Order in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons Limited)[SAT Appeal No.:07/2019]

SEBI/WTM/MPB/EFD-1-DRA-IV/ 46 /2017 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: MADHABI PURI BUCH, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons Limited)

1. Securities and Exchange Board of India (“SEBI”) conducted an examination into the dealings in the scrip of Kelvin Fincap Limited (formerly known as Dahyabhai Sons Limited); hereinafter referred to as “KFL” or the Company) on BSE Limited (“BSE”) during the period from June 18, 2013 to May 29, 2014 as there was huge rise in the price of the scrip. 2. Upon preliminary inquiry, SEBI prima facie observed the following: a. KFL issued 1,30,00,000 shares in physical form to 56 related entities on March 20, 2012. Thereafter, the shares of KFL were transferred among Kelvin Fincap Group entities in physical as well as dematerialized form after April 01, 2012. b. Suddenly after June 18, 2013, Kelvin Fincap Group entities started to trade heavily in KFL with huge trading volume concentration on BSE. c. Kelvin Fincap Group entities dealt amongst themselves in the market i.e. they were observed to be buying and selling shares amongst each other thereby creating artificial trading volume. Such artificial volume constituted almost 95.68% of the total market volume during the Examination Period. d. Kelvin Fincap Group also significantly exerted an upward pressure on the price inconsistent with normal buyer behaviour. e. The acts, omissions and conduct of the Kelvin Fincap Group as observed during preliminary examination prima facie fall in the definition of "fraud' under regulation 2(1) (c) of the SEBI(Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulation 2003 (hereinafter referred to as "PFUTP Regulations"). Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons Limited)

Kelvin Fincap Group entities adopted fraudulent device and artifice to defraud the genuine shareholders of KFL and have thus violated sections 12A (a) (b) and (c) of the SEBI Act, 1992 and regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a), (b), (e) and (g) of the PFUTP Regulations. f. Though the shares of KFL though allotted to 56 entities, KFL concealed the actual number of allottees and prima facie made false disclosure in that regard to camouflage the issuance to more than 49 persons so as to avoid compliance of issuance of prospectus and detailed disclosures therein. Such act omission and conduct, prima facie, apart from being fraudulent and in violation of the provisions of sections 12A (a) (b) and (c) of the SEBI Act, 1992, regulations 3(b), (c), (d) and 4(1) of the PFUTP Regulations and were also in contravention of the provisions of sections 56, 60 and 73 read with section 67(3) of the Companies Act, 1956 and regulations 4(2), 5(1), 5(7), 6, 7, 25, 36, 37, 46, and 57 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR Regulations) g. The disclosure made by KFL to BSE and MCA had different names of the directors leading to the incorrect disclosure. The shareholding pattern filed by KFL with BSE for the quarter ended June 30, 2012 was incorrect. Therefore the act and omission of Kelvin is prima facie in violation of clause 35 of the Listing Agreement read with section 21 of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as “SCRA”). Further, Keyur M. Shah, Keyur M Shah (HUF) and Kavita K Shah have failed to disclose changes in their shareholding to BSE and have thereby prima facie violated provisions of regulation 13(4A) of the Prohibition of Insider Trading) Regulations, 1992 (PIT Regulations) h. KFL and its directors were under obligation to ensure that the shares allotted under the purported preferential allotment are not transferred within one year from the date of the allotment. However, the same were transferred in connivance with Kelvin and its directors. Therefore, it was observed that such transfer of shares is in violation of regulation 78(2) of ICDR Regulations.

3. Therefore, in order to protect the interest of the investors and the integrity of the securities Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons market, SEBI, under section 11(1), section 11 (4) (b) and section 11B of the SEBI Act, 1992 and section 12A of the SCRA, pending investigation and passing of final order, vide order dated 14, August, 2014 restrained the following entities from accessing the securities market and further prohibited them from buying, selling or dealing in the securities markets, either directly or indirectly, in any manner whatsoever, till further directions: Table No.1 Si. No. Name of the entity PAN 1 Kelvin Fincap Limited AAACD1881H 2 Keyur M Shah AAHPS4084K 3 Keyur M Shah (HUF) AAAHK5034L 4 Kavita K Shah AAYPS3458E Dahyabhai Shares And Stock Brokers 5 Ltd AAACD1880G 6 Bhavik Satish Badani ALRPB9295L 7 Bipin Bhikhabhai Patel AIDPP3653M 8 Sushma Vimalkumar Raval BBPPE7839K 9 Mahendrabhai Sakalchand Shah AJMPS0962J 10 Mansukh Sanghvi ABJPS8618E 11 Vishal Kumar Shah AYBPS0534J 12 Surekhaben K Shah BORPS0804Q 13 Cromakem Limited AAECC0841Q 14 Do Max Steel Limited AACCD7020L 15 Stardom Trading Company Pvt Ltd AAHCS1332H 16 Sapan Chemicals Limited AAFCS2725Q 17 Fast Track Entertainment Limited AAACF7961Q 18 Cornhill Trading Company Pvt Ltd AACCC0591P 19 Sonal International Ltd AACCS1185R 20 Jalpa Jani AMVPJ5720H 21 Kirti Mehta AKSPM3939N 22 Jayshree Shankar Bhosle AFMPB0449P 23 Nova Gold Petro Resources Limited AAACO2454R 24 Acil Cotton Industries Limited AABCA7788F Zimig Trading Company Private 25 Limited AAACZ6848C 26 Inventure Finance Private Limited AAACM0623J 27 Naresh Nagindas Shah ARYPS5993F 28 Mukesh Nanubhai Desai AATPD0728R 29 RFL International Limited AAACR9384B 30 Rupesh Balkrishna Bhoir ALZPB9604R Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons

Si. No. Name of the entity PAN 31 Kavita Sunish Behl AAJPB7775N 32 Geeta Narendra Shah AAOPS2033H 33 Hasmukhlal Ramanlal Shah AADPS8752L 34 Shobhanaben N. Moradia AIKPM4674N 35 Bharat N. Moradiya AMTPM0749H 36 Vasantben Dhanjibhai Donda AEGPD4889J 37 Mukesh N. Moradia AIVPM3622K 38 Shehul V. Moradia AIVPM3623J 39 Bhimjibhai D. Chanchapara ACXPP9049B 40 Dhanjibhai S. Donda AEIPD5332A 41 Vallabhbhai D. Sachapra ACXPP9026C 42 Hiren Tulsibhai Moradia AMTPM8714C 43 Rajesh Moradia ACRPM4534E 44 Dharmesh Tulsibhai Moradia ALEPM6311R

4. Thereafter, vide order dated March 31, 2015 the directions issues against 42 entities mentioned in the following table were confirmed. Table No.2 Sl. No. PAN Name of the entity 1 AAACD1881H Kelvin Fincap Limited 2 AAHPS4084K Keyur M Shah 3 AAAHK5034L Keyur M Shah (Huf) 4 AAYPS3458E Kavita K Shah Dahyabhai Shares And Stock Brokers 5 AAACD1880G Limitd 6 BBPPE7839K Sushma Vimalkumar Raval 7 AYBPS0534J Vishal Kumar Shah 8 ALRPB9295L Bhavik Satish Badani 9 BORPS0804Q Surekhaben K Shah 10 AIDPP3653M Bipin Bhikhabhai Patel 11 AAACM0623J Inventure Finance Private Limited 12 AATPD0728R Mukesh Nanubhai Desai 13 AAJPB7775N Kavita Sunish Behl 14 AADPS8752L Hasmukhlal Ramanlal Shah 15 AIKPM4674N Shobhanaben N. Moradia 16 AMTPM0749H Bharat N. Moradiya Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons

Sl. No. PAN Name of the entity 17 AIVPM3622K Mukesh N. Moradia 18 AIVPM3623J Shehul V. Moradia 19 AMTPM8714C Hiren Tulsibhai Moradia 20 ACRPM4534E Rajesh Moradia 21 ALEPM6311R Dharmesh Tulsibhai Moradia 22 AEGPD4889J Vasantben Dhanjibhai Donda 23 AEIPD5332A Dhanjibhai S. Donda 24 ACXPP9049B Bhimjibhai D. Chanchapara 25 ACXPP9026C Vallabhbhai D. Sachapra 26 AAECC0841Q Cromakem Limited 27 AACCD7020L Do Max Steel Limited 28 AAFCS2725Q Sapan Chemicals Limited 29 AAACF7961Q Fast Track Entertainment Limited 30 AACCS1185R Sonal International Ltd 31 AMVPJ5720H Jalpa Jani 32 AAOPS2033H Geeta Narendra Shah 33 AFMPB0449P Jayshree Shankar Bhosle 34 AKSPM3939N Kirti Mehta 35 AAHCS1332H Stardom Trading Company Pvt Ltd 36 AACCC0591P Cornhill Trading Company Pvt Ltd 37 AAACO2454R Nova Gold Petro Resources Limited 38 AABCA7788F Acil Cotton Industries Limited 39 AAACZ6848C Zimig Trading Company Private Limited 40 ALZPB9604R Rupesh Balkrishna Bhoir 41 AAACR9384B RFL International Limited 42 ARYPS5993F Naresh Nagindas Shah

5. The directions issued against Mr. Mahendrabhai Sakalchand Shah in the interim order dated August 14, 2014 were revoked vide the order dated March 31, 2015. Since Mr. Mansukh Sanghvi had passed away on July 05, 2014, the proceedings against him abated and directions issued against him vide the interim order dated August 14, 2014 ceased to have effect.

6. Pursuant to the interim order, SEBI conducted a detailed investigation covering a period of November 31, 2011 to May 29, 2014, so as to ascertain the violation of securities laws.

Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons

7. In the meanwhile, Hon’ble Securities Appellate Tribunal (SAT) vide its order dated Feb 2, 2016 in appeal No. 218 of 2015(filed by Inventure Finance Private Ltd), directed SEBI to Complete the investigation as expeditiously as possible. In another appeal filed by Keyur Madhusudan Shah and others,(Appeal No. 112/2017) Hon’ble SAT vide order dated May 16, 2017 directed SEBI to complete the investigation and pass appropriate order within five months from the date of the order and communicate the same to the appellants.

8. Upon completion of investigation by SEBI, it is noted that investigation did not find any adverse evidence/findings against the following 20 entities warranting continuation of action under Sections 11B and 11(4) of the SEBI Act. Table No.3 Sl. No. PAN Name of the entity 1 AAHPS4084K Keyur M Shah 2 AAAHK5034L Keyur M Shah (Huf) 3 AAYPS3458E Kavita K Shah Dahyabhai Shares And Stock Brokers 4 AAACD1880G Limitd 5 BBPPE7839K Sushma Vimalkumar Raval 6 AAJPB7775N Kavita Sunish Behl 7 AADPS8752L Hasmukhlal Ramanlal Shah 8 AIKPM4674N Shobhanaben N. Moradia 9 AMTPM0749H Bharat N. Moradiya 10 AIVPM3622K Mukesh N. Moradia 11 AIVPM3623J Shehul V. Moradia 12 AMTPM8714C Hiren Tulsibhai Moradia 13 ACRPM4534E Rajesh Moradia 14 ALEPM6311R Dharmesh Tulsibhai Moradia 15 AEGPD4889J Vasantben Dhanjibhai Donda 16 AEIPD5332A Dhanjibhai S. Donda 17 ACXPP9049B Bhimjibhai D. Chanchapara 18 ACXPP9026C Vallabhbhai D. Sachapra 19 AAOPS2033H Geeta Narendra Shah 20 ARYPS5993F Naresh Nagindas Shah

Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons

9. Considering the fact that there are no adverse findings against the aforementioned entities in the scrip of KFL warranting continuation of action under Sections 11B and 11(4) of the SEBI Act, I am of the considered view that the directions confirmed vide Order dated March 31, 2015, are liable to be revoked. Investigation has found out evidence of violation of PIT Regulations by Keyur M. Shah, Keyur M Shah (HUF) and Kavita K Shah warranting adjudication proceedings against them. 10. In view of the foregoing, I, 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, 11(4) and 11B of the SEBI Act, section 12A of the Securities Contracts (Regulation) Act, 1956 hereby revoke the Confirmatory Order dated March 31, 2015 qua aforesaid 20 entities (paragraph 8 above) with immediate effect. 11. The revocation of the directions issued vide this order is only in respect of the entities mentioned at paragraph 8 of this order in the matter of KFL pertaining to the investigation period from November 31, 2011 to May 29, 2014, in respect of the prima facie violations for which the Confirmatory Order dated March 31, 2015 was passed by SEBI. As regards remaining 22 entities in the scrip of KFCL, violations under SEBI Act, SCRA, PFUTP Regulations and other securities laws were observed and SEBI shall continue its proceedings against them. Hence, the directions issued vide Order dated March 31, 2015 against remaining 22 entities shall continue. 12. This order is without prejudice to any other action that may be initiated as per law. 13. A copy of this Order shall be served on the Stock Exchanges and Depositories, for necessary action.

DATE: OCTOBER 03, 2017 MADHABI PURI BUCH PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the matter of in the matter of Kelvin Fincap Limited (formerly known as Dahyabhai Sons