Order with respect to Anita Deepak Dalal

WTM/RKA/IVD/ID-4/40 /2012 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: RAJEEV KUMAR AGARWAL, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4) and 11 B of the Securities and Exchange Board of India Act, 1992 read with Regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. In the matter of Bang Overseas Limited, Confidence Petroleum India Limited and Cals Refineries Limited In respect of Ms. Anita Deepak Dalal (PAN: AAEPD9039Q) Date of hearing: February 29, 2012 Appearances: For Noticee: Ms. Anita Dalal, and Ms. Shailashri Bhaskar. For SEBI: Mr. Santosh Kumar Shukla, Joint Legal Adviser Mr. Siddhesh Lotlikar, Assistant General Manager Mr. Amitesh Kumar Kumar, Assistant Legal Adviser, and Mr. Benoy Melshiyar, Assistant Legal Adviser. 1. Securities and Exchange Board of India (‘SEBI’) during routine market surveillance observed synchronized deals in the scrips of Temptation Foods Limited, Bang Overseas Limited ('Bang'), Confidence Petroleum India Limited (‘Confidence’), Cals Refineries Limited (‘Cals’) and Shree Precoated Steels Limited (presently known as Ajmera Realty & Infra India Limited) (hereinafter collectively referred to as ‘the five scrips’). On examination of the trade data relating to the five scrips, inter-linkages between certain entities (hereinafter collectively referred to as the ‘connected clients’) dealing in the five scrips were noticed in the form of off-market and market transactions including synchronized deals. 2. During the preliminary investigation, the 'connected clients' were found to be having large trading concentration in the five scrips and a substantial portion of their trading amongst themselves in synchronized nature was found to have contributed to the increase in the market volume. In view of the same, SEBI vide an ad interim ex-parte order dated June 04, 2009 restrained certain 'connected clients' from accessing the securities market and further prohibited them from buying, selling or dealing in the securities market, directly or indirectly, till further directions. Ms. Anita Deepak Dalal was not covered in the said order.

3. SEBI completed the investigation into the trading in the shares of ‘Bang’ for the period March 01, 2008 to February 28, 2009, ‘Confidence’ for the period January 01, 2008 to February 28, 2009 and ‘Cals’ for the period June 01, 2008 to February 28, 2009 and found that Ms. Anita Deepak Dalal was involved in creating artificial volumes in the scrips of ‘Bang’, ‘Confidence’ and ‘Cals’. Thereafter, SEBI issued a show cause notice (SCN) dated July 26, 2011 to Ms. Anita Deepak Dalal (‘the noticee’) under sections 11, 11(4) and 11B of the SEBI Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘PFUTP Regulations’) with respect to her trading in the scrips of ‘Bang’, ‘Confidence’ and ‘Cals’. The SCN alleged that the noticee had executed reversed trades, self trades and synchronized trades with 'connected clients', which resulted in the creation of artificial volumes in the scrips of ‘Bang’, ‘Confidence’ and ‘Cals’. The acts of the noticee were, thus, alleged to be in violation of regulations 3(a), (b), (c) and (d) and 4(1), 4(2) (a) and (g) of the PFUTP Regulations and section 12A(a), (b) and (c) of the SEBI Act.

4. The noticee, vide letters dated August 30, 2011 and January 10, 2012 replied to the SCN and sought an opportunity of personal hearing. Accordingly, an opportunity of personal hearing was granted to the noticee on February 29, 2012 when she along with her authorized representatives appeared before me and made submissions. 5. The submissions of the noticee inter alia are as under: a. The order dated June 04, 2009 is grossly silent in so far as her trades were concerned and did not even define her as 'connected client'. She does not have any relation/connection with any of the entities referred to as 'connected entities'. b. As regards her off market transactions, she had entered into only one off market transaction for only 599 shares of ‘Bang’ from Chandra Financial Services Pvt. Ltd.('Chandra'). The said shares were returned back to Chandra within 5 days. This was the loan transaction which had taken place in normal course of business. c. She had traded for 11,05,764 shares of ‘Bang’, 76,80,808 shares of ‘Cals’ and 26,25,592 shares of ‘Confidence’, respectively during the investigation period through her brokers Chandravadan J. Dalal ('C.

J. Dalal'), IL&FS Investsmart Securities Ltd., Krishvi Securities Pvt. Ltd. ('Krishvi') and Kotak Securities Ltd. d. She is director of Krishvi but the SCN has been issued to her in her individual capacity and not as director of Krishvi. She is not responsible in her individual capacity for any act, deed and action for or on behalf of Krishvi. She is wife of Mr. Deepak C. Dalal, proprietor of C. J. Dalal. No adverse inference should be drawn from the same. She had carried out trades in those scrips on her own and in her individual capacity and she is a distinct legal entity from Krishvi and her husband. The interpretation to deduce that being a director of a broking entity as well as wife of another member tantamount to association and/or connection is erroneous and improper. e. In an automated price mechanism system, it is impossible to reverse any trade since the counter party or the broker is not known. The observation in the SCN that on September 22, 2008 the noticee bought 14,302 shares from Chandra and on September 29, 2008 12,108 shares were sold to Maruti do not establish any reversal of trades.

Further, it is impossible on screen based trading to know the counterparty client or the counterparty broker. f. With regard to synchronized trades, orders executed at time difference of 1 second are normal in the securities market and no adverse inference may be drawn from the same. Further, there were only 8 instances out of 361 where orders were executed at time difference of 1 second. SAT in case of Grishma Securities P. Ltd. vs. SEBI has held that synchronized trades per se are not illegal. g. The investigation has failed to consider that volume in particular scrip may be influenced by innumerable factors like general market trends, corporate announcements, demand and supply, instinct of buyers and sellers etc. Thus, the inference that the trades of 'connected clients' contributed significantly to the increase in the volume is without basis. h. Her trades were executed under the 'trade to trade' segment and it is unable to comprehend how her 'trade to trade' trades were defined as self trades. i. Further, trades executed by her resulted into passing of beneficial ownership as all pay in and pay out obligations had been met with which itself proves that her trades were genuine. j. In the scrip of ‘Bang’, her percentage contribution was only 0.65% of the market volume and only on 54 days out of the 26 months investigation period.

In only 121 trades out of total of 332 trades shown in the annexure to the SCN, the price difference was zero. In the remaining 211 trades, there was price difference as high as of 9, 12 and 13. Further, in only 34 trades out of total of 332 trades, the quantity difference was zero. In the remaining 298 trades, there was huge quantity difference as high as from 25,000 to 45,000. In only 93 trades out of the 332 trades, the time difference was less than a minute. In the remaining 239 trades, there was time difference as high as ranging from 2 to 3 hrs. between the sell and buy orders. Also there were no orders where all the three conditions of same price, time and quantity met.

k. In the scrip of ‘Confidence’, her percentage contribution was only 1.15% of the market volume and only on 9 days out of the 26 months investigation period. In only 11 trades out of the 118 trades shown in the annexure to the SCN, the quantity difference was zero. In the remaining 107 trades there was huge quantity difference as high as from 175,000 to 295,000. In only 78 trades out of the 118 trades the time difference was less than a minute in these trades. In the remaining 40 trades, there was time difference as high as ranging to 1 hr. between the sell and buy orders. Also there were no orders where all the three conditions were met. Further, her trades were executed under the ‘trade to trade’ segment which means that every trade was to be settled by giving and taking delivery. l. In the scrip of ‘Cals’, her percentage contribution was only 0.88% of the market volume and only on 8 days out of the 26 month investigation period. In only 22 trades out of total of 53 trades shown in the annexure to the SCN, there was zero price difference. In the remaining 31 trades, there was price difference between the sell order and the buy order.

In only 4 trades out of the 53 trades, the quantity difference was zero. In the remaining 49 trades there was huge quantity difference as high as from 450,000 to 975,000. In all the 53 trades the time difference was more than 1 minute. Also there were no orders where all the three conditions of time difference being less than 1 minute, quantity difference and price difference being zero met. m. When majority of the orders are showing such a huge difference in quantity, time and price, the charge of synchronized trading being made falls apart as the trade logs prove otherwise compared to allegations made in the SCN. n. The contents of Annexure 3 (trades in the scrip of ‘Bang’), Annexure 5 (trades in the scrip of ‘Confidence’) and Annexure 8 (trades in the scrip of ‘Cals’) are disputed. 6. I have carefully considered the SCN, replies to the SCN, submission made during the hearing and all the material available on record. I note that in the interim order dated June 04, 2009, the noticee was not mentioned as 'connected client'. I, however, find that pursuant to the findings of the investigations in the case, these proceedings have commenced by issuance of the SCN to the noticee.

7. I note that the following facts suggest that the noticee is related with the 'connected clients'. (a) The noticee is wife of Mr. Deepak C. Dalal (Proprietor of C. J. Dalal), a member of BSE. (b) The noticee is director of Krishvi, another member of BSE.

(c) Mr. Harsh Shirish Maniar and Mr. Jay Shirish Maniar are the only directors in the companies namely, Chandra, Kundan Leasing and Finvest P. Ltd. (Kundan), Jay Investrade P. Ltd. (Jay), HSM Financial Services P. Ltd. (HSM) and Shanti Financial Services P. Ltd. (‘Shanti’) and these companies have common address at Achal Bhuvan, 3rd Floor, 21 Modi Street, Fort, Mumbai. Hence, these entities are related to each other and have been collectively referred to as ‘Maniar group’. (d) Further, Maniar group, Maruti Securities Ltd. (Maruti) and Acme Craft P. Ltd. (Acme) had financial dealings and off-market transfer of shares with each other. (e) All these entities were clients of trading members Krishvi and C J Dalal. 8. Now, I proceed to examine the trades of the noticees in three scrips of ‘Bang’, ‘Confidence’ and ‘Cals’ during relevant investigation period in the following paragraphs. I find that while the SCN (as shown in its annexures) relies only upon those trades of the noticee where the counter party client is connected with the noticee, in her replies, the noticee has shown all the trades that were executed by her.

I have, therefore, considered only the trades relied upon in the SCN in this order. In the scrip of ‘Bang’ 9. I note that the total market volume in the scrip of ‘Bang’ during the investigation period was 2,65,28,074 shares. During this period the noticee had bought 5,96,568 shares and sold 5,09,196 shares of ‘Bang’. The major counterparty selling clients for her buy trades were Maruti (1,85,180 shares), the Maniar group entities {i.e. Kundan (1,07,933 shares), Chandra (92,425 shares), Jay (12,189 shares)} and Deepak Dalal (10,345 shares) i.e. 68.40% of her buy trades were with these connected entities. The major counterparty buying clients for her sell trades were Maruti (1,57,647 shares), the Maniar group entities {(i.e. Chandra (73,509 shares), Kundan (19,702 shares), Jay (43,248 shares)} and Deepak Dalal (18,686 shares) i.e. 61.43% of her sell trades were with these connected entities. Table I- Details of transactions in the scrip of ‘Bang’ Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 13-Mar-08 Anita Dalal CJ Dalal CJ Dalal Kundan 1915 13-Mar-08 Kundan CJ Dalal CJ Dalal Anita Dalal 1000 12-May-08 Anita Dalal CJ Dalal CJ Dalal Maruti 1225 12-May-08 Maruti CJ Dalal CJ Dalal Anita Dalal 4899 15-May-08 Anita Dalal CJ Dalal CJ Dalal Chandra 6687 15-May-08 Chandra CJ Dalal CJ Dalal Anita Dalal 8000 20-May-08 Anita Dalal IL&FS CJ Dalal Chandra 19510 26-May-08 Maruti CJ Dalal IL&FS Anita Dalal 14673 27-May-08 Anita Dalal IL&FS CJ Dalal Maruti 32000

27-May-08 Anita Dalal CJ Dalal Lalkar Maruti 10000 27-May-08 Anita Dalal CJ Dalal CJ Dalal Maruti 3018 27-May-08 Maruti CJ Dalal CJ Dalal Anita Dalal 8162 28-May-08 Anita Dalal CJ Dalal CJ Dalal Jay 5000 28-May-08 Jay CJ Dalal IL&FS Anita Dalal 32998 28-May-08 Jay CJ Dalal CJ Dalal Anita Dalal 6250 29-May-08 Anita Dalal Krishvi CJ Dalal Jay 4426 29-May-08 Anita Dalal CJ Dalal CJ Dalal Jay 1406 30-May-08 Deepak Dalal CJ Dalal Krishvi Anita Dalal 10000 30-May-08 Maruti CJ Dalal CJ Dalal Anita Dalal 1000 2-Jun-08 Anita Dalal IL&FS CJ Dalal Maruti 8000 2-Jun-08 Anita Dalal Krishvi CJ Dalal Deepak Dalal 9689 2-Jun-08 Kundan Krishvi CJ Dalal Anita Dalal 3917 3-Jun-08 Deepak Dalal CJ Dalal Krishvi Anita Dalal 5500 3-Jun-08 Maruti CJ Dalal IL&FS Anita Dalal 8000 4-Jun-08 Anita Dalal IL&FS CJ Dalal Maruti 15806 4-Jun-08 Kundan Krishvi CJ Dalal Anita Dalal 5187 5-Jun-08 Maruti CJ Dalal IL&FS Anita Dalal 17228 6-Jun-08 Anita Dalal IL&FS CJ Dalal Maruti 39919 9-Jun-08 Chandra CJ Dalal IL&FS Anita Dalal 39950 11-Jun-08 Chandra CJ Dalal CJ Dalal Anita Dalal 3000 12-Jun-08 Anita Dalal IL&FS CJ Dalal Chandra 15000 13-Jun-08 Chandra SPS IL&FS Anita Dalal 10000 13-Jun-08 Chandra SPS CJ Dalal Anita Dalal 7403 17-Jun-08 Maruti CJ Dalal IL&FS Anita Dalal 2209 18-Jun-08 Anita Dalal IL&FS CJ Dalal Maruti 49800 20-Jun-08 Anita Dalal CJ Dalal CJ Dalal Maruti 5810 20-Jun-08 Maruti CJ Dalal CJ Dalal Anita Dalal 4000 10. I also note from the trading details of the noticee that in majority of trades executed by the noticee, C.J.

Dalal was the trading member on both sides of the noticee's transactions. These trades are as under:- Table II - Details of transactions where C. J. Dalal was on both sides of the transactions Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 10-Mar-08 Anita CJ Dalal CJ Dalal Maruti 5000 11-Mar-08 Anita CJ Dalal CJ Dalal Maruti 5999 11-Mar-08 Maruti CJ Dalal CJ Dalal Anita 616 12-Mar-08 Anita CJ Dalal CJ Dalal Chandra 14015 13-Mar-08 Anita CJ Dalal CJ Dalal Kundan 1915 13-Mar-08 Kundan CJ Dalal CJ Dalal Anita 1000 25-Mar-08 Maruti CJ Dalal CJ Dalal Anita 3079 2-Apr-08 Anita CJ Dalal CJ Dalal Maruti 100 2-Apr-08 Maruti CJ Dalal CJ Dalal Anita 1275 7-Apr-08 Anita CJ Dalal CJ Dalal Chandra 1990 7-Apr-08 Maruti CJ Dalal CJ Dalal Anita 3000 11-Apr-08 Maruti CJ Dalal CJ Dalal Anita 681 24-Apr-08 Maruti CJ Dalal CJ Dalal Anita 1972 28-Apr-08 Maruti CJ Dalal CJ Dalal Anita 8719

2-May-08 Maruti CJ Dalal CJ Dalal Anita 6000 7-May-08 Maruti CJ Dalal CJ Dalal Anita 1000 9-May-08 Maruti CJ Dalal CJ Dalal Anita 1233 12-May-08 Anita CJ Dalal CJ Dalal Maruti 1225 12-May-08 Maruti CJ Dalal CJ Dalal Anita 4899 13-May-08 Anita CJ Dalal CJ Dalal Anita 500 13-May-08 Maruti CJ Dalal CJ Dalal Anita 2998 15-May-08 Anita CJ Dalal CJ Dalal Chandra 6687 15-May-08 Chandra CJ Dalal CJ Dalal Anita 8000 20-May-08 Anita CJ Dalal CJ Dalal Maruti 370 27-May-08 Anita CJ Dalal CJ Dalal Maruti 3018 27-May-08 Maruti CJ Dalal CJ Dalal Anita 8162 28-May-08 Anita CJ Dalal CJ Dalal Jay 5000 28-May-08 Jay CJ Dalal CJ Dalal Anita 6250 29-May-08 Anita CJ Dalal CJ Dalal Jay 1406 29-May-08 Anita CJ Dalal CJ Dalal Kundan 40 30-May-08 Maruti CJ Dalal CJ Dalal Anita 1000 11-Jun-08 Chandra CJ Dalal CJ Dalal Anita 3000 12-Jun-08 Anita CJ Dalal CJ Dalal Kundan 500 20-Jun-08 Anita CJ Dalal CJ Dalal Maruti 5810 20-Jun-08 Maruti CJ Dalal CJ Dalal Anita 4000

11. From the above, I note that the noticee had repeatedly done trading with the connected counterparty clients, in this case to the extent of 68% of her total buy trades and 61% of her total sell trades. 12. In the SCN, it is also alleged that the noticee had indulged in the following synchronized trades in the scrip of ‘Bang’. Table II - Details of synchronized transactions Trade Date Trade Trade Trade Time Order Order Order Buy Buy Sell Sell Client Traded CP Order CP CP Time Diff Qty Rate No Rate Time Qty Rate Client Member Member Name Quantity Time Order Order Diff Diff Name Name Name Qty Rate

12-May-08 914 222.50 11:48:49 11:48:49 2500 222.50 Anita CJ Dalal IL&FS Anita 2490 11:48:44 2500 222.5 0:00:05 0 0.00 12-May-08 916 222.50 11:49:05 11:49:04 2500 222.50 Anita CJ Dalal IL&FS Anita 10 11:48:44 2500 222.5 0:00:21 0 0.00 12-May-08 917 222.50 11:49:05 11:49:04 2500 222.50 Anita CJ Dalal IL&FS Anita 2468 11:49:01 2500 222.5 0:00:03 0 0.00 30-May-08 910 255.45 15:28:47 15:28:47 10000 255.45 Deepak CJ Dalal Krishvi Anita 10000 15:28:46 10000 255.45 0:00:01 0 0.00 30-May-08 911 255.45 15:29:00 15:29:00 305 255.45 Anita Krishvi CJ Dalal Deepak 305 15:28:59 305 255.45 0:00:01 0 0.00 3-Jun-08 1045 244.50 15:29:12 15:29:11 5500 244.50 Deepak CJ Dalal Krishvi Anita 5500 15:29:11 5500 244.5 0:00:00 0 0.00 4-Jun-08 1220 245.50 15:07:11 15:07:11 2200 245.50 Anita CJ Dalal Krishvi Anita 2195 15:07:02 2200 245.5 0:00:08 0 0.00 4-Jun-08 1233 243.95 15:08:00 15:08:00 12 243.95 Anita CJ Dalal Krishvi Anita 12 15:08:00 12 243.95 0:00:01 0 0.00 6-Jun-08 469 243.00 14:59:35 14:59:07 5000 243.00 Anita IL&FS CJ Dalal Maruti 2472 14:59:35 5000 243 0:00:28 0 0.00 10-Jun-08 616 255.25 15:30:00 15:30:00 500 255.25 Anita CJ Dalal IL&FS Anita 500 15:29:57 500 255.25 0:00:03 0 0.00 24-Jun-08 24 294.95 9:59:01 9:59:01 500 294.95 Anita CJ Dalal IL&FS Anita 500 9:58:56 500 294.95 0:00:05 0 0.00

24-Jun-08 25 294.95 9:59:18 9:59:17 1000 294.95 Anita CJ Dalal IL&FS Anita 1000 9:59:11 1000 294.95 0:00:06 0 0.00 27-Jun-08 3 258.75 9:58:59 9:58:59 500 258.75 Anita CJ Dalal IL&FS Anita 500 9:58:51 500 258.75 0:00:08 0 0.00 22-Sep-08 424 290.00 14:56:34 14:55:48 5000 290.00 Anita IL&FS CJ Dalal Chandra 4221 14:56:34 5000 290 0:00:46 0 0.00 30-Jan-09 274 144.25 11:35:02 11:35:02 500 144.25 Deepak CJ Dalal IL&FS Anita 500 11:34:56 500 144.25 0:00:06 0 0.00 30-Jan-09 294 144.25 11:52:44 11:52:44 100 144.25 Deepak CJ Dalal IL&FS Anita 95 11:52:43 100 144.25 0:00:01 0 0.00 13. From the above table, it is observed that the aforesaid trades were synchronized in terms of price, quantity and time wherein the time difference between the buy and sell orders was negligible. For instance, on May 30, 2008 the noticee placed a sell order for 10,000 shares at 15:28:46 hrs. which matched in a time difference of 0:00:01 second with the buy order of Mr. Deepak Dalal. Immediately thereafter Mr. Deepak Dalal placed a sell order for 305 shares at 15:28:59 hrs. which matched in a time difference of 0:00:01 second with the buy order of the noticee. 14. In the SCN, it is further alleged that the noticee had executed self trades for 22,968 shares of ‘Bang’. TABLE III:- Details of Self Trades Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 12-May-08 Anita CJ Dalal IL&FS Anita 4968 13-May-08 Anita CJ Dalal CJ Dalal Anita 500 4-Jun-08 Anita IL&FS Krishvi Anita 1693 4-Jun-08 Anita CJ Dalal Krishvi Anita 2307 10-Jun-08 Anita CJ Dalal IL&FS Anita 500 13-Jun-08 Anita CJ Dalal IL&FS Anita 10000 24-Jun-08 Anita CJ Dalal IL&FS Anita 1500 27-Jun-08 Anita CJ Dalal IL&FS Anita 1500

15. I find from the aforesaid table that the noticee was the buyer as well as the seller in the aforesaid transactions. These were self trades which are fictitious and have been done to create artificial volumes in the scrip. In the scrip of ‘Confidence’ 16. In the SCN, it is alleged that the total traded quantity by the noticee during the period of investigation in the scrip of ‘Confidence’ was 24,97,826 shares out of which 22,66,626 shares were traded during the months of May to July 2008 i.e. constituting 90.74% of her total volume traded. The major counterparty selling clients for her buy trades were Maruti (3,33,083 shares), Kundan (4,87,240 shares) and Chandra (39,767 shares) i.e. 37.95% of her buy trades were with these entities. The major counterparty buying clients for her sell trades were Maruti (3,13,681 shares), Kundan (1,00,000 shares), Acme (18,519 shares) and Chandra (5,000 shares) i.e. 19.29% of her sell trades were with these entities. Table IV - Details of transactions in the scrip of ‘Confidence’ Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 9-May-08 Anita CJ Dalal CJ Dalal Maruti 3000 9-May-08 Anita CJ Dalal SPS Chandra 2300 9-May-08 Maruti CJ Dalal CJ Dalal Anita 5000 12-May-08 Anita CJ Dalal CJ Dalal Maruti 500 16-May-08 Anita Kotak CJ Dalal Kundan 2546 4-Jun-08 Maruti CJ Dalal IL&FS Anita 15030 18-Jun-08 Anita IL&FS CJ Dalal Kundan 287294 19-Jun-08 Maruti CJ Dalal IL&FS Anita 293651 26-Jun-08 Anita IL&FS CJ Dalal Kundan 197400 27-Jun-08 Acme CJ Dalal IL&FS Anita 6369 27-Jun-08 Chandra SPS IL&FS Anita 5000 21-Jul-08 Anita IL&FS CJ Dalal Maruti 267050 25-Jul-08 Anita IL&FS Krishvi Chandra 37467 25-Jul-08 Anita IL&FS Krishvi Maruti 62533

17. I note that 90.74% of total trades of the noticee in the scrip of ‘Confidence’ were done between May and June 2008. I also note that the noticee had repeatedly done trading with the connected counterparty clients, in this case to the extent of 38% of her total buy trades and 19% of her total sell trades. 18. In the SCN it is also alleged that the noticee had indulged in following synchronized transactions in the scrip of ‘Confidence’. Table V - Details of synchronized transactions Trade Date Trad Trade Trade Order Order Order Buy Buy Sell Sell Client Traded CP CP CP Time Qty Rate e No Rate Time Time Qty Rate Client Member Membe Name Qty Order Order Order Diff Diff Diff Name Name r Name Time Qty Rate

26-Jun-08 277 15.15 15:07:26 15:07:25 5000 15.15 Anita IL&FS CJ Dalal Kundan 4600 15:07:19 5000 15.15 00:00:06 0 0.00 26-Jun-08 278 15.15 15:07:46 15:07:46 5000 15.15 Anita IL&FS CJ Dalal Kundan 400 15:07:19 5000 15.15 00:00:27 0 0.00

19. From the above table, it is observed that on June 26, 2008 Kundan placed a sell order for 5,000 shares at 15:07:19 and the noticee placed a buy order of 5,000 shares at 15:07:25 hrs. In this order, trade of 4,600 shares got executed in a time difference of 0:00:06 seconds between buy and sell order. Similarly, Kundan placed a sell order for 5,000 shares at 15:07:19 and the noticee placed a buy order of 5,000 shares at 15:07:46 hrs. In this order, trade of 400 shares got executed in a time difference of 0:00:27 seconds between buy and sell order. I therefore, find that these trades were synchronized in terms of price, quantity and time wherein the time difference between the buy and sell orders was negligible. 20. In the SCN, it is further alleged that the noticee had executed self trades for 1,37,766 shares of ‘Confidence’. TABLE VI:- Details of Self Trades Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 16-May-08 Anita Kotak CJ Dalal Anita 73,702 22-May-08 Anita Kotak CJ Dalal Anita 24,225 28-Jul-08 Anita IL&FS IL&FS Anita 39,839 21. From the above table, I find that the noticee was the buyer as well as the seller in the aforesaid transactions. These were self trades which are fictitious and have been done to create artificial volumes in the scrip. In the scrip of ‘Cals’.

22. In the scrip of ‘Cals’, the total traded quantity during the investigation period between June 2008 and February 2009 was 85,78,47,441 shares. In the SCN, it is alleged that the noticee during the period August 2008 to January 2009 traded for 76,41,807 shares out of which 70,01,406 shares were traded during the month of August 2008 i.e. constituting 91.15% of her total volume traded. The noticee bought and sold 35,00,703 shares each side. The major counterparty selling clients for her buy trades were Chandra (5,58,520 shares) and Maruti (20,74,893 shares) i.e. 75.23% of her total buy trades. The major counterparty buying clients for her sell trades were Kundan (24,89,450 shares), Maruti (7,32,231 shares) and Acme (1,24,901 shares) i.e. 80.24% of her total sell trades. Table VII - Details of transactions in the scrip of ‘Confidence’ Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 1-Aug-08 Anita IL&FS CJ Dalal Chandra 5,58,520 1-Aug-08 Anita IL&FS CJ Dalal Maruti 4,05,094 4-Aug-08 Maruti CJ Dalal IL&FS Anita 74,590 5-Aug-08 Maruti CJ Dalal IL&FS Anita 30,848 7-Aug-08 Maruti CJ Dalal IL&FS Anita 1,00,000 8-Aug-08 Acme Krishvi IL&FS Anita 1,24,901 8-Aug-08 Maruti Krishvi IL&FS Anita 4,12,585 11-Aug-08 Maruti CJ Dalal IL&FS Anita 1,03,658 12-Aug-08 Anita IL&FS CJ Dalal Maruti 16,69,799 21-Aug-08 Kundan CJ Dalal IL&FS Anita 24,89,450 21-Aug-08 Maruti CJ Dalal IL&FS Anita 10,550

23. From the above table, I note that 91.15% of total trades of the noticee in the scrip of ‘Cals’ were done during the month of August 2008. I also note that the noticee had repeatedly done trading with the connected counterparty clients, in this case to the extent of 75% of her total buy trades and 80% of her total sell trades.

24. Considering the aforesaid facts and circumstances and trading pattern of the noticee in the three scrips as described above, in my view, several trades particularly synchronized trades of the noticee with the connected entities are of too much of a coincidence in the anonymous screen based trading system. Moreover, the counter-party broker in the majority of the instances was C. J. Dalal whose proprietor is husband of the noticee. I also find that there were several instances where the noticee had entered into self trades. I find that such trading with the connected clients in anonymous screen based trading could be possible only with the premeditated plan or device with involvement of the noticee. In this regard the following observations of Hon'ble Securities Appellate Tribunal (SAT) in its order dated December 13, 2010 in Appeal no. 190/2010 - Ajmera Associates Pvt. Ltd. Vs. SEBI is worth mentioning: "... It is not in dispute that the trading system that we have on the stock exchanges is a blind trading system which maintains complete anonymity of the persons trading. The broker while executing an order (buy or sell) cannot possibly know at the time of placing the order through the system as to who the counter party is or even the counter party broker.

In other words, the trading system does not permit the buyers and the sellers to have any interaction between them except through the trading system. A buy order placed on the system matches with a sell order and a trade comes to be executed and this matching is done by the system on a price time priority basis. Despite the anonymity of the system, we have seen market players and the intermediaries like the brokers executing manipulative trades by defeating the system and this is usually done by placing the buy and sell orders simultaneously for the same amount and at the same price. Such matching orders usually result in trades in comparatively less liquid scrips. This being the system, it sometimes becomes difficult to find out whether the brokers who execute the trades of their clients and who are expected to carry out their directions are also a party to the mischief. If the broker knew at the time of executing the trade what the client was upto, then obviously he is a party to the mischief. Since the trading system maintains complete anonymity, brokers always plead that they were ignorant about the counter party or his broker.

In such a situation one has to look to the trading pattern and if the trades match too often or if the matching of the trades is noticed day after day and trade after trade, one can infer that the matching was done not by the system but by manipulating the same....."

25. From the above transactions of the noticee it can reasonably be inferred that the noticee executed several trades with the connected clients /entities to create artificial volume in the scrips of ‘Bang’, ‘Confidence’ and ‘Cals’. The noticee was part of group of connected clients and had dealt in the shares of ‘Bang’, ‘Confidence’ and ‘Cals’ with other connected clients/entities. The trades of the noticee have to be considered as part of overall plan of manipulative trading in the five scrips amongst the connected clients. It is very often observed in the market that the manipulators operate in large group to make a particular strategy work and to avoid being caught. In such cases of manipulation the contribution of individual players in quantitative terms, sometimes, appears relatively small but their role in making a particular strategy successful becomes significant. I find that in the instant case, though the contribution of the noticee to the total artificial volume created appears to be relatively less, her contribution to the artificial volume in absolute terms and to the overall manipulative strategy can not be ignored. In view of the facts and circumstances of the instant case as discussed above, I find that the noticee also, alongwith the 'connected clients', contributed in creation of false and misleading appearance of trading without intention of change in beneficial ownership, in the scrips of ‘Bang’, ‘Confidence’ and ‘Cals’ and has thus violated regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) and (g) of the PFUTP Regulations and section 12A(a), (b) and (c) of SEBI Act. In my view, restraining her from buying, selling and dealing in securities and accessing the securities market for a period of 18 months would be appropriate for the violations committed by her.

26. In view of the foregoing, I, in exercise of the powers conferred upon me by virtue of section 19 read with sections 11, 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 and regulation 11 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, hereby restrain Ms. Anita Deepak Dalal (PAN: AAEPD9039Q) from accessing the securities market and further prohibit her 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 18 months. 27. A copy of this order shall be served on all recognized stock exchanges and depositories to ensure that the direction given in para 26 above are complied with. 28. This Order shall come into force with immediate effect.

RAJEEV KUMAR AGARWAL DATE: September 25th, 2012 WHOLE TIME MEMBER PLACE: MUMBAI SECURITIES AND EXCHANGE BOARD OF INDIA