Order in the matter of Tijaria Polypipes Ltd. in respect of Mr. Pawan Kumar Jain, Mr. Pana Chand Jain and Mr. Tej Kumar Jain

WTM/PS/15 /IVD/ID-2/OCT/2012 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER IN THE MATTER OF TIJARIA POLYPIPES LIMITED In respect of Mr. Pawan Kumar Jain, Mr. Pana Chand Jain and Mr. Tej Kumar Jain ORDER Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992

1. Tijaria Polypipes Limited (hereafter referred to as 'TPL') came out with an Initial Public Offering (hereafter referred to as 'IPO') of 1,00,00,000 equity shares of face value of ₹10 each, issued at a premium of ₹50 per equity share, to raise ₹60 crore to fund its proposed expansion and for its diversification plans. The said issue, which opened on September 27, 2011 and closed on September 29, 2011, was reportedly subscribed by 1.2 times. TPL allotted 71,64,406 shares in the retail investors category which constituted 71.64% of the public issue. The shares of the said company were listed on the Bombay Stock Exchange of India Limited (hereafter referred to as 'BSE') and the National Stock Exchange of India Limited (hereafter referred to as 'NSE').

2. On noticing a steep fall in the share price of TPL on the first day of trading/ listing, i.e., on October 14, 2011, the Securities and Exchange Board of India (hereinafter referred to as 'SEBI') conducted an investigation. The preliminary findings of the said investigation, prima facie revealed that TPL had diverted substantial part of the IPO proceeds, through layered transactions, to certain entities who had allegedly provided an exit to the retail allottees/ QIBs of their shares allotted in the IPO, in order to offset their losses in doing so.

3. In view of the same, SEBI vide an ad interim ex-parte order dated December 28, 2011 (hereinafter referred to as ‘interim order’) inter-alia prohibited the independent directors of TPL, namely, Mr. Pawan Kumar Jain and Mr. Pana Chand Jain and the Finance Manager and the Company Secretary of TPL, Mr. Tej Kumar Jain (hereinafter collectively referred to as 'the independent directors and company secretary') from buying, selling or dealing in any securities, in any manner whatsoever, till further directions. The persons/ entities against whom the interim order was passed, were advised to file their objections, if any, within twenty one (21) days from the date of the said order and also avail opportunity of personal hearing, if they so desire.

4. I note that TPL in its prospectus dated September 12, 2011, had declared that it had not raised any bridge loan against the proceeds of the IPO. However, it is seen that TPL in its Board meeting dated September 10, 2011 had taken the decision to raise Inter Corporate Deposits (hereinafter referred to as 'ICD') to meet the working capital requirements and the repayments of these ICDs had to be from the proceeds of IPO. It has been observed from the copy of minutes of the Board meeting held on Saturday, September 10, 2011 that the Chairman had informed the Board of Directors that there was a need for extra funds for meeting the business need.

5. Upon completion of the investigation, it has been found that the said independent directors and company secretary namely Mr. Pawan Kumar Jain, Pana Chand Jain and Mr. Tej Kumar Jain had not attended the Board meeting held on September 10, 2011 in which the decision to take ICDs were approved. It is seen that Mr. Pawan Kumar Jain has resigned from the post of independent director on January 05, 2012. Further, these three have already undergone restraint for more than nine months pursuant to the interim order.

6. On a careful scrutiny of these facts and the material available on record, I am of the considered view that there is not enough evidence to suggest that the independent directors and company secretary were aware of the decisions of the Board meeting dated September 10, 2011. Considering the the period of prohibition already undergone by the entities vis-a-vis the findings of investigations, I do not find it appropriate to continue with the directions passed by SEBI, vide the interim order. Having considered this, I am inclined to give Mr. Pawan Kumar Jain, Pana Chand Jain and Mr. Tej Kumar Jain the benefit of doubt. In view of the foregoing, I do not find it appropriate to continue with the directions passed by SEBI, vide order dated December 28, 2011.

7. Accordingly, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(1), 11(4) and 11B thereof, do hereby revoke the interim directions issued against Mr. Pawan Kumar Jain [PAN: AALPJ 1084G], Mr. Pana Chand Jain [PAN: ABJPJ 3148G] and Mr. Tej Kumar Jain [PAN: ACQPJ 1281L] vide the ad interim ex-parte Order dated December 28, 2011 with immediate effect.

PLACE: Mumbai PRASHANT SARAN DATE: October 25, 2012 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA