Order in the matter of Sun Infoways Ltd.

WTM/PS/ 71 /IVD/ID-06 /March /2012 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI CORAM: PRASHANT SARAN, WHOLE TIME MEMBER IN THE MATTER OF SUN INFOWAYS LTD. In respect of Heerachand Salecha, Great Eastern Mercantile Pvt. Ltd., Adinath Propcon Pvt. Ltd., Ramsudhakaran, Chetan Haridas Mapara, Shree Shyam Fabtex Pvt. Ltd., Rajender Rai ORDER Under Sections 11, 11B and 11(4) of Securities and Exchange Board of India Act, 1992 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted investigation into alleged irregular transactions in the scrip of Sun Infoways Ltd. (hereinafter referred to as “SIL” or “the company”) following a sudden fall in the price of the scrip accompanied by low delivery in the period from February 5, 2001 to May 2, 2001 (hereinafter referred to as the “investigation period”). There was a consistent fall in the price of the scrip during the investigation period. The opening price on February 5, 2001 was Rs.342, which fell to a low of Rs.60.75 on April 30, 2001 before finally closing at Rs.73.80 on May 2, 2001. SEBI had earlier conducted an investigation in the same scrip, for the period February, 2000 to August, 2000, where the price of the scrip had moved from Rs.10 in February, 2000 to Rs.696 in August, 2000. Actions were initiated against the company and its related entities as well as certain stock brokers and clients for violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995.

2. Investigation revealed that circular/synchronised trades were executed between certain brokers, trading on behalf of their clients, during the investigation period. These clients included Shri Heerachand Salecha, Great Eastern Mercantile Pvt. Ltd., Adinath Propcon Pvt. Ltd., Shri Ramsudhakaran, Shri Chetan Haridas Mapara, Shri Shyam Fabtex Pvt. Ltd. and Shri Rajender Rai (hereinafter collectively referred to as the “noticees”). Such circular/ reversal trades created artificial volumes to the tune of 5,43,500 shares (gross), executed in 2443 trades resulting out of 363 buy orders and 364 sell orders. Circular trades generated 26% to 97% of daily volumes on the days when such trading was observed. The daily traded volume in the scrip was considerably high, due to circular trading amongst the select brokers and their clients, in the first part of the investigation period, that is, from February 5, 2001 to March 2, 2001 (settlement numbers 46 to 49). These trades led to an increase in the price of the scrip from the beginning of the investigation period to March 2, 2001, and the price stayed in the range of Rs.342 to Rs.296 (opening price). Thereafter, the trading of these entities in the scrip reduced drastically and the volume of trades in the scrip became negligible. The price of the scrip also started declining, and by April 30, 2001 the price fell to Rs. 60.75 before rising marginally to Rs. 73.75 at the end of the investigation period. It was thus alleged that certain entities, including the noticees herein, had created artificial volumes in the scrip by executing circular trades which were synchronized in terms of order price, time and quantity, and thus violated Regulations 4(a), (b), (c) and (d) of SEBI (Prevention of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 (hereinafter referred to as “PFUTP Regulations, 1995”) read with Regulation 4(1), 4(2) (a), (b) (e) (g) and (n) of SEBI (Prevention of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003”).

3. Accordingly, SEBI issued a notice dated October 06, 2008 (hereinafter referred to as “SCN”) to Shri Heerachand Salecha, Great Eastern Mercantile Pvt. Ltd., Adinath Propcon Pvt. Ltd., Shri Ramsudhakaran, Shri Chetan Haridas Mapara, Shri Shyam Fabtex Pvt. Ltd. and Shri Rajender Rai asking them to show cause as to why suitable directions under Sections 11, 11(4) and 11B of the SEBI Act, 1992 should not be passed against them.

4. However, the SCNs were returned undelivered from the addresses available with SEBI. SEBI subsequently published notices dated August 13, 2009 in the Hindustan Times in respect of Rajender Rai, Great Eastern Mercantile and Ramsudhakaran, and on October 17, 2010 in the Times of India with respect to Shree Shyam Fabtex Pvt. Ltd., Chetan Haridas Mapara, Heerachand Salecha and Adinath Propcon Pvt. Ltd. as a mode of substituted service to these noticees, with an advice that in the absence of any reply, the matter would be proceeded ex-parte. However, no reply has been received from any of the noticees till date. Accordingly, I am compelled to proceed with the matter, ex-parte, on the basis of material available on record, having complied with the principles of natural justice.

5. I have carefully considered the SCN and other material available on record. The questions that arise for consideration here are:

a. Whether the noticees’ trades were non-genuine, artificial and synchronized in terms of order time, quantity and price? b. Whether the noticees had created artificial volumes in the scrip of SIL which distorted market equilibrium?

6. I note that during the investigation period, three different groups were trading in the scrip in a circular manner within the groups. These three groups can be divided as under:

Gross (buy+ No of Days Buy Sell sell) Traded During Sr. Member Dealt for client (sub- Gross Circular the Period / No of Circular/ No. Name broker) Circular / traded Qty. (% to Days Done reversal reversal Qty total trading of the Circular Trading Qty broker) Group I Angel Heerachand Salecha 14/12 34200 31300 65500 (86.41%) Broking Ltd. 26500 26500 NC Jain Proprietary trading 6/6 53000 (83.33%) Opulent Ramsudhakaran 7/6 27100 27100 54200 (90.03%) Broking Bharti Thakkar Govind Chhichani 5/5 26500 26500 53000 (100%) India Shripal Jain Proprietary trading 5/5 21400 20700 42100 (98.36%) Chetan Haridas ISJ Securities 17/9 8100 7100 15200 (37.25%) Mapara (Vintel

Securities) Joindre 1.Heerachand Salecha Capital 2.Kamlesh Jain (Alwin 14/9 5600 8900 14500 (34.65%) Services Securities) Renaissance Abhayraj Shukla Securities (Millennium 13/8 22500 23300 45800 (75.83%) (now Mehta Securities) Equities) Total circular trading among Group I 171400 171400 342800 Group II Adinath Propcon Pvt. LKP Shares & Ltd. (Surtaj Assets & 23100 21800 22/16 44900 (75.20%) Securities Ltd. Cap management Pvt. Ltd) Nirmal Bang Mayrose Capfin Pvt. Securities Pvt. 18/12 18900 20200 39100 (68.47%) Ltd. Ltd. Mahesh Great Eastern Kothari Shares Mercantile Pvt. Ltd. & Stock 20/16 19700 19600 39300 (75.43%) (Parth Investment Brokers Pvt. Consultants P Ltd) Ltd. Soverign Adhunik Finance Pvt. Securities Pvt. Ltd. (Hindustan 16/14 20700 22500 43200 (82.28%) Ltd. Holdings Ltd.) Sati & Swati Veekrant Investments. –trading Stocks & on own account 13/8 10700 8100 18800 (90.82%) Finance Pvt. Shree Shyam Fabtex Ltd. Pvt. Ltd (Yash Finance) Total circular trading among Group II 93100 92200 185300 Group III Rajender Rai Ashok Kumar IKM Investor Chaudhary 19/7 3800 4300 8100 (31.03%) Services Ltd. (CompuAction Securities Pvt. Ltd.) SSK Investor 7300 R.S Investments 3/3 4000 3300 Services (79.34%) Total circular trading among Group III 7800 7600 15400 Total of group I+II+III 272300 271200 543500 Total Market traded Quantity 456500 456500 913000 * Highlighted name indicates that the entity is a noticee.

7. Thus, entities belonging to Group I were seen to be trading in a circular manner amongst themselves, Group II entities executed circular/ reversal trades with other entities of the same group, and Group III entities also circulated the shares of the company amongst themselves. Each of the noticees, as evident from the table above, formed a part of Group I, II or III. While Heerachand Salecha, Ramsudhakaran and Chetan Haridas Mapara were part of Group I, Adinath Propcon Pvt. Ltd, Great Eastern Mercantile Pvt. Ltd. and Shree Shyam Fabtex Pvt. Ltd. were included in Group II. Rajender Rai, on the other hand, formed a part of Group III.

GROUP I

8. As mentioned before, the noticees traded within their groups in a circular fashion. Heerachand Salecha, Ramsudhakaran and Chetan Haridas Mapara, three among the noticees herein and trading clients being part of Group I traded amongst themselves and other entities of the same group. For instance, I note from the trade and order logs annexed to the SCN that on February 5, 2001 the clients indulged in circular trades. This circle can be diagrammatically represented as under:

700 shares @ 700 shares @ Rs.358 Chetan H Mapara Rs.358.5 Sub-broker- Vintel Securities (ISJ Securities) Ramsudhakaran Heerachand Salecha (Opulent Broking) (Angel Broking Ltd) e c. d. . 700 shares @ 700 shares @ Rs.357.5 Rs.357.5

N.C. Jain a. Govind Chichani b. f. (Bharti Thakkar) Abhayraj Shukla (Renaissance 700 shares @ 700 shares @ Securities) Rs.357 Rs.358

* The name without the parentheses indicates the name of the client and the name within the parentheses indicates the name of the broker. Coloured box indicates that the entity is a noticee.

a. Abhayraj Shukla, dealing through the broker Renaissance Securities, at 11:27:16 am, sold 700 shares of the company to NC Jain at the rate of Rs.357 per share. The buy and sell orders were placed a mere second apart. The buy and sell order price and quantity matched to perfection.

b. A few minutes later, at 11:33:05 am, NC Jain sold these 700 shares to Ramsudhakaran, one of the noticees, who was trading through the broker Opulent Broking at a price of Rs.357.50. In this case also, the quantity and price of the buy and sell orders were matched exactly and the time of placing the orders differed by just one second. c. Soon after, at 11:40:04 am, Ramsudhakaran sold 700 shares at Rs. 358 a share, to Vintel Securities, a sub broker dealing on behalf of Chetan H Mapara, one of the noticees. The buy and sell orders matched precisely in respect of price, quantity and time. d. Less than 4 minutes later, Vintel Securities, sold 700 shares through its broker ISJ Securities to Heerachand Salecha, another noticee, at Rs. 358.50 a share. Once again, the buy and sell orders were identical in terms of price, quantity and time. e. Heerachand Salecha, then, dealing through Angel Broking Ltd, sold 700 shares at the rate of Rs.357.50 to Govind Chichani. The difference between the buy and sell orders was nil. f. Thereafter, at 12:09:29 pm Abhayraj Shukla bought 700 shares from Govind Chichani, dealing through his broker, Bharti Thakkar India Ltd. The time difference between the buy and sell orders was one second, and the buy and sell order price and quantity were alike. In this manner, the 700 shares were circulated amongst the clients. A number of such circular and synchronized trades were executed by the aforenamed noticees. Another such instance is illustrated below:

Kamlesh Jain 500 shares (Joindre Capital Services) 1000 shares

Heerachand Salecha Chetan H. Mapara (Angel Broking Ltd) (ISJ Securities)

500 shares The name without the parentheses indicates the name of the client and the name within the parentheses indicates the name of the broker. Coloured box indicates that the entity is a noticee.

a. On March 22, 2001 Kamlesh Jain, dealing through his broker, Joindre Capital Services, sold 1000 shares to Chetan H. Mapara, who was dealing through Vintel Securities, a sub-broker of ISJ Securites. b. Thereafter, on March 26, 2001, Chetan H. Mapara securities sold 500 shares to Heerachand Salecha. c. Subsequently, on the same day, Heerachand Salecha sold 500 shares to Kamlesh Jain.

The aforesaid trades resulted out of buy and sell orders which were placed less than a minute apart. Further, the counterparty buy and sell order price and quantity were also similar in each of the trades.

9. Heerachand Salecha traded on 14 days with the broker, Angel Broking Ltd. and executed reversal/circular trades on 12 days for 65500 shares (gross), which amounts to 7.12% of the market traded quantity (gross). Majority of these trades were executed with brokers Opulent Stock Broking (4 days), Bharti Thakkar India Ltd. (5 days), ISJ Securities (8 days), NC Jain (4 days), Shripal Jain (3 days), Joindre Capital Services (4 days) and Renaissance Securities Ltd. (now known as Mehta Equities Ltd.) (3 days) as counter parties. There were 308 buy trades and 278 sell trades (that resulted in circular/ reversal trades) by the broker arising out of 45 buy orders and 39 sell orders. This circular trading amounted to 86.41% of trades of Angel Broking Ltd. in the scrip of SIL during the Investigation period.

10. Heerachand Salecha also dealt through the broker Joindre Capital Services Ltd. in the scrip. Joindre Capital Services Ltd. traded for 14 days for its clients Kamlesh Jain and Heerachand Salecha, and executed reversal/circular trades on 9 days for 14500 shares (gross) which is 1.59% of the market traded quantity (gross). Majority of these trades were executed with the brokers Angel Broking Ltd. (4 days), ISJ Securities Ltd. (8 days), Renaissance Securities Ltd. (now known as Mehta Equities Ltd.) (2 days), Opulent Broking (1 day) and Shripal Jain (1 day). There were 56 buy trades and 69 sell trades (that resulted in circular/ reversal trades) by the broker arising out of 9 buy orders and 15 sell orders. 34.65% of the broker’s trades in the scrip of Sun Infoways Ltd. during the investigation period were of a circular nature. In respect of Heerachand Salecha, the broker bought 4000 shares and sold 7700 shares, out of which 3000 shares were purchased and 3900 shares were sold through circular trades.

11. Thus, Heerachand Salecha in total bought 42400 shares and sold 45100 shares through Angel Broking Ltd. and Joindre Capital Services Ltd. during the investigation period. Out of these, 37200 shares were bought and 35200 shares were sold by Heerachand Salecha through circular trades.

12. Ramsudhakaran dealt through Opulent Broking Ltd. and traded for 7 days. Ramsudhakaran executed reversal/circular trades on 6 days for 54200 shares (gross) which is 5.43% of the market traded quantity (gross). Majority of these trades were executed with the brokers Angel Broking (4 days), Bharti Thakkar India Ltd. (5 days), ISJ Securities (1 day), NC Jain (4 days), Shripal Jain (4 days), Joindre Capital Services (1 day) and Renaissance Securities Ltd. (now known as Mehta Equities Ltd.) (4 days) as counterparties. There were 266 buy trades and 241 sell trades (that resulted in circular/ reversal trades) by the broker arising out of 32 buy orders and 33 sell orders. Circular trading accounted for 90.03% of the broker’s trades in the scrip of Sun Infoways Ltd. during the investigation period.

13. Chetan Haridas Mapara traded for 17 days through the sub broker Vintel Securities Ltd. (broker-ISJ Securities), and executed reversal/circular trades on all the 9 days for 15200 shares (gross) which is 1.66% of the market traded quantity (gross). Majority of these trades were executed with the brokers Angel Broking Ltd. (8 days), Joindre Capital Services Ltd. (8 day) and G R Pandya (1day) as counterparties. There were 81 buy trades and 73 sell trades (that resulted in circular/ reversal trades) by the broker arising out of 15 buy orders and 15 sell orders. 37.25% of the broker’s trades in the scrip of Sun Infoways Ltd. during the investigation period were circular in nature.

14. I note that a clear pattern of circular trading emerges in the trades carried out among these clients during the investigation period. Each leg of the circular trades impacted the price of the scrip and/ or gave a misleading appearance of trading in the scrip.

15. The Group I clients had together, by way of circular trading that was structured by order time (less than one minute), order quantity and order rate, contributed to a gross quantity of 342800 shares i.e., over 37.2% of the gross traded volume in the scrip during the investigation period. These trades comprised of 214 buy orders and 215 sell orders and had resulted in 1562 trades. Most of these orders were placed with a time gap of just 0-4 seconds and the maximum time difference being 1 minute. Such closely matched orders resulting in a circular pattern of trading cannot be a mere coincidence.

16. In view of the above, I find that Heerachand Salecha, Ramsudhakaran and Chetan Haridas Mapara had created artificial volumes in the scrip by executing circular trades which were synchronized in terms of order price, time and quantity, and thus violated Regulations 4(a), (b), (c) and (d) of PFUTP Regulations, 1995 read with Regulation 4(1), 4(2) (a), (b) (e) (g) and (n) of PFUTP Regulations, 2003.

GROUP II

17. Group II consists of brokers and clients who are either connected to the company or its directors/ promoters or its auditor, Dilip Nabera. Of the noticees herein, Adinath Propcon Pvt. Ltd. (hereinafter referred to as “Adinath”), Great Eastern Mercantile Pvt. Ltd. (hereinafter referred to as “Great Eastern”) and Shree Shyam Fabtex Pvt. Ltd. (hereinafter referred to as “Shree Shyam”) form part of Group II.

18. I note that while Adinath dealt through the sub-broker Surtaj Assets & Capital Management Services Pvt. Ltd. (broker- LKP Shares & Securities Ltd.), Great Eastern dealt through Parth Investment Consultants Pvt. Ltd, a sub-broker of Mahesh

Kothari Shares and Stock Brokers Pvt. Ltd. (MKSSBPL). Shree Shyam dealt through the sub-broker Yash Finance (broker- Veekrant Stocks and Finance Pvt. Ltd.).

19. From the trade and order logs that are annexed to the SCN, I note that there were several reversal/ circular trades in the scrip wherein the noticees were involved. For instance, on February 15, 2001 at 1:01:22 pm, Adinath, one among the noticees in Group II, sold 1000 shares to Adhunik Finance Pvt. Ltd. The sell and buy orders matched in terms of price and quantity. Thereafter, at 1:44:43 pm the trade was reversed when Adhunik Finance Pvt. Ltd. sold 1000 shares to Adinath Propcon Pvt. Ltd. The price and quantity of the buy order were the same as that of the sell order. In both these trades, the time difference in the buy and sell orders was less than a minute.

Adhunik Finance 1000 shares Adinath Ltd. Pvt. Ltd.

Coloured box indicates that the entity is a noticee.

20. Another instance of circular trading between the Group II entities is illustrated below:

19/2/2001 (600) Mayrose Capfin Pvt Ltd Great Eastern

19/2/2001 15/2/2001 (600) (500) Shyam Fabtex Adinath

21/2/2001. (400)

Coloured box indicates that the entity is a noticee. Quantity of shares is given in brackets.

21. From the above it is evident that on February 15, 2001 Shree Shyam Fabtex, one amongst the noticees herein, sold 500 shares of SIL to Great Eastern, another noticee. The buy and sell orders were matched in terms of price and quantity and were placed twenty one seconds apart. Thereafter, Great Eastern sold 600 shares to Mayrose Capfin Pvt. Ltd. on February 19, 2001. Here too, the price and quantity of the buy and sell orders were alike and the time difference was four seconds. On the same day, Mayrose Capfin Pvt. Ltd. sold 600 shares to the other noticee from Group II, Adinath in matched orders that were placed only seven seconds apart. Adinath subsequently sold 400 shares Shree Shyam on February 21, 2001 through matched buy and sell orders placed within three seconds of each other.

22. I note that the sub broker Parth Investment Consultants Pvt. Ltd. traded through MKSSBPL for 20 days for its client, Great Eastern, one among the noticees herein, and executed reversal/circular trades on all the 16 days for 39300 shares (gross) which is 4.30% of the market traded quantity (gross). Majority of these trades were executed with the brokers Nirmal Bang Securities Pvt. Ltd. (12 days), LKP Shares & Securities Ltd. (11 days), Sovereign Securities Ltd. (11 days) and Veekrant Stocks & Finance Pvt. Ltd. (8 days) as counterparties. There were 198 buy trades and 192 sell trades (that resulted in circular/ reversal trades) by the broker arising out of 31 buy orders and 32 sell orders.

23. With respect to Shree Shyam Fabtex Pvt. Ltd., the client bought a total of 3800 shares and sold an aggregate 7300 shares through the broker Veekrant Stocks & Finance Pvt. Ltd. during the investigation period. Of these, 3700 shares were bought and 5700 shares were sold through circular trades. Shree Shyam Fabtex Pvt. Ltd. traded on 7 days during the investigation period and executed circular trades on all 7 days.

24. The noticee Adinath dealt through Surtaj Assets & Cap management Pvt. Ltd., a sub broker of LKP Shares & Securities Ltd. for 22 days, and executed reversal/circular trades on all the 16 days for 44900 shares (gross) which is 4.92% of the market traded quantity (gross). Majority of these trades were executed with the counterparty brokers being Nirmal Bang Securities Pvt. Ltd.(12ays), Mahesh Kothari Shares & Stock Brokers Pvt. Ltd. (11 days), Sovereign Securities Ltd. (11 days) and Veekrant Stocks & Finance Pvt. Ltd. (8 days). 187 buy trades and 252 sell trades by the sub broker/ broker arising out of 30 buy orders and 32 sell orders resulted in circular/ reversal trades. This circular trading accounts for 75.20% of the broker’s trades in the scrip SIL during the investigation period.

25. Thus, I note that the entities belonging to Group II contributed 185300 shares i.e., about 20.29% of the gross traded volume in the scrip during the investigation period by way of circular/ reversal trades. These trades comprised of 138 buy orders and 139 sell orders and had resulted in 819 trades. Majority of these trades were placed within 0-20 seconds of the counter order.

26. In view of the above, I find that Shree Shyam Fabtex Pvt. Ltd., Adinath Propcon Pvt. Ltd and Great Eastern Mercantile Pvt. Ltd. had created artificial volumes in the scrip of SIL by indulging in circular trades/ reversal of trades which were synchronized in terms of order price, time and quantity, and thus violated Regulations 4(a), (b), (c) and (d) of PFUTP Regulations, 1995 read with Regulation 4(1), 4(2) (a), (b) (e) (g) and (n) of PFUTP Regulations, 2003.

GROUP III

27. Rajender Rai, one among the noticees herein, is a part of Group III.

28. I note from the trade and order logs annexed to the SCN that the noticee, Rajender Rai was involved in reversal of trades on several days. For example, on February 15, 2001, the noticee bought and sold 1000 shares from/ to RS Investments as the counterparty in the manner depicted below:

Sell Client Name Order Time Order Rate Order Rajender R S Trade Date Trade Time Buy Client Name Difference Diff Qty Diff Rai Investments 2/15/2001 11:33:17 AM R S Investments 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 0:00:12 0 0 100 11:34:16 AM Rajender Rai 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 0:00:10 0 0 100 2/15/2001 Total 1000 1000 29. Similarly, on February 20, 2001, Rajender Rai executed reversed trades with the same counterparty client, RS Investments, in the manner illustrated below:

Sell Client Name Trade Date Trade Time Buy Client Order Time Order Order Rajender R S Name Difference Rate Diff Qty Diff Rai Investments 2/20/2001 02:56:49 PM R S Investments 0:00:15 0 0 200 0:00:15 0 0 200 0:00:15 0 0 200 0:00:15 0 0 200 0:00:15 0 0 200 02:57:15 PM Rajender Rai 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 0:00:13 0 0 100 2/20/2001 Total 1000 1000

30. From the above two tables, it is evident that the buy and sell orders were closely matched. While the time difference was miniscule, the order price and quantity matched exactly. Moreover, the trades were reversed in a less than a minute on both occasions demonstrated above.

31. The sub broker CompuAction Securities Pvt. Ltd. traded through IKM Investor Services Ltd. for its clients, Rajender Rai and one Ashok Kumar Chaudhary on 10 days and executed reversal/circular trades on 7 days for 9000 shares (gross) which is 0.89% of the market traded quantity (gross). Majority of these trades were matched with the broker and SSK Investor Services (3 days). There were 37 buy trades and 29 sell trades (that resulted in circular/ reversal trades) by the broker arising out of 6 buy orders and 6 sell orders. This circular trading comes to 34.48% of the broker’s trades in the scrip of Sun Infoways Ltd., during the investigation period. However, I note from the trade and order log annexed to the SCN that, during the investigation period, Ashok Kumar Chaudhary had only purchased 300 shares, for which he had placed only a single order.

32. Thus, a large percentage of the noticee, Rajender Rai’s trades in the scrip were circular/ reversal trades. The entity was evidently a part of the manipulation, and his trades cannot be viewed individually. The scheme of manipulation must be seen as a whole.

33. In view of the above, I find that Rajender Rai also had created artificial volumes in the scrip along with others, by executing circular trades/ reversal of trades which were synchronized in terms of order price, time and quantity, and thus violated Regulations 4(a), (b), (c) and (d) of PFUTP Regulations, 1995 read with Regulation 4(1), 4(2) (a), (b) (e) (g) and (n) of PFUTP Regulations, 2003.

34. Therefore, taking into consideration the facts and circumstances of the case, I, in exercise of the powers conferred upon me under Sections 19 read with Sections 11,

11(4) and 11B of SEBI Act, 1992, hereby restrain the following entities from accessing the securities market and prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, for a period of one (1) year.

Sl. No. Name Address i. Shri Heerachand Salecha Shree Vishal Complex Flat No.603, B Wing Malad (W), Mumbai -63 ii. Great Eastern Mercantile Pvt. C/o Iqbal Rupani Ltd. 3rd Floor, Mondes Apartment. Perry Cross Road, Bandra (W) Mumbai -51 iii. Adinath Propcon Pvt. Ltd. 1,G-R, May Building, 299, Princess Street, Marine Lines Mumbai-2 iv. Shri Ramsudhakaran 305/B, Saraswati Sadan Navghar Road Bhayender (E), Thane. v. Shri Chetan Haridas Mapara 89/20, Pushpa Park Daftari Road, Malad (E) Mumbai 97 vi. Shree Shyam Fabtex Pvt. Ltd Shop No. 3 Sarkar Corner,Veera Desai Road, Andheri (W), Mumbai 58 vii. Shri Rajender Rai K II 479, Sangam Vihar New Delhi, 110062

35. This order shall be served on all recognized stock exchanges and depositories to ensure that the noticees are not allowed to undertake transactions as prohibited in Para 34 above.

36. This order shall come into effect immediately.

DATE : March 1, 2012 PRASHANT SARAN PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA