Order in the matter of Shantanu Sheorey Aquakult Linited[SAT Appeal No.:418/2021][SAT Appeal No.:419/2021]

UNDER SECTIONS 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN THE MATTER OF SHANTANU SHEOREY AQUAKULT LTD. In respect of: Sr. No. Entity Name PAN 1. ASBN Commodities & Fineserve Pvt. Ltd. AAJCA2178D 2. Naseen Tradelink Pvt. Ltd. AADCN1075A 3. Abjayoni Trading Pvt. Ltd. AAJCA2177N 4. Nirvana Mall Management Co. Pvt. Ltd. AACCN2665B 5. Adamina Traders Pvt. Ltd. AAICA0681J 6. Orange Mist Productions Pvt. Ltd. AABCO0927C 7. Anvita Real Estate Pvt. Ltd. AAICA2157M 8. Roho Real Estate Pvt. Ltd. AAECR5430N 9. Black Horse Media and Entertainment Pvt. Ltd. AADCB5849G 10. Sally Real Estate Pvt. Ltd. AANCS8549Q 11. Dizzystone Trading Pvt. Ltd. AADCD5749F 12. Tushar Pandit Jadhav AHUPJ8781G 13. Haritima Infrastructure Pvt. Ltd. AACCH8710M 14. Vihar Infrastructure Pvt. Ltd. AADCV9737F 15. Jeshna MuiltitradePvt. Ltd. AACCJ2392K 16. Wellman Tradelinks Pvt. Ltd. AAACW8534C 17. Magan Mercantile Pvt. Ltd. AAGCM2167D 18. Whitetext Infrastructure Pvt. Ltd. AABCW0224G 19. Matulya Trading Pvt. Ltd. AAHCM0217H 20. Yogita Trading LLP AABFY4583D 21. Meritorious Realty Pvt. Ltd. AAGCM3629L (The above entities are individually referred to by their corresponding names/numbers and collectively referred to as “Noticees”)

Order in the matter of Shantanu Sheorey Aquakult Ltd.

Background: 1. The present proceedings arise out of an investigation conducted in the scrip of Shantanu Sheorey Aquakult Ltd. (hereinafter referred to as “SSAL/the Company”) for the period of March 01, 2014 to May 31, 2016 (hereinafter referred to as “the investigation period”), in which a common show cause notice dated August 09, 2017 (hereinafter referred to as “the SCN”) was issued to 21 entities named above. The facts necessary for the present proceedings, as have been captured in the said SCN are briefly stated hereunder: i. The scrip of the Company was listed on BSE Limited. The price of the scrip opened at INR 4.95 on March 03, 2014, which touched a high of INR 261 on May 26, 2016 before closing at INR 260.50 on May 31, 2016. ii. The Company had made preferential allotment of its equity shares on three different instances during the Financial Years 2012-13, 2013-14 and 2014-15. The Company had made profits of INR 26.40 Lakh, INR 79.80 Lakh and INR 99.20 Lakh for the FY 2012-13, 2014-15 and 2015-16 respectively and incurred a loss of INR 8.52 Crore for the FY 2013-14. During the investigation period, no major corporate announcements except for declaration of financial results, allotment of shares on preferential allotment etc., were made by the Company. iii.

The trading in the scrip of the Company was under suspension during the period of January 07, 2015 to December 08, 2015, due to surveillance measure. The market capital of the Company as on March 23, 2017 was INR 559.13 Crore. iv. As the profits of the Company were negligible and no major corporate announcements were made, the price hike of the scrip from INR 4.95 to INR 260.50 during the investigation period did not view to be normal. v. A total no. of 8274 trades were executed in the scrip of the Company during the investigation period involving 79,55,079 shares i.e. 961 shares per trade on an average. vi. The Noticees were found to be involved in the trades which had contributed to the last traded price (hereinafter referred to as “LTP”) and were also found to be connected to each other, majorly on account of common directorships, fund transfer etc. vii. The Noticees had carried out a total number of 4217 buy trades in the scrip of the Company out of the total number of 8274 trades, as aforesaid, which was 50.96% of the total market wide trade. Out of those 4217 trades, in 4028 trades, the buy orders were placed by the Noticees subsequent to the sell orders, with which the buy orders of the Noticees have got matched.

Order in the matter of Shantanu Sheorey Aquakult Ltd.

The said 4028 trades were executed by the Noticees during the period of February 01, 2016 to May 31, 2016 and during such time, the price of the scrip of the Company had increased from INR 141 to INR 260.50. In the aforestated period, the Noticees in total had purchased 44.07 Lakh shares, which was 55.39% of the total market volume of 79.55 Lakh shares. viii. Further, out of these 4028 trades, in 1252 trades, the Noticees had placed their respective buy orders at prices higher than the sell order prices available on the market platform. In the said 1252 trades, the Noticees have purchased a total quantity of 36.38 Lakh shares only, when the total quantity of shares available for sale from the sellers was 98.98 Lakh shares. 2. Based on the aforesaid facts, the SCN alleges that by executing such trades at prices higher than the LTP, the Noticees have violated Regulation 3 (a), (b), (c), (d), 4 (1), 4 (2) (a) and (e) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as “the PFUTP Regulations”) 3. From the records of the present matter, it is noted that as the SCN could not be served on all the Noticees through SPAD/email, therefore, the service of the SCN was effected upon few of the Noticees by way of substituted mode, with the following details: Table no. 1

Sr. Noticee nos. Mode of Service of SCN no. Noticee nos. 4, 7, 1. 11, 14, 19 and 21 Newspaper publication Times of India/Navbharat Times/Maharashtra Times- Mumbai Edition – 30/08/2018 Noticee no. 12, 16, 2. 20 Affixation on last known address

4. The personal hearing in the matter was first scheduled on December 17, 2019. The hearing notice for the said date of hearing was served upon Noticee nos. 5, 6, 12 and 20. As the hearing notices could not be served upon the rest of the Noticees through postal modes, the said hearing notice was affixed on the last known address of the Noticee no. 11 while on the other Noticees, the Order in the matter of Shantanu Sheorey Aquakult Ltd.

hearing notices were served by way of newspaper publication that was carried out on December 10, 2019 in the following newspapers: a) Kolkata Edition of Asian Age (English), Bartaman (Bengali) and Dainik Jagran (Hindi) for Noticee no. 16; and b) Times of India (English), Navbharat Times (Hindi) and Maharashtra Times (Marathi) for Noticee nos. 1, 2, 3, 4, 7, 8, 9, 10, 13, 14, 15, 17, 18, 19 and 21. 5. On the said date of hearing, i.e., December 17, 2019, only Noticee no. 5 entered appearance and made oral submissions. Subsequently another opportunity of personal hearing was granted to all the Noticees on April 22, 2020. However, due to the lockdown imposed in the wake of Covid-19, the personal hearing on the said date could not take place. The hearing was thereafter scheduled on August 25, 2020 and hearing notices dated July 27, 2020 were issued to all the Noticees through postal modes as well as through emails (as mentioned in the records of BSE and CDSL). Additionally, publication of the hearing notice was also carried out in the following newspapers on August 10, 2020: a) Kolkata Edition of Times of India (English), Bartaman (Bengali) and Dainik Jagran (Hindi) for Noticee no. 16; b) Ahmedabad Edition of Times of India (English), Gujarat Vaibhav (Hindi) and Gujarat Samachar (Gujarati) for Noticee no. 20; and c) Times of India (English), Navbharat Times (Hindi) and Maharashtra Times (Marathi) for Noticee nos. 1-15, 17-19 and 21. 6. On the said date of hearing, i.e., August 25, 2020, the authorised representatives of Noticee nos. 4, 5, 11 and 16 appeared through Video Conferencing and made their respective submissions. During the course of the said hearing, certain queries were raised to the said authorised representatives, however, the said Noticees could not furnish the information/documents pertaining to the queries so raised to them. 7. Subsequently, the personal hearing in the matter was again fixed for February 11, 2021 and February 16, 2021 and the hearing notices were served to the Noticees in the following manner:

Order in the matter of Shantanu Sheorey Aquakult Ltd.

Table no. 2

Sr. no. Noticee no. Mode of Service

1. Noticee no. 1, 2, 12-15, 18 Newspaper publication and 19

2. Noticee no. 3, 7-10, 17, 20 E-mail and 21

3. Noticee no. 6 SPAD and email

8. It is noted from the records that many of the Noticees have filed numerous letters seeking adjournment and/or asking for more time to file their replies on merits of the case, etc. For the sake of convenience, the details of such communications that have been received are indicated in the following table: Table no. 3

Sr. Noticee Letter/email date Details No.

1. Noticee Letter dated September Request to grant additional time to file no. 1 26, 2017 reply to the SCN

Letter dated November Seeking copy of the Investigation Report 14, 2018 and other documents, statement of Mr. Madan as referred in para 6, Trade and Order log of the Noticee

Email dated August 17, Request for adjournment of the hearing 2020 scheduled on August 25, 2020, as it has filed application under SEBI (Settlement Proceedings) Regulations, 2018,

Order in the matter of Shantanu Sheorey Aquakult Ltd.

2. Noticee Letter dated December Request to provide copy of the SCN. no. 3 07, 2018

Email dated December Request to provide copy of the SCN and 18, 2019 adjourn the hearing.

3. Noticee Letter dated November Request to provide copy of the SCN. no. 4 09, 2018

4. Noticee Letter dated September Request to provide copies of no. 5 02, 2017 Investigation Report, legible copy of the statement of Mr. Kumar Raichand Madan etc.

Letter dated December Reply to the SCN 16, 2019

5. Noticee Letter dated September Request to grant additional time to file no. 6 09, 2017 reply to the SCN

Letter dated November Seeking copy of the Investigation Report 11, 2018 and other documents, statement of Mr. Madan as referred in para 6, Trade and Order log of the Noticee

Letter dated December Reply to the SCN 24, 2019

6. Noticee November 06, Request to provide copy of SCN to new no. 7 2018/December 14, 2019 address and adjournment of the hearing

7. Noticee November 09, Request to provide copy of SCN to new no. 8 2018/December 16, 2019 address and adjournment of the hearing

Order in the matter of Shantanu Sheorey Aquakult Ltd.

December 26, 2019 Reply to the SCN

8. Noticee November 07, 2011 Request to provide copy of SCN to new no. 9 address

Email dated December Request to provide copy of SCN and 18, 2019 adjourn the hearing.

9. Noticee November 09, Request to provide copy of SCN to new no. 10 2018/December 17, 2019 address

10. Noticee August 20, 2020 Reply to the SCN no. 11

11. Noticee September 21, 2017 Request to grant additional time to file no. 13 reply to the SCN

November 14, 2018 Seeking copy of the Investigation Report and other documents, statement of Mr. Madan as referred in para 6, Trade and Order log of the Noticee

12. Noticee September 27, 2017 Request to grant additional time to file no. 14 reply to the SCN

November 13, 2018 Request to provide copy of SCN at new address

13. Noticee November 15, 2018 Seeking copy of the Investigation Report no. 15 and other documents, statement of Mr. Madan as referred in para 6, Trade and Order log of the Noticee

Order in the matter of Shantanu Sheorey Aquakult Ltd.

14. Noticee November 10, 2018 Request to provide SCN at new address no. 16 August 20, 2020 Reply to the SCN

15. Noticee December 10, 2018 Request to provide copy of SCN at new no. 17 address

December 17, 2020 Reply to the SCN

16. Noticee September 27, 2017 Request to grant additional time to file no. 18 reply to the SCN

17. Noticee December 16, 2020 Reply to the SCN no. 21

9. As noted from the above details, certain Noticees had requested SEBI for serving the copy of the SCN at their new addresses. Accordingly, the SCN along with the annexures were again sent at the new addresses provided by the respective entities, however, as the said letters also returned undelivered, the copy of the SCN and the annexures were served on the respective entities through emails. Subsequently, pursuant to the issuance of the hearing notices (through publication), certain entities like Noticee no. 3 again requested for the copy of the SCN and in response thereto, in the interest of justice, copy of the SCN and its annexures were provided afresh to the such entities to enable them to defend themselves against the allegations made in the SCN. It is also pertinent to mention here that the Noticee nos. 1 and 13 (vide their separate emails dated August 17, 2020) had submitted that they have filed an application under SEBI (Settlement Proceedings) Regulations, 2018, however, no detail of any such application was provided by the said Noticees. 10. As noted earlier, only Noticee nos. 5, 6, 8, 11, 16, 17 and 21 have filed written replies to the SCN. A careful perusal of the said replies reflect that all these replies carry certain common submissions, which are presented in brief herein below: i. The SCN has been issued after delay as the alleged transactions pertained to May, 2016 and SCN has been issued in August, 2017.

Order in the matter of Shantanu Sheorey Aquakult Ltd.

ii. The scrip was trading in “T” group, therefore there was no scope of manipulation due to the continuous surveillance. iii. The SCN does not allege any profit earned by the Noticees nor it demonstrates how the Noticees gained by causing LTP contribution. No loss to any investor has been caused. iv. The trading system does not provide the details of orders placed by sellers, like quantity of shares, price and time of orders etc. v. The power under Section 11B of SEBI Act, 1992 cannot be used for penal purposes, as has been laid down by Hon’ble SAT in the matter of Libord Securities Vs. SEBI and by Hon’ble Supreme Court in the matter of SEBI Vs. Libord Securities. vi. The Noticees are net buyers of the scrip during the investigation period. vii. The Noticee nos. 5 and 6 have traded only during February, 2016 to May, 2016 whereas the Noticee no. 8 had traded during March, 2014 to May 2016. viii. The trades of the respective Noticees have been wrongly bunched with other Noticees. ix. Mr. Kumar Raichand Madan (based on whose statement recorded before Income Tax, the allegations of connections have been made in the SCN), has expired on 08.10.2016. x. The bank account transactions referred to in the SCN to impute connections are commercial in nature and have no connection with the trading done in the scrip of the Company. xi. The entities with whom connection is sought to be alleged are not the counter parties to the trades of the Noticees. xii. Orders were executed at sell order prices. xiii. There is no embargo on placing of orders on positive LTP and manipulation cannot be related only to positive LTP as it can be a genuine case of buyer being desperate to acquire shares. xiv. It is a market practice to put orders at higher round figure price to get the orders executed. xv. All the orders were limit order which can only be executed at limit price or lower, based on the price quoted by the seller. xvi. There is a substantial time gap in the orders placed by the Noticees as buyers and majority of the pending sell orders. xvii. The counter parties are not impleaded nor such parties are connected to the Noticee.

11. It is further noted that apart from the aforesaid common points of arguments, following submissions have also been made, which though vary only on the factual aspects specific to a particular Noticee are identical in essence, such as:

Order in the matter of Shantanu Sheorey Aquakult Ltd.

i. The current Directors of Noticee no. 5 are Mr. Sanjay Mahadev Unawane and Sujata Deepak Mane. The current Directors of Noticee no. 6 are Mr. Akshay Vijay Nawale and Sunil Sudhakar Ahire. The current Directors of Noticee no. 8 are Nisha Sanjay Unawane and Akshay Unawane. The current Directors of Noticee no. 11 are Mr. Rohit Dattatrya Navle and Mr. Ganesh Shankar Budbadkar. The current Directors of Noticee no. 16 are Mr. Rohit Dattatrya Navle and Mr. Aditya Rupchand Sueyavanshi. The current Directors of the Noticee no. 17 are Mr. Ranjankumar Ramdulare Rajbhar and Mr. Prakash Ratilal Naik. The current Directors of the Noticee no. 21 are Ms. Reshma Rajesh Malagavakar and Mr. Ajitkumar Sudhakar Singh. ii. During the relevant period the price of the scrip rose from INR 150.80 to INR 260.50. The Notice no. 5 made an insignificant contribution of INR 2.60 (1.02% of the total market positive LTP) towards LTP while the Notice no. 6 contributed INR 14.30 (4.84% of the total market positive LTP) to the LTP and the said LTP contributions are miniscule to the total market positive LTP. iii. During the investigation period, Noticee no. 5 purchased 2,20,880 shares and sold 10,320 shares.

Noticee no. 6 had purchased 8,12,243 shares and Noticee no. 8 had purchased 2,96,000 shares and both of them did not sell any share. Noticee no. 11 has purchased 159497 shares and no shares were sold by it. The Noticee no. 16 has purchased 24367 shares and sold 1900 shares and the Noticee no. 17 has purchased 2,97,504 shares and sold 19,458 shares. The Noticee no. 21 has purchased 327385 shares during the investigation period. iv. As per SCN, the Noticee no. 5 had executed 166 trades, out of which 129 trades resulted in 0 LTP, 14 trades resulted in negative LTP of Rs. 6.00 and only 23 trades resulted in positive LTP of Rs. 12.90. Noticee no. 6 had executed 489 trades, out of which 403 trades resulted in 0 LTP, 21 trades resulted in negative LTP of Rs. 7.20 and only 65 trades resulted in positive LTP of Rs. 29. The Noticee no. 11 has executed 202 trades, out of which 165 trades have resulted in 0 LTP, 17 trades have resulted into negative LTP of Rs.4.70 and 20 trades have resulted into positive LTP of Rs.6.20. The Noticee no. 16 has alleged to have executed 2 trades in a single day when it contributed LTP of Rs.2.70 only.

The Noticee no. 17 has executed 263 trades, out of which 232 trades have resulted into 0 LTP, 11 trades have resulted into negative LTP of Rs.1.80 and 20 trades have resulted into positive LTP of Rs.17.10. The Noticee no. 21 has executed 261 trades, out of which 218 trades have resulted in 0 LTP, 13 trades have resulted into negative LTP of Rs.3.80 and 30 trades have resulted in positive LTP of Rs.10.90. The aforesaid pattern of trade shows that the Noticees were not

Order in the matter of Shantanu Sheorey Aquakult Ltd.

having any intention of manipulating the scrip as every trade will result into some kind of LTP. v. On a few occasions, part of the order quantity got matched at 0 LTP and subsequently, for remaining quantities, the price was modified which led to contribution to LTP. The modification was done to grab the next best-selling orders. For example, an order of 1000 shares @ INR 227 per share was placed by the Noticee no. 5 for which, two trades of 400 and 250 shares got executed @ INR 227 only and no LTP was contributed. For remaining 350 shares, the price was modified @ INR 228 and resultantly, the trade got executed @ INR 227.50 by creating a positive LTP of INR 0.50.

Consideration 12. After carefully perusing the charges levelled in the SCN, the replies that have been filed, as well as the materials available on record, I observe that the issue that needs to be adjudged in the present proceedings is whether or not, the trades executed by the Noticees in the scrip of the Company, have resulted in violation of provisions of the PFUTP Regulations? 13. Form the replies filed by the Noticees, as aforesaid, I find that two technical issues have been raised by most of the Noticees. The first one pertains to the non-supply of the copy of the entire investigation report and the second issue pertains to the delay in initiating the proceedings, which is submitted to have caused prejudice to the Noticees. Therefore, before embarking on the merits of the matter, I find it appropriate to first deal with those two preliminary issues. 14. Insofar as the issue of providing copy of documents like investigation report is concerned, there is no dispute that the relevant findings of the investigation report which formed the basis for the imputations/allegations made against the Noticees have already been captured in the show cause notice, which was duly served upon the Noticees. Further, I observe that all the relevant documents which have been relied upon for the purpose of examination to arrive at the findings against the Noticees, including the bank account statements, complete or /relevant Order Log and Trade Log, have already been served on the Noticees in form of Annexures to the SCN. Since all the relevant extracts of the investigation report have been captured in the SCN and the documents relied upon therein have also been provided to the Noticees, there does not appear to be any prejudice whatsoever caused to the Noticees nor the Noticees have brought to my attention any such specific prejudice that has possibly been caused to them by not receiving any particular document due to which they can claim that they are not in a position to defend themselves against the allegations made in the SCN. The Noticees have apparently raised the bogey of non-

Order in the matter of Shantanu Sheorey Aquakult Ltd.

receipt of investigation report or documents as a matter of a general claim without any bonafide reason or specific grievance in this regard, which appears to be an attempt to thwart the proceedings. I may add here that Hon’ble Securities Appellate Tribunal in a recent order dated July 17, 2020, passed in the matter of Anant R. Sathe Vs. SEBI (Appeal no. 150/2020) have held that SEBI is required to supply only those documents, which have been relied upon while serving the show cause notice and supply of such documents are sufficient for the purpose of filing an efficacious reply in defence. Thus, I can firmly observe that there is no violation of principles of natural justice as all the documents relied upon in the present proceedings have already been served to the Noticees along with the SCN. 15. With respect to the submission that delay in initiating the present proceedings has caused prejudice to the Noticees, I find it relevant to recollect here that the investigation period in the present matter was for the period of March 01, 2014 to May 31, 2016, and the SCN came to be issued on August 09, 2017. Further, the details of time consumed in serving the SCN as well as hearing notices on most of the Noticees have already been elaborated in the earlier part of the order and thus need no reiteration.

Therefore, from the factual conspectus of the present case, it is seen that the SCN was issued within a period of around fifteen months from the end of the investigation period during which the alleged violations took place; hence, there does not appear to be any ‘delay’ which can be claimed to be fatal to have caused any serious prejudice of any nature to the Noticees and thereby incapacitated them from defending themselves against the allegations. It is an undisputed position that in order to arrive at a prima facie case prior to issuance of SCN, several factual details like bank account transfers, directorship, trading data, etc., need to be collected and investigated empirically, which was also done in the present case. Therefore, the reasonable time consumed to put appropriate efforts during an investigation, cannot be taken as a plank of defence by the delinquent itself, who was the subject of such investigation. I would also like to add here that the said claim of prejudice caused due to delay is also a generic claim, without assigning any details or explaining as to what exact prejudice was caused to the Noticees emanating from the purported delay.

In this connection, it is noted that Hon’ble SAT, while dealing with the issue of delay, have observed in the matter of Bhavesh Pabari Vs. SEBI (date of decision: October 07, 2020) as: “…The defense of delay is an afterthought and without any supporting reason like the prejudice in defending the case before the adjudicating officer…” 16. It is also relevant to observe here that under the extant framework of SEBI Act, 1992 and PFUTP Regulations, there is no limitation period prescribed for initiation of action against any delinquent for the violations of the said Act and Regulations made thereunder. It is a settled position of law that in absence of any specific limitation period prescribed under the statute itself, the proceedings cannot be dropped merely on the ground of delay, and all the cases need

Order in the matter of Shantanu Sheorey Aquakult Ltd.

to be evaluated on the basis of their respective facts. [Ravi Mohan Vs. SEBI, date of decision: December 16, 2015]. It is also pertinent to note here that the ratio laid down by Hon’ble SAT in the aforesaid case, was upheld and reiterated by it, in its order in the matter of Kunal Pradip Savla & Ors v. SEBI, date of decision: April 13, 2018. Thus, considering the foregoing, particularly the fact that the SCN has been issued within a reasonable time frame and in light of the applicable legal framework, I find that there is no merit in the said submission of the Noticees and accordingly the same is rejected. 17. Before adverting to the facts of the case, it is deemed relevant to first recapitulate that the SCN alleges violation of Regulation 3, (a), (b), (c), (d), 4 (1), 4 (2) (a) & (e) of PFUTP Regulations. Therefore, in order to adjudge the charges made against the Noticees and to evaluate the strength of the replies filed herein, it is relevant that a reference to the aforesaid regulations be made at this point, which are reproduced for ready reference hereunder: Regulation 3. Prohibition of certain dealings in securities “No person shall directly or indirectly – (a) buy, sell or otherwise deal in the securities in a fraudulent manner; (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under; (c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange; (d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under.”

Regulation 4. Prohibition of manipulative, fraudulent and unfair trade practices “(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; ………… (e) any act or omission amounting to manipulation of the price of a security;”

Order in the matter of Shantanu Sheorey Aquakult Ltd.

18. As noted in the earlier part of the order, certain trading activities of the Noticees, in the scrip of the Company have been alleged to be manipulative and unfair. Further, the said allegations are also corroborated by the inter-se connection between the Noticees. The allegation of connection is primarily premised on various cardinal factors such as common directorship, common email address, and in few cases, the said allegation is also premised on inter se fund transactions. The details of the connections that were observed to be existing amongst various Noticees during the relevant period, as culled out from the SCN are reproduced herein below: Table no. 4 Sr. Connected Connected Names of Directors Connection Details no. Entity’s Entity’s name Address 1 Orange Mist Office no. 01, Kumar Raichand Entities at Sr. No. 1, 2, 3, 4, 5 are connected Productions Laura Building Madan, Athistamani to each other through common Director i.e. Pvt. Ltd. No. 13/21 1st Velu, Sadashiv Pawar Kumar Raichand Madan. (Noticee no. Dhobi Talao 6) Lane, Mumbai - Connection through Fund transfers: 400002 Fund transaction between Orange Mist 2 Magan R. No. 13, Prakash R Naik, (Corporation bank, A/c no: Mercantile Daulat nagar, Ranjankumar R 146901601000344) and Tushar P Jadhav Pvt. Ltd. Rd., No.7, Near Rajbhar, Kumar (A/c no: 146900101002398, Corporation (Noticee no. Jain mandir, Raichand Madan, Bank).

17) Borivali (E), Sumit V Salvi Fund transaction between Adamina Traders Mumbai- (Axis Bank A/c: 914020029287819) and 400066 Matulya Traders (A/c no: 146901601000200, 3 Roho Real 3,Bldg No C- Kumar Raichand Corporation Bank), Tushar P Jadhav (A/c Estate Private 38,Shanti Nagar Madan, Paresh B no: 146900101002398, Corporation Bank). Limited Complex Sec-2, Gharat, Prashant S (Noticee no. Mira Road Indlkar 8) Thane 401107 4 Adamina Office no. 01, Rajesh P Malgaonkar, Traders Pvt. Laura Building Ranjankumar R Ltd. No. 13/21 1st Rajbhar, Raichand (Noticee no. Dhobi Talao Kumar Madan 5) Lane, Mumbai - 400002 5 Yogita 1/3/52 Krishna Raichand Kumar Trading LLP Chawl, Opp Madan, Chetan S (Noticee no. Bihari Mills, Bhelekar 20) Khokhramedab ad, Ahmedabad 380008 6 Abjayoni 12 Vasant Sunil B Rajbhar, Raichand Madan, Sunil Rajbhar and Shyam Trading Pvt. Heights, Bldg Shivsharan Yulidra, Kadam are common Directors of Patel & Ltd. 74, Shanti Park, Sajid Sayed Patel Team Developers LLP. Hence, the (Noticee no. Mira Road East entities at Sr. No. 6-7 are connected to each 3) Thane- 401107 other through Kumar Raichand.

Order in the matter of Shantanu Sheorey Aquakult Ltd.

7 Jeshna R. No. 6, Hari Sunil Rajbhar, Shyam Muiltitrade Nivas CHS kadam Pvt. Ltd. Ltd., Daulat (Noticee no. Nagar, Rd. 15) No.7, Borivali (E), Mumbai- 400066 8 Anvita Real Shop No-5 Mahesh Hirji Jogadia, Raichand Madan and Reshma Malagavakar Estate Pvt. Aadeshwar Reshma R Malagavakar are common Directors of Jeet Commosales Ltd. Krupa Chs Ltd LLP and Avantika Commosales LLP. Hence, (Noticee no. Shanti Park the entities at Sr. No. 8 to 10 are connected 7) Mira Road to each other through Kumar Raichand (East) Thane- Madan. 401107 9 Meritorious No. 9, Building Ajitkumar S Singh, Realty Private No. B-20, Reshma R Malagavakar Limited Sector-10, (Noticee no. Shanti Nagar, 21) Mira Rd. (E), Thane- 401107 10 Haritima Shop-5, Reshma R Malagavakar Infrastructure Aadeshwar, Deepak Jambodaker, Private Krupa Chs Ltd, Limited Shanti Park, (Noticee no. Mira Road 13) Thane 401107 11 Sally Real Shop Chetan S Bhelekar, Raichand Madan and Chetan S Bhelekar are Estate Private No.10,Wing- Sunita Poojary, common Directors of Yogita Trading LLP Limited M,Gokul Reshma R Surve. and Moonlight Trading LLP. Hence, entity at (Noticee no. Village sr. no 11 is connected to Kumar Raichand 10) (Two)Chs Madan and thus connected to other Noticees ltd,Shan-ti Park through him. Layout,Near Corporation Bank, Mira Road€, Thane 401107 12 White Text R No 10, Shree Mukhtar Shaikh, Raichand Madan and Chandrakant Gaikwad Infrastructure Hari Niwas Pradeep Tak, are common Directors of Bymethod Reality Pvt. Ltd. Daulat Naga Chandrakant Gaikwad Pvt Ltd. Hence, the entities at Sr. No 12-13 (Noticee no. Road No - 7, are connected to Kumar Raichand and thus 18) Near connected to other Noticees through him. jainMandir, Borivali - East, Mumbai 400066 13 Vihar R N 12, Hanmant Ranjane, Infrastructure SaiSadan T Chandrakant Gaikwad, Private Nagar, R Chawl, Kirtikumar Sidhpura Limited Bandongri (Noticee no. Village, Malad, 14) Nr Times of India Mumbai

Order in the matter of Shantanu Sheorey Aquakult Ltd.

400064

14 Nirvana Mall 104, Vardhman Sunil V Vachharajani, Kumar Raichand Madan and Athistamani M Management Shopping Vilas Antu Yadav, Velu are common directors of Orange Mist Co. Pvt. Ltd. Center, Athistamani M Velu, Productions Pvt. Ltd. Hence the entities at sr. (Noticee no. Manpada Road, Sadashiv D Pawar no 14-15 are connected to Kumar Raichand 4) Dombivli (E) thus connected to other Noticees through Behind Shivaji him. State, Thane 421201 15 Dizzystone D-1 Plot No- Athistamani M Velu, Trading Pvt. 854 Charkop Ganesh S Budbadkar, Ltd. Hari Om Nilesh D Pagare (Noticee no. Bhavan CHS 11) Ltd Charkop Kandivali (w) R.S C-12 No-41 Sector-8 Mumbai 400067 16 A S B N R No 10, Shree Mahesh Hirji Jogadia, Kumar Raichand and Rajesh Malgaonkar are Commodities Hari Niwas Rajesh P Malgaonkar, common Directors of Adamnia Traders Pvt. & Fineserve Daulat Naga Ltd. Hence entities at Sr. no 16-17 are Pvt. Ltd. Road No - 7, connected to Kumar Raichand and thus Near jain connected to other Noticees through him. (Noticee no. Mandir, Borivali 1) - East, Mumbai 400066 17 Black Horse Shop No 6, Rajesh P Malgaonkar, Media and Solitare - 2, Hiralal K Bhardwaj Entertainment Bldg No.6, Mira Pvt. Ltd. Bhaindar Road, Near MIG (Noticee no. Complex 9) Poonam Garden, Mira Road -(E) Thane 401107 18 Wellman 8, Old China Sunil sukum, Meena Raichand Madan and Meena C Kamani are Tradelinks Bazar Street, Kamani, Suryanath common Directors of Samyak Multitrade Private Ground Floor Singh PLtd. Hence, the entity at Sr. No. 18 is Limited Kolkata WB connected to Kumar Raichand thus 700001 connected to other Noticees through him. (Noticee no. 16) 19 Naseen M/4, New Nathuram Plakar, Raichand Madan and Ranjankumar Rajbhar Tradelink Anant Bhuvan Ranjankumar Rajbhar, are common Director of Magan Mercantile Private 257/65 N.N. Priti Thakkar Pvt Ltd. Also the email id of these entities are Limited Street Mumbai common. Hence the entity at Sr. no. 19 is MH 400009 connected to Kumar Raichand thus (Noticee no. connected to other Noticees through him.

Order in the matter of Shantanu Sheorey Aquakult Ltd.

2)

20 Matulya No. 9, Building Geeta Varma, Rakesh Matulya (A/c no: 146901601000200, Trading Pvt. No. B-20, Naik, Priti M Thakkar, Corporation Bank) received funds from Ltd. Sector-10, Kartik S Thakkar Adamina Traders (A/c no: Shanti Nagar, 914020029287819, Axis Bank) in which (Noticee no. Mira Rd. (E), Kumar Raichand is Director. Hence, the 19) Thane- 401107 entity at Sr. no. 25 is connected to entity at Sr. no. 4 in which Mr. Kumar Rai Chand holds directorship. Thus, entity at Sr. No. 25 is connected to other Noticees. 21 Tushar P. C-4 Kearlodha Tushar Jadhav (A/c no: 146900101002398, Jadhav Heven near Corporation Bank) Received funds from (Noticee no. Shivaji Circle, Orange Mist Productions (A/c no: 12) Dombivali East, 146901601000344, Corporation Bank) / Kalyan, Thane Adamina Traders P Ltd (A/c no: 914020029287819, Axis Bank) in which Kumar Raichand is director. Hence, the entity at Sr. no. 26 is connected to other Noticees.

19. A perusal of the aforesaid details would indicate that the Noticees no. 5, 6, 8,17 and 20 had a common Director on their respective Board of Directors, viz., Mr. Kumar Raichand Madan. In this connection, it is also relevant to highlight that the said person, Mr. Kumar Raichand Madan, in a separate proceeding before the Office of Income Tax, Ahmedabad, had recorded a statement on April 09, 2013. In the said statement, Mr. Madan had inter alia admitted that he was Director in 44 companies, and out of the said 44 companies, in 34 companies, he was acting as a proxy to another third person. Apart from the above assertion, he had also claimed to have provided many name lending directors, from his family, friends etc. The list of such companies as furnished by Mr. Madan also included many of the Noticees herein. 20. Apart from the aforesaid, many of the Noticees are allegedly connected because of the reason of having common Director amongst themselves. For illustration, Noticee no. 7 (Anvita Real Estate Private Limited) and Noticee no. 21 (Meritorious Realty Private Limited), were having Ms. Reshma R Malagavakar as common Director. Further, the said person, Ms. Reshma R Malagavakar, was also acting as Director of Jeet Commosales LLP and Avantika Commosales LLP. On the Boards of both the aforesaid LLP, Mr. Kumar Raichand Madan was also one of the Directors. 21. Insofar as the allegation of connection on the basis of common directorship of Mr. Kumar Raichand Madan is concerned, the Noticees have made few submissions. Some of the Noticee

Order in the matter of Shantanu Sheorey Aquakult Ltd.

companies, where Mr. Kumar Raichand Madan himself was a Director, have claimed that Mr. Madan has expired in October, 2016 and the current Directors of such Noticee companies are not aware of the past activities undertaken by Mr. Madan. Further, few of the Noticees like Noticee no. 16 has challenged the allegation of connection by claiming that said Mr. Madan was never a Director on its Board. I have considered both sets of submissions, and in my view, the said arguments are baseless and devoid of merits as the SCN has not proceeded to make any imputation with respect to any act done by Mr. Madan in his personal capacity. It is only the common directorship of Mr. Madan between a set of Noticees, or common directorship of Mr. Madan on some third-party company/LLP, which is also shared by a person who is one of the Director of a Noticee, that has been premised to allege connection between the entities. Further, the said narration of connection is not a violation in itself nor is the only premise to establish the charge of indulging in unfair and manipulative trades. It is the acts of unusual trading indulged in by the Noticees, which could be the basis to come to a finding as to whether the charges would sustain or not after due appreciation of the materials on record.

The issue pertaining to enjoyment of connections amongst different Noticees will only serve as a corroboration to other finding about the alleged manipulative trades allegedly indulged in by the Noticees and nothing more. In view of the above, I find that the said submissions do not hold any water and are thus rejected, leading me to deal with the other submissions. 22. The Noticees have attempted to defend their trades by claiming that none of the parties with whom connection has been alleged are counter parties to their trades. In this regard, it is noted that in the present SCN, there is no such allegation of matching/synchronising trades between two connected entities. The allegation levelled against the connected Noticees is that they have acted in a uniform manner to manipulate the price of the scrip through their abnormal and unusual way of trading in securities, where they were noticed to have placed buy orders over and above the sellers’ demand price. The SCN does not proceed with allegation of any nature against the Noticees for indulging in trades with known counter parties.

Thus, the said submission is rejected in limine and I do not find it relevant to deal with the details of such submission. 23. Further, as noted in the above table, many of the Noticees were having inter-se fund transactions. I note that the details of the said fund transactions have been duly reflected in the bank account statements, annexed to the SCN and furnished to the Noticees. For illustrative purpose, it may be mentioned here that the Noticee no. 6 (Orange Mist Productions Pvt. Ltd.) and Noticee no. 12 (Mr. Tushar Pandit Jadhav) were having fund transactions between themselves. From the relevant annexure, it is noted that an amount of INR 2.10 Lakh has been transferred from the bank account of the Noticee no. 6 to the account of the Noticee no. 12, on March 08, 2016. In this connection, it is noted about the recipient of the funds, that the Noticee no. 12, has

Order in the matter of Shantanu Sheorey Aquakult Ltd.

preferred not to file any specific response to the facts stated in the SCN. On the other hand, Noticee no. 6 has in its reply has stated baldly that the said fund transfer was commercial in nature, and has no connection with trading in shares. A copy of the ledger of the Noticee no. 12, in the books of accounts of the Noticee no. 6 has been furnished in support of the said submission. The said ledger reflects only three entries: one journal entry for “investment unquoted shares” of INR 5.40 Lakh on August 18, 2015, for one bank account entry of INR 7.50 Lakh on March 04, 2016 and one payment entry of INR 2.10 Lakh on March 08, 2016. In this connection, it is seen that the reply of the said Noticee is largely evasive as it has only stated about the above said fund transactions to be in commercial nature, without providing further necessary details like name of the company whose shares were transacted between the two parties, broker involved in such transaction, etc. Furthermore, the manner of closing the ledger account also corroborates the kind of a collusive nexus apparently existing between the said two entities, as the reply is completely silent as to how and when the two Noticees came in contact and what transpired between them on the basis of which they readily agreed to enter into those commercial transaction involving transfer of funds and for which, even they did not bother to enter into any documentation.

I further note that there was an outstanding amount of INR 5.40 Lakh payable to the Noticee no. 6 by the Noticee no. 12, pertaining to some transaction of unlisted/unquoted shares. In order to settle the said outstanding amount, the Noticee no. 12 first pays INR 7.50 Lakh on March 04, 2016 and subsequently, the purported excess amount of INR 2.10 Lakh (INR7.50- INR5.40) is paid back after 3 days to the Noticee no. 12. From the said flow of funds and the explanation emanating from the ledger statement, I find no ground to term those transactions as commercial transaction, as the same are shorn of necessary details pertaining to such transactions. The absence of the necessary documents which are normally required to be executed in any commercial transaction, more particularly when it involves an artificial person/ corporate body, further strengthens the preposition of the said transaction being bogus in nature and not a commercial one as no such documents have been furnished in support of the claims so advanced. 24. I find that the Noticee no. 5 has also taken a similar stand of having commercial transactions with the Noticee no. 19. The copy of ledger statement filed by the Noticee no. 5 is also found to be questionable and is found wanting.

It is seen from the said ledger statement that during the period of July 25, 2015 till March 04, 2016, the Noticee no. 5 has received a total amount of INR 1.58 Crore in multiple transactions from Noticee no. 19 and has paid back INR 10 Lakh to the Noticee no. 19, thereby leaving an outstanding amount of INR 1.48 Crore vis-a-vis the Noticee no. 19, at the close of the financial year 2015-16. The said transactions were in the range of INR 3.00 Lakh to INR 16.50 Lakh. In the next financial year (2016-17), there is another payment of INR

Order in the matter of Shantanu Sheorey Aquakult Ltd.

15 Lakh on April, 2016 by Noticee no. 5, reducing the outstanding dues to INR 1.33 Crore. The said outstanding due is settled then by a Journal Entry of INR 1.13 Crore on July 5, 2018 against investment of unquoted shares and payment of INR 20 Lakh on August 04, 2018. As observed in the case of the Noticees whose inter se transactions are discussed in preceding paragraphs, these aforesaid details of transactions also do not substantiate any commercial deals as the Noticees would like one to believe in as the transactions have neither been explained with justification nor have been substantiated with any documentary support to suggest that they were entered into with a commercial purpose not having to do anything with their involvement in the share trading as alleged in the SCN. Thus, these transactions per se do not convey any meaning at all to grant exoneration to these two Noticees from the charges of having a collusive nexus between them. I therefore, find that my findings as recorded in the previous para in the context of the inter se transactions between Noticee no. 6 and 12 are equally applicable to the aforesaid transactions between Noticee no. 5 and 19 as well which are not being repeated for the sake of brevity.

25. The SCN has also alleged about fund transfers between Noticee no. 5 and Noticee no.12, for which no comment or document has been filed by the Noticee no. 5. A bare perusal of the copies of the statement of the bank accounts indicates that there have been numerous fund transfers from the bank account of the Noticee no. 5 to the bank account of the Noticee no. 12. For example, on August 12, 2015, the Noticee no. 12 has received INR 5.00 Lakh from the Noticee no. 5 and the previous balance in the account of Noticee no. 12 was only INR 15,397. I may hasten to add here that apart from the fund transactions that have been categorically imputed in the SCN based on the bank account statements, it is seen that there are other transactions also, which have been executed between certain Noticees. For example, the Noticee no. 12 and the Noticee no. 3 can also been seen to have exchanged funds on multiple occasions, however, no explanation with respect to the said fund transfers has been put forth by either of the said entities with any justification and supportive documents. 26. It is found worthy to add here that the details of the present Directors of the Noticee companies, (as per the publicly available on the website of Ministry of Corporate Affairs and also as claimed in the respective replies of the Noticees) would show that even as on today, few of the Noticee companies are having common Directors, as can be observed from the following table:

Table no. 5

Order in the matter of Shantanu Sheorey Aquakult Ltd.

Sr. Noticee Directors during investigation Present Directors Remarks No. period Athistamani M Velu, Ganesh Shankar 1) Dizzystone Trading Budbadkar Athistamani M Ganesh S Budbadkar, Pvt. Ltd. (Noticee Velu was a no.11) common Director Nilesh D Pagare Rohit Dattatrya between Noticee Navle nos. 4 and 11 during the investigation period.

2) Nirvana Mall Sunil V Vachharajani, Mahesh Natvarlal -do- Management Co Khatri Pvt. Ltd. (Noticee Vilas Antu Yadav, no. 4) Athistamani M Velu, Sunil Vinodrai Sadashiv D Pawar Vachharajani

3) Wellman Sunil Sukum, Rohit Dattatrya Rohit Dattatrya Tradelinks Pvt. Ltd. Navle Navle is a common (Noticee no 16) Director, at present, between the Noticee Meena Kamani, Suryanath Singh nos. 11 and 16 Aditya Rupchand Suryavanshi

27. Similar to the above, other Noticee companies like Noticee nos. 6 and 8 which were having Mr. Madan as common Director during the investigation period, are now having Mr. Akshay Vijay Nawale as a Director common between them and it is only Mr. Akshay who has signed replies on behalf of both the said Noticees. Thus, even after the demise of Mr. Madan, the two Noticee companies are still enjoying connection with each other, which reinforces the view that the allegations pertaining to connections made in the SCN are not based on surmises and conjectures but on actual relationship on ground between these corporate Noticees. 28. Under the circumstances, the aforesaid examination of materials and responses submitted by the Noticees, clearly lead to the view that all the Noticees named in the SCN were tied with a common thread, which would further lead me to believe that there could be a meeting of minds amongst the said Noticees to manipulate the price of the shares of the Company by way of a Order in the matter of Shantanu Sheorey Aquakult Ltd.

common strategy or device to achieve a common purpose. It may also be of relevance to mention here that the connection that has been narrated in the SCN is only a premise, on the basis of which allegation of ‘market price manipulation’ has been levelled against the Noticees treating them as a group of persons allegedly having acted in concert. Thus, the alleged connection amongst the Noticees per se is not an allegation on its own about manipulative practices. What holds key to the main allegation in the SCN is that apart from the explicit factors binding the Noticees with each other, the Noticees are seen to have displayed uniform conduct of trading in the scrip of the Company, which was devoid of any strong financials, in a manner to manipulate the price of the scrip. Without prejudice to the said observations, I shall now evaluate the trades imputed in the SCN that have been executed by the Noticees in the scrip of the Company. 29. Moving on to the trades executed by the Noticees, I may recapitulate here that as per SCN, the Noticees have executed 4217 buy trades in the scrip of the Company, which constituted 50.96% of the total number of market trades (8274 trades). Out of such 4217 trades, in as many as 4028 trades, the buy orders were placed by the Noticees subsequent to the sell orders. The aforementioned trades were executed by the Noticees during the period from February 01, 2016 to May 31, 2016 during which the price of the scrip of the Company had increased from INR 141 (on February 01, 2016) to INR 260.50 (on May 31, 2016). The above noted trades of the Noticees had further involved purchase of 44.07 Lakh shares, which was 55.39% of the total market volume (79.55 Lakh shares) traded during the period. 30. It is further noted from the contents of the SCN that the out of the total number of 4028 trades, in 1252 trades, the Noticees have not only placed their respective buy orders after the sell orders were available on the stock exchange, but even the buy prices for such orders were placed at price higher than that of the available sell orders price. Further, out of such 1252 trades, there were contributions to the LTP in as many as 225 trades. The break-up of all the trades executed by the Noticees and their impact on the LTP of the price of the scrip, Noticee wise, are provided in the following table:

Order in the matter of Shantanu Sheorey Aquakult Ltd.

Table no. 6 No. of Positive trades out LTP Sr No. of instance No. of trades in of 1252 contribution no (trades) in which which buy order trades (in INR) in. Total buy orders were price > sell order which 225 trades. Noticees Trades placed after sell Price (modified contribute orders (excluding price) (excluding d to the market orders) market orders) price rise (+ Ve LTP) 1 A S B N 24 11.40 Commodities & 269 266 135 Fineserve Pvt. Ltd. 2 Abjayoni Trading 27 16.00 819 720 123 Pvt. Ltd. 3 Adamina Traders 11 2.60 166 161 47 Pvt. Ltd. 4 Anvita Real 25 13.30 688 669 133 Estate Pvt. Ltd. 5 Black Horse 11 1.40 Media And 77 77 44 Entertainment Pvt. Ltd. 6 Dizzystone 2 0.30 202 185 24 Trading Pvt. Ltd. 7 Haritima 10 2.10 Infrastructure Pvt. 163 163 74 Ltd. 8 Jeshna Muiltitrade 8 1.60 136 122 46 Pvt. Ltd. 9 Magan Mercantile 10 5.40 263 256 36 Pvt. Ltd. 10 Matulya Trading 5 0.90 121 121 70 Pvt. Ltd. 11 Meritorious 9 5.30 261 258 62 Realty Pvt. Ltd. 12 Naseen Tradelink 7 2.80 84 84 26 Pvt. Ltd. 13 Nirvana Mall - - Management Co 57 56 2 Pvt. Ltd. 14 Orange Mist 44 14.3 Productions Pvt. 489 487 260 Ltd. 15 Roho Real Estate 5 1.45 60 60 33 Pvt. Ltd. 16 Sally Real Estate 7 5.2 148 134 34 Pvt. Ltd. 17 Tushar Pandit 5 4.80 80 80 38 Jadhav 18 Vihar 57 52 30 6 0.80

Order in the matter of Shantanu Sheorey Aquakult Ltd.

Infrastructure Pvt. Ltd. 19 Wellman - - Tradelinks Pvt. 28 28 6 Ltd. 20 Whitetext 8 2.90 Infrastructure Pvt. 28 28 18 Ltd 21 Yogita Trading 1 0.20 21 21 11 LLP Total 4217 4028 1252 225 92.75 Market Trades 8274 6009 1876 Total buy order 3638537 (809 buy Qty of the orders) Noticees of 1252 trades Total sell order 9898073 qty of the market of the 1252 trades

31. As can be deciphered from the details captured in the table above that all the Noticees have executed a number of trades totalling to 4217 trades. For the purpose of adjudging the present matter, however, the relevant trades are those 1252 buy trades, which the Noticees have placed at prices higher than the prices asked by the already pending sell orders. Further, out of said 1252 buy trades, 225 trades have contributed to the LTP of the scrip of the Company. I may clarify here that out of the 21 Noticees, two Noticees, viz., Noticee no. 4 (Nirvana Mall Management Pvt. Ltd.) and Noticee no. 16 (Wellman Tradelinks Pvt. Ltd.) have not executed any such LTP contributing trades, however, based on their connection with the other Noticees, the SCN has made allegations that they are also involved in the manipulation of the price of the scrip of the Company by their attempts to buy shares at prices higher than the sell price. As the contentions of the Noticees are broadly identical, I shall deal with them collectively while making reference to the specificities of the trades of the respective Noticees, wherever required. 32. The first and foremost contention which the Noticees have raised is that by their alleged trades individually they have made minuscule contributions to the total market LTP and therefore the said trades cannot be termed as manipulative. It has been attempted to project that by their respective individual trades, the allegation of price manipulation cannot stand out against them as have been alleged in the SCN. In this connection, it is to be first recalled that all the 21 Noticees, which comprises of twenty corporate entities and one individual, have already been observed to be enjoying connections amongst themselves in one way or the other with each other as has been demonstrated in the earlier paragraphs of this order. Further, as stated earlier, the SCN alleges that the Noticees have through their 1252 trades inflated the price of the scrip by Order in the matter of Shantanu Sheorey Aquakult Ltd.

placing their respective buy orders higher than the existing sell orders. Out of said trades, it has also been found that in 225 trades, the Noticees were successful in marking the price of the scrip up and higher than the LTP of the scrip and collectively, they have contributed INR 92.75 of positive LTP to the total market positive LTP in the scrip. The said LTP contribution of INR 92.75 constitutes 15.46% of the total market positive LTP that the scrip had witnessed during the relevant time. I observe that the claim of the Noticees that their respective individual contribution to market positive LTP was miniscule appears to be factually correct, however when their contributions to market positive LTP is examined in the backdrop of connections that have been found existing amongst the Noticees one cannot lose sight of the essence of the allegations of the SCN that have been attributed to the Noticees as having indulged in manipulative trades in a concerted manner. The issue that needs to be adjudged in the present proceedings is to decide on the complicity of the Noticees as a group in manipulating the price of the scrip of the Company.

In terms of the allegations, the Noticees, acting as a homogeneous group have manipulated the price of the scrip of the Company. In such a case, when all the entities have been found to be connected and are also found to be acting in unison, the collective quantum of the LTP changed due to their trades executed in unison needs to be considered, dehors the actual individual contribution emanating from such individual trades. I find strength for my aforesaid observations from the order of the Hon’ble SAT, passed in the matter of Hemant Sheth & Ors vs SEBI (date of Decision March 04, 2020). In the said matter, the Hon’ble SAT has appreciated by holding that in case of a group involved in manipulative and unfair trading, participation of all violators may not be of equal magnitude. In the exact words of the Hon’ble SAT: “In a scheme of manipulative and unfair trading it is not necessary that every participant should be indulging in every type of trading violation or even in the same / similar magnitude. Once they are found to be part of a group trying to manipulate the volume or price of the scrip they became party to the violation.

Hair splitting arguments that some traded more than others or on more days or some indulged in synchronized reversal and self trade while others did only one of those types do not cast away their violations.”. Further, in another matter, the Hon’ble SAT have, inter alia, held that: “Having heard the learned counsel for the parties, we are of the considered view that the impugned transactions, in the facts and circumstances of the matter, would fall in the realm of violations of PFUTP Regulations. Individual argument that each entity’s trade is miniscule and only on a few days alone etc. is not sufficient to rebut the findings in the impugned order.” [Giriraj Kumar Gupta HUF Vs. SEBI (Date of decisions: February 25, 2020)] 33. It is noted that the Noticees who have filed replies to the SCN have tried to explain their respective individual trades, which have been alleged to be manipulative. As all such explanations seems to be overlapping/identical, I shall illustrate the explanation filed by one of such Noticees, which will largely cover the contentions of all other Noticees. For illustration, the Noticee no. 17

Order in the matter of Shantanu Sheorey Aquakult Ltd.

(Magan Mercantile Pvt. Ltd.) has submitted that on March 15, 2016, a buy order for 1000 shares of the Company was placed by it at a price of INR 184.50. The said order was executed in two different trades involving 961 and 39 shares, respectively. The first trade of 961 shares was executed at the rate of INR 184.50 and LTP contribution was zero. For remaining order of 39 shares, the price was modified by the Noticee to INR 185 and the said modified buy order resulted in trade at the rate of INR 184.90, and a LTP contribution of INR 0.40 was made. In this regard, it is noted from the trade log that the first trade of 961 shares got executed immediately after placing of the order at 12:29:56 pm at INR 184.50 with no change in the LTP. However, the Noticee for reasons best known to it, without even waiting for few more seconds and despite the fact that almost 96% of his desired quantity had been acquired, modified its order at 12:30:06 pm from INR 184.50 to INR 185. In the said process, the 39 shares were purchased by the Noticee no. 17 at a higher price thereby contributing to the LTP by INR 0.50.

The aforesaid explicit impatient act of modifying the price even for a smaller quantity without waiting for some time to observe the direction of the market, specifically when 96 % of its desired quantity had already been bought indicates that the Noticee was not trading in a fair manner. 34. Further, it has also been contended that the Noticees were net buyer of the shares of the Company and some of them have claimed that they are still holding the said shares, as purchased during the investigation period. Insofar as the submission of being a net buyer is concerned, I find that the SCN has alleged that the Noticees have purchased the shares of the Company at prices higher than the seller’s demand price and have thus indulged in manipulative trading. In the said process, the Noticees have apparently acted in concert and unitedly and have kept marking the price of the scrip higher and higher. When such an explicit conduct of the Noticees has been exposed by the factual matrix, the other facts of being net buyer during the relevant time and even the argument that they are still holding on to those shares, are too insignificant to result in exonerating the Noticees from the charge of indulging unfair and manipulative trades.

I observe that the Noticees were under an obligation to justify their trades by showing some cogent reasons. As noted above, the financials of the Company were nothing but poor and despite the said known fact, the Noticees, majority of which are incorporated entities have not only purchased shares in large quantities but also placed buy orders for purchasing those shares in excess of the price at which shares were already available for sale in the market. 35. The SCN narrates that in majority of the instances, the Noticees have been seen placing buy orders subsequent to the sell orders. It is also noted that the Company had no sound financial track capable of attracting the investors to trade so abnormally in the scrip. Although the Noticees have claimed that their trades were backed by their inside research, on most of the occasions,

Order in the matter of Shantanu Sheorey Aquakult Ltd.

they have been seen placing buy orders after the sell orders had already been placed in the system. The Noticees have not furnished any documents substantiating their claim of having done any in-house research to justify their buying spree at rates higher than the prevailing prices of sell orders pending in the system. It is not their case that they have placed any buy order first prior to the sell orders to further substantiate their interest in acquiring shares of the Company at higher prices. As regards the claim of having done internal research about the Company, during the personal hearing the authorised representatives of the Noticees nos. 4, 5, 11 and 16 were asked to provide certain information including the details of the research that the Noticees have carried out prior to taking a decision so as to make investments in the shares of the Company. However, no reply/information what so ever, has been filed in response to the said queries. Under the circumstances, the allegation against the Noticees of indulging into unfair trades in cohesion with each other, contributing to the market positive LTP of the price of the scrip gains strength to suggest that the Noticees by resorting to such an abnormal way of trading have acted against the established prudential principles of market mechanism, where buyers always intent to buy at the lowest prices available, but contrary to the said universal practice, these Noticees were happily placing buy order for the shares of the Company even at prices higher than the prices at which shares were available for sale in the market.

Thus, from the submissions of the Noticees, it emerges that they have not been able to justify their decisions of buying shares of the Company in such large quantities at prices higher than the LTP and under such circumstances, their alleged trades can’t be held to be fair trades executed in the normal course of trading. Rather, the acts of placing buy orders/buying shares repeatedly over and above the available market price and thereby contributing to the market positive LTP in the scrip of the Company, which had no market fundamentals to support such price rise or acts of buying at such price, evidently suggest that the trades were nothing but executed with an intent to manipulate the price of the scrip. 36. Moving on to the next submission, it is noted that the Noticees have sought to take a shelter under the fact that the scrip was under the “T Group” and due to the surveillance imposed on it, manipulation was not possible. I have considered the said submission and find that the only difference that a T group stock holds out vis-à-vis other stocks is that a person holding the shares can sell it on the market platform on trade-for-trade basis by way of compulsory delivery of such shares.

The other factors of stock trading like demand and supply, matching of trades on price-time priority are exactly the same for a T Group stock as for the other regular stocks. Thus, the alibi of T Group shares sought to be created by the Noticees under the extant trading framework falls short of acceptance for the reasons explained above. It is not the case of the Noticees that sellers were not possessing the requisite shares and placed shares for sale on short selling basis and thereby induced the buyer entities including the Noticees herein to match their

Order in the matter of Shantanu Sheorey Aquakult Ltd.

buy orders with the orders placed by such seller entities. In this respect, the SCN narrates that during the investigation period, while sufficient selling quantities were available for purchase, the Noticees have bought only 40.09 Lakh shares out of total number of 79.55 shares traded during the period. The Noticees, despite having sufficient sell orders at lower price, willingly bought shares at higher prices, either by placing orders at prices higher than the prevailing market price or by modifying their originally placed orders as illustrated above in the case of Noticee no.17. Thus, the above submission taking the plea that the scrip was under T Group would not be helpful in bringing exoneration to the Noticees. 37. It is noted that much of emphasis has been laid down by the Noticees on the fact that they have also executed a large number of trades contributing zero or negative LTP to the scrip. The Noticees have argued that every trade shall result in some kind of LTP (zero, positive or negative) and merely because fraction of their trades has contributed to positive LTP, such trades should not be held as manipulative trades. In this connection I find that the Noticees have not been able to discharge the primary onus of controverting the main charge in the SCN about manipulating the price of the scrip in a concerted manner through their buy orders placed after the sell order and above the price quoted by sellers hence, by referring to their other benign trades executed at zero or negative LTP which have not at all been imputed in the SCN to be fraudulent or manipulative in nature, the Noticees have not been able to make any improvement on their submissions to defend themselves against the charges brought in the SCN against them. Infact, the SCN itself acknowledges all the trades executed by the Noticees and the impact on the ‘net LTP’ of those trades executed during the investigation period have already been shown in the following table: Table no. 7 Net LTP Positive LTP Negative LTP Zero LTP % o f Positive No LTP No LTP No. of LTP LTP to QTY No of QTY of impac QTY of QTY No of Buyer Name impact tradin impact Total traded trades traded trade t in traded trad traded trades in Rs. g days in INR MKT s INR es Positive LTP

Commodities 13.60 329630 34 269 19.10 57031 41 -5.50 20280 15 252319 213 3.19 & Fineserve Pvt. Ltd Abjayoni Trading Pvt. 15.00 457837 59 819 64.15 63947 102 -49.15 39816 94 354074 623 10.70 Ltd Adamina Traders Pvt 6.90 234570 22 166 12.90 45477 23 -6.00 48691 14 140402 129 2.15 Ltd

Order in the matter of Shantanu Sheorey Aquakult Ltd.

Anvita Real 20.10 641543 46 688 45.70 73651 60 -25.60 50336 32 517556 596 7.62 Estate Pvt. Ltd Black Horse Media And 2.25 101495 13 77 3.10 17995 14 -0.85 14726 7 68774 56 0.52 Entertainment Pvt. Ltd Dizzystone Trading Pvt 1.50 159497 17 202 6.20 17130 20 -4.70 7373 17 134994 165 1.03 Ltd Haritima Infrastructure 1.70 195987 22 163 3.10 23840 14 -1.40 8687 5 163460 144 0.52 Pvt. Ltd Jeshna Muiltitrade Pvt 1.30 153315 13 136 4.60 29170 16 -3.30 4600 4 119545 116 0.77 Ltd Magan Mercantile Pvt 15.30 260056 18 263 17.10 49040 20 -1.80 34152 11 176864 232 2.85 Ltd Matulya Trading Pvt. 5.80 132710 14 121 6.10 10532 12 -0.30 6511 3 115667 106 1.02 Ltd Meritorious 7.10 327385 33 261 10.90 43532 30 -3.80 23093 13 260760 218 1.82 Realty Pvt. Ltd Naseen Tradelink Pvt. 2.40 57630 12 84 3.30 7539 11 -0.90 2469 3 47622 70 0.55 Ltd Nirvana Mall Management 2.70 95598 12 57 3.00 3333 3 -0.30 13310 2 78955 52 0.50 Co Pvt Ltd Orange Mist Productions 21.80 700963 41 489 29.00 124092 65 -7.20 60714 21 516157 403 4.84 Pvt Ltd Roho Real 1.85 165390 10 60 3.95 22068 7 -2.10 32300 5 111022 48 0.66 Estate Pvt. Ltd Sally Real 3.50 163915 20 148 7.70 25500 13 -4.20 33908 16 104507 119 1.28 Estate Pvt. Ltd Tushar Pandit 4.30 107705 23 80 5.40 20502 9 -1.10 16510 6 70693 65 0.90 Jadhav Vihar Infrastructure 1.40 100248 12 57 2.40 29773 13 -1.00 15337 6 55138 38 0.40 Pvt. Ltd Wellman Tradelinks Pvt. 2.70 26267 11 28 2.70 2550 2 0.00 0 0 23717 26 0.45 Ltd Whitetext Infrastructure 3.00 84029 8 28 3.40 32331 9 -0.40 16900 3 34798 16 0.57 Pvt. Ltd. Yogita Trading 0.80 8910 2 21 0.80 2039 2 0.00 0 0 6871 19 0.13 LLP LTP - Contribution 135.00 4504680 81 4217 254.60 701072 486 449713 277 3353895 3454 42.46 119.60 by 21 Noticees - MKT LTP 255.78 7955079 207 8274 599.68 1046241 922 721208 559 6187630 6793 100 343.90

38. A perusal of the contents of the aforesaid table would go on to indicate that despite the fact that the Noticees have also executed trades on zero and negative LTP, the ‘net LTP’ contribution

Order in the matter of Shantanu Sheorey Aquakult Ltd.

made by all the trades executed by the Noticees together cannot be ignored. In other words, out of the total market positive LTP of INR 255.78 that occurred in the scrip of the Company during the investigation period, it was the trades of the Noticees that have caused LTP contribution of INR 135.00, which comes to 42.46% of the total market positive LTP. When such a substantial amount of market positive LTP contribution is noticed by an explicit act of manipulative trades executed by a connected group of Noticees apparently acting in concert, the other non-LTP contributing trades of the Noticees will not have any strength to outweigh those allegedly manipulative trades which have been executed in a fraudulent in nature to artificially raise the price of the scrip. The above noted acts on the part of the Noticees deserve to be justified with credible reasoning supported by verifiable evidence so that the Noticees can defend themselves against the charges of indulging in manipulative and unfair trades. The Noticees are required to explain with strong reason as to when they themselves have executed large number of orders either at par or below the market price, what then prompted them to execute those imputed trades as alleged in the SCN to place the buy orders for the shares of the same company in huge quantities at prices even higher than the prices being demanded by the sellers, whose sell orders were already pending in the system when the buyer Noticees entered into the market to buy those shares of the Company.

39. Another contention raised by the Noticees is that there was substantial time gap between the orders placed by the Noticees as buyers and the orders placed by the sellers which is not substantiated by the actual trade logs which actually reveal that, contrary to the above claim put forward by the Noticees, not only the sell orders were placed long before placing of the buy orders by the Noticees but also the buyers (Noticees) have willingly bought the shares at higher price, which reflects nothing but evidence of a concerted plan on the part of the Noticees to always mark the price up of the scrip higher and higher. Thus, when a group of connected entities are seen to have displayed a dispensation to buy the shares at higher prices than those demanded by the sellers, it cannot be termed to be a practice of placing the orders only by rounding off the price, as claimed by the Noticees. The manipulative intent of the Noticees is manifest from the explicit fact that all the Noticees have acted in an identical manner to buy the shares of the scrip of a company at prices higher than the prices demanded by the sellers, more so when the dismal financial health of the Company at that time could not have justified the strong interest that was exhibited by the Noticees to buy the shares of the Company.

At this stage, I may also recollect that many of the Noticees have also been seen to have involved in inter-se fund transactions amongst themselves, for which no acceptable justification has been brought to the table. For example, Noticee no. 12, Mr. Tushar P. Jadhav was seen to have received funds from a few of the other Noticees on multiple occasions. As noted from the bank account statement, on February 22, 2016,

Order in the matter of Shantanu Sheorey Aquakult Ltd.

an amount of INR 9.00 Lakh has been received by the Noticee no. 12 from the Noticee no. 5 (Adamina Traders Pvt. Ltd.). Before receiving the said amount, the Noticee no. 12 had only INR 12,688 as his account balance. On the same very day of receiving the said amount of money, the Noticee no. 12 transfers the whole amount of INR 9.00 Lakh to his broker Swastika Investmart Ltd. The Noticee no. 12 is also seen to have executed trades in the scrip of the Company from February 16, 2016 to February 26, 2016. Thus, the aforesaid sequence of funds transactions is adequate enough to rebuff the claims of the Noticees that their trading in the scrip of the Company and their inter se fund transactions have no co-relation, when confronted with the above stated attending facts of the case. 40. Yet another contention of the Noticees is that the trading system does not show the details of the sell orders like quantity of shares, price and time of placing the orders etc. The said contention of the Noticees is again liable to be rejected as at any given point of time, the trading system of the stock exchange reflects the best 5 sell/buy orders and the quantities offered in such orders.

When a person can easily see that a certain number of shares are available in the market at a particular price point, a reasonable and prudent approach would be to buy the shares at the available market price or at a reduced price. However, in the present case, it has been brought out that despite availability of shares at lower prices which were visible on the screen, the Noticees have placed buy orders at higher prices. Such types of trades were not so small in number that could have been ignored, and rather were as many as 1252 in numbers. Further, out of such 1252 trades, through as many as 225 trades, the Noticees have been able to actually increase the price of the scrip by INR 92.75. If the Noticees were desperate and serious enough to buy the shares at any price point, they would have placed market orders that would have resulted in the purchase of shares at the best available/cheapest sell prices. However, in all those trades which have been imputed in the SCN as having contributed to the market positive LTP of the scrip, the Noticees have not placed any market orders, but have placed limit orders, at prices higher than the sell orders.

Under the circumstances, the ignorance feigned by the Noticees with respect to the details of the pending sell orders available in the system does not help their case and is thus rejected. 41. I note that the Noticees have placed strong reliance on the order of Hon’ble SAT passed in the matter of Nishith Shah HUF Vs. SEBI; Sapna Bombaywala Vs. SEBI and Jayesh Gandhi & Ors. Vs. SEBI, so as to buttress their submission that in order to prove price manipulation, collusion of both buyers-sellers needs to be demonstrated. At the outset, it is to be appreciated that the task assigned to me as a quasi-judicial authority is to adjudge the charges levelled against the Noticees, dehors the role of any other entity. The Noticees here are under an obligation to make out a case in their favour by presenting strong arguments in their defence supported by factual

Order in the matter of Shantanu Sheorey Aquakult Ltd.

details, which they have failed to do. There is nothing brought on record to suggest that any of the counter parties to the trades executed by the Noticees was also having any kind of connection with any of the Noticees so as to justify their claim of parity. I also seek guidance from the findings of the Hon’ble SAT recorded in the matter of Systematix Shares & Stocks India Limited v. SEBI (2012). While dealing with a similar argument, the Hon’ble SAT has held inter alia as: “We cannot subscribe to this view since the Board has set its own benchmark in selecting cases for action and, in any case, the appellant cannot plead himself innocent or his trades as lawful.” 42. Notwithstanding the above, it is also observed that the facts of the above cited cases relied upon by the Noticees in their defence are glaringly distinguishable from the facts of the present proceedings. In the present case, the Noticees who have been accused for the allegations of manipulation are admittedly the buyers of the shares, who were deliberately buying shares at higher prices and thus were manipulating the share price on their own volition and will without being dictated or influenced by the sellers.

Therefore, the reliance placed on the afore-mentioned cases decided by the Hon’ble SAT is completely misplaced in facts and holds no water. Besides, I may also add here that in a recent decision passed in the matter of Tanuj Khandelwal Vs. SEBI (date of decision: January 04, 2021) the Hon’ble SAT has held that even in absence of any connection with the counter party, the vested interest of the entity to manipulate the market can be found from the trading pattern. 43. It is undisputed that the financials of the Company were not at all promising and no major corporate announcement was made by it during the investigation period and the profits earned by the Company during the relevant financial years were also meagre. Despite being aware of such precarious financial conditions of the Company, the Noticees went on purchasing large quantities of shares and in the process have increased the price of the scrip through their trading in the scrip of the Company without any bonafide reasons. In a similar matter involving the issue of placement of buy orders at prices higher than the sell orders, the Hon’ble SAT has inter alia held as: “The appellant’s role has been one of conscious indulgence in manipulation of the trade in a crude and preplanned manner.

The very fact that the appellant has placed orders above the last traded price when sell orders were available in the market at a lower price shows the intention behind the trade.” [Shailesh Jain v. SEBI (date of decision May 01, 2012)]. In another case, Hon’ble SAT has held that: It must not be forgotten that every trade establishes the price of the scrip and the noticee’s trading at higher than LTP resulted in the price of the scrip going up and were done with a view to set the price at a desired level and thereby influencing the innocent/gullible investors. By purchasing at a higher price in most of his trades, the noticee had given the wrong impression about the price of the scrip in the market. [Saumil Bhavnagari v. SEBI (date of decision: March 21, 2014)]

Order in the matter of Shantanu Sheorey Aquakult Ltd.

44. To sum up the foregoing observation, I would say that the Noticees were enjoying collusive nexus with each other and this finding of the investigation has not been disputed by the Noticees with any tangible explanation with supporting evidence to the contrary. Further, the trading pattern displayed by the Noticees with glaring unfair practice of placing buy orders repeatedly at prices higher than the sell order prices already pending in the system coupled with funds transfers amongst certain Noticees indicating a nexus with such trading pattern, and the fact that none of the Noticees has been able to explain with conviction the rationale behind resorting to such frequent buy trades in large numbers in a scrip, which did not enjoy any market fundamentals go a long way to tilt the preponderance of probabilities against the Noticees and in support of the charges levelled in the SCN. The Noticees have grossly failed to demonstrate as to how the fund transfers amongst them effected during the investigation period were of commercial nature; how is it possible that some of them still continue to have common Directors on their respective Boards, if their claim of no connections is to be accepted; why have they exhibited so much exuberance to buy large quantities of shares at prices higher than what was available in the market and what was the reason for all of them to act in an identical manner while dealing in the securities of the Company.

On the whole the Noticees have not been successful in demonstrating innocence in their conduct which has been alleged to be manipulative and violative of the provisions of PFUTP Regulations in the SCN. 45. I note that time and again, the Hon’ble apex Court of the country has laid emphasis on the importance of curbing manipulative practices in the securities market. The Hon’ble Supreme Court in the matter of N. Narayanan v. SEBI [(2013) 12 SCC 152] held that “if market abuse is not properly curbed, then it would result in defeating the very object and purpose of SEBI Act. …..Prevention of market abuse and preservation of market integrity is the hallmark of Securities Law.” Further, in another matter of Kishore Ajmera v. SEBI [(2016) 6 SCC 368], Hon’ble Supreme Court held as: “…Investors' confidence in the Capital/Securities Market is a reflection of the effectiveness of the regulatory mechanism in force. All such measures are intended to pre-empt manipulative trading and check all kinds of impermissible conduct in order to boost the investors' confidence in the Capital market. The primary purpose of the statutory enactments is to provide an environment conducive to increased participation and investment in the securities market which is vital to the growth and development of the economy…” 46. Insofar as the degree of proof is concerned, it is now a settled law and also has been upheld by various courts that in a case of market manipulation where it is not feasible or practicable to have a direct evidence, based on the attending facts and circumstances of the matter, the allegations of market manipulation need to be adjudged based on the principles of preponderance of probabilities.

[SEBI Vs. Kishore R. Ajmera (supra)]. In another matter, the Hon’ble Supreme Court held that unfair trade practice is to be determined by all the facts

Order in the matter of Shantanu Sheorey Aquakult Ltd.

surrounding the case and cannot be fixed in a straight-jacket definition. The relevant potion of the judgment passed in the matter of Securities and Exchange Board of India and Ors. v. Kanaiyalal Baldevbhai Patel and Ors. [(2017) 143 SCL 124 (SC)], are reproduced hereunder: “31. Although unfair trade practice has not been defined under the regulation, various other legislations in India have defined the concept of unfair trade practice in different contexts. A clear-cut generalized definition of the ‘unfair trade practice’ may not be possible to be culled out from the aforesaid definitions. Broadly trade practice is unfair if the conduct undermines the ethical standards and good faith dealings between parties engaged in business transactions. It is to be noted that unfair trade practices are not subject to a single definition; rather it requires adjudication on case to case basis. Whether an act or practice is unfair is to be determined by all the facts and circumstances surrounding the transaction. In the context of this regulation a trade practice may be unfair, if the conduct undermines the good faith dealings involved in the transaction. Moreover, the concept of ‘unfairness’ appears to be broader than and includes the concept of ‘deception’ or ‘fraud’. ……………… 60. Coupled with the above is the fact that the said conduct can also be construed to be an act of unfair trade practice, which though not a defined expression, has to be understood comprehensively to include any act beyond a fair conduct of business including the business in sale and purchase of securities. However, the said question, as suggested by my learned Brother, Ramana, J. is being kept open for a decision in a more appropriate occasion as the resolution required presently can be made irrespective of a decision on the said question.”

47. The guiding principles that emerge from the aforesaid judgments is that it is essential to curb the market manipulation and unfair trade practices and any attempt made in the direction to interfere with the free and fair operation of the market to create an artificial, false or misleading appearance with respect to the price of security, would amount to entering into the territory which is explicitly forbidden by the PFUTP Regulations. 48. Based on the aforesaid factual analysis and observations, I am of the firm view that the Noticees by placing buy orders at prices higher than the available sell orders in 1252 instances have attempted to inflate the price of the scrip of the Company with a clear manipulative intent. The said attempt to inflate the market price of the scrip so made by the Noticees through 1252 trades fructified in 225 trades, in which the Noticees glaringly purchased the shares of the Company at prices higher than the last traded price. In this regard, I find that although the SCN acknowledges that the trades executed by the Noticee nos. 4 and 16 have not directly lead to price rise in the scrip of the Company, the very fact that they have also traded in those 1252 instances and were enjoying connection with the order Noticees, they cannot claim themselves to be Order in the matter of Shantanu Sheorey Aquakult Ltd.

completely ignorant about the fact that the prices of the scrip were manipulated by those artificial trades by their other accomplice Noticees. Nevertheless, considering the fact that these two Noticees are not responsible for the alleged 225 trades, for their connection with the other Noticees, these two Noticees deserves to be strongly warned to be extremely careful and cautious while dealing in securities. 49. As regard to the acts of other Noticees, I find that they have not been successful in discharging the burden of establishing that their trades were fair and executed by them in due course of trading in securities, like any ordinary investors normally trade in the market and therefore, considering the connections that existed amongst the Noticees, their acts of indulging in trades to manipulate the price of the scrip of the Company, their trading pattern of placing buy order subsequent to sell orders and above the sell order price cannot be ignored simply on the ground that individually the contribution to LTP by each of the Noticees was miniscule and not significant. I must conclude the proceedings by observing that the demand created by the Noticees for shares at prices higher than the ask price of the seller was indeed adequate to hold out inducement, sufficient enough to attract the gullible investors of the securities market to trade in the shares of the Company under a mistaken belief that the scrip held out promise for good returns.

50. In view of the foregoing factual analysis and observations, I hold that the Noticees (except Noticee nos. 4 and 16) by their respective acts, as enumerated in detail above and as alleged in the SCN, have violated Regulation 3 (a), (b), (c), (d) and 4 (1), 4(2), (a) and (e) of the PFUTP Regulations. Directions: 51. It is a bounden duty of SEBI to insulate the securities market from the offenders like the Noticees, who by their ill-will distort the price discovery mechanism and therefore create an impact of price rise in the minds of the investors, which is indeed artificial. I, therefore, in exercise of the powers conferred upon me under Sections 11(1), 11(4) and 11B (1) read with Section 19 of the Securities and Exchange Board of India Act, 1992, hereby restrain the Noticee nos. 1-3, 5-15, 17-21 from accessing the securities market and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, for a period of three (03) months from the date of this order. 52. It is further clarified that during the period of restraint, the existing holding of securities including the holding of units of mutual funds of the Noticees shall remain frozen.

Order in the matter of Shantanu Sheorey Aquakult Ltd.

53. The Noticees nos. 4 and 16 are cautioned and directed to be careful and to refrain from indulging in such unfair trade practices in future or in any other similar act whatsoever, which will violate the sanctity of the SEBI Act, 1992 and the Rules and Regulations made thereunder. 54. Obligation of the aforesaid Noticees, in respect of settlement of securities, if any, purchased or sold in the cash segment of the recognized stock exchange (s), as existing on the date of this Order, can take place irrespective of the restraint/prohibition imposed by this Order, only in respect of pending unsettled transactions, if any. Further, all open positions, if any, of the aforesaid Noticees in the F & O segment of the stock exchange, are permitted to be squared off, irrespective of the restraint/prohibition imposed by this Order. 55. The Order shall come into force with the immediate effect. 56. A copy of this order shall be forwarded to the Noticees, all the recognized stock exchange, depositories and registrar and transfer agents for ensuring compliance with the above directions.

-Sd- Date: JUNE 01, 2021 S. K. MOHANTY Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the matter of Shantanu Sheorey Aquakult Ltd.