Order in the matter of Top Telemedia Ltd and Top Media Entertainment Ltd

In the matter of irregularities in the trading of the shares Top Telemedia Limited and Top Media Entertainment Limited against Coverage and Consultants Ltd., Essem Associates, Pivotal Stoxare Ltd., Prakash Ceramics Ltd., Prakash Fortran Softech Ltd., Rajesh Jain and M. M. Securities

DATE OF HEARING: 08.03.2007 and 19.06.2007

APPEARANCES: FOR THE ENTITIES / PERSONS INVOLVED IN THIS MATTER: 1. Shri Prasad Lotlikar, Advocate, Vishwas Pathak & Co. representing M/s Pivotal Stoxare Ltd. 2. Ms. Sonal Parikh, Authorised Representative of M. M. Securities FOR SEBI: 1. Shri Sanjiv Dutt, CGM. 2. Shri P. Bhagavathi Raja, Manager. 3. Shri Mohamed Rahaz P. M., Legal Officer.

ORDER

Under Section 11B and 11(4) of the Securities and Exchange Board of India Act, 1992 and Regulation 11 and 12 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995.

1. Top Telemedia was incorporated as a public limited company on January 10, 1995 under the name ‘Sargam Cassette Ltd’. Subsequently the name of the company was changed to ‘Top Cassettes Ltd.’ and then on June 01, 1996 changed to ‘Top Telemedia Ltd.’. Top Media was incorporated as Navyug Electric Ltd. and in 1992, the name of the company was changed to Top Media with effect from July 31, 2001.

2. The Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted investigation into the trading in the shares of Top Telemedia Limited (hereinafter referred to as “Top Telemedia”) and Top Media Entertainment Limited (hereinafter referred to as “Top Media”) on observing spurt in price of the shares of both the companies. The shares of Top Telemedia had moved on BSE from Rs 12.10 on June 06, 2000 to Rs 48/- on November 10, 2000. The price of the scrip Top Media on BSE had moved from Rs 6.90 on November 13, 2000 to Rs 61/- on December 29, 2000. There were no positive corporate developments in either of the companies during the said period to justify this rise in price.

3. Investigations inter alia alleged that the entities such as Coverage and Consultants Ltd., Essem Associates, Pivotal Stoxare Ltd., Prakash Ceramics Ltd., Prakash Fortran Softech Ltd., Rajesh Jain and M. M. Securities (these entities/persons are hereinafter collectively referred to as ‘the Noticees’ and singularly by their individual name) were all connected with each other and with Top Telemedia and Top Media and their common director Shri Deep Trivedi and were mainly responsible for placing huge orders which impacted the price of the scrips during the period under investigation.

4. The trading in the shares of Top Telemedia (erstwhile Top Cassettes) was suspended by the Bombay Stock Exchange Ltd (BSE) from January 06, 2000 to January 10, 2000 on account of spectacular rise in the price and volumes of the scrip. BSE had levied special margin of 25% on Top Telemedia starting from July 10, 2000. The special margin was increased to 50% from September 03, 2000 and has remained the same till the end of investigation period. Similarly special margin was also levied on Top Media. It is noted that special margins are levied on scrips which show abnormal activity. It was also observed that for a short period of time, the scrip also attracted Additional Volatility Margin (AVM). In spite of all these, the Noticees had chosen to trade heavily in the scrips.

5. Investigations also revealed that Top Telemedia had allotted 1,19,00,500 shares to Top Media for which the shares of Top Media were overvalued in a fraudulent manner. In order to get a higher valuation, the companies had given money and the common director Shri Deep Trivedi had given shares to the other Noticees who in turn created artificial market by entering into the manipulative transactions to inflate the price of the scrip. Thus, the investigations alleged that the Noticees had violated provisions of Regulation 4 (a), 4 (b) and 4 (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 (hereinafter referred to as ‘PFUTP Regulations’).

6. Show Cause Notices dated January 25, 2005 were issued to the other Noticees viz Shri Minesh Patel, Proprietor, MM Securities, Shri Rajesh Jain, Prakash Ceramics Ltd. and Prakash Fortan Softech Ltd as also show cause notice dated October 05, 2004, March 02, 2005 and July 13, 2005 were issued to Essem Associates, Pivotal Stoxare Ltd and Coverage and Consultants Ltd respectively and advised them to show cause as to why directions under Section 11 B and 11(4) of SEBI Act, 1992 read with Regulation 11 and 12 of PFUTP Regulations should not be issued against them.

7. M/s. Essem Associates and Pivotal Stoxare Ltd. filed their replies dated October 19, 2004 and March 14, 2005 respectively through their Advocate Shri Vishwas Pathak. The contents of both the replies are almost similar in the following lines: 7.1 They denied their relation with Coverage and Consultants Ltd., Top Telemedia Ltd., Top Media Entertainment Ltd., Prakash Fortran Softech Limited and Prakash Ceramics Limited. 7.2 All these companies are separate legal entities and have no relationship with them and the criteria of relationships cannot be established just by personal relationships of the individuals. 7.3 The trades done by them were in the normal course of business and all those trades were executed through the terminals of the broker, Mafatlal Securities Ltd. by the sub-broker Essem Associates and majority of the transactions were delivery based. 7.4 They were not aware of the transfer of shares into the pool a/c of Mafatlal by Shri Deep Trivedi, (Demat a/c. no. 30157655) who was the Director of both the companies. 7.5 They were not aware of whether Coverage and Consultants Ltd had received any money from the companies for dealing in their shares. They were also not aware of whether the companies had made payments to the brokers for dealing in their shares. 7.6 They admitted that Shri Himanshu Trivedi and Shri Gautam Trivedi are Directors in Pivotal Stoxare Ltd. and Shri Gautam Trivedi is proprietor of Essem Associates. Shri Himanshu Trivedi was a Director of Coverage and Consultants Ltd and he resigned long back in the year 1986 from Coverage and Consultants Ltd. 7.7 They stated that they had acted as a sub-broker in the normal course of business and executed trades as per the instructions of their client, Coverage and Consultants Ltd and payments were also received from them. 7.8 They have also stated that they have not violated any of the provisions of PFUTP Regulations.

8. Shri Rajesh Jain filed reply on May 20, 2005 and denied the entire charges levelled against him and submitted the following: 8.1 The transactions were carried out on BOLT terminal of BSE and BSE never wrote a single letter to him about the price manipulation. 8.2 The price rise of the scrip does not depend only on positive developments but also on several other factors.

8.3 Brokers were not made aware of names of the counter brokers nor their ultimate clients. The trades executed during the investigation period between brokers do not appear to be fictitious in nature for the simple reason that buy and sell orders in both the scrips were that of different clients of the sub-brokers / brokers. 8.4 He did not pay any role for manipulating the price of both the scrips and he has no relation in any manner with Shri Deep Trivedi, Coverage and Consultants Ltd, Mafatlal and Equisearch. 8.5 As mitigating factors, he stated that he has not done any transaction in the scrips from the fund of the companies and had not knowingly committed any irregularity or lapse as also not violated any of the provisions of law.

9. Prakash Ceramics Ltd and Prakash Fortan Softech Ltd through their Director Shri Rajesh Jain filed a reply vide letter dated May 20, 2005 which is similar to that of the reply filed by Shri Rajesh Jain in his individual capacity as stated in paragraph no. 8 above.

10. Shri Minesh Patel, the proprietor of M/s M. M. Securities and Coverage and Consultants Ltd. had also not filed any reply to the show cause notices issued to them.

11. An opportunity of personal hearing was granted to all the Noticees on March 08, 2007. Shri Prasad Lotlikar, Advocate from Vishwas Pathak & Co. representing Pivotal Stoxare Ltd. and Ms. Sonal Parikh, Authorised Representative of M. M. Securities attended the hearing on March 08, 2007. Another opportunity of personal hearing was also granted to the other Noticees on June 19, 2007 which was not availed by them.

12. I have carefully examined the show cause notices, replies thereof and other materials on record.

13. I find that all the Noticees are connected to each other and with Top Media and Top Telemedia and their connections / linkages are explained hereunder:

• Shri Sharad Gujarati, who was one of the directors of Coverage and Consultants Ltd was also on the board of Top Telemedia. • Shri Inderjeet Singh Vaghela had placed orders on behalf of Coverage and Consultants Ltd. He was also on the board of Top Telemedia and Top Media. • Top Telemedia had transferred money to Coverage and Consultants Ltd on several occasions, which was used by Coverage and Consultants Ltd to purchase the shares of Top Telemedia. • Shri Deep Trivedi, one of the directors and promoters of Top Telemedia, had transferred shares sold by Coverage and Consultants Ltd (through Mafatlal and Equisearch) to the pool account of Mafatlal Securities and Equisearch Broking. • Shri Deep Trivedi has transferred shares of Top Media Entertainment to the account of Coverage and Consultants Ltd (DP: Mafatlal Securities Ltd. Client ID:10015532). • Shri Himanshu Trivedi, diresctor of Pivotal Stoxare Ltd., was one of the first directors of Coverage and Consultants Ltd. He is also cousin of Shri Deep Trivedi. • Shri Himanshu Trivedi and Shri Gautam Trivedi are partners in Pivotal Stoxare Ltd. Essem Associates is proprietary concern of Shri Gautam Trivedi. • As per the 6th Annual Report of Top Telemedia, Shri Himanshu Trivedi had been shown as director of the company. This fact was denied by Shri Himanshu Trivedi, though he accepted that he was promised a directorship of Top Telemedia. • The registered office address of Top Media and the administrative and corporate office address of Top Telemedia is same i.e. 703, Anand Mangal III, Ambawadi, Ahmedabad.

• The address of Coverage and Consultants Ltd is same as the correspondence address of Top Cassettes (stated in some of the communication of the said company with the Exchange). • Top Media vide its letter dated December 20, 2000 submitted along with other documents a copy of bank statement where it had deposited call monies received from the allottees of the preferential issue of 40,00,000 shares in January 2000. From this bank statement, it was observed that funds had come from Coverage and Consultants Ltd. The Coverage and Consultatns Ltd. was not an allottee of the preferential issue. • From the prospectus of Top Telemedia (Top Cassettes Ltd.) it was observed that this company had bought premises from Prakash Ceramics Ltd. The shares purchased by Prakash Fortran Softech Ltd. and Prakash Ceramics Ltd. were to be held by Pivotal Stoxare Ltd. and Gautam Trivedi as trustee/nominee under authority. The address of Pivotal Stoxare Ltd. was same as the Mumbai address of Top Telemedia (Top Cassettes Ltd). • Shri Himanshu Trivedi and Shri Gautam Trivedi of Essem Associates in their statement have accepted that Essem and Pivotal Stoxare Ltd. are related to each other. Further, they have also stated that the orders for Prakash Ceramics (Director - Rajesh Jain), Prakash Fotran Softech and Mr. Rajesh Jain in his individual capacity were placed by Coverage and Consultants Ltd and that the payments were also received through Coverage and Consultants Ltd. It further establishes that Essem Associates, Pivotal Stoxare Ltd., Prakash Ceramics (Director - Rajesh Jain), Prakash Fotran Softech and Mr. Rajesh Jain were acting in concert along with Coverage and Consultants Ltd. • Sanjay Baweja who was one of the subscribers of Coverage and Consultants Ltd and Rajeev Baweja who was one of the directors of Top Telemedia (erstwhile TopCassettes) have the same address as 35, Ravindra Nagar, Indore. Himanshu Trivedi, being one of the first directors of Coverage was the director of Top Telemedia and Pivotal Stoxare Ltd. This proves the nexus between Top Telemedia, Coverage and Consultants Ltd. and Pivotal Stoxare Ltd. • According to the company’s website and other correspondences, the office address of Top Telemedia is found to be same as that of Coverage and Consultants Ltd. (203, Apollo Towers, M.G. Road, Indore), even though Top Telemedia was registered in Maharashtra.

14. It was observed from the bank statement of account and bank book of Coverage and Consultants Ltd that on number of occasions, it had received money from Top Tele Media and immediately the same was used to make payments to brokers/sub-brokers through whom it was trading. (Bank statements of Global Trust Bank A/c.No 2101101370 & Bank of Madura A/c. No 14321 of Coverage and Consultants Ltd). Some of the transactions of this nature are given hereunder:

Date Particular Debit Credit amount amount (Rs.) (Rs.) 26.07.00 Transfer from Top Cassettes 15,00,000 26.07.00 DD favouring Pivotal (Debited Essem 11,01,000 Associates) 31.07.00 Transfer from Top Cassettes 11,00,000 31.07.00 DD favouring Pivotal (Debited Essem 11,51,000 Associates) 04.08.00 Transfer from Top Cassettes 26,00,000 04.08.00 DD favouring Pivotal (Debited Essem 25,41,080 Associates) 05.08.00 Transfer from Top Cassettes 22,50,000 05.08.00 DD favouring Pivotal (Debited Essem 12,51,000 Associates) 07.08.00 DD favouring Pivotal (Debited Essem 10,01,000 Associates) 07.08.00 Transfer from Top Cassettes 10,00,000 09.08.00 Transfer from Top Cassettes 50,00,000 09.08.00 DD (Paid to Essem) 35,01,000 14.08.00 DD (Paid to Essem) 25,01,000 17.08.00 Transfer from Top Cassettes 25,00,000 24.08.00 DD (Paid to Essem) 15,01,000 28.08.00 Transfer from Top Cassettes 645,000 28.08.00 DD (Paid to Essem) 16,00,000 05.09.00 Transfer from Top Cassettes 10,00,000 05.09.00 DD (Paid to Equisearch) 10,01,000 22.09.00 Transfer from Top Cassettes 20,00,000

Date Particular Debit Credit amount amount (Rs.) (Rs.) 22.09.00 DD (Paid to Mafatlal Sec.) 20,02,000

15. In addition to the above, the ledger account of Top Telemedia maintained by Coverage and Consultants Ltd, revealed that Top Telemedia had made direct payments to Essem Associates by way of a demand draft. Some of such instances noticed were given hereunder:

Date Particular Cr. Amount 06.07.00 By Essem Associates (DD given to Essem on our behalf) 10,00,000 17.07.00 By Essem Associates (DD given to Essem on our behalf) 10,00,000 21.07.00 By Essem Associates (DD given to Mafatlal Securities) 8,00,000

16. From the above illustrations, it is clear that Top Telemedia had given money to Coverage and Consultants Ltd on number of occasions and the same has been used by Coverage and Consultants Ltd for paying the brokers/sub-brokers for the purchases made in the shares of Top Telemedia. It was also observed that Top Telemedia has also made direct payments to various brokers / sub-brokers on behalf of Coverage and Consultants Ltd.

17. It was also observed that shares of Top Telemedia were transferred from Client ID – 30157655 (DP ID – IN301276) and this beneficiary account belongs to Shri Deep Trivedi, director of Top Telemedia and Top Media. Shri Deep Trivedi had transferred shares to the pool account of Mafatlal Securities Ltd., and Equisearch Broking Pvt. Ltd. on behalf of their ultimate clients. Some of such instances noticed are given hereunder:

Date Description Credit Debit 05.10.00 To CM Mafatlal Sec., Physical/0001028 25,000 05.10.00 To CM Equisearch, Physical/0001028 5,500 10.11.00 To Mafatlal Sec. Ltd. / 10015532* 1,00,000 18.11.00 To CM Mafatlal Sec. Ltd., Rolling Mkt. Lot/ 61,500 0001162 18.11.00 To CM Mafatlal Sec. Ltd., Rolling Mkt. Lot/ 80,156 0001161 22.11.00 To CM Equisearch, Physical/0001034 75,000 22.11.00 To CM Mafatlal Sec. Ltd., Rolling Mkt. Lot/ 11,000 0001164

22.11.00 To CM Equisearch Brkg. P. Ltd., Rolling Mkt. Lot/ 210,000 0001034 20.12.00 To CM Mafatlal Sec. Ltd., Rolling Mkt. Lot/ 98,461 0001183 22.12.00 To CM Mafatlal Sec. Ltd., Rolling Mkt. Lot/ 1,75,215 0001186 23.12.00 To CM Mafatlal Sec. Ltd., Rolling Mkt. Lot/ 1,26,765 0001187

18. I find that Coverage and Consultants had heavily traded in both the scrip on BSE and created artificial price and volume during the investigation period. The quantity traded by Noticee on BSE as per trade log and its comparison to the total traded quantity in the market is as under:

Trades of Coverage and Consultants Ltd in the scrip of Top Telemedia: Name of the client Sett. No./Spot Buy Sell Net Coverage & Consultants 14 900 0 900 15 3,79,100 700 3,78,400 16 68,800 0 68,800 17 1,96,500 0 1,96,500 18 92,100 0 92,100 19 22,600 0 22,600 20 2,000 0 2,000 21 500 0 500 22 1,46,600 2,000 1,44,600 23 59,900 25,000 34,900 24 20,200 13,700 6,500 25 5,700 0 5,700 26 1,700 0 1,700 27 2,500 0 2,500 Total 9,99,100 41,400 9,57,700 Trades Coverage and Consultants Ltd in the scrip of Top Media:

Name of the client Sett. No./Spot Buy Sell Net Coverage & 34 1,14,800 1,84,000 -69,200 Consultants 35 1,11,100 2,06,800 -95,700 36 1,09,000 1,09,000 0 37 80,520 77,620 2,900 38 96,285 46,510 49,775 39 1,72,130 95,100 77,030 40 1,07,740 20,000 87,740 Total 7,91,575 7,39,030 52,545

19. From the above tables, I find that Coverage and Consultants Ltd had transacted heavily in the scrip. Coverage and Consultants Ltd was incorporated in the state of Madhya Pradesh on November 15, 1985. The first directors of the company were Shri Sanjay Baweja, Shri Sameer Bhatt and Shri Himanshu Trivedi. Shri Sharad Chandra Gujarati was witness to the subscriber of Memorandum of Association. It was observed from the details submitted by Coverage and Consultants Ltd that it had purchased 37,10,900 Top Telemedia shares and sold 28,72,300 shares on BSE. It is relevant to mention here that approx. 1,19,35,500 shares of Top Telemedia were traded on BSE during the period under investigation. Therefore, the quantity traded by Coverage and Consultants Ltd comes to approx. 31.10% on purchase basis and 24.10% on sales basis. In addition to the above, Coverage and Consultants Ltd had purchased 18,77,400 shares and sold 2,200 shares on other exchanges and on off-market basis as admitted by it before the investigating authority. Therefore, the total quantity traded by Coverage and Consultants Ltd during the period of investigation was 55,88,300 shares purchases and 28,74,500 shares sold.

20. As regards Top Media, Coverage and Consultants Ltd had submitted that it had purchased 29,67,775 shares and sold 30,61,275 shares during the period November 13, 2000 to December 29, 2000 on BSE through different brokers and sub-brokers. In addition to the above, it was seen from the records submitted by it that it has purchased 24,33,600 shares and sold 40,000 shares in out of market deals/transactions. I find that the money and shares were received by the brokers Mafatlal and Equisearch from companies and its common director, Shri Deep Trivedi and this was utilised by Coverage and Consultants Ltd to manipulate the scrip.

The trades of Pivotal Stoxare Ltd. and Essem Associates in the matter are tabulated below:

Trades of Pivotal Stoxare Ltd & Essem Associates

Name of the client Sett. Buy Sell Net No. Pivotal Stoxare Ltd. 15 105,800 0 105,800 16 95,200 0 95,200 18 198,700 0 198,700 19 275,000 0 275,000 20 178,200 0 178,200 21 700 0 700 Sub-Total 853,600 0 853,600 21 10,000 10,000 0 24 7,000 5,000 2,000 25 8,500 2,500 6,000 26 10,000 1,300 8,700 27 11,000 7,200 3,800 28 12,000 13,000 -1,000 29 39,800 113,800 -74,000 30 7,700 7,700 0 31 5,400 6,400 -1,000 32 5,000 1,500 -3,500 Sub-Total 116,400 168,400 -59,000 Total (Pivotal) 970,000 168,400 794,600 Essem Associates 20 189,300 0 189,300 21 42,000 0 42,000 22 201,900 0 201,900 23 120,600 0 120,600 24 165,700 63,100 102,600 25 188,800 0 188,800 26 237,800 0 237,800 27 477,700 50,600 427,100 28 56,100 106,500 -50,400 29 39,800 113,800 -74,000 30 109,300 135,200 -25,900 31 89,700 11,100 78,600 32 115,200 19,900 95,300 33 188,000 118,300 69,700 Total 2,221,900 618,500 1,603,400 Trades of Essem Associates in respect of Top Media

Name of the client Sett. Buy Sell Net No. Essem Associates 34 4,00,400 70,200 3,30,200 35 3,91,395 90,346 3,01,049 36 3,22,715 1,26,150 1,96,565 37 2,09,531 57,821 1,51,710 38 3,51,200 76,225 2,74,975 39 3,95,936 1,14,200 2,81,736 40 97,270 65,520 31,750 Total 21,68,447 6,00,462 15,67,985

21. The relevant portion of the statements of Shri Himanshu Trivedi who appeared on behalf of Essem Associates and Pivotal Stoxare are quoted hereunder.

“The client (Coverage and Consultants Ltd) started trading with us sometime in July 2000. Shri Deep Trivedi, our cousin, who used to stay in Indore, knew the directors of Coverage and Consultants Ltd. In addition to above, we had done certain consultancy work for Coverage and Consultants Ltd in the past. Therefore, when they came to us with business proposal we agreed to execute transactions for them. We were getting orders from Shri Sharad Gujarati, Shri Inderjeet Singh Vaghela and Shri Bhavarlal Joshi on behalf of Coverage and Consultants Ltd.”

“I confirm that I was one of the first directors of Coverage and Consultants Ltd. This directorship was offered to me by Shri Prakash Trivedi, my brother in law. I have never held any shares of Coverage and Consultants Ltd and was outside director of the company and had no financial commitment in the company and received no remuneration from the company. I have not attended any meeting of the company. Further, I wish to state that I had resigned from the directorship of Coverage and Consultants Ltd sometime in the year 1986-87”.

“I was promised a directorship in Top Cassettes Ltd. by Shri Deep Trivedi and other promoters however as far as my knowledge goes this promise was not fulfilled by them. I do not recollect signing any paper appointing me as director of the company.”

“Mr. Deep Trivedi, my cousin, had requested me to use my office space to save cost. I had given my consent for the same and this office was used by them as registered office for a period of 6-8 months and thereafter shifted to Pune. However, I would like to state here that the company has not paid any rentals though I was promised compensation for the same.

My office place was mainly used by junior sales staff in addition to receiving letter as it was registered office. Further, none of the senior officials/directors of the company ever visited the office.”

“From the data shown to me, it appears that we may have unknowingly aided and abetted Coverage and Consultants Ltd /Promoters of Top Telemedia and Top Media Entertainment Ltd. At the time of executing the transactions we were informed that they are picking stake/consolidating the stake in the company. All our transactions were executed on behalf of the clients only. We have not done any transactions in our own account. The only income which we have earned is brokerage income. Therefore, it is humbly submitted that if any rules or regulations of SEBI/exchange is violated, it was without any move and the same may be viewed leniently.”

22. On the basis of the above submissions of Shri Himanshu Trivedi, it can be concluded that the transactions executed by them were on behalf of Coverage and Consultants Ltd who received fund and securities from the companies and its director.

23. I note that M M Securities had traded in the scrips, details of which are tabulated below:

Trades of M. M. Securities in the scrip of Top Telemedia Name Sett. No. Buy Sell Net M. M. Securities 15 25,600 600 25,000 (Traded through Patel 18 2,500 2,500 0 Gandhi & Co) 21 10,000 10,000 0 24 35,700 0 35,700 25 39,300 0 39,300 26 53,800 45,000 8,800 27 1,25,000 1,10,000 15,000 28 25,000 25,000 0 29 1,000 0 1,000 31 5,200 55,900 -50,700 32 0 1,78,800 -1,78,800 33 1,000 25,000 -24,000 Sub-Total 3,24,100 4,52,800 -1,28,700 M. M. Securities 15 35,100 8,000 27,100 (Client of Patel Gandhi) 19 2,600 3,500 -900

21 40,600 2,000 38,600 23 11,100 15,100 -4,000 24 73,900 25,000 48,900 25 25,000 0 25,000 26 0 43,000 -43,000 27 0 11,000 -11,000 Sub-Total 1,88,300 1,07,600 80,700 Total 5,12,400 5,60,400 -48,000 Trades of M. M. Securities in the scrip of Top Media Name Sett. No. Buy Sell Net M. M. Securities (Thru 34 100 100 0 Ketan Shah & Co. 35 1,00,000 1,00,000 0 36 50 50 0 38 0 9,000 -9,000 39 0 9,000 -9,000 Sub-total 1,00,150 1,18,150 -18,000 M. M. Securities (Thru 34 0 65,100 -65,100 Parikh & Co.) 36 1,00,000 50,000 50,000 37 50,000 58,700 -8,700 38 50,000 1,85,590 -1,35,590 39 1,72,400 1,91,500 -19,100 40 35,000 63,500 -28,500 Sub-total 4,07,400 6,14,390 -2,06,990 M. M. Securities (Through 34 0 65,000 -65,000 Admiral Securities 35 0 1,58,000 -1,58,000 36 50,000 64,200 -14,200 37 50,000 0 50,000 38 1,09,300 2,00,000 -90,700 39 83,000 2,12,200 -1,29,200 40 35,100 74,050 -38,950 Sub-total 3,27,400 7,73,450 -4,46,050 M. M. Securities (Through 34 100 1,14,175 -1,14,075 Patel Gandhi & Co.) 38 3,100 50,100 -47,000 Sub-total 3,200 1,64,275 1,61,075 Total 8,38,150 16,70,265 -8,32,115

24. I note that the statement of Shri Minesh Patel of M. M. Securities was recorded by the investigating authority. At the time of recording the statement, Ms. Sonal Parikh of Parikh and Co. also accompanied Shri Minesh Patel. Summary of their submissions are given hereunder:

“Ms. Bhavna Patel is the wife of Minesh Patel. Our back office work is being handled by Ms. Sonal Parikh of M/s. Parikh and Co. We work together in the stock market. Therefore, Admiral Securities, Parikh & Co.

and M. M. Securities are directly/indirectly connected to each other. Mr. Bhavar Joshi, director of Coverage and Consultants Ltd is known to us for the last five years. I was representing an advertising agency and newspaper and during the course of business I came in touch with Mr. Bhavar Joshi who was representing M/s. Top Cassettes at that time. Sometime in August 2000, Shri Bhavar Joshi approached us for trading in different scrips. Initially, they were trading in many scrips including A group. However, later on their trading in B group was pre-dominant. We had taken initial margin in the form of shares from the client before we started trading. Whenever we received the orders from the client, we used to place these orders either with M/s. Patel Gandhi & Co. or with M/s. Karanjit Resources Pvt. Ltd., Member of VSE. Coverage and Consultants Ltd was generally a buyer in all the settlements except the last three settlements. As regards payment, we have to submit that we have received all the payments from Coverage and Consultants Ltd and given all the deliveries to Coverage and Consultants Ltd only. M/s. M. M. Securities has acted as sub-broker (for the transactions entered into by it on behalf of Coverage and Consultants Ltd). We do not have any kind of relation/association other than normal broking transaction which we have done for him. We have not funded the purchases of Coverage and Consultants Ltd while dealing in the scrip.”

“---- Whenever we received the orders from the client, we used to place these orders either with M/s. Patel Gandhi and Co. or with M/s. Ketan Shah & Co. In addition, we also used to punch the orders in the terminals of Parikh & Co. and Admiral Securities. Terminal No. 42 was provided to Admiral Securities (Bhavana Patel) and Terminal No. 44 was provided to Parikh & Co. (Sonal Parikh).”

“it was a mistake on our part which we realized after executing the trades.” From the delivery details submitted by M. M. Securities, it was observed that their associate entities had received shares directly from the account of Shri Deep Trivedi for the sales effected by it.”

25. From the analysis of the above statement, it can be concluded that M. M. Securities, Parikh and Co., Admiral Securities were related to each other. M. M. Securities was aware that Coverage and Consultants Ltd/Shri Bhavar Joshi was associated / related to the management of both the companies. As brought out in trade and order log analysis, M. M. Securities has entered into transactions which were fictitious in nature.

26. In view of the above, Coverage and Consultants Ltd purchased 55,88,300 shares and sold 28,74,500 shares of Top Telemedia and had also purchased 5401375 shares and sold 3101215 shares of Top Media. From the trading details it was found that initially it had picked up delivery and thereby squeezed the supply of shares and created interest in the scrip. Once the interest was created it started squaring off the transactions and in some settlements, it has been net seller as well. A series of orders/trades during the period under consideration appeared to have been put with a view to distort the market equilibrium. It is seen from the demat account of Shri Deep Trivedi that he has transferred shares of Top Media Entertainment to the pool account of Mafatlal Securities and Equisearch Broking, Shri Deep Trivedi is one of the director/promoter of the company. Coverage and Consultants Ltd, on number of occasions, had received the funds from Top Cassettes Ltd. and almost on the same day had made payments to the brokers/sub-brokers through whom it was dealing. Hence, Coverage and Consultants Ltd was manipulating the price of the scrip along with the management of the company.

It was also seen that Top Telemedia has made direct payments to Mafatlal Securities Ltd. and Equisearch Broking on behalf of Coverage and Consultants Ltd. From the prospectus of Top Cassettes Ltd. it was observed that this company had bought premises from Prakash Ceramics Ltd. Further, the members have stated that the shares purchased by Prakash Fortran Softech Ltd. and Prakash Ceramics Ltd. were to be held by Pivotal Stoxare Ltd. and Gautam Trivedi as trustee/nominee under authority. It may be noted that the address of Pivotal Stoxare Ltd. is same as the Mumbai address of Top Cassettes Ltd. Shri Himanshu Trivedi and Shri Gautam Trivedi of Essem Associates in their statement have accepted that Essem Associates and Pivotal Stoxare Ltd. are related to each other. Further, they have also stated that the orders for Prakash Ceramics (Dir: Rajesh Jain), Prakash Fotran Softech and Mr. Rajesh Jain in his individual capacity were placed by Coverage and Consultants Ltd and that the payments were also received through Coverage and Consultants Ltd. It further establishes that Essem Associates, Pivotal Stoxare Ltd., Prakash Ceramics (Dir: Rajesh Jain), Prakash Fotran Softech and Mr. Rajesh Jain were acting in concert along with Coverage and Consultants Ltd.

27. In view of what has been stated above, I find that that the Noticees connected with both the companies created artificial market in shares of Top Media and Top Telemedia at BSE by artificially raising the price with a fraudulent and deceptive intention to create a misleading appearance of trading and to manipulate the price and volume of both the scrip. The price of the shares of Top Telemedia had moved on BSE from Rs 12.10 on June 06, 2000 to Rs 48/- on November 10, 2000 and the price of the scrip Top Media on BSE had moved from Rs 6.90 on November 13, 2000 to Rs 61/- on December 29, 2000. There were no positive corporate developments in either of the companies during the said period to justify this rise in price. Hence, the rise in price can be attributed to the fraudulent and manipulative trades executed by the Noticees. Not only does this gravely affect the market by tampering the discovery mechanism, but it invariably harms the interests of investors. In light of these, it is established that the Noticees had created artificial market and entered into transaction that was intended to operate as a devise to inflate the price of the scrip and, therefore, all these entities appear to have violated provisions of Regulation 4 (a), 4 (b) and 4 (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995.

28. In view of the violations committed by the noticees and taking into consideration the facts and circumstances of the case, I am of the view that this is a fit case to restrain the above entities from accessing the securities market in the interest of investors and for orderly development of the securities market. Further, these directions would serve as deterrence on others for such violations.

29. Therefore, 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 11B and 11(4) of the Securities and Exchange Board of India Act, 1992, hereby restrain M/s. Coverage and Consultants Ltd.(PAN No.AABCC3952H), Essem Associates, Pivotal Stoxare Ltd., Prakash Ceramics Ltd., Prakash Fortran Softech Ltd., Rajesh Jain(ABAPJ2869B) and M. M. Securities from accessing the securities market and prohibit them from associating with the securities market in buying, selling or dealing in securities market in any manner for a period of three months.

30. This order shall come into force with immediate effect.

DATE: March 3, 2008 V. K. CHOPRA PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA