August 03, to August 11, 2010 and August 11, 2010 2010 12 Aug 12, 2010 10,00,000 Debit 89,996.25 DD/Cheque No. 615501: Amount paid pursuant to ‘Agreement for sale’ dated July 08, 2010 for the flat From the above, it can be seen that Kamal had made payments for the purchase of flat from the money which he had received from his broker. The above instances shows that without the money received by him from the broker, he could not have made payment to the seller for the purchase of the flat. Therefore, it is can be said that Kamal had used the gains which he had made from trading in the securities market in purchasing the aforesaid flat.

- An analysis of the trades of Colin and Kamal for the period of January 01, 2010 to December 31, 2010, for ascertaining the front running trades of Kamal and original trades of Colin and profit, if any, earned revealed that Kamal had traded ahead of Colin’s trades in 59 scrip days1 at NSE and in 38 scrip days at BSE. Colin had accepted his trades during the investigation period and provided his daily trade details for the same period. Colin also stated that he was not aware of any front running trades of Kamal.

From the discussion above, it can be concluded that Kamal had placed orders on behalf of Colin and without the knowledge of Colin he had indulged in front-running of Colin’s trades. Kamal had attempted to mislead SEBI by stating that he was forced to sell the flat he had purchased from the ill-gotten gains of front running transactions and Colin had extorted the said money. From the above findings of investigation, it is clear that Colin had neither extorted money from Kamal nor had he shared any profit from Kamal. Having considered the above, it can be said that Kamal had siphoned off

1 A scrip day denotes each day on which a scrip is traded. Total number of scrip days may be higher than total number of days on which trading has been done, as one trading day may be counted as multiple scrip days on the basis of different scrips traded on one day. E.g. suppose a person has traded in 3 scrips in one trading day, then it would be counted as 3 scrip days.

the ill-gotten gains, by purchasing a flat and subsequently transferred his share in the said flat to his mother just after the issuance of the SCN by SEBI, so that he can escape the disgorgement of ill-gotten gains of ₹37,99,818.

b. Ill-gotten profits earned by Kamal: Having considered the above, I note that Kamal had the information of Colin’s sell and buy order details i.e., scrip, quantity, time and price range. The investigation had revealed two kind of trading patterns of Kamal through which he had indulged in front running activities, the details of these are as under: - Front running of sell trades of Colin: Under this pattern, before Colin’s sell orders in the scrip were entered, Kamal had sold the shares in advance. Thereafter, he had entered buy orders for squaring up his positions in the scrip just before the sell orders of Colin were entered in the same scrip. Kamal followed the same pattern of trading on 23 scrip days out of 59 scrip days at NSE and on 16 scrip days out of 38 scrip days at BSE. While trading in this pattern, most of his buy trades were matched with Colin’s sell trades.

- Front running of buy trades of Colin: Before Colin’s buy orders in the scrip were entered, Kamal had bought the shares in advance. Thereafter, he entered sell orders to square up his position in the scrip just before Colin’s buy orders in the same scrip were entered. Kamal followed the same pattern of trading on 37 scrip days out of 59 scrip days at NSE and on 23 scrip days out of 38 scrip days at BSE. While trading in this pattern, most of his buy trades were matched with Colin’s sell trades.

- The details of 59 scrip days at NSE are as follows: TABLE C S.No. Date Scrip Symbol Kamal’s Kamal’s Square off Matched Qty. Matched Buy Qty. Sell Qty. Earnings with Colin % 1 29-Jun-10 ALOKTEXT 1,90,000 1,90,000 1,23,951.20 1,10,000 57.89 2 06-Aug-10 ALOKTEXT 2,00,000 2,00,000 2,01,450.50 2,00,000 100.00 3 21-Jan-10 BANKRAJAS 2,500 2,500 1,016.10 - 0.00 4 27-Apr-10 BANKRAJAS 80,833 80,833 81,414.15 47,583 58.87 5 05-May-10 BANKRAJAS 1,25,600 1,25,600 1,72,201.00 45,747 36.42 6 26-May-10 BANKRAJAS 47,000 47,000 37,653.65 14,152 30.11 7 27-May-10 BANKRAJAS 10,000 10,000 8,686.25 10,000 100.00

8 07-Jan-10 CREWBOS 200 200 80.00 - 0.00 9 13-Aug-10 DBREALTY 6,000 6,000 23,569.40 6,000 100.00 10 16-Aug-10 DBREALTY 1,500 1,500 4,400.50 1,500 100.00 11 24-Sep-10 DBREALTY 6,000 6,000 46,938.35 3,902 65.03 12 11-Jun-10 EDELWEISS 421 421 2,773.00 237 56.29 13 14-Jun-10 EDELWEISS 622 622 2,788.75 422 67.84 14 21-Jun-10 EDELWEISS 2,120 2,120 13,902.35 2,070 97.64 15 23-Jun-10 EDELWEISS 6,200 6,200 42,518.90 2,947 47.53 16 09-Aug-10 EDELWEISS 5,000 5,000 51,400.55 5,000 100.00 17 24-Aug-10 EDELWEISS 7,000 10,000 9,940.00 10,000 100.00 18 13-Sep-10 EDELWEISS 50,000 50,000 51,174.35 39,853 79.71 19 14-Sep-10 EDELWEISS 50,000 50,165 81,157.55 49,454 98.58 20 12-Apr-10 ESSAROIL 23,200 23,200 16,374.75 10,000 43.10 21 01-Jun-10 FEDERALBNK 15,500 15,000 43,873.50 15,000 100.00 22 11-Jun-10 FEDERALBNK 14,000 14,000 27,819.05 13,000 92.86 23 07-Jul-10 GRABALALK 14,500 14,000 69,448.31 14,000 100.00 24 08-Jul-10 GRABALALK 8,568 8,568 34,897.80 6,000 70.03 25 09-Jul-10 GRABALALK 10,184 13,784 21,530.34 - 0.00 26 12-Jul-10 GRABALALK 21,500 21,500 61,658.95 21,500 100.00 27 13-Jul-10 GRABALALK 16,332 20,000 56,037.20 20,000 100.00 28 26-Aug-10 GRABALALK 1,311 3,311 4,978.50 3,311 100.00 29 26-May-10 KTKBANK 40,354 40,354 60,975.05 39,000 96.64 30 27-May-10 KTKBANK 45,190 45,190 69,619.10 42,126 93.22 31 16-Jun-10 KTKBANK 68,502 68,702 1,81,765.01 68,203 99.56 32 13-Jul-10 MOSERBAER 29,000 29,000 41,084.80 28,999 100.00 33 13-Aug-10 MOSERBAER 40,000 41,500 57,185.34 40,000 100.00 34 28-Jul-10 MSKPROJ 7,100 5,600 9,382.13 4,823 86.13 35 30-Jul-10 MSKPROJ 4,600 5,100 14,735.94 5,100 100.00 36 03-Aug-10 MSKPROJ 11,000 11,000 31,073.15 11,000 100.00 37 06-Aug-10 MSKPROJ 30,000 30,000 99,993.95 30,000 100.00 38 10-Aug-10 MSKPROJ 8,500 8,500 30,683.50 8,500 100.00 39 13-Sep-10 MSKPROJ 15,000 15,000 1,06,928.90 15,000 100.00 40 14-Sep-10 MSKPROJ 28,750 28,000 1,42,104.98 27,865 96.92 41 20-Sep-10 MSKPROJ 22,000 22,000 90,803.55 16,264 73.93 42 24-Aug-10 ORCHIDCHEM 9,000 9,000 6,504.60 9,000 100.00 43 27-Aug-10 ORCHIDCHEM 10,000 10,000 16,634.55 10,000 100.00 44 31-Mar-10 SPICEMOBIL 15,000 15,000 17,195.55 15,000 100.00 45 11-Jun-10 SPICEMOBIL 20,000 20,000 30,995.25 20,000 100.00 46 14-Jun-10 SPICEMOBIL 3,000 3,000 3,458.75 3,000 100.00 47 21-Jun-10 SPICEMOBIL 9,500 9,500 18,441.60 9,500 100.00 48 13-Jul-10 SPICEMOBIL 30,399 30,399 57,130.05 28,000 92.11 49 14-Jul-10 SPICEMOBIL 19,500 19,500 20,967.15 19,500 100.00 50 29-Jul-10 SPICEMOBIL 20,000 20,000 3,638.90 20,000 100.00 51 10-Aug-10 SPICEMOBIL 25,000 25,000 40,212.50 23,431 93.72 52 16-Aug-10 SPICEMOBIL 15,510 15,510 18,849.85 15,000 96.71 53 23-Aug-10 SPICEMOBIL 50,000 50,000 46,102.30 50,000 100.00 54 22-Jun-10 VISHALRET 27,237 27,237 34,440.85 17,000 62.42 55 23-Jun-10 VISHALRET 10,000 10,000 26,863.20 5,455 54.55 56 24-Jun-10 VISHALRET 10,101 8,101 12,682.29 5,501 67.91 57 01-Jul-10 VISHALRET 6,000 6,000 9,979.10 6,000 100.00 58 07-Jul-10 VISHALRET 30,000 30,000 60,410.30 30,000 100.00 59 09-Jul-10 VISHALRET 11,000 11,000 14,966.80 11,000 100.00 Total 15,87,334 15,96,717 26,69,443.94 12,85,945 Note: Square off earnings are calculated on the basis of lower of Kamal's buy quantity or sell quantity

- The details of 38 scrip days at BSE are as follows: TABLE D S. No. Date Scrip Symbol Kamal’s Kamal’s Square off Matched Qty. Matched % Buy Qty. Sell Qty. Earnings with Colin 1 21-Jan-10 BANKOFRAJ. 1,000 1,000 595.95 1,000 100.00 2 26-May-10 BANKOFRAJ. 12,000 12,000 8,324.80 12,000 100.00 3 14-Sep-10 DBREALTY 8,500 8,500 47,427.30 7,973 93.80 4 22-Sep-10 DBREALTY 5,611 5,611 28,270.10 5,611 100.00 5 23-Sep-10 DBREALTY 3,000 3,000 11,110.10 3,000 100.00 6 24-Sep-10 DBREALTY 11,000 11,000 1,13,358.65 11,000 100.00 7 11-Jun-10 EDELWEISSFS 195 195 1,202.90 21 10.77 8 15-Jun-10 EDELWEISSFS 900 900 5,103.00 861 95.67 9 18-Jun-10 EDELWEISSFS 650 650 1,243.50 650 100.00 10 27-Sep-10 EDELWEISSFS 85,500 85,500 1,65,861.05 85,500 100.00 11 6-Oct-10 EDELWEISSFS 85,000 85,000 75,615.80 74,455 87.59 12 26-Oct-10 EDELWEISSFS 37,000 37,000 15,680.20 23,196 62.69 13 12-Nov-10 EDELWEISSFS 80,000 79,500 56,236.49 60,000 75.47 14 22-Nov-10 EDELWEISSFS 60,981 60,981 73,208.20 40,981 67.20 15 25-Nov-10 EDELWEISSFS 29,505 29,505 17,455.50 29,505 100.00 16 2-Dec-10 EDELWEISSFS 33,641 33,641 37,903.50 33,641 100.00 17 7-Dec-10 EDELWEISSFS 45,000 45,000 50,714.20 15,000 33.33 18 18-Oct-10 GEODLTD 25,000 25,000 66,259.25 19,641 78.56 19 26-Oct-10 GEODLTD 11,748 11,748 11,579.05 10,086 85.85 20 8-Jul-10 GRABALALOK 2,000 900 940.52 - 0.00 21 15-Jul-10 GRABALALOK 5,132 5,132 12,677.05 5,132 100.00 22 22-Sep-10 GRABALALOK 2,000 5,600 3,064.33 2,914 52.04 23 15-Nov-10 GRABALALOK 15,000 15,000 11,567.90 14,770 98.47 24 8-Jan-10 GUJARANREC 1,000 1,000 365.00 1,000 100.00 25 16-Jun-10 KARNATAKABK 12,000 12,000 22,080.00 12,000 100.00 26 13-Aug-10 MOSERBAER 6,000 6,000 6,750.00 6,000 100.00 27 24-Aug-10 ORCHIDCHEM 1,400 1,400 1,060.70 - 0.00 28 1-Sep-10 PUNJLLOYD 500 500 1.90 - 0.00 29 11-Jan-10 SMOBILITY 500 1,000 49.20 - 0.00 30 6-Dec-10 TATASTL 10,500 10,500 513.60 1,500 14.29 31 6-Jul-10 V2RETAIL 4,000 5,500 4,344.36 - 0.00 32 15-Jul-10 V2RETAIL 7,000 10,500 12,070.37 2,500 23.81 33 12-Aug-10 V2RETAIL 5,000 5,000 2,426.10 2,835 56.70 34 20-Sep-10 WELPROJ 8,500 8,500 45,592.40 8,500 100.00 35 22-Sep-10 WELPROJ 33,662 37,162 1,38,111.01 22,297 66.24 36 1-Oct-10 WELPROJ 10,000 10,600 42,124.51 6,300 59.43 37 29-Oct-10 WELPROJ 3,100 3,100 8,570.05 3,100 100.00 38 16-Nov-10 WELPROJ 11,000 11,000 30,915.25 - 0.00 Total 6,74,525 6,86,125 11,30,373.79 5,22,969 Note: Square off earnings are calculated on the basis of lower of Kamal's buy quantity or sell quantity

- From the table C and D, it is noted that Kamal while indulging in front running transactions had earned a profit of ₹37,99,818 (₹26,69,444 while trading on NSE on 59 scrip days + ₹11,30,374 while trading on BSE on 38 scrip days).

5. As the alleged gains from front running were made during the period of January 2010 - December 2010 and Kamal had used such undue profits, it becomes reasonable and necessary to levy an interest at 12% simple interest per annum from January 01, 2011 i.e. from the day after the end of investigation period. The amount of interest is calculated and provided in the table below: Kamal Jitendra Katkoria (AHCPK7426P) Gain in (₹) Interest @ 12% p.a. (₹)* Total Amount (₹) NSE 26,69,444 16,67,488 43,36,932 BSE 11,30,374 7,06,097 18,36,471 Grand Total 37,99,818 23,73,585 61,73,403 *Interest has been calculated from January 01, 2011 till March 15, 2016. 6. SEBI vide order dated May 26, 2014 held that Kamal has contravened the provisions of Regulation 3(a), (b), (c), (d) and 4(1) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 read with Section 12A(a), (b) and (c) of the SEBI Act, 1992 and had restrained him from accessing the securities market and also prohibited him from buying, selling and otherwise dealing in securities market, directly or indirectly, in any manner whatsoever, for a period of three years. As earlier stated, SEBI had vide the said order stated that the ill-gotten gains, if any, of Kamal cannot be computed with certainty at this stage. Now the present investigation has again found that the profit was earned by Kamal while indulging in front running transactions.

I note that Kamal is aware of the specific purpose of investigation initiated by SEBI after passing of the order dated May 26, 2014, as also the likely findings of the same, in the light of the evidences gathered. With the initiation of investigation and quasi-judicial proceedings, it is possible that Kamal may divert the unlawful gains (subject to the adjudication of the allegation on the merits in the final order), which may result in defeating the effective implementation of the direction of disgorgement. Non-interference by the Regulator at this stage would therefore result in irreparable injury to interests of the securities market and the investors.

7. It therefore becomes necessary for SEBI to take urgent steps of impounding and retaining the proceeds (unlawful gains) allegedly made by Kamal, by way of an interim measure. Considering the facts and circumstances of the case, the balance of convenience lies in favour of SEBI. Accordingly, as an interim measure, an ad-interim ex-parte Order for impounding under Section 11(4)(d) of the Securities and Exchange Board of India Act, 1992, needs to be issued against Kamal.

8. In view of the foregoing, I, in exercise of the powers conferred upon me by virtue of Section 19 read with Sections 11(1), 11(4)(d) and 11B of the SEBI Act, 1992, hereby order to impound the unlawful gains of a sum of ₹61,73,403 (gain of ₹37,99,818 + interest of ₹23,73,585 from January 01, 2011 till March 15, 2016) from Mr. Kamal Jitendra Katkoria [PAN: AHCPK7426P]. If the funds are found to be insufficient to meet the figure of unlawful gains, as directed above, then the securities lying in his demat account shall be frozen to the extent of the remaining value.

9. The Banks are directed that no debit shall be made, without permission of SEBI, in respect of the bank accounts held, by Mr. Kamal Jitendra Katkoria except for the purposes of transfer of the funds to the escrow account as mentioned at para10 below. Further, Depositories are hereby directed that no debit shall be made, without permission of SEBI, in respect of the demat accounts held, by Mr. Kamal Jitendra Katkoria. However, credits, if any, into the accounts of Mr. Kamal Jitendra Katkoria may be allowed. The Banks and the Depositories are directed to ensure that all the above directions are strictly enforced.

10. Kamal is also directed not to dispose off or alienate any of his assets/ properties/ securities, till such time the amounts mentioned in paragraph 8 are credited to an escrow account [‘Escrow Account in Compliance with SEBI Order dated March 17, 2016 – A/c (in the name of Mr. Kamal Jitendra Katkoria’)] created specifically for the purpose in a Nationalized Bank. The escrow account/s shall create a lien in favour of SEBI and the monies kept therein shall not be released without permission from SEBI. After the said monies are deposited in the escrow account, SEBI shall communicate to the Banks and Depositories to defreeze the accounts.

11. Mr. Kamal Jitendra Katkoria is directed to provide, within 7 days of this order, a full inventory of all his assets and properties and details of all his bank accounts, demat accounts and holdings of shares/ securities, if held in physical form and details of companies in which he holds substantial or controlling interest.

12. As discussed above, the flat, having address as 302, Building no-1, C-wing, Mody Park, Pruthvi Classique, Iraniwadi, Kandiwali (West), Mumbai, was bought by Kamal (in his name and that of his wife) from the ill-gotten gains of front running transactions. The said flat is now registered in the name of Ms. Jagruti Katkoria and Ms. Saroj Katkoria (wife and mother of Kamal, respectively). Considering the same, I, in exercise of the powers conferred upon me under Section 19 read with Section 11(4)(f) of the SEBI Act, 1992, hereby direct Ms. Jagruti Katkoria (wife of Kamal) and Ms. Saroj Katkoria (mother of Kamal) not to dispose of or alienate the said flat until the amount mentioned at paragraph 8, above is credited to an escrow account created for the said purpose.

13. The above directions shall come into force with immediate effect. 14. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against the persons/entities covered under this Order, in accordance with law. The persons/ entities against whom this Order has been passed may file their replies to SEBI within 21 days from the date of receipt of this order, if they so desire. They may also indicate in their replies whether they wish to avail an opportunity of personal hearing in the matter.

15. A copy of this order shall be served to the Registrar/ Sub-Registrar (of the area where the above mentioned property is located) and the Secretary of the ‘housing society’ of the Building no. - 1, Mody Park, Pruthvi Classique, Iraniwadi, Kandiwali (West), Mumbai with a direction not to act upon any documents purporting to be dealing with transfer, mortgage, charge, lease or creation or alteration of any interest in the said property mentioned above, if presented for registration.

Date: March 17, 2016 PRASHANT SARAN Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA