Order in the matter of Sanjay Dangi and his asscoiates in various scrips

DIRECTIONS UNDER SECTIONS 11B, 11D AND 11(4)(b) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN THE MATTER OF MR. SANJAY DANGI, HIS ASSOCIATES AND OTHER ENTITIES IN VARIOUS SCRIPS

1. The Securities and Exchange Board of India (hereinafter referred to as SEBI), vide an ad interim ex-parte Order dated December 2, 2010 (hereinafter referred to as the Order) in the matter of dealings in the scrips of Murli Industries Limited, Hubtown Limited (earlier known as Ackruti City Limited), Welspun Corp Limited (earlier known as Welspun-Gujarat Stahl Rohren Limited), Brushman (India) Limited and RPG Transmission Limited issued various directions for the reasons stated therein. The directions issued under the said Order in brief are given below:

“A. The persons/entities mentioned in the table below are restrained from accessing the securities market and further prohibited from buying, selling or dealing in securities in any manner whatsoever, till further directions: Sr. Entity Permanent Account Number Dangi Group Entities 1. Alpana Sanjay Dangi AFNPD2805C 2. Amit Business Limited AACCA6091Q 3. Ashoka Finstock Limited AADCA7725J 4. Goldflag Trading Company P Limited AACCG2601E 5. Ivory Consultants Private Limited AAACI5518C 6. Mentor Capital Limited (erstwhile Pacific Corporate AACCP7995G Services Limited) 7. Sanjay Soumitra Singh Dangi AHSPD6986H

Sr. Entity Permanent Account Number 8. Sunil Somitra Singh Dangi AAZPD2714P 9. Supersun Trading Company Private Limited AAICS7352N 10. Top City Mercantile Company Private Limited AACCT1775G Ashika Group Entities 11. Calcom Consultancy Services Private Limited AABCC0899F 12. Cynosure Tie-Up Private Limited AACCC8722E 13. Delight Tie-Up Private Limited AACCD4249H 14. Forever Merchants Private Limited AAACF9807H 15. Fountain Vanijya Private Limited AABCF1407E 16. Hanurang Vinimay Private Limited AAACH6707Q 17. Micro Management Private Limited AABCM8245K 18. PR Vyapaar Private Limited AAECP3304K 19. Pushkar Banijya Limited AABCP9780E 20. Rosewood Vanijya Private Limited AADCR3600D 21. Sarswati Vincom Limited AAECS4656B 22. Splendor Vanijya Private Limited AAKCS0981P 23. Winall Vinimay Private Limited AAACW8004B 24. Withal Commercial Private Limited AAACW2222R B. The promoter/promoter related entities of Murli Industries Limited, Ackruti City Limited, Welspun Gujarat Stahl Rohren Limited (now Welspun Corp. Limited) and Brushman India Limited mentioned below in the table are hereby directed not to buy, sell or deal in the securities of their own companies and their listed group companies, in any manner whatsoever, till further directions:

Sr. Entity Permanent Account Number Entities Connected to Murli Industries limited 1. Ambaji Papers Private Limited AAFCA2276C 2. Bajranglal Bankatlal Maloo ACHPM5764C 3. Bajranglal Maloo (HUF) AAAHB8633E 4. Inco Infrastructures Private Limited AABCI3615H 5. Kanhaiya Mining And Minerals Private Limited AACCK5740L 6. Krishnum Investments Private Limited AACCK5953H 7. Lakhi Packaging Private Limited AABCL0873C 8. Lalchand B Maloo (HUF) AAAHL2224F 9. Lalchand Bankatlal Maloo ACGPM0657D

Sr. Entity Permanent Account Number 10. Mahesh Maloo AFXPM4524R 11. Murli S Maloo ACGPM0665D 12. Nandlal B Maloo (HUF) AAAHN6253N 13. Ramji Agri Business Private Limited AACCR9946F 14. Ramkrishana Fabrication & Machineries Private AADCR0189F Limited 15. Runicha Alloys And Steel Private Limited AACCR9947E 16. Simple Mining And Power Private Limited AAJCS0291D 17. Sunilkumar S Maloo ACGPM0659P 18. Taitan Management Services Private Limited AACCT2473R Entities Related to Ackruti City Limited 19. Cello Finance Corporation AAFFC0147D 20. Cello Pens And Stationery Private Limited AABCC1808J 21. Falguni Vyomesh Shah AAFPS0667J 22. Hemant Mahipatray Shah (HUF) AAAHH1062F 23. Khandesh Builders Limited AAACK8222H 24. Kunjal Hemant Shah AAGPS9693B 25. Lata Mahipatray Shah AAGPS9692A 26. Mahipatray V Shah (HUF) AAFHM0519R 27. Naresh Jayantilal Shah AADPS0903R 28. Pankaj G Rathod AAAPR5522N 29. Pradeep G Rathod AAAPR5520Q 30. Sangeeta P Rathod AAAPR5521R 31. Vyomesh Mahipatray Shah (HUF) AAAHV1442H Welspun Group Entities 32. GRG Cosmetics Private Limited AABCG6334M 33. Krishiraj Trading Limited AAACK2257N 34. Welspun Mercantile Limited AAACW2876K 35. Welspun Polybuttons Private Limited AAACW0036H 36. Welspun Trading Limited AAACW2877J 37. Welspun Wintex Limited AAACW0488M Brushman India Limited 38. Kapil Kumar AALPK9933F C. The stock exchanges are advised to enable squaring off, at the earliest, existing open positions in the Futures and Options Segment, if any, for the persons/entities mentioned above. Further, the concerned stock exchanges should also ensure that said persons/entities do not take fresh positions or increase their open positions. D. Murli Industries Limited, Ackruti City Limited, Welspun Gujarat Stahl Rohren Limited (now Welspun Corp. Limited) and Brushman India Limited, and their respective promoters are directed to cease and desist from carrying out the activities mentioned above in this Order which is prima facie in contravention of the securities laws.

E. Murli Industries limited, Ackruti City Limited, Welspun Gujarat Stahl Rohren Limited (now Welspun Corp. limited) and Brushman India Limited and their respective promoters are further directed to ensure that, the shareholding of the promoters/promoter group in the said companies is not altered in any manner till further directions.

F. The stock brokers namely, Sanchay Fincom Limited, Sanchay Finvest Limited and Ashika Stock Broking Limited are hereby directed not to buy, sell or deal in the securities in their own/proprietary account in any manner till further directions in this regard. They are further directed not to take/deal with fresh/new clients with immediate effect until further orders.”

2. Subsequently, after providing opportunity of hearing, SEBI, vide Order dated March 23, 2011 had passed further directions, as mentioned below:

“10. …… i. The interim ex-parte directions issued vide the ad-interim ex-parte Order dated December 02, 2010 against Murli Industries Limited, Mr. Bajranglal Bankatlal Maloo, Bajranglal Maloo (HUF), Lalchand B Maloo (HUF), Mr. Lalchand Bankatlal Maloo, Mr. Mahesh Maloo, Mr. Murli S Maloo, Nandlal B Maloo (HUF), Mr. Sunilkumar S Maloo, Krishnum Investments Private Limited, Lakhi Packaging Private Limited, Simple Mining and Power Private Limited and Taitan Management Services Private Limited, is hereby confirmed. ii. Further, the directions issued vide the ad-interim ex-parte Order dated December 02, 2010 against Kanhaiya Mining and Minerals Private Limited, Ambaji Papers Private Limited, Inco Infrastructures Private Limited, Ramji Agri Business Private Limited, Runicha Alloys & Steel Private Limited and Ramkrishna Fabrications & Machineries Private Limited is hereby revoked, for the reasons stated above in this Order, with immediate effect. Notwithstanding such revocation, the said entities shall co-operate with the ongoing investigation in the matter and furnish all documents and information sought by the Securities and Exchange Board of India.”

3. SEBI, vide three separate orders dated July 19, 2011 had confirmed the directions issued against Mentor Capital Limited, Ivory Consultants Private Limited, Ashok Finstock Limited, Mr. Sanjay Dangi, Mrs. Alpana Dangi, Mr. Sunil Dangi, Sanchay Fincom Limited, Sanchay Finvest Limited, Calcom Consultancy Services Private Limited, Cynosure Tie-Up Private Limited, Delight Tie-Up Private Limited, Forever Merchants Private Limited, Fountain Vanijya Private Limited, Micro Management Limited, PR Vyapaar Limited, Pushkar Banijya Limited, Rosewood Banijya Private Limited, Sarswati Vincom Limited, Splendor Vanijya Private Limited and Withal Commercial Private Limited. SEBI, vide one of the aforesaid orders had also revoked the directions issued against Winall Vinimay Private Limited and Hanurang Vinimay Private Limited. Further, the directions against the stock broker, Ashika Stock Broking Limited were revoked to the extent of taking fresh clients. However, the direction restraining it from buying, selling or dealing in the securities in its own/proprietary account in any manner, was ordered to continue.

4. Thereafter, SEBI completed the investigation within the time stipulated by the Honourable Securities Appellate Tribunal. Based on the findings of the investigation, appropriate proceedings, are being initiated against various persons/entities, including those mentioned in the Order. Such details in so far as related to the persons/entities mentioned in the Order are given below:

Table-1

Actions under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act) and Regulation 44 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 read with Regulation 35(1), (2) and (3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 are being initiated against the following entities.

Sr. No. Entity Permanent Account Number 1 Bajranglal B Maloo HUF AAAHB8633E 2 Bajranglal Bankatlal Maloo ACHPM5764C 3 Lalchand B Maloo HUF AAAHL2224F 4 Lalchand Bankatlal Maloo ACGPM0657D 5 Mahesh Maloo AFXPM4524R 6 Murli S Maloo ACGPM0665D 7 Nandlal Maloo HUF AAAHN6253N 8 Sunilkumar Sobhagmal Maloo ACGPM0659P 9 Krishnum Investments Private Limited AACCK5953H 10 Lakhi Packaging Private Limited AABCL0873C 11 Taitan Management Services Private Limited AACCT2473R 12 Simple Mining & Power Private Limited AAJCS0291D 13 Ambaji Papers Private Limited AAFCA2276C 14 Inco Infrastructures Private Limited AABCI3615H 15 Kanhaiya Mining And Minerals Private Limited AACCK5740L 16 Ramji Agri Business Private Limited AACCR9946F 17 Ramkrishana Fabrication & Machineries AADCR0189F Private Limited 18 Runicha Alloys And Steel Private Limited AACCR9947E

Further, adjudication proceedings under Section 15 of the SEBI Act are also being initiated against entities mentioned at S. No. 9, 10,11 & 12 above.

TABLE-II Adjudication proceedings under Section 15 of the SEBI Act/ Section 23 of the Securities Contracts (Regulation) Act, 1956 are being initiated against the following entities.

Sr.No. Entity Permanent Account Number

Sr.No. Entity Permanent Account Number 19 Ashoka Finstock Limited AADCA7725J 20 Ivory Consultants Private Limited AAACI5518C 21 Mentor Capital Limited (erstwhile Pacific Corporate AACCP7995G Services Limited) 22 Sanjay Soumitra Singh Dangi AHSPD6986H 23 Supersun Trading Company Private Limited (now merged AAICS7352N with Mentor Capital Limited) 24 Top City Mercantile Company Private Limited (now AACCT1775G merged with Mentor Capital Limited) 25 Calcom Consultancy Services Private Limited AABCC0899F 26 Cynosure Tie-Up Private Limited AACCC8722E 27 Delight Tie-Up Private Limited AACCD4249H 28 Forever Merchants Private Limited AAACF9807H 29 Fountain Vanijya Private Limited AABCF1407E 30 Micro Management Private Limited AABCM8245K 31 PR Vyapaar Private Limited AAECP3304K 32 Pushkar Banijya Limited AABCP9780E 33 Rosewood Vanijya Private Limited AADCR3600D 34 Sarswati Vincom Limited AAECS4656B 35 Splendor Vanijya Private Limited AAKCS0981P 36 Winall Vinimay Private Limited AAACW8004B 37 Withal Commercial Private Limited AAACW2222R 38 Hubtown Limited (earlier known as Ackruti City Limited) 39 Murli Industries Limited

5. Based on the findings of the investigation no action/proceedings are recommended against the following entities: TABLE- III

Sr.No. Entity Permanent Account Number 40 Alpana Sanjay Dangi AFNPD2805C 41 Amit Business Limited (now merged with Mentor AACCA6091Q

Sr.No. Entity Permanent Account Number Capital Limited) 42 Goldflag Trading Company P Limited (now merged with AACCG2601E Mentor Capital Limited) 43 Sunil Somitra Singh Dangi AAZPD2714P 44 Cello Finance Corporation AAFFC0147D 45 Cello Pens And Stationery Private Limited AABCC1808J 46 Falguni Vyomesh Shah AAFPS0667J 47 Hemant Mahipatray Shah (HUF) AAAHH1062F 48 Khandesh Builders Limited AAACK8222H 49 Kunjal Hemant Shah AAGPS9693B 50 Lata Mahipatray Shah AAGPS9692A 51 Mahipatray V Shah (HUF) AAFHM0519R 52 Naresh Jayantilal Shah AADPS0903R 53 Pankaj G Rathod AAAPR5522N 54 Pradeep G Rathod AAAPR5520Q 55 Sangeeta P Rathod AAAPR5521R 56 Vyomesh Mahipatray Shah (HUF) AAAHV1442H 57 GRG Cosmetics Private Limited AABCG6334M 58 Krishiraj Trading Limited AAACK2257N 59 Welspun Mercantile Limited AAACW2876K 60 Welspun Polybuttons Private Limited AAACW0036H 61 Welspun Trading Limited AAACW2877J 62 Welspun Wintex Limited AAACW0488M 63 Kapil Kumar AALPK9933F 64 Hanurang Vinimay Private Limited AAACH6707Q 65 Welspun Corp Limited (earlier known as Welspun- Gujarat Stahl Rohren Limited), 66 Brushman (India) Limited 67 Ashika Stock Broking Limited 68 Sanchay Fincom Limited 69 Sanchay Finvest Limited

6. I have considered the findings in the investigation report. This is a matter where various directions were issued against a number of entities as stated above. The investigation is now complete and in the interest of justice, I feel it appropriate to consider the matter as to whether the prohibitory directions issued under the Order need to be continued or not. I am of the opinion that, generally, while dealing with such matters, certain factors as mentioned below need to be considered.

A. Factors to be considered for continuation of directions:

a. The continuance of the entity in the securities market is likely to be detrimental to the interest of investors and the securities market. b. There is substantive material on record to suggest that the entity was involved in similar manipulative activities in the past. c. Seriousness of the offence committed by the entity, as per the investigation. d. Continuous non-adherence to the law and the repeated nature of violations by the entity. e. To ensure effective implementation of disgorgement, if contemplated.

B Factors to be considered for revocation of the directions:

a. The findings of investigation does not substantiate prima facie charges levelled against the entity in the ad-interim ex-parte Order. b. The period of prohibition already undergone by the entity vis –a vis the findings of investigations. c. The recommendation is to initiate adjudication proceedings which may result only in imposition of monetary penalty. d. There is nothing to suggest that revocation of interim directions would result in resumption of the undesirable activity for which the interim directions were already issued.

However, I must hurry to add that the aforesaid factors are not exhaustive and may vary depending on the facts and circumstances of each case and the findings of investigation thereof.

7. In the present case, I note that in respect of the persons/entities mentioned at Table I at paragraph 4 above, proceedings under Sections 11, 11B and 15 of the SEBI Act and Regulation 44 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 read with Regulation 35(1),(2) and (3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 are being initiated by SEBI on the basis of the findings of the investigation, as stated above. Considering the findings of the investigation, the role of the entities mentioned at Sr. no. 1 to 12 of Table I at paragraph 4 above in the scheme of things and the factors as stated above, in the interest of justice, I feel it appropriate not to revoke the directions issued against such entities, at this stage. The directions against the entities at Sr. no. 13 to 18 therein were already revoked, vide order dated March 23, 2011. In respect of persons/entities mentioned in Table II at paragraph 4 above, I note that adjudication proceedings are being initiated. Considering the findings of the investigation and the fact that the said persons/entities are restrained from dealing in securities market for a period of almost fifteen months, I am of the considered view that the interim directions issued vide the Order against such entities need to be vacated. In respect of the persons/entities mentioned at Table III at paragraph 5 above, as no adverse findings are observed in the investigation, in the interest of justice, I am of the considered view that the interim directions issued vide the Order against such entities need to be vacated.

8. In view of the above reasons, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11 and 11B thereof, issue the following directions:

A. The interim directions issued by the Securities and Exchange Board of India, vide Order dated December 2, 2010 and which were confirmed, vide Order dated March 23, 2011 against the persons/entities mentioned at serial no. 1 to 12 at Table I Paragraph 4 would continue till further directions considering the violations committed by the entities. The directions issued against persons at serial no. 13 to 18 at Table I at paragraph 4 were already revoked by the Securities and Exchange Board of India, vide Order dated March 23, 2011 for the reasons stated therein.

B. The interim directions issued by the Securities and Exchange Board of India, vide Order dated December 2, 2010 against the persons/entities mentioned at Table II at Paragraph 4 above are revoked considering the proposed adjudication proceedings and also the fact that the entities have already undergone debarment for a period of fifteen months.

Further, the interim directions issued by the Securities and Exchange Board of India, vide Order dated December 2, 2010 against the persons/entities mentioned at Table III at paragraph 5 (except Hanurang Vinimay Private Limited and Winall Vinimay Private Limited for whom the directions are already revoked vide Order dated July 19, 2011) are revoked considering the fact that no charge is made out against such entities by the investigation. Without prejudice to the said revocation, the reference about the entities at Sr. no. 68 and 69 is being forwarded to the concerned department of SEBI for an inspection.

C. The interim direction mentioned at paragraph 53 (E) of the Order dated December 2, 2010 is modified to the extent of directing the promoters of Murli

Industries Limited to ensure that, their shareholding in Murli Industries Limited is not altered in any manner till the enforcement proceedings are completed.

9. Copies of this Order shall be served on the National Stock Exchange of India Limited, Bombay Stock Exchange Limited, National Securities Depository Limited and the Central Depository Services (India) Limited, to enable them to take necessary steps for ensuring due compliance with this Order.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA PLACE: MUMBAI DATE: MARCH 16, 2012