Order in the respect of Econo Trade India Limited

UNDER SECTION 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992.

IN COMPLIANCE WITH THE ORDER DATED SEPTEMBER 06, 2023, OF THE HON’BLE SECURITIES APPELLATE TRIBUNAL IN THE MATTER OF MAURIA UDYOG LTD., 7NR RETAIL LTD., DARJEELING ROPEWAY COMPANY LTD., GBL INDUSTRIES LTD. AND VISHAL FABRICS LTD.

IN RESPECT OF SR. NO. APPLICANT PAN 1. ECONO TRADE (INDIA) LIMITED AAACE5451C

Background 1. SEBI passed an Interim Order cum Show Cause Notice dated June 19, 2023 (“Interim Order”), against 226 Noticees, including Econo Trade (India) Limited (“Noticee 5 of the Interim Order / Applicant”), for their alleged role in the manipulation of the price of five scrips viz. Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling Ropeway Company Ltd., GBL Industries Ltd. and Vishal Fabrics Ltd. Vide the Interim Order, the following directions were issued qua the Applicant: (a) Restrained the Applicant from buying, selling or dealing in the securities market or associating itself with the securities market, either directly or indirectly, in any manner whatsoever until further orders; (b) Impounding of the amount of unlawful gains of Rs. 126,00,94,597 generated in the 5 scrips, jointly and severally, from the Applicant and other Noticees; Order in the respect of Econo Trade (India) Limited P a g e 1 | 5 (c) The Applicant along with various other Noticees was directed to credit/deposit the aforesaid amount of wrongful gains into an interest bearing Escrow Account or Savings a/c with a lien marked in favour of SEBI, created specifically for the purpose in a Nationalized Bank, within 15 days from the Interim Order.

The monies kept therein were not to be released without permission from SEBI. (d) The banks where the Noticees, including the Applicant, were holding bank accounts, jointly or severally, were directed to ensure that till further directions, except for compliance of directions as stated above, no debits were to be made in the bank accounts of the Noticees without the permission of SEBI. Further, the depositories were also directed that no debit were to be made, without the permission of SEBI, in respect of the demat accounts held by the said Noticees. 2. The Applicant filed an appeal against the Interim Order before the Hon’ble Securities Appellate Tribunal (“SAT”). The Hon’ble SAT disposed of the said appeal vide an Order dated September 06, 2023 (“SAT Order”) and directed as under: “We accordingly dispose of the appeal directing the appellant to file a reply/ objection to the show cause notice as well as, if advised, file an application for vacation/ modification of the ex-parte ad-interim order. If such an application is filed the WTM will fix a date for hearing and would pass appropriate orders on the said application for vacation/ modification of the ex-parte ad-interim order within two weeks after giving an opportunity of hearing.” 3. Accordingly, the Applicant vide letter dated October 18, 2023 filed its reply / objections to the Interim Order as well as application for vacation / modification of the directions in the Interim Order.

Subsequently, in compliance with the directions of the Hon’ble SAT, Applicant was provided an opportunity of personal hearing on October 31, 2023. On the said date, Authorised Representative of the Applicant appeared and made submissions on the lines of the reply filed with SEBI. Further, vide letter dated November 02, 2023

Order in the respect of Econo Trade (India) Limited P a g e 2 | 5 (forwarded vide email dated November 06, 2023), the Applicant filed a post-hearing reply. Submissions of Applicant 4. I note from the Applicant’s replies that it has challenged the findings in the Interim Order and has made submissions on merit. I also note that the Applicant has prayed for immediate defreezing of certain bank, trading and demat accounts. 5. While the Applicant has made submissions on merit in respect of the allegations in the Interim Order, it has made inter alia the following submissions in respect of its application for vacation / modification of the directions in the Interim Order: (a) The only allegation against the Applicant in the Interim Order is that it acted as a conduit in passing on the alleged gains between parties who were alleged to be involved in the manipulation. (b) Applicant is a RBI registered NBFC and the interim directions in the Interim Order have resulted in freezing of even its client bank accounts in which the clients’ money is held. If the interim directions in the SCN are not vacated immediately, all the clients of Econo Trade will suffer and the Applicant will lose all its clients and business. (c) Interim Directions have resulted in shutting down the Applicant’s business and caused tremendous harm and loss to the Applicant, its 470 clients and about 2,764 public shareholders. (d) The Applicant’s bank accounts which have been frozen are used for meeting expenses, such as salary, rent, professional fees, expenses for listing compliances and other administrative expenses. 6. In view of the above, the Applicant has prayed for immediate defreezing of following bank, trading and demat accounts: Table 1 Sr. Bank / DP / Account Number Type of Account No. Broker Name 1. HDFC 57500001145292 Bank Account 2. IDBI 0359102000041371 Bank Account Order in the respect of Econo Trade (India) Limited P a g e 3 | 5

3. Econo Broking 1206740000305371 Demat Account 4. Econo Broking BA30 Trading Account

Consideration 7. I note that the prima facie findings against the Applicant made in the Interim Order are serious in nature, wherein the Applicant is alleged to be one of the connected entities of the mastermind / SMS Sender (Mr. Hanif Shekh) involved in volume and price manipulation in 5 scrips. I further note that the role allegedly played by the Applicant in the whole scheme of manipulation in five scrips is intertwined with the roles allegedly played by many of the 225 other entities named in the Interim Order and any conclusive inference in respect of the allegations against them can be drawn only after a holistic consideration of all the issues involved and replies of all entities, after granting them suitable opportunity of hearing. In this regard, it is noted that in order to grant an opportunity of personal hearing to the Noticees before passing a final order in the matter, the process of scheduling personal hearing and issuance of hearing notices to the Noticees named in the Interim Order has already been initiated. A personal hearing for the Applicant has been scheduled on December 11, 2023. In view of the above, I am of the opinion that it would be appropriate to consider the Applicant’s objections / replies to the Interim Order on merit at the time of passing the final order in respect of all the Noticees together, and not at this stage on a stand-alone basis.

8. With respect to the Applicant’s request for unfreezing certain bank, trading and demat accounts as mentioned in Table 1 under paragraph 6 above, I note from the information provided by the banks, stock exchanges and depositories that the said bank accounts, demat account and trading account pertain to the Applicant. Though the Applicant has contended that the interim directions in the Interim Order have resulted in freezing of even its client bank accounts in which the clients’ money is held, as per the records available before me, I note that the bank accounts mentioned in Table 1 belong to the Applicant. 9. Further, I note that the Applicant is yet to comply with the interim direction pertaining to impounding of the amount of unlawful gains of Rs. 126,00,94,597 Order in the respect of Econo Trade (India) Limited P a g e 4 | 5 generated in five scrips, jointly and severally, with other Noticees. Similarly, the Applicant has also failed to comply with the direction in the Interim Order regarding providing full inventory of all its assets to SEBI. 10. I have considered the Applicant’s request for revocation of directions issued in the Interim Order.

However, taking into consideration all the observations mentioned above, I do not find it appropriate to modify any of the directions of the Interim Order qua the Applicant at this stage. Directions 11. In view of the above, I, in exercise of the powers conferred upon me under Sections 11, 11(4) and 11B read with Section 19 of the SEBI Act, hereby dispose of the application of the Applicant without any directions. 12. A copy of this Order shall be forwarded to the Applicant.

Place: Mumbai ASHWANI BHATIA Date: November 07, 2023 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

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