Order in the matter of Parichay Investments Ltd.[SAT Appeal No.:40/2022 & Misc.App.No.10/2022]

WTM/GM/EFD/ 27 / 2019-20 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER In respect of Show Cause Notice dated August 22, 2017 in the matter of Parichay Investments Ltd. (PIL) In respect of: Sr. No. Noticees PAN 1. Mr. Sanjay Jethalal Soni BVSPS9741N 2. Ms. Krupa Sanjay Soni BVSPS9740P 3. M/s. J M Soni Consultancy AAGFJ2939P 4. Mr. Dhiren Dharamdas AAZPA8189K Agarwal 5. Ms. Shweta Dhiren Agarwal AIZPA2160J 6. Mr. Krunal Gopaldas Rana AKMPR9961M 7. Mr. Amul Gagabhai Desai AHDPD3526G 8. Mr. Mahesh Somabhai Desai AMGPD0183P 9. Mr. Arif Gulammustufa CKZPS8073E Shaikh

The aforesaid entities are hereinafter referred to by their respective names/serial numbers or collectively as “the Noticees”.

1. Securities and Exchange Board of India (SEBI) conducted an investigation in the scrip of Parichay Investments Ltd ("PIL"/ "the company"/ "target company") for the period of July 21, 2010 to August 30, 2011 to ascertain any violation of the provisions of SEBI Act 1992, SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ("PFUTP Regulations"). The investigation revealed both violation of PFUTP Regulations as well as SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SAST Regulations"). Accordingly, SEBI issued show cause notice dated August 22, 2017 (hereinafter referred to as "the SCN") to the noticees. The facts elaborated in the SCN are reproduced in the following paragraphs.

Connection between the Noticees 2. The Noticees to this Order were, after perusal of their respective KYC documents. found to be connected to each other, the basis for this connection elaborated as follows: Table 1 Sl. Name of entity Basis of connection No. 1. S anjay Jethalal Soni (1) Self (Noticee No. 1) 2. K rupa Sanjay Soni (1) Krupa Sanjay Soni is wife of Sanjay Jethalal Soni. (Noticee No. 2) (2) Krupa Sanjay Soni and Sanjay Jethalal Soni share common email id shreejisecurities14@yahoo.co.in. (3) From the bank account transaction statements, it has been observed that there have been fund movements between Sanjay Soni and Krupa Soni. 3. M /s. J.M. Soni (1) Sanjay Soni is the proprietor of M/s. J.M. Soni Consultancy (Noticee Consultancy. No. 3) (2) M/s. J.M. Soni Consultancy and Krupa Sanjay Soni share common address D-19, Karnavati Apts., Near Shradda Petrol Pump Hotel, Ahmedabad and contact no. 9727548290. (3) From the bank account transaction statements, it has been observed that there have been regular fund movements between M/s. J M Soni Consultancy and Sanjay Soni as well as Krupa Soni.

4. K runal Gopaldas Rana (1) Krunal Gopaldas Rana and M/s. J.M. Soni Consultancy (Noticee No.6) share common contact no. 9727548290. (2) From the bank account statement, there have been transfer of funds between Krunal Gopaldas Rana and M/s. J.M. Soni Consultancy on September 3, 2009. (3) On perusal of trades of Krunal Gopaldas Rana with BMA Wealth Creators P. Ltd., it is observed that orders were placed through Sanjay Jethalal Soni. 5. D hiren Dharamdas (1) Dhiren Dharamdas Agarwal and Sanjay Jethalal Soni Agarwal (Noticee No.4) share common contact no. 9879430033. (2) From the bank account statement, there have been transfer of funds between Dhiren Dharamdas Agarwal and M/s. J.M. Soni Consultancy on July 21, 2010. (3) On perusal of trades of Dhiren Dharamdas Agarwal with BMA Wealth Creators P. Ltd., it is observed that orders were placed through Sanjay Jethalal Soni. 6. S hweta Dhiren Agrawal (1) Shweta Dhiren Agarwal is wife of Dhiren Dharamdas (Noticee No.5) Agarwal. 7. A mul Gagabhai Desai (1) Amul Gagabhai Desai and Shantiben Gangaram Desai (Noticee No.7) share common address 135, Ranuja Nagar Part – 2, Premchand Nagar Road, Jodhpur Ahmedabad.

Shantiben Gangaram Desai and Krupa Sanjay Soni / Sanjay Jethalal Soni share common email id shreejisecurities14@yahoo.co.in. (2) On perusal of trades of Amul Gagabhai Desai with BMA Wealth Creators P. Ltd., it is observed that orders were placed through Sanjay Jethalal Soni.

Sl. Name of entity Basis of connection No. 8. M ahesh Somabhai (1) Mahesh Somabhai Desai and M/s. JM Soni Consultancy Desai (Noticee No.8) share common contact no. 9727548290. (2) On perusal of trades of Mahesh Somabhai Desai with Prabhudas Lilladher P. Ltd., it is observed that orders were placed through Sanjay Jethalal Soni. 9. A rif Gulam Mustafa (1) Arif Gulam Mustafa Shaikh and Krupa Sanjay Soni share Shaikh (Noticee No.9) common email id shreejisecurities14@yahoo.co.in. (2) Arif Gulam Mustafa Shaikh and M/s. JM Soni Consultancy share common contact no. 9727548290.

3. Allegation of Fraudulent and Manipulative Trades in securities The investigation was divided into patches: Period from 21-Jul-2010 to 23-Feb- 2011 described as "Patch I" and Period from 24-Feb-2011 to 30-Aug-2011 described as "Patch II". During both patches, significant instances of volume and price manipulation were found to have been executed among the Noticees.

3.1. Violations observed in Patch I 3.1.1 During Patch I, it was observed that the following entities were observed to be top 10 buy clients and sell clients: Table 2 Buy Client Name Qty % of Sell Client Name Qty % of Total Total Mkt.Vol. Mkt. Vol. Mr. Krunal Gopaldas Rana 6,78,000 8.05 Mr. Omi Bagadia 8,10,700 9.63 Mr. Krunal Gopaldas Mr. Amul Gagabhai Desai 6,16,150 7.32 5,30,150 6.30 Rana Ms. Krupa Sanjay Soni 5,25,700 6.25 Ms. Krupa Sanjay Soni 4,95,950 5.89 Mr. Sanjay Jethalal Soni 4,73,000 5.62 Mr. Sanjay Jethalal Soni 4,55,650 5.41 Mr. Dhirenkumar Mr. Amul Gagabhai 4,24,950 5.05 4,26,550 5.07 Dharamdas Agarwal Desai Mr. Mahesh Somabhai Mr. Dhirenkumar 2,85,350 3.39 3,46,700 4.12 Desai Dharamdas Agarwal Mr. Mahesh Somabhai Ms. Shweta Dhiren Agrawal 2,15,300 2.56 2,47,900 2.95 Desai Mr. Arif Gulammustufa Ms. Shweta Dhiren 1,52,650 1.81 1,35,000 1.60 Shaikh Agrawal Mr. Pradeep Narendra Mr. Arif Gulammustufa 1,44,400 1.72 1,30,600 1.55 Bhatt Shaikh Mr. Janakray Vithaldas M/s. J M Soni 1,34,700 1.60 1,29,550 1.54 Soni Consultancy Top 10 Buy Clients Top 10 Sell Clients 36,50,200 43.36 37,08,750 44.06 Remaining Clients Remaining Clients 47,67,500 56.64 47,08,950 55.94 Total Market Vol. Total Market Vol. 100 .00 84,17,700 100.00 84,17,700

3.1.2 The investigation by SEBI had identified 63 entities as forming part of the larger Soni group which were connected to each other. Out of these 63 entities, the following 15 entities (which is referred to as the "sub-group" in the Table below and which includes all the Noticees) had traded among themselves for more than 10,000 shares during Patch I, executed matched trades, thereby creating artificial volumes in the scrip: Table 3 Client Name Buy Qty Buy Qty Sell Qty Sell Qty matched with matched matched with matched entire Soni with sub entire Soni with sub group group group group Krunal Gopaldas Rana 4,68,700 2,51,200 4,56,400 2,18,000 Amul Gagabhai Desai 4,11,200 2,28,650 3,81,850 2,07,800 Dhirenkumar Dharamdas Agarwal 2,91,550 1,03,750 3,12,400 1,50,750 Krupa Sanjay Soni 2,54,450 1,33,550 3,57,050 2,53,650 Sanjay Jethalal Soni 2,46,950 1,41,050 2,31,150 1,47,850 Mahesh Somabhai Desai 2,12,500 95,800 2,53,850 1,40,900 Shweta Dhiren Agrawal 2,00,750 77,700 1,70,100 44,350 Miteshgiri Chandangiri Goswami 1,36,350 52,650 1,00,750 11,900 Arif Gulammustufa Shaikh 1,22,950 78,350 95,550 33,850 Janakray Vithaldas Soni 93,100 42,350 81,300 13,950 Amitkumar Rameshchandra Rana 87,500 10,350 79,400 26,050 Vipul Virendrakumar Patel 75,350 49,700 49,350 13,650 J M Soni Consultancy 70,550 39,900 62,950 18,800 Shantiben Gangaram Desai 47,850 0 80,400 23,650 Dhaval Satishkumar Agrawal 47,050 12,150 48,300 12,000 Total 27,66,800 13,17,150 27,60,800 13,17,150

3.1.3 The following Noticees had executed self trades repeatedly (i.e. quantity of more than 10,000 shares, more than 10 count of trades executed for two or more days), the details thereof are as follows: Table 4 Client Name Self No. of No. of Sum of % of Self % of Self % of Self Trade Self tradin LTP diff. Traded Traded Qty. Traded Qty. Qty. Trades g days (`) Qty. to to Clients to Clients Market Buy Vol. Sell Vol. Vol. Mr. Krunal Gopaldas Rana 34,850 240 36 1.00 0.41 5.14 6.57 Mr. Sanjay Jethalal Soni 29,750 224 22 1.00 0.35 6.29 6.53 Ms. Krupa Sanjay Soni 29,550 146 34 -17.05 0.35 5.62 5.96 Mr. Amul Gagabhai Desai 21,150 230 33 0.85 0.25 3.43 4.96

Investigation observed that following 13 entities (which includes all the Noticees) contributed to 1.00% or more towards positive LTP (gross) and the details are given in Table 5 below:- Table 5 Name All trades LTP Diff. > 0 LTP Diff. < 0 LTP Diff. =0 % of Sum of Sum of No of Sum of Qty No of Sum of Qty No of Qty No of +ve LTP diff. Qty trades LTP diff. traded trades LTP traded trade traded trades LTP diff. s to total mkt. +ve LTP Krupa Sanjay - 12.6 62.45 5,25,700 3,892 294.10 42,60 264 52,05 4,31,000 3,15 Soni 231.65 469 1 0 0 8 Amul 6,16,15 - Gagabhai 67.15 4,109 154.55 63,40 221 35,85 5,16,900 3,60 6.63 0 87.40 279 Desai 0 0 9 Krunal 6,78,00 Gopaldas 18.10 4,966 118.75 49,00 188 -100.65 61,50 4,45 5.09 0 328 5,67,500 Rana 0 0 0 Sanjay 4,73,00 - 47.00 2,504 100.70 53,10 178 18,70 4,01,200 2,12 4.32 Jethalal Soni 0 53.70 203 0 0 3 Dhirenkumar - 51.85 4,24,950 1,941 99.40 38,80 117 23,85 3,62,300 1,67 4.26 Agarwal 47.55 152 0 0 2 Mahesh 2,85,35 - Somabhai 31.10 3,155 68.80 22,05 157 12,40 2,50,900 2,88 2.95 0 37.70 109 Desai 0 0 9 Vaishali - 51.10 86,300 555 62.55 10,60 91 11,90 59 63,800 405 2.68 Jimish Soni 11.45 0 0 Arif 1,52,65 - Gulammustuf 15.05 836 42.00 24,65 72 9,350 87 1,18,650 677 1.80 0 26.95 a Shaikh 0 Shweta 2,15,30 Dhiren 36.80 1,260 40.90 14,65 43 -4.10 6,750 27 1,93,900 1,19 1.75 0 Agrawal 0 0 Shantiben - 20.50 90,600 664 35.30 5,400 56 11,90 40 73,300 568 1.51 Desai 14.80 0 Ajaykumar - 15.70 37,750 415 29.30 3,500 30 4,200 58 30,050 327 1.26 Jayntilal Pala 13.60 Nehaben Janakray 19.35 68,700 458 24.80 4,950 26 -5.45 8,450 14 55,300 418 1.06 Soni J M Soni 1,29,55 - 3.05 709 24.65 17,90 48 9,700 56 605 1.06 Consultancy 0 21.60 1,01,950 0 Total of the 8,88,05 45,21 market 363.65 84,17,700 52,583 2331.84 0 3,414- 1968.19 660,700 3954 68,68,900 5 100

From the above Table 5, investigation observed that for 173 trades the buy orders were placed in the system before the sell orders were placed thereby contributing Rs.196.65 to LTP. Further, for 296 trades which contributed Rs.173.45 to LTP the counter party sellers were among these 13 entities. Thus, on the basis of trading pattern, i.e. on account of trading among themselves and by placing orders above LTP, investigation concluded that these entities have manipulated the price of the scrip.

3.1.4 Investigation analyzed the trades of 13 entities who contributed majorly towards net LTP as given in Table 5 above and observed that first trades of 7 entities contributed towards net LTP, details of which are given in Table 6 below:

Table 6 Clients Name Sum of No. of First % to total No. % to total First First Trades of First First Trades LTP Trade Qty. Trades Trades diff. (`) s Qty. 18.80 9 1,450 5.92 3.57 Mr. Amul Gagabhai Desai Mr. Krunal Gopaldas 13.60 10 550 6.58 1.35 Rana Mr. Sanjay Jethalal Soni 11.75 7 6,350 4.61 15.62 Ms. Krupa Sanjay Soni 9.95 21 1,050 13.82 2.58 2.60 8 3,900 5.26 9.59 Mr. Dhirenkumar Agarwal M/s. JM Soni 1.05 1 50 0.66 0.12 Consultancy Ms. Shantiben Desai 0.10 1 50 0.66 0.12 Total of the group 57.85 57 13,400 37.51 32.95 From the above Table 7, investigation observed that these 7 entities contributed Rs.57.85 towards net LTP in 57 first trades. Investigation concluded that these entities have contributed to the price rise by increasing LTP through first trades and thereby manipulated the price of the scrip.

3.1.5 Also, it was observed that the price of scrip increased from Rs.36.00 to a high of Rs.407.75 (an increase of Rs.371.75) through first trades as well as intra-day price movements. Investigation analyzed the trades of 13 entities as given in Table 5 above and observed that following 12 entities (which includes all the Noticees) contributed towards NHP and the details are given in Table 7 below:- Table 7 Clients Name Sum of No. of % to total NHP (`) % to total NHP Qty Trades mkt. NHP mkt. NHP trades

Clients Name Sum of No. of % to total NHP (`) % to total NHP Qty Trades mkt. NHP mkt. NHP trades Mr. Amul Gagabhai Desai 15,300 8.58 37.25 10.01 40 Ms. Krupa Sanjay Soni 5,900 7.73 21.55 5.77 36 Ms. Shweta Dhiren Agrawal 4,550 2.36 19.70 5.30 11 Ms. Vaishali Jimish Soni 3,050 5.79 15.85 4.25 27 Mr. Krunal Gopaldas Rana 4,700 5.36 14.65 3.93 25 Mr. Mahesh Somabhai Desai 4,700 7.08 11.40 3.05 33 Mr. Sanjay Jethalal Soni 2,500 3.86 11.35 3.07 18 Mr. Arif Gulammustufa 2,150 3.00 8.15 2.18 Shaikh 14 Mr. Dhirenkumar Agarwal 750 1.93 5.60 1.51 9 Ms. Shantiben Gangaram 750 1.50 4.10 1.09 Desai 7 M/s. JM Soni Consultancy 550 4 0.86 1.35 0.37 Ms. Nehaben Janakray Soni 800 1.29 0.50 0.12 6 Total 45,700 230 49.34 151.45 40.65

From the above Table 6, it is observed that 12 entities have contributed Rs.151.45 (i.e. 40.65% to total market NHP) in 230 trades and have contributed to the price rise by establishing new high price and thereby manipulated the price of the scrip.

3.2 Violations observed in Patch II 3.2.1 During Patch-II, it was observed that the following entities were observed to be top 10 buy clients and sell clients: Table 8 Buy Client Name Qty % of Sell Client Name Qty % of Total Total Mkt Vol. Mkt Vol. Mr. Krunal Gopaldas 2,57,700 6.49 Mr. Krunal Gopaldas Rana 3,40,500 8.57 Rana Mr. Dhirenkumar 1,39,450 3.51 Mr. Amul Gagabhai Desai 2,56,200 6.45 Dharamdas Agarwal Mr. Amul Gagabhai Mr. Dhirenkumar 1,30,450 3.28 2,19,250 5.52 Desai Dharamdas Agarwal Mr. Ashlesh 1,28,650 3.24 Ms. Shweta Dhiren Agrawal 1,96,150 4.94 Gunvantbhai Shah Ms. Shweta Dhiren 1,20,800 3.04 M/s. Shyam Construction 1,79,050 4.51 Agrawal Mr. Mahesh Somabhai 96,950 2.44 Mr. Mahesh Somabhai Desai 1,49,750 3.77 Desai Ms. Krinaben Ranjitbhai 96,500 2.43 Ms. Krupa Sanjay Soni 1,05,550 2.66 Gajjar

Buy Client Name Qty % of Sell Client Name Qty % of Total Total Mkt Vol. Mkt Vol. Mr. Mayur Narayandas Mr. Ashlesh Gunvantbhai 79,500 2.00 86,500 2.18 Darji Shah Ms. Krinaben Ranjitbhai Ms. Krupa Sanjay Soni 70,050 1.76 81,400 2.05 Gajjar M/s. Chimanlal Mr. Jitendra Hasmukhlal Maneklal Securities P. 68,350 1.72 79,250 2.00 Vyas Ltd. Top 10 Buy Clients 11,88,400 29.92 Top 10 Sell Clients 16,93,600 42.64 Remaining Clients 27,83,400 70.08 Remaining Clients 22,78,200 57.36 Total Market Vol. 39,71,800 100.00 Total Market Vol. 39,71,800 100.00

3.2.2 Investigation observed that of the 63 entities forming part of the larger sub-group, the following 12 entities (which is referred to as the "sub-group" in the Table below and which includes some of the Noticees) had traded among themselves for more than 10,000 shares during Patch-II, the details of match trades is given in Table 9 below:

Table 9 Client Name Buy Qty Buy Qty Sell Qty Sell Qty matched with matched matched with matched entire Soni with sub entire Soni with sub group group group group Mr. Dhirenkumar Dharamdas Agarwal 98,000 54,050 99,150 51,550 Mr. Ashlesh Gunvantbhai Shah 98,550 42,400 32,750 0 Mr. Jitendra Hasmukhlal Vyas 47,050 12,900 30,450 0 Mr. Amul Gagabhai Desai 79,750 32,550 1,19,600 70,350 Ms. Krinaben Ranjitbhai Gajjar 52,350 32,700 20,350 0 Ms. Shweta Dhiren Agrawal 87,350 31,100 75,200 29,400 Mr. Krunal Gopaldas Rana 1,13,550 56,650 1,66,900 94,750 Mr. Miteshgiri Chandangiri Goswami 48,750 31,000 42,000 14,650 Mr. Amitkumar Rameshchandra Rana 34,750 18,100 5,800 0 Mr. Mahesh Somabhai Desai 49,400 0 62,200 29,800 Mr. Janakray Vithaldas Soni 13,200 0 24,700 10,150 Ms. Shantiben Gangaram Desai 14,950 0 34,100 10,800 Total 7,37,650 3,11,450 7,13,200 3,11,450 From the above Table 9, investigation observed that these entities (which include all the noticees) executed matched trades by trading among themselves thereby created artificial volumes in the scrip.

3.3 It was accordingly alleged that Noticee Nos. 1 to 9 executed matched trades by trading among themselves and thereby created artificial volumes in the scrip and manipulated the price of the scrip. It is alleged that Noticee No.1, Noticee No.2, Noticee No.6 and Noticee No.7 executed self trades repeatedly in the scrip of PIL which created false and misleading appearance of trading and without change in ownership in the scrips. It is therefore alleged that, Noticee Nos. 1 to 9 have violated Section 12A(a), (b) & (c) of SEBI Act, 1992 read with Regulations 3(a), (b), (c)&(d) and 4(1), 4(2)(a), (b), (e) & (g) of SEBI (PFUTP) Regulations, 2003.

4. Allegation of trigger of SAST Regulations 4.1 Investigations have revealed that Sanjay Jethalal Soni (Noticee No. 1) is the proprietor of M/s. J M Soni Consultancy (Noticee No.3) and Ms. Krupa Sanjay Soni (Noticee No.2) is the wife of Noticee No.1. In view of the above, Noticee Nos. 1 to 3 are persons acting in concert (PACs) under Regulation 2(e)(1) and Regulation 2(e)(2)(ii) read with 2(e)(2)(iii) of SAST Regulations for acquiring shares of PIL. The three Noticees together cumulatively acquired 10.18% of paid up equity capital of the company on September 21, 2010. Thereafter they purchased / sold shares and their holdings exceeded 15.00% of the paid up capital on September 29,2010. Thereafter, they increased their shareholding to 18.88% (as on September 30,2010) and reduced their holding subsequently to less than 15% of shareholding. The details of their trading is given in Table 10 below:

Table 10 Date Buy Sell Net Cumulative % 21-Sep-10 8,550 0 8,550 1,22,150 10.18 22-Sep-10 12,350 0 12,350 1,34,500 11.21 24-Sep-10 34,500 -3,600 30,900 1,65,400 13.78 27-Sep-10 5,650 -11,100 -5,450 1,59,950 13.33 28-Sep-10 11,650 -950 10,700 1,70,650 14.22 29-Sep-10 18,900 -5,550 13,350 1,84,000 15.33 30-Sep-10 48,050 -5,500 42,550 2,26,550 18.88 1-Oct-10 0 -1,550 -1,550 2,25,000 18.75 4-Oct-10 900 -14,950 -14,050 2,10,950 17.58 5-Oct-10 0 -40,300 -40,300 1,70,650 14.22 6-Oct-10 1,000 0 1,000 1,71,650 14.30 7-Oct-10 24,900 -32,450 -7,550 1,64,100 13.68 8-Oct-10 17,350 -9,750 7,600 1,71,700 14.31 11-Oct-10 30,500 -20,550 9,950 1,81,650 15.14 12-Oct-10 14,500 -5,050 9,450 1,91,100 15.93 14-Oct-10 15,000 -5,500 9,500 2,00,600 16.72 15-Oct-10 300 -9,050 -8,750 1,91,850 15.99 18-Oct-10 200 0 200 1,92,050 16.00 19-Oct-10 21,650 -7,500 14,150 2,06,200 17.18

Date Buy Sell Net Cumulative % 20-Oct-10 100 -1,000 -900 2,05,300 17.11 21-Oct-10 7,750 -7,750 0 2,05,300 17.11 22-Oct-10 16,000 -5,750 10,250 2,15,550 17.96 25-Oct-10 16,150 -12,200 3,950 2,19,500 18.29 26-Oct-10 400 0 400 2,19,900 18.33 27-Oct-10 2,300 -500 1,800 2,21,700 18.48 28-Oct-10 21,000 -6,700 14,300 2,36,000 19.67 29-Oct-10 30,600 -200 30,400 2,66,400 22.20 2-Nov-10 9,050 0 9,050 2,75,450 22.95 3-Nov-10 7,150 -19,150 -12,000 2,63,450 21.95 8-Nov-10 14,550 -7,950 6,600 2,70,050 22.50 9-Nov-10 200 -2,000 -1,800 2,68,250 22.35 12-Nov-10 5,500 -15,300 -9,800 2,58,450 21.54 15-Nov-10 500 -29,100 -28,600 2,29,850 19.15 16-Nov-10 19,950 -13,550 6,400 2,36,250 19.69 18-Nov-10 0 -1,800 -1,800 2,34,450 19.54 19-Nov-10 9,800 -2,000 7,800 2,42,250 20.19 22-Nov-10 3,850 -73,250 -69,400 1,72,850 14.40 23-Nov-10 20,300 -16,950 3,350 1,76,200 14.68 24-Nov-10 4,150 -16,750 -12,600 1,63,600 13.63 25-Nov-10 35,300 -37,950 -2,650 1,60,950 13.41 26-Nov-10 18,200 -13,350 4,850 1,65,800 13.82 29-Nov-10 19,650 -11,250 8,400 1,74,200 14.52 30-Nov-10 35,850 -10,650 25,200 1,99,400 16.62 1-Dec-10 4,000 -39,500 -35,500 1,63,900 13.66 2-Dec-10 14,450 -11,050 3,400 1,67,300 13.94 3-Dec-10 16,000 -5,100 10,900 1,78,200 14.85 6-Dec-10 10,950 -3,000 7,950 1,86,150 15.51 7-Dec-10 27,300 -2,000 25,300 2,11,450 17.62 8-Dec-10 11,250 -5,850 5,400 2,16,850 18.07 9-Dec-10 9,500 -5,550 3,950 2,20,800 18.40 10-Dec-10 6,650 -12,450 -5,800 2,15,000 17.92 13-Dec-10 450 0 ,450 2,15,450 17.95 14-Dec-10 0 -2,500 -2,500 2,12,950 17.75 15-Dec-10 13,800 -29,300 -15,500 1,97,450 16.45 16-Dec-10 9,450 -4,000 5,450 2,02,900 16.91 20-Dec-10 3,050 0 3,050 2,05,950 17.16 21-Dec-10 500 -1,000 -500 2,05,450 17.12 22-Dec-10 19,700 -9,950 9,750 2,15,200 17.93 23-Dec-10 4,600 -37,100 -32,500 1,82,700 15.23 24-Dec-10 6,400 -17,800 -11,400 1,71,300 14.28 From the above Table 10, investigation observed that Noticee Nos. 1 to 3 together as PACs crossed the 15.00% threshold limit on four occasions i.e October 11, 2010, November 30, 2010 and December 6, 2010. Also it is observed that Noticee Nos. 1 to 3 together as PACs bought more than 5% after crossing 15% on October 29, 2010.

4.2 Investigation also revealed that Ms. Shweta Dharam Agarwal (Noticee No. 5) is wife of Dhiren Dharamdas Agarwal (Noticee No. 4) and hence falls under the definition of 'persons acting in concert' (PAC) under Regulation 2(e)(1) of SAST Regulations. Noticee No. 4 and Noticee No. 5 together cumulatively acquired

11.36% of paid up equity capital of the company on January 20, 2011. Thereafter they purchased / sold shares and their holdings exceeded 15.00% of paid up equity on March 14, 2011. The details of their trading is given in Table 11 below:

Table 11 Date Buy Sell Net Cumulative % 20-Jan-11 24,900 4,950 19,950 1,36,300 11.36% 21-Jan-11 9,750 1,850 7,900 1,44,200 12.02% 24-Jan-11 0 3,100 -3,100 1,41,100 11.76% 25-Jan-11 4,500 2,100 2,400 1,43,500 11.96% 27-Jan-11 0 16,250 -16,250 1,27,250 10.60% 28-Jan-11 22,050 6,000 16,050 1,43,300 11.94% 31-Jan-11 0 12,650 -12,650 1,30,650 10.89% 1-Feb-11 0 13,500 -13500 1,17,150 9.76% 2-Feb-11 7,800 3,650 4,150 1,21,300 10.11% 3-Feb-11 13,900 50 13,850 1,35,150 11.26% 4-Feb-11 0 600 -600 1,34,550 11.21% 7-Feb-11 0 3,050 -3,050 1,31,500 10.96% 8-Feb-11 14,200 6,300 7,900 1,39,400 11.62% 9-Feb-11 2,000 5,800 -3,800 1,35,600 11.30% 10-Feb-11 0 5,500 -5,500 1,30,100 10.84% 11-Feb-11 0 2,000 -2,000 1,28,100 10.68% 14-Feb-11 5,050 1,100 3,950 1,32,050 11.00% 15-Feb-11 6,000 ,0 6,000 1,38,050 11.50% 16-Feb-11 22,500 2,250 20,250 1,58,300 13.19% 17-Feb-11 3,950 14,900 -10,950 1,47,350 12.28% 18-Feb-11 8,400 0 8,400 1,55,750 12.98% 21-Feb-11 200 9,250 -9,050 1,46,700 12.23% 22-Feb-11 11,150 1,500 9,650 1,56,350 13.03% 23-Feb-11 3,000 800 2,200 1,58,550 13.21% 25-Feb-11 3,800 500 3,300 1,61,850 13.49% 28-Feb-11 3,450 2,000 1,450 1,63,300 13.61% 1-Mar-11 0 11,000 -11,000 1,52,300 12.69% 3-Mar-11 0 300 -300 1,52,000 12.67% 4-Mar-11 0 4,000 -4,000 1,48,000 12.33% 7-Mar-11 6,500 0 6,500 1,54,500 12.88% 8-Mar-11 16,000 0 16,000 1,70,500 14.21% 11-Mar-11 0 950 -950 1,69,550 14.13% 14-Mar-11 40,900 50 40,850 2,10,400 17.53% 6-Apr-11 0 7,000 -7,000 2,03,400 16.95% 7-Apr-11 0 3,800 -3,800 1,99,600 16.63% 11-Apr-11 0 50 -50 1,99,550 16.63% 13-Apr-11 0 2,200 -2,200 1,97,350 16.45% 15-Apr-11 41,750 27,100 14,650 2,12,000 17.67% 18-Apr-11 950 2,000 -1,050 2,10,950 17.58% 19-Apr-11 0 18,150 -18,150 1,92,800 16.07% 20-Apr-11 0 13,500 -13,500 1,79,300 14.94% Thus Noticee No. 4 and Noticee 5 together had acquired more than 15.00% of the paid up capital of the company on March 14, 2011.

4.3 Investigation analysed the trades of Amul Gagabhai Desai (Noticee No. 7). Noticee No. 7's cumulative percentage shareholding in PIL during the investigation period is given in Table 12 below:

Date Buy Sell Net Cumulative % 16-Dec-10 0 6,500 -6,500 1,19,200 9.93 21-Dec-10 1,000 6,000 -5,000 1,14,200 9.52 22-Dec-10 15,950 1,700 14,250 1,28,450 10.70 23-Dec-10 0 2,150 -2,150 1,26,300 10.53 24-Dec-10 24,400 50 24,350 1,50,650 12.55 27-Dec-10 4,600 5,200 -600 1,50,050 12.50 28-Dec-10 2,450 3,000 -550 1,49,500 12.46 29-Dec-10 0 3,250 -3,250 1,46,250 12.19 30-Dec-10 0 2,800 -2,800 1,43,450 11.95 31-Dec-10 15,500 1,000 14,500 1,57,950 13.16 04-Jan-11 0 3,550 -3,550 1,54,400 12.87 05-Jan-11 11,350 1,850 9,500 1,63,900 13.66 06-Jan-11 8,100 13,000 -4,900 1,59,000 13.25 07-Jan-11 9,650 0 9,650 1,68,650 14.05 10-Jan-11 8,000 7,400 600 1,69,250 14.10 Date Buy Sell Net Cumulative % 11-Jan-11 0 7,500 -7,500 1,61,750 13.48 12-Jan-11 0 8,050 -8,050 1,53,700 12.81 13-Jan-11 16,300 0 16,300 1,70,000 14.17 14-Jan-11 5,550 6,250 -700 1,69,300 14.11 17-Jan-11 500 6,200 -5700 1,63,600 13.63 18-Jan-11 2,950 7,050 -4100 1,59,500 13.29 19-Jan-11 27,000 13,600 13400 1,72,900 14.41 20-Jan-11 12,600 5,000 7600 1,80,500 15.04 21-Jan-11 4,300 4,650 -350 1,80,150 15.01 24-Jan-11 0 200 -200 1,79,950 14.99 25-Jan-11 700 0 700 1,80,650 15.05 27-Jan-11 0 5,600 -5600 175,050 14.59 28-Jan-11 3,000 5,800 -2800 172,250 14.35 31-Jan-11 13,000 3,800 9200 181,450 15.12 01-Feb-11 1,400 10,800 -9400 172,050 14.34 02-Feb-11 1,900 3,400 -1500 170,550 14.21 03-Feb-11 0 5,400 -5400 165,150 13.76 04-Feb-11 5,750 1,900 3,850 169,000 14.08 07-Feb-11 5,500 0 5,500 174,500 14.54 08-Feb-11 500 10,500 -10,000 164,500 13.71 09-Feb-11 5,000 3,500 1,500 166,000 13.83 10-Feb-11 10,500 2,250 8,250 174,250 14.52 11-Feb-11 5,350 500 4,850 179,100 14.93 14-Feb-11 550 1,200 -650 178,450 14.87 15-Feb-11 0 2,900 -2,900 175,550 14.63 16-Feb-11 9,100 1,100 8,000 183,550 15.30 17-Feb-11 400 3,500 -3,100 180,450 15.04 18-Feb-11 0 2,050 -2,050 178,400 14.87 21-Feb-11 13,400 300 13,100 191,500 15.96 22-Feb-11 0 2,600 -2,600 188,900 15.74 23-Feb-11 800 100 700 189,600 15.80

Date Buy Sell Net Cumulative % 24-Feb-11 1,000 0 1,000 190,600 15.88 28-Feb-11 0 100 -100 190,500 15.88 01-Mar-11 0 3,500 -3,500 187,000 15.58 03-Mar-11 800 9,050 -8,250 178,750 14.90 11-Mar-11 0 11,500 -11,500 167,250 13.94 14-Mar-11 6,900 0 6,900 174,150 14.51 15-Mar-11 15,800 0 15,800 189,950 15.83 31-Mar-11 0 100 -100 189,850 15.82 06-Apr-11 0 29,150 -29,150 160,700 13.39 15-Apr-11 2,200 7,050 -4,850 155,850 12.99 18-Apr-11 500 0 500 156,350 13.03 19-Apr-11 16,650 0 16,650 173,000 14.42 20-Apr-11 1,650 0 1,650 174,650 14.55 21-Apr-11 100 2,100 -2,000 172,650 14.39 25-Apr-11 0 33,450 -33,450 139,200 11.60 26-Apr-11 0 2,650 -2,650 136,550 11.38 27-Apr-11 0 8,900 -8,900 127,650 10.64 28-Apr-11 8,650 3,550 5,100 132,750 11.06

Thus Noticee No. 7 had acquired more than 15 % of the paid up capital of the company on six occasions i.e. January 20, 2011, January 25, 2011, January 31, 2011, February 16, 2011, February 21, 2011 and March 15, 2011.

4.4 The cumulative percentage shareholding of Noticee No.6 in PIL during the investigation period is given in Table 13 below: Table 13 Date Buy Sell Net Cumulative % 21-Sep-10 150 0 150 55,050 4.59 22-Sep-10 3,500 500 3,000 58,050 4.84 24-Sep-10 5,000 0 5,000 63,050 5.25 27-Sep-10 7,300 5,000 2,300 65,350 5.45 28-Sep-10 6,000 1,900 4,100 69,450 5.79 29-Sep-10 25,000 2,500 22,500 91,950 7.66 30-Sep-10 41,000 0 41,000 1,32,950 11.08 04-Oct-10 0 11,000 -11,000 1,21,950 10.16 05-Oct-10 27,350 25,000 2,350 1,24,300 10.36 06-Oct-10 27,500 0 27,500 1,51,800 12.65 07-Oct-10 16,700 6,500 10,200 1,62,000 13.50 08-Oct-10 10,900 0 10,900 1,72,900 14.41 11-Oct-10 3,450 3,000 450 1,73,350 14.45 12-Oct-10 2,250 8,000 -5,750 1,67,600 13.97 13-Oct-10 2,950 350 2,600 1,70,200 14.18 14-Oct-10 5,200 0 5,200 1,75,400 14.62 15-Oct-10 0 3,550 -3,550 1,71,850 14.32 19-Oct-10 10,800 0 10,800 1,82,650 15.22 20-Oct-10 1,450 0 1,450 1,84,100 15.34 21-Oct-10 5,000 100 4,900 1,89,000 15.75

Date Buy Sell Net Cumulative % 22-Oct-10 7,750 5,550 2,200 1,91,200 15.93 25-Oct-10 5,500 3,500 2,000 1,93,200 16.10 26-Oct-10 1,800 0 1,800 1,95,000 16.25 27-Oct-10 3,200 0 3,200 1,98,200 16.52 28-Oct-10 21,950 0 21,950 2,20,150 18.35 29-Oct-10 0 33,500 -33,500 1,86,650 15.55 01-Nov-10 0 50 -50 1,86,600 15.55 02-Nov-10 2,900 5,300 -2,400 1,84,200 15.35 03-Nov-10 5,850 56,850 -51,000 1,33,200 11.10 05-Nov-10 5,500 0 5,500 1,38,700 11.56 08-Nov-10 0 2,550 -2,550 1,36,150 11.35 09-Nov-10 5,600 1,000 4,600 1,40,750 11.73 04-Feb-11 0 3,000 -3,000 1,64,000 13.67 07-Feb-11 5,500 4,450 1,050 1,65,050 13.75 08-Feb-11 4,950 4,700 250 1,65,300 13.78 09-Feb-11 8,650 4,450 4,200 1,69,500 14.13 10-Feb-11 4,500 5,600 -1,100 1,68,400 14.03 11-Feb-11 9,100 300 8,800 1,77,200 14.77 14-Feb-11 0 750 -750 1,76,450 14.70 15-Feb-11 2,250 0 2,250 1,78,700 14.89 16-Feb-11 0 30,350 -30,350 1,48,350 12.36 17-Feb-11 3,950 18,800 -14,850 1,33,500 11.13 21-Feb-11 13,450 1,100 12,350 1,45,850 12.15 22-Feb-11 2,500 500 2,000 1,47,850 12.32 24-Feb-11 1,350 0 1,350 1,49,200 12.43 25-Feb-11 0 2,500 -2,500 1,46,700 12.23 28-Feb-11 1,050 1,000 50 1,46,750 12.23 01-Mar-11 17,150 1,050 16,100 1,62,850 13.57 03-Mar-11 11,300 10,850 450 1,63,300 13.61 07-Mar-11 2,800 1,000 1,800 1,65,100 13.76 08-Mar-11 27,550 0 27,550 1,92,650 16.05 11-Mar-11 0 5,150 -5,150 1,87,500 15.63 14-Mar-11 13,150 27,750 -14,600 1,72,900 14.41 15-Mar-11 29,450 0 29,450 2,02,350 16.86 23-Mar-11 0 800 -800 2,01,550 16.80 06-Apr-11 0 11,700 -11,700 1,89,850 15.82 15-Apr-11 15,450 21,850 -6,400 1,83,450 15.29 18-Apr-11 1,750 0 1,750 1,85,200 15.43 19-Apr-11 10,250 4,700 5,550 1,90,750 15.90 20-Apr-11 22,300 0 22,300 2,13,050 17.75 21-Apr-11 100 7,250 -7,150 2,05,900 17.16 25-Apr-11 0 6,900 -6,900 1,99,000 16.58 26-Apr-11 8,250 2,000 6,250 2,05,250 17.10 27-Apr-11 950 50 900 2,06,150 17.18 28-Apr-11 5,300 30,750 -25,450 1,80,700 15.06 29-Apr-11 2,650 15,000 -12,350 1,68,350 14.03 17-May-11 0 25,800 -25,800 1,42,550 11.88

Date Buy Sell Net Cumulative % 18-May-11 11,100 2,000 9,100 1,51,650 12.64

From the above Table 13, investigation observed that Noticee No. 6 acquired more than 15% of the paid up capital of the company on three occasions i.e. October 19, 2010, March 08, 2011 and March 15, 2011.

4.5 Noticee No.1 along with persons acting in concert with him viz. Noticee No.2 and Noticee No. 3 acquired more than 15% of the paid up capital of the company. They were also found to have acquired more than 5% in a year after having acquired 15 % of the paid up capital of the company. Thus, it was alleged that Noticee Nos. 1 to 3 have violated Regulations 10 and 11(1) of the SAST Regulations by not making an open offer in accordance with the SAST Regulations. Similarly, Noticee No.4 along with persons acting in concert with him viz. Noticee No.5 acquired more than 15% of the paid up capital of the company and Noticee Nos. 6 and 7 have individually acquired more than 15% of the paid up capital of the company. Thus, it was alleged that Noticee Nos. 4 to 7 have violated Regulation 10 of SAST Regulations by not making an open offer in accordance with the SAST Regulations.

5. REPLIES 5.1. Replies were filed by the noticees on the following dates: Table 14 Noticee Noticee Name Date of reply No. 1. Mr. Sanjay Jethalal Soni Received on 16.01.2019 2. Ms. Krupa Sanjay Soni Email dated 16.01.2019 3. M/s. J M Soni Consultancy Received on 18.01.2019 4. Mr. Dhiren Dharamdas Agarwal Email dated 15.01.2019 5. Ms. Shweta Dhiren Agarwal 6. Mr. Krunal Gopaldas Rana 16.01.2019 7. Mr. Amul Gagabhai Desai 09.01.2019 8. Mr. Mahesh Somabhai Desai 17.01.2019 9. Mr. Arif Gulammustufa Shaikh Not received

5.2. Personal Hearing was granted to the Noticees on January 10, 2019 and January 18, 2019, wherein the written submissions were summarised and reiterated. Advocates representing the Noticees who appeared are tabulated as follows: Table 15 Sr No. Noticee Name Name of Representative 1. Mr. Sanjay Jethalal Soni Advocate Akshit Jain 2. Ms. Krupa Sanjay Soni 3. M/s. J M Soni Consultancy 4. Mr. Dhiren Dharamdas Advocate Rinku Valanju Agarwal 5. Ms. Shweta Dhiren Agarwal 6. Mr. Krunal Gopaldas Rana Advocate Pratham Masurekar 7. Mr. Amul Gagabhai Desai Advocate Hiral Shah 8. Mr. Mahesh Somabhai Desai Advocate Pratham Masurekar

5.3. Noticee No. 9 i.e. Arif Gulammustufa Shaikh has neither replied to the SCN nor appeared for the personal hearing granted to him. Infact when hand delivery of the SCN/Hearing Notice was attempted at his address, SEBI representatives were informed by neighbours that he has passed away. However there is no formal/official confirmation of the same.

5.4. A few written submissions filed by the noticees are almost identical. Some such submissions are extracted and summarized as follows: (i) The violations of provisions under the PFUTP Regulations and SAST Regulations cannot co-exist as the transactions which are considered genuine, valid and legal for the purpose of levying of charges / penalty under SAST Regulations cannot be treated as objectionable for the purpose of levying charges / penalty under PFUTP Regulation. (ii) The scrip of PIL was in ‘T’ group and thus under continuous surveillance / supervision. Hence, there was no scope for manipulation in the scrip. The Noticee states that all purchase/sale orders of the Noticee were limit orders. A limit order is a direction given to a broker to buy and sell a security or commodity at a specified price or better. A buy limit order can only be executed at the limit price or lower. A sell limit order can only be executed at a limit price or higher. A limit order can be only filled if the stock’s market price reaches the limit price. (iii) The very fact that the orders placed were limit orders, it always ranges between prevalent market price at the time of placing of the order and limit price (for the buy order it is limit price or lower and for the sell order it is limit price or higher) In the circumstances, purported match-trades of the outcome of market mechanism in the normal course and nothing adverse or negative can be attributed to Noticee’s conduct.

(iv) The purported consolidated contribution to NHP difference of Rs.11.35 out of the total increase of Rs. 371.85 do not mean anything adverse or negative. Such trades could have been the outcome of some entry / exit strategy or the normal trading or value investing, bottom fishing, square-off trade etc. Further the quantity of such trades was miniscule, were stray / erratic trades and may have been carried out in line with dynamic market conditions on ‘as is where is and what is there is’ basis reflecting on the trading screen at the relevant time. (v) The alleged LTP contribution through first trades is of no significance. Buying first at higher than previous closing market price is not against any trading regulation. (vi) Against certain noticees, adjudication proceedings were initiated and monetary penalty imposed. In view of the penalty already levied based on same cause of action, the proceeding under Section 11, 11B should be dropped. (vii) For applying the concept of 'persons acting in concert', the acquisition of shares has to be pursuant to an agreement or an understanding and in furtherance of a common objective to acquire control over the target Company.

This element is missing in the SCN as it does not establish that the Noticees acquired any share or acted in any manner in pursuance of common intention with other Noticees.

5.5. Relevant extracts/summary of submissions made by each of the Noticees are reproduced hereunder: 5.5.1. Sanjay Soni (i) The Noticee had franchise of ‘BMA Wealth Creators’ and operated under the trade name of ‘J M Soni Consultancy’ and also had franchise of ‘Prabhudas Lilladher’ and operated under the trade name of ‘Shreeji Securities’. The Noticee was also an investor / trader in the market and had carried out buy / sell / trade / investment related transactions in different scrips before, during and after the investigation period. (ii) The Noticee’s trading was separate, independent and stand alone and cannot be linked / connected or related to the group’s volume. Though the Noticee and his wife, Noticee No. 2, are matrimonially connected to each other, they have not played any role in each other’s transactions. The mere factum that Noticee is husband of Noticee No. 2 and consequent sharing of common email ID or transfer of funds are not in themselves sufficient to bring home the residual charge of violations of PFUTP qua the Noticee. There is no sufficient evidence on record to clearly prove connivance on the part of the Noticee with a counter party to prove the charge in question against the Noticee.

Since Noticee is proprietor of Noticee No. 3, sharing of common address and contact number does not establish connection for alleging violations enumerated in the SCN. No where in the SCN it is alleged that said transfer of funds were used for carrying out purported objectionable transactions. The Bank Statements provided by SEBI does not disclose any transfer of funds to Krupa Sanjay Soni and J M Soni Consultancy. The Mobile number 9879430033 does not belong to Noticee. Noticee had trading account with J M Financial Services (through Mr. Dhiren Dharamdas Agarwal who was franchise holder of J M Financial Services). Since, the KYC details are filled by main broker (J M Financial Services), it is submitted that they have wrongly mentioned the mobile number of franchise holder ( Dhiren Dharamdas Agarwal) and not of Noticee. Dhiren Dharamdas Agarwal had trading account with BMA wealth creators and was trading through J M Soni Consultancy. Therefore, trades were placed through Noticee. Krunal Gopaldas Rana had trading account with BMA Wealth Creators and hence trades are placed through Noticee.

Mahesh Somabhai Desai had trading Account with Prabhudas Lilladher P. Ltd. (through Shreeji Securities who is franchise holder of Prabhudas Lilladher P. Ltd. and sole proprietorship concern of Noticee) and therefore orders were placed through Noticee. (iii) Alleged Matched trades took place on 21/10/10, 12/11/10, 19/11/10, 23/11/10, 25/11/10, 09/12/10, 22/12/10 right till 22/02/11, whereas the fund transfer took place only on 08/12/2010 which clearly shows no connection as the trades were throughout and the fund transfer took place only on one day. (iv) SEBI has not provided any specific details whatsoever regarding specific trades which are considered objectionable (for match trades, LTP, NHP and First

Trades). Although, trades regarding LTP and NHP have been extracted and identified out of trade logs but LTP through first trades cannot be extracted and identified out of trade logs. (v) The Noticee has traded in several other scrips and not in PIL only during the Investigation Period. The percentage of trades carried out in the scrip of PIL is not substantial compared to market volume. Instances of match-trades would be purely accidental/incidental in the ordinary course of business. (vi) Out of the total trades of the Noticee, during the investigation period 2504 trades are considered towards LTP contribution and out of which only 178 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 100.70. (vii) Noticee has provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 09.02.2011, the Noticee placed an order to buy 1000 shares of PIL at 11.10.16 AM when already a sell order of 200 shares was available in the system at 11.04.06 AM. The said Order got executed in 4 trades with 4 different counter parties.

The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 5. The counter party to the Noticee’s order was Kinjal Bhaskar Rao who is not a Noticee to the SCN. Even considering that an LTP of Rs. 5 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. (b) On 23.11.2010, the Noticee placed an order to buy 20000 shares of PIL at 09.15.43 PM which order got executed in 38 trades with 28 different counter parties of which 3 are Noticees to the SCN. Both the sell order were in the system prior to Noticee’s buy order (in which LTP was Rs. 2.4). There was difference in quantities of the orders placed by the Noticee and the difference in the counter parties. Thus, it cannot be said that the Noticee was trying to increase the price of PIL as his trades have taken place with other counter parties also. (c) On 13.09.2010, the Noticee placed an order to buy 5000 shares of PIL at 15.28.02 PM which order got executed in 4 trades with 3 different counter parties.

The sell orders were in the system prior to Noticee’s buy order. One trade created a positive LTP of Rs. 0.3 whereas the other trade created a zero (Rs. 0) LTP. Thus, one order that got executed into 4 different trades resulting into positive as well as zero LTP with 3 different counter parties (2 of which are not Noticees to the SCN) can be only an outcome of normal trading activity and no adverse inference can be drawn of it. (d) On 01.09.2010, the Noticee placed an order to buy 50 shares of PIL at 13.06.43 PM when already a sell order of 500 shares was available in the system at 9.30.33 AM. The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 0.1. The counter party to the Noticee’s order was Mayaben Chetankumar Shah who is not a Noticee to the SCN. Even considering that an LTP of Rs. 0.1 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. (viii) The self-trades have not caused any losses to an Investor or group of Investors as there was no default to complete the above referred two transactions.

It is pertinent to mention that it was only in February 2013 that the exchanges for the first time informed members regarding certain transactional alerts, downloadable to the trading members on a day to day basis. The BSE Circular dated 20.2.2013 and 7.3.2013 identified a list of 13 alerts by the exchanges including ‘Wash Sales of Trades, Reversal of Trades” etc. Such alerts, were not available for downloading during the said period of investigation and hence there was no facility to know of such aberrations even with the availability of the best systems. It was only in the first quarter of 2015 that the exchanges have devised a system of self trade prevention check in the equity segment. The exchanges’ efforts in 2015 to introduce systems for self trade prevention is indicative of the recognition of such aberrations in the markets by the regulators and addressing the same in a systemic manner. If such prevention checks were operative from the exchanges’ end, such self trades would have been identified and removed from the system in an automatic manner. Hence, levelling of charges on occurrence of such aberrations, which today is an impossible event, purely due to lack of addressing of the same by the concerned regulators, is unfair and unjustified.

(ix) Intention is a sine qua non for establishing manipulation in case of self-trades and accidental/unintentional self-trades are not covered under Regulations 4(2)(a), 4(2)(b) and 4(2)(g) of PFUTP Regulations, 2003 which are the specific legal provisions applicable to self-trades.

5.5.2. Krupa Sanjay Soni (i) The mere factum that Noticee is wife of Noticee No. 1 and consequent sharing common email ID or transfer of funds are not in themselves sufficient to prove violations of PFUTP qua the Noticee. (ii) Out of the total trades of the Noticee, during the investigation period 3892 trades are considered towards LTP contribution (positive, 0 and negative) and out of which only 264 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of 294.10. (iii) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 25.02.2011, the Noticee placed an order to buy 200 shares of PIL at Rs 385 on 14:59:37 when already sell orders were available in the system at 14:52:41. The said order got executed in 3 different trades with 3 different counterparties. The Noticee in order to grab the order and seeing the best buy quotes on the system placed the order which resulted into positive LTP of Rs. 11.6, Rs. 0.05 and Rs. 0.1. The counter parties to the Noticees order were Rahul Anantrai Mehta, Dipan Mehta Share and Paresh Ramjibhai Chauhan all of whom are not Noticees to the SCN.

Even considering that an LTP of Rs. 11.6, Rs. 0.05 and Rs. 0.1 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. (b) On 10.06.2011, the Noticee placed an order to buy 3500 shares of PIL at 09:46:31 which order got executed in 18 trades with 14 different counter parties. The sell orders were in the system prior to Noticee’s buy order. One trade created a positive LTP of Rs. 0.3 and Rs. 0.35 whereas the other trade created a negative (Rs. -0.9) LTP. Thus, one order that got executed into 3 different trades resulting into positive as well as negative LTP with 14 different counter parties (All of which are not Noticees to the SCN) can be only an outcome of normal trading activity and no adverse inference can be drawn of it. (c) On 24.12.2010, the Noticee placed an order to buy 50 shares of PIL at 15:07:16 PM when already a sell order of 600 shares was available in the system at 14:59:40 PM. The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 1.7.

The counter party to the Noticee’s order was Mahesh Desai who is a Noticee to the SCN. Even considering that an LTP of Rs. 1.7 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. (iv) The purported consolidated contribution to NHP difference of Rs. 21.55 out of the total increase of Rs. 371.85 do not mean anything adverse or negative. Such trades could have been the outcome of some entry / exit strategy or the normal trading or value investing, bottom fishing, square-off trade etc.

5.5.3. JM Soni Consultancy (i) The noticee has been trading/jobbing/arbitrage on daily basis in shares of many companies listed on NSE and BSE. The percentage of trades carried out in the scrip of PIL is not substantial compared to market volume. (ii) Out of the total trades of the Noticee, during the investigation period 709 trades are considered towards LTP contribution and out of which only 48 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 24.65. (iii) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: On 29.11.2010, the Noticee placed an order to buy 20000 shares of PIL at 09.16.01 AM when already a sell order(s) were available in the system from 09.15 AM. The said Order got executed in 28 trades with 28 different counter parties. The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 2 but the same order has also resulted into negative LTP. The counter parties to the Noticee’s order are not a Noticee to the SCN. On 07.01.2011, the Noticee placed an order to buy 1000 shares of PIL at 15.10.03 PM and sell order(s) were placed at 15.09.53 PM. The said Order got executed in 2 trades with 2 different counter parties. The order resulted into positive and negative LTP.

5.5.4. Krunal Gopaldas Rana (i) Hon'ble Adjudicating Officer vide order dated 28.09.2018 against the Noticee imposed penalty of Rs. 18,00,000/- for the alleged violation of Regulation 7(1) of SAST Regulations 1997 and Regulation 13(1) of PIT Regulations 1992 and a penalty of Rs. 25,00,000/- vide order dated 16.11.2018 for the violation of Match trade, price manipulation through LTP, NHP and first trades. Hence in view of the penalty already levied based on same cause of action, the proceeding under Section 11, 1IB may be dropped. (ii) Out of the total trades of the Noticee, during the investigation period 4,966 trades are considered towards LTP contribution (positive/ negative) and out of which only 138 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 118.75. (iii) The LTPs at which the Noticee was alleged to have been established were already established on previous days. (iv) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 08.12.2010, the Noticee placed an order to buy 2600 shares of PIL at Rs. 125 at 15:42:06 A.M. when already a sell order of 5500 shares was available in the system at 15:22:22 P.M.

The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 1.1. The counter party to the Noticee's order was Amul Desai who is not alleged to be connected to the Noticee. The Noticee submits that the price of Rs. 124.05 had already been established on 07.12.2010. Hence trade at positive LTP of Rs. 1.1 is of no significance. (b) On 11.10.2010, The Noticee placed an order at Rs. 76to buy 50 shares of PIL at 13:51:29P.M. where already a sell order of 4000 shares was available in the system at 10:03:49 P.M. The Noticee in order to grab the order and seeing the best 5 buy quotes .on the system placed the order which resulted into positive LTP of Rs. 1.7 The counter party to the Noticee's order was Krupa Soni who is not alleged to be connected to the Noticee. Even considering that an LW of Rs. 1.7 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. The Noticee submits that the price of Rs. 75 had already been established on 08.10.2010.

Hence trade at positive LTP of Rs. 1.7 is of no significance. (c) On 14.03.2011, the Noticee placed an order at Rs. 279.85 to buy 50 shares of PIL at 15:10:13 PM which got executed with sell order of 2000 shares placed by Bhavesh Trivedi at Rs. 279.85 which was already present in the system at 15:02:03. The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 9.85.

5.5.5. Mahesh Somabhai (i) The volume of alleged matched trade is only 2.15% of the total market volume which is very minuscule and therefore cannot be said to have created artificial volume. (ii) During the investigation period, 3155 trades are considered towards LTP contribution and out of which only 157 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 68.80. (iii) Positive LTP of Rs. 2331.84 by group entities whereas total / actual price rise of Rs. 371.75 during Investigation Period is of no relevance, significance and is misunderstood. (iv) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 15.09.2010, the Noticee placed an order to sell 13,250shares of PIL at Rs. 32.95 at15:15:33 PM. Buy order for 500 shares was placed by Krunal Gopaldas Rana at Rs. 62.95 at 15:18:29P.M. The LTP created was Rs. 1.1. The counter party to the Noticee's order was Krunal Gopaldas Rana who is not alleged to be connected to the Noticee. Even considering that an LTP of Rs. 1.1 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. The price of Rs. 62.85 had already been establishe14.09.2010. Hence trade at positive LTP of Rs. 1.1 is of no significance. (b) On 08.02.2011, The Noticee placed an order at Rs. 265 to sell 19350 shares of PIL at 15:02:07 PM. Arif Shaikh placed a buy order of 5500 shares at Rs. 265 at 15:14:22. The LTP created was Rs. 1.5. The counter party to the Noticee's order was Arif Shaik who is not alleged to be connected to the Noticee. Even considering that an LTP of Rs. 1.5 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. The Noticee submits that the price of Rs. 262.1 had already been established on 08.10.2010. Hence trade at positive LTP of Rs. 1.5 is of no significance.

(c) On 14.09.2010 the Noticee placed an order at Rs. 62to buy 5500 shares of PIL at 10:34:56A.M.which order got executed with Krunal Gopaldas Rana who placed sell order of 200 shares at Rs. 62 at 14:01:04 when negative LTP of -0.05 was created. It is pertinent to mention that if the intention of the Appellant was to manipulate the price why would he execute trades that create negative LTP.

5.5.6. Dhiren Dharmdas Agarwal (i) The Noticee was an authorized person of J M Financial Services Pvt Ltd and was holding their franchisee from about 2007 to 2011 and was trading through K & A Securities / Trustline Securities Ltd., BMA Wealth Creators through BMA Wealth Creators, Prabhudas Liladhar through Shreeji Securities (proprietor Sanjay Soni) and Anagram Stock Broking. (ii) Out of the total trades of the Noticee, during the investigation period 1941 trades are considered towards LTP contribution (positive, 0 and negative) and out of which only 117 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 99.40 (iii) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 10.11.2010, the Noticee placed an order to buy 50 shares of PIL at 9.49.21 am when already a sell order of 100 shares was available in the system at 9.24.15 am. The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive LTP of Rs. 4.95.

The counter party to the Noticee’s order was Bimla Devi who is not a Noticee to the SCN and also not alleged as a group entity. Even considering that an LTP of Rs. 4.95 is created there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. The Noticee submits that the price of Rs. 79.95 had already been established on 20.10.2010. Hence trade at +ve LTP of Rs. 4.95 is of no significance. (b) On 04.01.2011, The Noticee placed an order at Rs. 79.95 to buy 1000 shares of PIL at 15.20.24 pm which order got executed in 2 trades of 150 shares and 850 shares each with 2 different counter parties. Both the sell orders were in the system prior to Noticee’s buy order. One trade created a negative LTP of Rs. -0.55 whereas the other trade created a positive LTP of Rs. 0.05. Thus, one order that got executed into 2 different trades resulting into positive as well as negative LTP with 2 different counter parties which are not Noticees to the SCN can be only an outcome of normal trading activity and no adverse inference can be drawn of it.

(c) On 19.11.2010, the Noticee placed an order at Rs. 76.35 to buy 500 shares of PIL at 14.48.33 pm which order got executed in 2 trades of 50 shares and 450 shares each with 2 different counter parties of which 1 is a Noticee to the SCN, Krunal Gopaldas Rana. Both the sell order were in the system prior to Noticee’s buy order. There was difference in quantities of the orders placed by the Noticee and the counter parties. The trades created a positive LTP of Rs. 0.25 and Rs. 0.05 each. Thus, it cannot be said that the Noticee was trying to increase the price of PIL which the alleged group as his trades have taken place with other counter parties also. The Noticee submits that the price of Rs. 76.35 had already been established on 05.10.2010. Hence trade at +ve LTP of Rs. 0.25 and Rs. 0.05 is of no significance.

5.5.7. Shweta Dhiren (i) Out of the total trades of the Noticee, during the investigation period 1260 trades are considered towards LTP contribution (positive, 0 and negative) and out of which only 43 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 44.90 (ii) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 04.01.2011, The Noticee placed an order at Rs. 122 to buy 1000 shares of PIL which got executed in 2 trades of 150 shares and 850 shares each with 2 different counter parties. Both the sell orders were in the system prior to Noticee’s buy order. One trade created a negative LTP of Rs. -0.05 whereas the other trade created a positive LTP of Rs. 0.05. Thus, one order that got executed into 2 different trades resulting into positive as well as negative LTP with 2 different counter parties which are not Noticees to the SCN can be only an outcome of normal trading activity and no adverse inference can be drawn of it. The Noticee submits that the price of Rs. 122 had already been established in the market since 16.12.2010. Thus, the positive LTP of Rs. 0.05 cannot mean anything. (b) On 23.02.2011, the Noticee placed an order at Rs. 397 to buy 500 shares of PIL which order got executed in 3 trades of 50 shares, 50 shares and 400 shares with 3 different counter parties of which 1 is a Noticee to the SCN, Sanjay Jethalal Soni. All 3 the sell orders were in the system prior to Noticee’s buy order. There was difference in quantities of the orders placed by the Noticee and the counter parties. The trades created a positive LTP of Rs. 1.9, 0.1 and Rs. 0.5 each. Thus, it cannot be said that the Noticee was trying to increase the price of PIL which the alleged group as his trades have taken place with other counter parties also.

5.5.8. Amul Gagabhai Desai (i) The mere fact that Noticee shares common email ID is not sufficient to bring home the residual charge of violations of PFUTP qua the Noticee. (ii) Noticee had trading account with BMA Wealth Creators (through J M Soni Consultancy who was franchise holder and sole proprietor concern of Sanjay Soni) and hence trades are placed through Sanjay Soni. (iii) As regards allegation of matched trades, Noticee states that any match trades executed by him would be purely accidental/incidental. The random nature of timing, quantity, dealers and partial matching with other market participants may substantiate the same. (iv) It is mentioned in the SCN itself that the alleged self-trades is only 0.25% of the total market volume which is miniscule and no adverse inference can be drawn. (v) Out of the total trades of the Noticee, during the investigation period 4109 trades are considered towards LTP contribution (positive, 0 and negative), out of which only 221 trades of the Noticee have allegedly considered to have resulted / contributed to positive LTP contribution of Rs. 154.55.

(vi) Noticee provided illustration of trades to demonstrate that the purchase at price above LTP were not manipulative: (a) On 31.01.2011, the Noticee placed an order to buy 10000 shares of PIL at 15.08.54 pm which got executed in 16 trades out of which few counter party orders were already in the system. The Noticee in order to grab the order and seeing the best 5 buy quotes on the system placed the order which resulted into positive as well as negative LTP out of which few trades that resulted in negative LTP got matched with other the Noticees. Thus the manner in which the trading took place, there is nothing to show or prove that the parties were at ad-idem and were instrumental in increasing the price of PIL. (b) On 04.02.2011, the Noticee placed an order to buy 1000 shares of PIL at 15.18.04 pm which order got executed in 2 trades of 200 shares and 800 shares each with 2 different counter parties. Both the sell orders were in the system prior to Noticee's buy order. One trade created a negative LTP of Rs. 2 whereas the other trade created a positive LTP of Rs. 0.9. Thus, one order that got executed into 2 different trades resulting into positive as well as negative LTP with 2 different counter parties can be only an outcome of normal trading activity and no adverse inference can be drawn of it.

(vii) Positive LTP of Rs. 2331.84 by group entities whereas total / actual price rise of Rs. 371.75 during Investigation Period is of no relevance, significance and is misunderstood. (viii) The purported consolidated contribution to NHP difference of Rs. 37.25 out of the total increase of Rs. 371.75 does not mean anything adverse or negative.

6. Subsequent to the personal hearing offered to the Noticees, based on specific request of some of the Noticees' representatives, data on new high price and LTP on first trades was provided, in addition to the trade logs already provided to the Noticees. Also, since some time had elapsed from the last date of personal hearing afforded to the Noticees, emails/letters were sent to the Noticees on July 04, 2019 asking them to submit any additional written submissions if they so desired, within 10 days. However the Noticees have not made any additional submissions till date. Rather some of the Noticees' representatives have claimed that logs enabling New High Price/Last Traded Price Analysis are incomplete. I have had a careful look at the logs provided to the Noticees and I find that they are complete and sufficient for the Noticees to proffer their defence.

ISSUES FOR CONSIDERATION 7. The Issues for Consideration in this Order are listed under two main heads as follows: A. Whether the noticees manipulated the volume and price of the PIL scrip thereby violating PFUTP Regulations? A.1. Whether the noticees were connected to each other and may be referred to as a single group for the purpose of analyzing the trades placed by them? A.2. Whether the noticees can be said to have created artificial volumes in the scrip? A.3. Whether the noticees can be said to have manipulated the price of the scrip?

B. Whether the noticees had triggered the open offer under the SAST Regulations 1997? B.1. Whether the acquisition of shares by the noticees had breached the limits specified in SAST Regulations? B.2. Whether the allegation of fraudulent trades in shares and acquisition of shares leading to trigger of the SAST Regulations can co-exist? B.3. Whether an open offer is required to be made by the notices?

C. Whether SEBI has power to issue directions under section 11B in the facts and circumstances of this case, and whether delay in taking enforcement action is a ground to mitigate the possibility of passing such directions?

The aforesaid issues are discussed separately in the following paragraphs.

8. VIOLATION OF PFUTP REGULATIONS 8.1. The relevant legal provisions under consideration in the context of this allegation are reproduced hereunder for ease in reference: Section 12A of the SEBI Act Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control. 12A. No person shall directly or indirectly— (a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder;

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

PFUTP Regulations 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 thereunder; (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 thereunder. 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 intend to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; ... (e) any act or omission amounting to manipulation of the price of a security; … (g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security;"

8.2. Connection between the noticees As per the SCN, the noticees are said to be connected with each other on the following broad grounds -  Related as spouses  Common mobile numbers and email IDs  Transfer of funds  Placing of trades through 'the Sonis' Sanjay Soni and Krupa Soni are spouses of each other. Similarly Dhiren Dharmdas Agarwal and Shweta Dhiren Agarwal are spouses of each other. As discussed more in detail in subsequent paragraphs of this Order, the natural presumption in the case of spouses is that they are connected with each other, unless there is specific and significant evidence to disprove the same. Therefore I am of the view the two sets of noticees are connected with each other. Also, J M Soni Consultancy being the sole proprietary concern of Sanjay Soni, the same can only be regarded as a mirror image of Sanjay Soni himself. For the aforesaid reasons, Sanjay Soni, Krupa Soni and JM Soni Consultancy are referred to in this Order as 'the Sonis'. Dhiren Dharmdas Agarwal, Krunal Gopaldas Rana, Mahesh Somabhai Desai and Arif Gulam Mustafa Shaikh are related to the Sonis, by virtue of common mobile numbers/email IDs and/or trades having been placed through the Sonis.

The noticees have sought to defend the common contact details by claiming that this has happened because they were clients of JM Soni Consultancy and that this should not mean that the transactions were placed in coordination. I note that the coordination behind placing trades and the intent behind the same is derived from several circumstances. The question first sought to be addressed is whether the noticees were connected to each other i.e. whether they were known to each other sufficiently enough to impute a possible financial relationship or trading relationship between them. It is other aspects including those of the commonality in trading pattern that gives rise to a preponderance in probability of fraudulent trading. Therefore for the instant purpose, the factum of the aforesaid noticees having common contact details and having placed orders through the Sonis is indicative of a possible connection between the said noticees and the Sonis. This indication gets further strengthened especially in the cases of Dhiren Dharmdas Agarwal, Krunal Gopaldas Rana and Mahesh Somabhai Desai in whose cases there are records of fund transfer from Sanjay Soni.

As can be seen from the records, as well as submissions from some of the noticees, several of the impugned trades were also entered into with other noticees. Therefore from the available records, I am of the view that there is sufficient evidence to support the allegation that the noticees were connected.

8.3. Artificial Volumes in the scrip The relevant extracts of the SCN reproduced in this Order point to two aspects that support the allegation of the noticees having created artificial volumes in the scrip – the presence of matched trades and self trades by certain noticees. While matched trades, by itself may not constitute a fraudulent or manipulative practice, its sizeable proportion is significant pointer. The quantum of matched trades noted in the table above must be read along with the fact that the noticees had contributed to 41.86% / 34.43% of the buy /sell volume in Patch I and contributed to 23.76%/31.91% of the buy/sell volume in Patch II, which is a sizeable proportion of the trades executed in the company’s scrip. During Patch I, some of the noticees, namely Sanjay Jethalal Soni Krupa Soni, Krunal Gopaldas Rana and Amul Gagabhai Desai were also found to have executed 224, 146, 240 and 230 self trades, respectively, over a period ranging from 22 to 36 trading days. Cumulatively 1,15,300 shares were traded by way of placing self trades by the said noticees, the quantum of each noticee’s trades ranging from 21,150 to 34,850 shares.

These figures are clearly not insignificant. It can also not be construed as being technical errors. The noticees have tried to justify their actions by claiming that there was a market wide phenomenon of self trades which started getting addressed only recently after exchanges were able to build alerts into the system. They have also claimed that self trades can only be fraudulent if some malafide intent can be identified behind such self trades. These contentions are at best a feeble defence. The absence of a mechanism in the stock exchange to prevent self trade cannot by itself be a ground which will absolve the Noticees from the charge of self trade, if such self trades are otherwise illegally executed. It is true that all self trades need not necessarily be construed as being fraudulent or illegal in nature. The recent decision of the Hon'ble Securities Appellate Tribunal ("SAT") in the matter of Crosseas Capital Services Ltd. v. SEBI is instructive in this regard. Extracts of observations made by SAT in this case are as follows: "In case of self-trades, both the buyer and the seller are the same entity and, therefore, execution of self-trade does not result in change of beneficial ownership.

Nonetheless, it may create a false or misleading appearance of trading in the securities market and may entice other investors to trade in that particular scrip or entities may enter into such trades with the intention of manipulating the price or volume of the scrip. As such, the execution of self-trades falls within the purview of Regulation 4(2)(a) and (g) of PFUTP Regulations, 2003. However, orders placed through algo trading software using different terminals through the same broker, may get matched accidentally without any manipulative intention. As such, mere occurrence of self-trades may be accidental but still would attract the provisions of Regulation 4(a) and (g) of the PFUTP Regulations, 2003 if any additional material, evidence or circumstances are available to indicate manipulation of the price or volume of the scrip or creation of false or misleading appearance of trading in securities market resulting from such self-trades.... Various decisions have also been passed by the Tribunal on the issue of self-trades wherein this Tribunal has taken a consistent view that a few instances of self-trades in themselves would not amount to an objectionable trade if there was no manipulative intent.

In the light of the various decisions taken by this Tribunal, SEBI reviewed its stand and came out with the circular dated May 16, 2017 dealing in self-trades.... The circular indicates that in order to find someone guilty of self-trades under the PFUTP Regulations, 2003, it is essential to find out the intention or manipulation. The circular indicated that accidental / unintentional self-trades were not covered under the regulations and mere occurrence of self-trades would not be considered per se illegal in the absence of any other additional evidence to prove manipulation or intention to defraud. The circular, thus, provided that in all matters of self-trades, an assessment has to be made as to whether the said trade was intentional or unintentional on the basis of supporting evidence. One such supporting evidence as per the circular to indicate the manipulative intent is, the volume transacted.... The algo softwares are designed to detect the most minute changes in stock prices and to respond accordingly and, therefore, it is quite possible that when certain orders are automatically generated without any human intervention for purchase of shares on a minute change in the stock prices, simultaneously in a fraction of seconds a similar order of the same quantity could be booked for sale.

Consequently, such purchase and sale could happen automatically which may result in self-trades. Whether such self-trades generated automatically could lead to violation of PFUTP Regulations is a point which is required to be considered by the AO especially in the light of the policy declared by SEBI in its circular of 2017, namely, the intention/the manipulative intention. " (emphasis supplied)

In the instant case, trades placed were not as a result of algorithmic trading. The noticees' group contribution to self trades as a proportion of market volume was 1.36% which is not a small figure. Infact in absolute numbers, the group was found to have executed 840 self trades. To conclude that orders relating to 840 trades were accidentally reversed, is implausible and indefensible. The number of such trades executed, the quantum of shares transferred by way of the self trades and the repetitiveness with which the self trades were executed by connected persons lend credence to the allegation that such self trades were neither genuine nor technical defaults. The volume of the self trades had the potential to give a false impression of actual or genuine volumes of trading in the company’s scrip and therefore I am of the view that the noticees namely, Sanjay Jethalal Soni

Krupa Soni, Krunal Gopaldas Rana and Amul Gagabhai Desai had artificially manipulated volumes and thereby violated Section 12A (a), (b) and (c) of the SEBI Act, 1992 read with regulation 3 and regulation 4(2)(a) & (g) of the PFUTP Regulations.

8.4. Manipulation in price of the scrip 8.4.1 The charge of manipulation of the price of the scrip itself commences with an assessment of what may be the reasons associated with the motive behind the acquisition at higher prices by the Noticees. Investigation has revealed that there were no major corporate announcements that justify an interest in the scrip at steep prices. Further, in the context of the allegation that the noticees had triggered open offer obligations under SAST Regulations, as per the noticees own submissions, they were only traders and not interested in actually acquiring/investing in the shares, a fact which according to the noticees was evident in the net position in their shareholding in PIL. If this was the case, the larger question as to why the noticees would continuously attempt to buy the said shares at unjustifiably higher prices during the period of investigation, remains open. 8.4.2 The SCN has alleged manipulation of the price of PIL's scrip on the basis of LTP Analysis, NHP analysis and First Trade Analysis. The LTP analysis is used to examine whether the trades executed at prices higher or lower than the previous trade is substantial enough to be regarded as being manipulative in nature.

The NHP Analysis examines a series of trades placed by an individual or group of connected persons in order to identify creation of every new high price, during the period of investigation, as a result of placing orders at prices which are manipulative in nature. In Patch I, the contribution of the group to positive LTP is stark and substantial. For 154 trades in which the noticees placed sell orders, the buy orders placed in the system contributed to a positive LTP of Rs 184.5. The contribution by one of the noticees, namely, Ms. Krupa Sanjay Soni alone is Rs 62.45, and 6 of the noticees have contributed to a net LTP difference of more than Rs 30 which are all significant figures. Also, in all of the 154 trades, there was an LTP difference greater than zero. Individual trades where buy orders are placed at prices higher than LTP and where such buy orders are placed before sell orders, may not be seen adversely. However when a pattern emerges of several such trades and considering the circumstances behind such trades (i.e. not intended for long term investment), the intent behind such trades becomes suspicious.

The noticees have cited individual instances which according to them indicate that there was no intent to manipulate the price of the security, and rather have contended that whenever they saw orders which they felt was to their benefit, they moved aggressively to acquire the same leading to higher positive LTPs. They have given instances of negative LTPs and trades with persons who are not noticees, which had resulted in positive LTPs. With respect to LTP Analysis, some noticees appear to contend that the manipulated price which were alleged to have been established had been established on previous days. Further, some of the noticees have cited their individual contribution to new high prices created, which according to them are insignificant. I do not agree with the merit of the submissions made by the noticees in this regard. It is not individual instances but a pattern of trading by the noticees, both individually and as a group, that supports the allegation of price manipulation. It would be naive to expect a market manipulator acting with the objective of rigging price upwards to not also intermittently place trades in a contrarian manner merely to quell any suspicion.

The upward push to the price of the scrip due to this mechanism of manipulation is obvious from the records. The sum of LTP Difference greater than zero, contributed by the noticees, as per the table above itself comes to Rs. 332.55, which is demonstrative of an overwhelming attempt by the group of noticees to push the price upwards. The LTP Analysis measures the positive or negative move created by trades in comparison to the immediately previous trades. It is really not material if these prices had been established earlier as any manipulative trade further reinforces the price trends. Therefore it is not relevant to contend that the alleged manipulative prices had already been established previously. This artificial upward price push is evident through the NHP analysis as well which reveals that the noticees contributed to Rs 131 through 190 trades. Infact of the total NHP created by the market i.e. all those who had traded in the PIL scrip during the same period, the noticees as a group alone contributed 35.19%. This is also a strong indicator of the group attempting to increase the price in a coordinated and manipulative manner.

8.4.3 The noticees have also contended that the orders placed were limit orders and that PIL scrip was placed in the 'T' group which is subject to greater surveillance thereby leaving no scope for manipulation. These arguments, in my view are frivolous and without basis. Placing limit orders in the instant case merely suggests that the manipulative price at which the noticees placed them were pre-determined. Further, simply because scrips are placed in 'T' group does not mean that they are immune from manipulative practices. Placing scrips in the 'T' group is a surveillance and risk management measure which among other things seeks to curtail speculative practices in certain scrips. Such scrips would have an inbuilt price band, but does not completely remove the possibility of price manipulation within such price bands. As regards the allegation that the manipulation was also perpetrated by placing first trades at a substantially higher price than the closing price, the percentage of the number of first trades of total number of days in the investigation period as well as the incremental price at which the noticees traded do not appear significant enough to be the basis of an allegation of price manipulation. Therefore though the First Trade Analysis is inconclusive, I am in agreement with the allegation made in the SCN on the basis of records and submissions before me that the noticees are liable for having manipulated the price of the PIL scrip and have therefore violated section 12A(a), (b) and (c) of the SEBI Act read with regulation 3(a), (b), (c), (d), 4(1), 4(2)(b) and (e) of the PFUTP Regulations.

8.5. Overall Conduct of the Group To determine whether or not the noticees transactions were fraudulent and manipulative in nature, their contribution to artificial volumes, contribution to price manipulation and trading pattern across various scrips cannot be seen in isolation from each other. In fact it is a combined reading of their conduct that leads to an inescapable conclusion that they are liable for fraud and manipulation in trading in the scrip of PIL. The upward price rigging seen through LTP and NHP analysis must be seen in the context of the large proportion of matched trades executed by the group and the sheer scale of the contribution of the group to the overall volume in the trades in the scrip. Moreover, the Investigation report reveals that this pattern of manipulative practices in trading by the Soni Group during the same period can be seen in 266 scrips of which in 5 scrips, their trades contributed to 20% or more. In the Moryo Industries and Rottam Commercials cases wherein SEBI had passed orders in December 4, 2014 and October 1, 2014, respectively, certain noticees to this Order, including ‘the Sonis’ were found to have engaged in fraudulent and manipulative trades and were restrained from dealing in the securities market. Adjudication orders have been passed in the following matters against one or more of the Noticees finding them liable for having executed trades which are fraudulent and manipulative in nature:

Table 16 Case name Noticee Name Date of AO Order Parichay Investments Ltd,. All the Noticees to this November 16, 2018 Order Saianand Commercial Ltd. All the Noticees to this November 16, 2018 (formerly Oregon Order Commercial Ltd.) Ushdev International Ltd. All the Noticees to this November 14, 2018 Order except for Shweta Dhiren Agarwal Shree Global Tradefin Ltd. All the Noticees to this October 25, 2018 Order except for Shweta Dhiren Agarwal Shree Global Tradefin Ltd. Sanjay Soni and Krupa September 14, 2012 Sanjay Soni (Merit of AO order upheld vide SAT order dated January 24, 2014) Hit Kit Global Solutions Sanjay Soni October 21, 2011 (Merit of Ltd. AO Order upheld vide SAT Order dated August 20, 2014)

The trades executed by the noticees to this Order must also be seen in the light of their propensity to being repeat offenders. The noticees against whom multiple proceedings have been initiated and monetary penalty imposed for the same set of violations under consideration in this Order have contended that they should not be subject to 11B directions as well. This argument is misplaced. Proceedings under section 11B are independent from adjudication proceedings under Chapter VI-A of the SEBI Act. It is possible under securities law for multiple proceedings to exist for the same cause of action given that the object of the proceedings are different from each other.

9. LIABILITY TO MAKE OPEN OFFER Regulation 10 and 11(1) of the SAST Regulations reads as follows:

"Acquisition of fifteen per cent or more of the shares or voting rights of any company. 10. No acquirer shall acquire shares or voting rights which (taken together with shares or voting rights, if any, held by him or by persons acting in concert with him), entitle such acquirer to exercise fifteen per cent or more of the voting rights in a company, unless such acquirer makes a public announcement to acquire shares of such company in accordance with the regulations."

Consolidation of holdings. 11. (1) No acquirer who, together with persons acting in concert with him, has acquired, in accordance with the provisions of law, 15 per cent or more but less than fifty five per cent (55%) of the shares or voting rights in a company, shall acquire, either by himself or through or with persons acting in concert with him, additional shares or voting rights entitling him to exercise more than 5% of the voting rights, with post acquisition shareholding or voting rights not exceeding fifty five per cent., in any financial year ending on 31st March unless such acquirer makes a public announcement to acquire shares in accordance with the regulations."

9.1. The trading records (as reproduced in foregoing paragraphs of this Order) clearly show that Noticee Nos. 1, 2 and 3 on the one hand and Noticee Nos. 4 and 5 on the other, respectively, had acquired more than 15% of the target company on four days / one day, during the investigation period. (Collectively, Noticee Nos. 1-5 are referred to as "Noticee Acquirers") Also, Noticee Nos. 1 to 3 together as PACs on October 29, 2010 acquired more than 5% after crossing the threshold of 15%. In the case of Noticee Nos. 1 and 2, I note that they are spouses of each other and Noticee No. 3 is the proprietary concern of Noticee No. 1, which is therefore merely a reflection of Noticee No. 1 himself. Similarly Noticee Nos. 4 and 5 are spouses of each other. The said spouse Noticees have in their respective replies sought to distance themselves from each other stating that being husband and wife does not demonstrate that they are persons acting in concert and that SEBI has not provided any proof of them having acted in concert in the case of acquisition of shares. I do not find merit in this submission. While the husband and wife may not be specifically covered under the definition of 'persons deemed to be acting in concert', the very nature of the relationship makes it clear that there is a natural presumption of spouses acting in concert unless there are concrete reasons (such as separated living, marital disputes etc.) to dispel such a presumption.

Clearly, the onus of proof was with the noticees to strengthen their contention that they did not act in concert. No such reasons have been satisfactorily brought forth. The SAST Regulations also, whether of 1997 or 2011, infact grant automatic exemption from making an open offer if the transfer is between 'relatives'. This in my view is indicative of the legislative intent recognising spouses as acting with one mind as far as the holding of shares is concerned. This intent cannot be any different as far as acquisition of shares is concerned as well. Secondly, the noticees have also contended that the acquisitions were only in the nature of trades and not acquisition since there was no intent in holding the shares. They have also contended that impugned transactions cannot result in both the allegations made in the SCN i.e. allegation of violation of PFUTP regulations and violation of SAST Regulations, since if the trades are illegal, the acquisition would be illegal and void. I do not agree with these submissions made by the noticees. The SAST Regulations do not discriminate between 'trading' activity and 'investment'/'acquisition' activity.

The thresholds in the SAST Regulations are specific and must be strictly viewed. In the case of Noticee Nos. 6 and 7, the acquisitions have been made by them alone and not in concert with any one else. The trading records (as reproduced in foregoing paragraphs of this Order) clearly show that Noticee Nos. 6 and 7, respectively, had acquired more than 15% of the target company on six days / three days, during the investigation period. None of these noticees had sought exemption from making open offer in terms of the SAST Regulations prior to the said acquisitions, nor have they demonstrated any reasons to be eligible for automatic exemption. Further, the defence that the two allegations of fraudulent trades and acquisition in breach of thresholds under the SAST Regulations cannot survive together, holds no water. The allegation against the Noticees in the SCN as discussed in this Order is that the Noticees had engaged in volume and price manipulation in the shares of PIL and thereby violated the PFUTP Regulations. This leads to a conclusion that the 'transactions' were fraudulent in nature.

It does not however lead to the conclusion that the acquisition of shares are rendered illegal and void. Except in the case of self trades, there was a change in ownership of shares once the trade consummated. The violations under the two regulations are independent of each other, the frameworks having been laid down to address two different consequences of market conduct. Any acquisition of shares beyond specified threshold under the SAST Regulations requires giving the shareholders an exit opportunity. In the circumstances of the case, and based on records noted above, I find all the Noticees have violated regulation 10 of the SAST Regulations and Noticee Nos. 1to 3 have also violated regulation11(1) of the SAST Regulations.

9.2. As concluded in preceding paragraphs, the noticees had acted together for the purpose of manipulating the volume and price of the PIL scrip and are liable for having violated PFUTP Regulations. When related entities driven with the motive of market manipulation cross the stipulated thresholds and later reduce their positions, directing them to make an open offer and acquire substantial number of shares and control over the company, may not be in accordance with the underlying spirit of the SAST Regulations. It may actually lead to a situation where persons who perpetrated fraud with respect to a listed company's scrip, are forcibly asked to be substantial shareholders of the company which may be detrimental to the public shareholders of the company. Therefore, while their acquisition does violate the thresholds stipulated in the SAST Regulations, in the interest of the investors and the securities market, I am convinced that a different set of directions must follow.

LEGALITY OF DIRECTIONS UNDER SECTION 11B 10. The legal position on directions under section 11B of the SEBI Act, 1992 being preventive and remedial in nature is well settled and does not require elaboration. Unlike section 11B, section 11(4) of the SEBI Act lays down specific directions that can be passed by SEBI in the interest of investors or securities market. The catena of legal precedents therefore indicate that Section 11B empowers SEBI to structure the directions in a specific case to suitably address the wrongs committed in a given case. SAT has in the case of MP Mehrotra v. SEBI [2003] 43 SCL 315 (SAT), observed that whether a direction is penal or remedial in nature would depend on the facts specific to each case. The following observations of SAT in the case of Libord Finance Ltd. v. SEBI 2008 86 SCL 72 SAT, is also instructive in this regard: "When such directions are issued, the object is not to punish the delinquent but to protect and safeguard the market and the interest of the investors which is the primary duty cast on the Board under the Act. The directions may result in penal consequences to the entity to whom those are issued but that would be only incidental.

The purpose or the basis of the order or the directions would nevertheless be to protect the securities market and the interest of the investors." The noticees have contended that the proposal for the action pertains to alleged illegalities that happened 7 years before and therefore the delayed action is not justifiable particularly when remedial powers under section 11B are sought to be exercised. I note from the records that the involvement of the noticees and the 'Soni group' in various scrips came to the attention of SEBI and the stock exchanges through various market alerts. The investigation process is a detailed one which passes through various levels of analysis. This will invariably consume considerable time depending on the number of entities involved, scrips involved and the complexity of the transactions. Therefore questioning the merits of the proposed directions on the sole criteria of the time it took to crystallise the extent of the violations, would defeat the process of justice. The remedial nature of SEBI's directions under section 11B does not change merely because of the delay.

Wherever it is concluded that the actions of certain entities are detrimental to the safety, integrity and confidence in the securities market, SEBI is duty bound to take remedial measures. Moreover the past conduct of the Noticees, as discussed earlier, do not warrant the delay to be considered as a mitigating factor. Therefore I do not find merit in the noticees' submissions in this regard.

11. DIRECTIONS (A). For the Violation of PFUTP Regulations In view of the above, I in exercise of the powers conferred on me under Sections 11, 11(4) and 11B of the SEBI Act, 1992 hereby pass the following directions, with immediate effect - (i) the Noticees i.e. Sanjay Jethalal Soni, Krupa Sanjay Soni, J M Soni Consultancy, Dhiren Dharamdas Agarwal, Shweta Dhiren Agarwal, Krunal Gopaldas Rana, Amul Gagabhai Desai, Mahesh Somabhai Desai and Arif Gulammustufa Shaikh shall not access the securities market or buy, sell or otherwise deal in the securities market, either directly or indirectly for a period of 5 years from the date of this order; (ii) the Noticees shall not associate themselves with any listed company or company proposing to list, or any registered intermediary, whether in the capacity of a director, key management personnel or partner (in the case of a partnership firm), for a period of 5 years, with effect from September 01, 2019.

(B). For the violation of SAST Regulations In view of the above, I in exercise of the powers conferred on me under Sections 11, 11(4) and 11B of the SEBI Act, 1992 read with section 19 of the SEBI Act, 1992, regulation 44 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and regulation 32 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, hereby direct that the Noticee Acquirers i.e. Sanjay Jethalal Soni, Krupa Sanjay Soni, J M Soni Consultancy, Dhiren Dharamdas Agarwal and Shweta Dhiren Agarwal shall not access the securities market or buy, sell or otherwise deal in the securities market, either directly or indirectly for a period of 5 years from the date of this order. The periods of restraint specified in this sub-paragraph and sub-paragraph (A) shall run consecutively and not concurrently.

12. A copy of this Order shall be served on the Noticees immediately and forwarded to the recognised stock exchanges, registered depositories and registered registrars to issue and share transfer agents for necessary compliance with the above directions.

DATE: July 31, 2019 G. MAHALINGAM PLACE: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA