Order with respect to Chandra Financial Services P. Ltd., Kundan Leasing & Finvest P. Ltd., Jay Investrade P. Ltd., HSM Financial Services P. Ltd., Shanti Financial Services P. Ltd., Mr. Harsh Shirish Maniar, Mr. Jay Shirish Maniar, Maruti Securities Ltd. and Mr. K. Varadarajan.

WTM/RKA/IVD/ID-4/ 39 /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 Temptation Foods Limited, Bang Overseas Limited, Confidence Petroleum India Limited, Cals Refineries Limited and Shree Precoated Steels Limited (now known as Ajmera Realty & Infra India Limited). In respect of 1. Chandra Financial Services P. Ltd. (PAN: AABCC5331Q) 2. Kundan Leasing & Finvest P. Ltd. (PAN: AAACK7448R) 3. Jay Investrade P. Ltd. (PAN: AAACJ5150H) 4. HSM Financial Services P. Ltd. (PAN: AAACH9218G) 5. Shanti Financial Services P. Ltd. (PAN: AAFCS2399G) 6. Mr. Harsh Shirish Maniar (PAN: AABPM3940R) 7. Mr. Jay Shirish Maniar (PAN: AMKPM0946R) 8. Maruti Securities Ltd. (PAN: AABCM3651M) 9. Mr. K. Varadarajan (PAN: ADOPK6730C) Dates of hearing: March 01, 2012 and March 05, 2012 Appearances: For Noticees 1 to 7 Mr. Rajesh Khandelwal, Advocate Mr. Harsh Shirish Maniar, and Mr. Jay Shirish Maniar For Noticees 8 and 9 Mr. K. Varadarajan For SEBI: Mr. Santosh Kumar Shukla, Joint Legal Adviser Ms. Neelam Bhardwaj, General Manager Mr. Siddhesh Lotlikar, Assistant General Manager Mr. Amitesh 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 (‘Temptation’), Bang Overseas Limited (‘Bang’), Confidence Petroleum India Limited (‘Confidence’), Cals Refineries Limited (‘Cals’) and Shree Precoated Steels Limited (‘SPSL’) (presently known as Ajmera Realty & Infra India Limited). These scrips, hereinafter, have been collectively referred to as ‘five scrips’. On examination of the trade data relating to these five scrips, inter-linkages among certain entities (hereinafter collectively referred to as the ‘connected clients’) dealing in these five scrips were noticed in the form of off-market transactions as well as synchronized deals in the market. The names of these ‘connected clients’ are mentioned in the show cause notices issued under these proceedings. These ‘connected clients’ were found to be having large trading concentration in the said five scrips and a substantial portion of their trading amongst themselves in synchronized manner was found to have contributed to the increase in the market volume of those five scrips.

2. Pursuant to the preliminary investigation, SEBI vide an ad interim ex-parte order dated June 04, 2009 restrained certain ‘connected clients’ including Chandra Financial Services P. Ltd. (‘Chandra’), Kundan Leasing & Finvest P. Ltd. (‘Kundan’), Jay Investrade P. Ltd. (‘Jay’), HSM Financial Services P. Ltd. (‘HSM’), Shanti Financial Services P. Ltd. (‘Shanti’) and Mr. Harsh Shirish Maniar and Mr. Jay Shirish Maniar who are directors in these companies (‘hereinafter collectively referred to as 'Maniar group’) and Maruti Securities Ltd. ('Maruti') from accessing the securities market and further prohibited them from buying, selling or dealing in the securities market, directly or indirectly, till further directions. The ad-interim order dated June 04, 2009 was confirmed vide orders dated September 18, 2009 and September 30, 2009 in respect of Maniar group and Maruti, respectively.

3. SEBI had conducted investigation into the trading in the shares of the said five scrips for the following periods- (a) 'Temptation'- for the period August 01, 2007 to February 28, 2009, (b) 'Bang' - for the period March 01, 2008 to February 28, 2009, (c) 'Confidence'- for the period January 01, 2008 to February 28, 2009, (d) 'Cals' - for the period June 01, 2008 to February 28, 2009; and (e) 'SPSL' -for the period October 01, 2007 to February 29, 2008. 4. Upon completion of the investigation, SEBI issued separate show cause notices (SCNs) dated July 05, 2011 and July 12, 2011 to the Maniar group; and Maruti and its director Mr. K. Varadarajan under sections 11, 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) read with Regulation 11 of SEBI (Prohibition of Fraudulent Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘PFUTP Regulations’) with respect to their trading in the said five scrips for violation of various provisions of the SEBI Act and PFUTP Regulations. The allegations and the violations charged in SCNs issued to respective noticees are listed in the following Table :-

Table I : List of charges against respective noticees:

Sl. Name of Allegation Violation No. the entity 1. Chandra Executed circular and synchronized deals in Regulations 3(a), the five scrips and executed reverse trades in (b), (c) and (d) the scrips of 'Temptation', 'Bang' and 'Cals'; and 4(1), 4(2) which created artificial volumes in the (a), (b), (e) and respective scrips and manipulated the price (g) of the of the scrips of 'Bang', 'Confidence', 'Cals' and PFUTP 'SPSL'. Regulations read 2. Kundan Executed circular and synchronized deals in with section 12A the five scrips and executed reverse trades in (a), (b) and (c) of the scrip of 'Cals'; which created artificial SEBI Act. volumes in the respective scrips and manipulated the price of the scrips of 'Bang', 'Confidence', 'Cals 'and 'SPSL'. 3. Jay Executed circular and synchronized deals in the scrips of 'Temptation', 'Bang', 'Confidence' and 'Cals'; which created artificial volumes in the respective scrips and manipulated the price of the scrips of 'Bang', 'Confidence', 'Cals' and 'SPSL'. 4. HSM Executed synchronized deals in the scrip of 'Bang' and reversal of trades in the scrips of 'Bang', 'Cals' and 'SPSL'; which created artificial volumes in the respective scrips and manipulated the price of the scrip of 'Bang'. 5. Shanti Executed circular trades by entering into off Regulations 3(a), market transactions in the scrip of (b), (c) and (d) 'Temptation'. and 4(1), 4(2) (a) and (g) of the PFUTP Regulations. 6. (i) Mr. Harsh They are the only directors of Chandra, Regulations 3(a), Shirish Kundan, Jay, HSM and Shanti and were in (b), (c) and (d)

Maniar and charge of the day to day management of and 4(1), 4(2) (ii) Mr. Jay these companies. (a), (b), (e) and Shirish (g) of the Maniar PFUTP Regulations. 7. Maruti Executed circular and synchronized deals in Regulations 3(a), the five scrips and reversed trades in the (b), (c) and (d) scrips of 'Temptation' and 'SPSL'; which and 4(1), 4(2) created artificial volumes in the respective (a), (b), (e) and scrips and manipulated the price of the scrip (g) of the of 'Bang', 'Confidence', 'Cals 'and 'SPSL'. PFUTP Regulations 8. Mr. K Mr. K. Varadarajan was director of Maruti and Regulations 3(a), Varadarajan was in charge of its day to day affairs. (b), (c) and (d) and 4(1), 4(2) (a), (b), (e) and (g) of the PFUTP Regulations

5. Chandra, HSM and Mr. Harsh Shirish Maniar vide their separate letters dated August 29, 2011 and Kundan, Jay, Shanti and Mr. Jay Shirish Maniar vide their separate letters dated September 09, 2011 replied to the SCNs issued to them and sought an opportunity of personal hearing. Accordingly, an opportunity of personal hearing was granted to the Maniar group on March 01, 2012 before me when Mr. Harsh Shirish Maniar and Mr. Jay Shirish Maniar along with advocate Mr. Rajesh Khandelwal appeared on behalf of the Maniar group and made submissions. 6. Further, Maruti vide letter dated November 09, 2011 replied to the SCNs issued to it and sought an opportunity of personal hearing. Accordingly, an opportunity of personal hearing was granted to Maruti on March 05, 2012 before me when Mr. K. Varadarajan appeared for himself as well as for Maruti and made submissions. 7. The submissions of the noticees inter alia are as under: a. For proving misleading appearance of trading, the trading has to be done in synchronized manner, without any order difference, or rate difference and time difference of less than 1 minute.

By no figment of imagination, their transactions can be termed misleading appearance of trading as beneficial ownership has changed and the alleged transactions are all backed by delivery in case of sale transactions and backed by payment and taking delivery in case of buy transactions. b. They do not have any relation/connection with any of the ‘connected clients’. Sharing common address and having common directors does not lead towards wrongful act. c. Off-market transactions do not create artificial volume or impact market price or volume in any manner. Taking the off-market volumes and adding up to the market volume and stating that volumes were created in the market in unacceptable. In the matter of Kajal P Shah vs. SEBI, Hon’ble SAT vide order dated August 11, 2011 has stated that “Of course, the appellant executed an off market transaction when she sold the shares but off market transactions are not illegal and nothing has been stated in the show cause notice as to how that transaction was illegal violating the trading norms of the exchange.” ThisSAT judgment clearly brings out the fact that off-market transaction cannot be illegal and affect the trading in the exchange.

Further, a glance at the quantity column at the right of the annexure to the SCN alleging circular trading shows that no quantity is matching at all between the entities. Hence, no adverse inference regarding circular transactions even in off-market (though it will not impact market equilibrium) can be made. d. The scrip wise submissions of Maniar group and Maruti are mentioned in the following paragraphs. e. In the scrip of 'Temptation'- I. MANIAR GROUP (i) From the pattern described in the SCNs, two transactions werein off-market and the market transactions were not synchronized as there was price and quantity difference between the orders. Further, delivery had been taken and there were no reversals of trades. (ii) Out of 230 trades shown in the SCN, only in 43 trades time difference was less than 1 minute. Out of these 43 trades, only in 21 trades (of 2,03,250 shares) the quantity as well as price difference was zero. In 191 trades, the difference between the sell and buy orders was very huge ranging from 1,499 shares to 12,500 shares. When majority of the orders are showing such a huge difference in time and order, the charge of synchronized trading falls apart as the trade logs prove otherwise.

(iii) On November 7, 2008 Acme Craft P. Ltd. (‘Acme’), placed a sell order for 8,500 shares which matched with 182 buy orders of Chandra with quantity difference of 8,499 to 6,000 shares wherein the traded quantity was 1 share for most of the buy orders. Thus, these trades were not synchronized in any manner. Delivery of shares was taken on November 7, 2008 and there were no reversals. Further, on November 11, 2008 Chandra placed a sell order to sell 8,500 shares and Maruti placed 4 buy orders with quantity difference of 3500, 6000, 8000 shares. The time difference was between 2 to 3 minutes and there was no synchronization. Delivery of shares was taken on November 11, 2008 and there were no reversals. On November 14, 2008

Maruti sold these 8,500 shares to Kundan with a price difference of 0.15.

The trade on November 20, 2008 had a price difference of 0.05 and therefore not synchronized. 2,03,250 shares of the noticees that matched contributed only 0.86% of the market volume and cannot lead to any artificial volume. The allegation with regard to non-transfer of beneficial ownership is false as all sales were backed by delivery. (iv) The SCNs alleged only 2 transactions of reversal of trades on 2 different days. On July 2, 2008 Chandra sold 1 lac shares to Maruti and Maruti took delivery of the said shares. On July 4, 2008, Maruti sold these shares to Chandra. This trade was also backed by payments and delivery. In both these trades, there was price difference between orders and, therefore, they were not synchronized. These two trades cannot be said to be reversal as it is clearly established fact that reversal refers to reversal on the same day and when delivery is not taken leading to artificial volumes. (v) As per SEBI regulations, for creation of artificial volumes, no delivery should take place and there should not be change of beneficial ownership. (vi) Payment was made to Maruti on account of advance as Maruti was short of funds and had approached for short term lending. Lending of funds cannot lead to creation of artificial volumes in the market. II. MARUTI (i) They bought 3,35,018 shares of Temptation and sold 3,35,018 shares, as against 2,30,68,520 shares traded during the investigation period wherein the ‘connected clients’ traded quantity was 96,54,996 shares during that period. Their contribution is 3.46% of the quantity of ‘connected clients’ and 1.45% of the total traded volume. During the period August 2007 to February 2009, the average traded volume of Maruti was 19,972 shares as against exchange average monthly traded volume of 12,14,133 shares which in terms of percentage was 1.645%. Therefore, it is evident that Maruti did not contribute any trading concentration in the scrip of Temptation.

(ii) It is wrong to allege that Maruti was involved in circular trading as the shares were bought through exchange, delivery of shares was credited to the demat account and payment was made. Every transaction had transferred the beneficial ownership. The allegations of transfer of beneficial ownership not happening is untrue as all sales were backed by delivery and on a single day, no entity had undertaken both buy and sell transactions. (iii) There is no connection with Venture Business Advisors P. Ltd. (‘Venture’) and 1 lac shares were bought in July 2008 from Chandra through the exchange in the normal session, for which delivery of shares was credited to the demat account and payments were made. (iv) The reversal transaction has been alleged on two different days. This cannot be reversal as it is clearly established fact among SEBI, SAT, Supreme Court, etc that reversal refers to reversal on same day, and when delivery is not taken leading to artificial volumes. (v) Further, artificial volumes as per the SEBI regulations require no delivery to be taken and no change in beneficial ownership for artificial volumes to be created.

(vi) The payment made to Maruti by Chandra was on account of advance given to Maruti as it was short of funds and they provided a short term loan, and has nothing to do with the market. Advancing of loan cannot lead to creation of artificial volumes in the market. f. In the scrip of 'Bang' I. MANIAR GROUP (i) The volume of transactions done by Chandra was only 2.90 lac shares, whereas the trading volume was 2.65 crore shares. Its contribution was therefore only 1.09%. Regarding the trades shown in SCN (Annexure 11) for 2.85 lac shares by Chandra, in 46 trades it may be pointed out that these trades were not synchronized with respect to price, quantity and time. In 44 trades out of 46 trades there was quantity difference in sell order and buy order. 41 trades had time difference greater than a minute ranging from 5 minutes to more than an hour. (ii) The volume of transactions done by Kundan was only 3.19 lac shares, whereas the trading volume was 2.65 crore shares. Its contribution was therefore, only 1.1%. Regarding the trades shown in SCN (Annexure 9) for 1.39 lac shares by Kundan, in 28 trades it may be pointed out that these trades were not synchronized with respect to price, quantity and time.

In 11 trades, there was price difference of 2.1. In 26 trades there was difference in quantity ranging from 1,000 to 63,000 shares. In 24 trades there was a time difference of more than a minute ranging up to half an hour. (iii) The volume of transactions done by Jay was only 2.61 lac shares, whereas the trading volume was 2.65 crore shares. Its contribution was therefore, only 1.08%. Regarding the trades shown in SCN (Annexure 9) for 2.85 lac shares by Jay, 54 trades were not synchronized with respect to price, quantity and time. In 51 trades out of 54 trades, there was quantity difference in sell order and buy order. 52 trades had time difference greater than a minute ranging from 5 minutes to more than an hour. Hence more than 90% of the trades shown in SCN were not synchronized. (iv) The volume of transactions done by HSM was only 3.01 lac shares, whereas the trading volume was 9.15 crore shares. Its contribution was therefore only 0.3%. Regarding the trades shown in SCN (Annexure 2) for 3.01 lac shares by HSM, 37 trades were not synchronized with respect to price, quantity and time.

In 36 trades out of 37 trades there was quantity difference in sell order and buy order. 33 trades had time difference greater than a minute ranging from 5 minutes to more than four hours. Hence more than 90% of the trades shown in SCN were not synchronized. (v) Out of the 159 trades done by Chandra for the period October 2008 to December 2008 as shown in the Annexure 13 to the SCN, 46 trades were having price difference between buy orders and sell orders. Further, 151 of the 159 trades were having quantity difference ranging between 20,000 to 44,000 shares. 110 trades had a time difference greater than one minute ranging from two minutes to nineteen minutes. Thus, there was time, price and quantity difference between the orders and therefore, the trades were not synchronized. Further, on each of these days the delivery of shares had been taken and beneficial ownership of shares had changed. (vi) Out of the 161 trades done by Chandra for the period January 2009 to February 2009 as shown in the Annexure 16 to the SCN, 60 trades were having price difference between buy orders and sell orders.

Further, 119 trades of the 161 trades were having quantity difference ranging between 20,000 to 85,000 shares. 102 trades had a time difference greater than one minute ranging from twenty minutes to more than two hours. Thus, there was time, price and quantity difference between the orders and therefore, the trades were not synchronized. Further, on each of these days the delivery of shares had been taken and beneficial ownership of shares had changed. (vii) Chandra had placed only 2,410 orders out of the total 1,42,603 market orders constituting only 1.69%. Kundan had placed only 1,053 orders out of the total market orders constituting only 0.74%. Jay had placed only 235 orders out of the total market orders constituting only 0.16%. HSM had placed only 124 orders out of the total market orders constituting only 0.09%. The total percentage of all the four entities is only 2.5%. The remaining orders constituting 97.5% were placed by others. (viii) Further, Chandra had placed 1,796 orders for 8.60 lac shares at last traded price (LTP). Only 476 orders for 4.30 lac shares were placed at price higher than LTP and 138 orders for 1.15 lac shares at price lower than LTP.

Thus, Chandra placed more than double the shares and 4 times the orders at market price. Kundan had placed 739 orders for 3.29 lac shares at LTP. Only 258 orders for 2.87 lac shares were placed at price higher than LTP and 56 orders for 61,137 shares at price lower than LTP. Thus, Kundan placed more than 50,000 shares and 3 times the orders at market price. Jay had placed 178 orders for 1.09 lac shares at LTP and 20 orders for 57,828 shares at price lower than LTP. Thus, Jay placed more than four times of the orders at market price. HSM had placed 91 orders for 1.08 lac shares at LTP. Only 23 orders for 15,903 shares were placed at price higher than LTP and 10 orders for 9,734 shares at price lower than LTP. Thus, HSM placed more than 6 times of shares and 3 times the orders at market price. (ix) It can be seen from Annexure 20 of the SCN that Chandra had placed 50 orders for 1.57 lac shares at LTP. Only 1.5 lac shares in 35 orders were placed at price higher than LTP. Further, 600 shares in two orders were placed at price lower than LTP. This clearly shows that Chandra placed more shares and orders at market price.

It can also be seen that Chandra had only placed 5.90% of the orders, whereas others have placed 94% of the total orders. It can be seen from Annexure 18 of the SCN that Kundan had placed 50 orders for 1.78 lac shares at LTP. Only 99,000 shares in 52 orders were placed at price higher than LTP. Further, 8,223 shares in 8 orders were placed at price lower than LTP. This clearly shows that Kundan placed more shares and orders at market price. It can be seen from Annexure 18 of the SCN that Jay had placed 33 orders for 1.55 lac shares at LTP. Only 90,950 shares in 26 orders were placed at price higher than LTP. Further, 10,535 shares in 5 orders were placed at price lower than LTP. This clearly shows that Jay placed more shares and orders at market price. It can be seen from Annexure 18 of the SCN that HSM had placed 75 orders for 1.12 lac shares at LTP. Only 39,000 shares in 28 orders were placed at price higher than LTP. Further, 23,650 shares in 5 orders were placed at price lower than LTP. This clearly shows that HSM placed more shares and orders at market price. (x) In the matter of Appeal No. 102 of 2006 decided on October 27, 2008 in the matter of M/s Jagruti Securities Ltd. and in Ketan Parekh vs. SEBI Appeal No. 2 of 2004 decided on July 14, 2006, Hon’ble SAT decided that LTP trades as being made out by SEBI without the whole data and only selective data at higher LTP is not conclusive of any manipulation.

II. MARUTI (i) The total market volume during the investigation period was 2,65,28,074 shares wherein Maruti's trading volume during the said period was 33,25,520 shares i.e. 12.51%. It is alleged in the SCN that Maruti had executed synchronized orders for 2,51,158 shares by creating artificial volumes. The total market volume was 2,65,28,074 shares and its contribution by way of synchronized trading was 2,51,158 shares i.e. 0.95% of the total market volume which will not impact the market in any way. (ii) The total traded volume of Maruti during the months of October, November and December 2008 were 1,42,090 shares, 2,09,020 shares and 91,453 shares, respectively totaling to 4,42,563 shares i.e. 32.66% of the total traded volume for these months and 1.66% of the total volume during the investigation period. (iii) Out of the 159 trades shown in the annexure 11 of the SCN for the period October 2008 to December 2008, 46 trades were having price difference between buy orders and sell orders. Further, 151 of the 159 trades were having quantity difference ranging between 20,000 to 44,000 shares.

110 trades had a time difference greater than one minute ranging from two minutes to nineteen minutes. Thus, there was time, price and quantity difference between the orders and therefore, the trades were not synchronized. Further, on each of these days the delivery of shares had been taken and beneficial ownership of shares had changed. (iv) Maruti had placed only 10,380 orders out of the total market orders of 1,42,603 orders constituting only 7.27%. Further, Maruti had placed 8,110 orders for 13.84 lac shares at LTP. Only 1,573 orders for 7.68 lac shares were placed at price higher than LTP and 697 orders for 2.14 lac shares at price lower than LTP. Thus, Maruti placed more than double the shares and 5 times the orders at market price. (v) In the matter of Appeal No. 102 of 2006 decided on October 27, 2008 in the matter of M/s Jagruti Securities Ltd. and in Ketan Parekh vs SEBI Appeal No. 2 of 2004 decided on July 14, 2006, Hon’ble SAT decided that LTP trades as being made out by SEBI without the whole data and only selective data at higher LTP is not conclusive of manipulation. (vi) It can be seen from Annexure 16 of the SCN that Maruti had placed 103 orders for 2.36 lac shares at LTP.

Only 1.84 lac shares in 75 orders were placed at price higher than LTP. Further, 1,764 shares in 12 orders were placed at price lower than LTP. This clearly shows that Maruti placed more shares and orders at market price. It can also be seen that Maruti had placed only 12.89% of the orders, whereas others have placed 87.11% of the total orders. g. In the scrip of 'Confidence' I. MANIAR GROUP (i) Only 11.22 lac shares out of 15.27 crore shares were synchronized. This constitutes only less than 1% of the total market volume and cannot be said manipulative. Further, the market transactions were not synchronized as there was price and quantity difference between orders. (ii) Annexure 23 of the SCN shows synchronized trading of 9 trades executed by Chandra on 7 days in the time frame of 24 months of investigation period. Such a small number of synchronized trades constituting less than 1% of the total market volume for only 7 days out of 26 months is only coincidental and cannot be called manipulative. (iii) Annexure 24 of the SCN shows 93 orders placed by Chandra. Of these 49 orders were having price difference upto 0.80.

89 orders were having quantity difference between sell and buy order. Annexure 21 of the SCN shows the synchronized trading done by Kundan. 16 of the 33 orders had a time difference of greater than 1 minute. All the 33 orders had quantity difference ranging from 1 lac to 4 lac shares. 8 orders had even price difference between buy and sell orders. These trades cannot be called manipulative. (iv) Chandra had placed only 199 orders constituting only 0.70% of the total market orders. Kundan had placed only 1.44% of the total orders. Jay had placed only 0.29% of the total orders. Further, Chandra had placed 14.38 lac shares in 152 orders at LTP. Only 1.37 lac shares in 34 orders were placed at price higher than LTP. Thus, the trades executed at market price were 10 times of the volume traded and 5 times of the number of trades executed by Chandra at LTP in comparison to price higher than LTP. Kundan had placed 8.04 lac shares at LTP and only 3.44 lac shares at price higher than LTP. Thus, the trades executed at market price were 2.5 times of the volume traded and 3 times of the number of trades executed by Kundan at LTP in comparison to trades executed at price higher than LTP.

Jay had placed 3.11 lac shares at LTP and only 38,599 shares at price higher than LTP. Thus, the trades executed at market price were 10 times of the volume traded and 5 times of the number of trades executed by Jay at LTP in comparison to trades executed at price higher than LTP. (v) The allegations made in para 20 of the SCN is very far-fetched. 9.64 lac shares were purchased by Chandra and then 9.75 lac shares (more than the original quantity of 9.64 lac shares) was transferred to Maruti. Similarly, Maruti had transferred 9.98 lac shares (more than 9.75 lac shares) to Kundan. A person buying 1 pencil cannot sell 2 pencils to another person as it has been made out in the SCN. II. MARUTI (i) The total traded volume of Maruti from January 2008 to February 2009 was 1,40,70,400 shares as against total market volume of 15,27,32,567 shares i.e. 9.23% of the total market volume. Hence, Maruti cannot influence market trade in any manner. (ii) Only 11.22 lac shares out of 15.27 crore shares was synchronized. This constitutes less than 1% of the total market volume and cannot be said as manipulative.

Further, the market transactions were not synchronized as there was price and quantity difference between orders. (iii) Maruti had placed 25.38 lac shares in 531 orders at LTP. Only 7.49 lac shares in 231 orders were placed at price higher than LTP. Thus, the trades executed at market price were 4 times of the volume traded and 3 times of the number of trades executed by Maruti at LTP in comparison to price higher than LTP. This clearly shows that there were no manipulative trades. h. In the scrip of 'Cals' I. MANIAR GROUP (i) Out of total volume of 85.78 crore shares, only 1.77 crore shares were synchronized. There were only 50 trades that were synchronized out of 95,044 trades in the scrip during the investigation period. Further, the market transactions were not synchronized as there was price and quantity difference between orders. (ii) Chandra had placed only 1.37% of the total market orders. Further, Chandra had placed 6.45 crore shares at LTP. Only 89.76 lac shares were placed at the price higher than LTP. Thus, the trades executed by Chandra at market price were 8 times of the volume traded and 5 times of the number of trades in comparison to trades executed at price higher than LTP.

Kundan had placed 5.53 crore shares at LTP. Only 97.35 lac shares were placed at the price higher than LTP. Thus, the trades executed by Kundan at market price were 10 times of the volume traded and 5 times of the number of trades in comparison to trades executed at price higher than LTP. Jay had placed 3.68 crore shares at LTP. Only 33.57 lac shares were placed at the price higher than LTP. Thus, the trades executed by Jay at market price were 10 times of the volume traded and 5 times of the number of trades in comparison to trades executed at price higher than LTP. This clearly shows that there were no manipulative trades. (iii) HSM had executed 9 trades for 3.56 lac shares which was less than 0.01% of total volume of 86.74 crore. 7 out of 9 trades had quantity difference from 90,000 to 11 lac shares and had time difference greater than 1 minute. 6 out of 9 trades had even price difference. Further, in all these trades, HSM appeared on the sell side and had taken delivery of all shares and change of beneficial ownership had taken place. II. MARUTI (i) Maruti traded for 8,27,91,182 shares i.e. 9.69% of the total market volume of 85,35,62,169 shares.

Further, out of total volume of 85.78 crore shares, only 1.77 crore shares were synchronized. There were only 50 trades that were synchronized out of 95,044 trades in the scrip during the investigation period. (ii) With regard to circular trading, it is observed that the shares were bought and sold on different dates, for different quantities and at different prices where the delivery was given leading to the change in beneficial ownership. Thus, the said transactions were not circular trading.

(iii) Maruti had placed only 2.79% of the total market orders. Further, Maruti had placed 6.38 crore shares at LTP. Only 1.66 crore shares were placed at higher LTP. Thus, the trades executed at market price were 4 times of the volume traded and 3 times of the number of trades executed by Maruti at LTP in comparison to price higher than LTP. This clearly shows that there were no manipulative trades as majority of trades were at LTP. i. In the scrip of 'SPSL' I. MANIAR GROUP (i) Out of the volume of 14.54 crore shares of structured trading done in 7,61,071 trades, Chandra's contribution was only 2.32 lac shares in 15 trades and only for 5 days during a period of 26 months. Thus, creation of 0.01% volume in a scrip can only be a coincidence and not any manipulation. Further, Chandra had placed only 0.34% of the total market orders. It had placed 69,915 shares in 201 trades at LTP. Only 48,001 shares in 85 trades were placed at the price higher than LTP. Thus, the trades executed by Chandra at market price were 1.5 times of the volume traded and 2 times of the number of trades in comparison to trades executed at price higher than LTP.

This clearly shows that there were no manipulative trades. (ii) Kundan had placed only 0.34% of the total market orders. It had placed 57,376 shares at LTP. Only 18,137 shares were placed at the price higher than LTP. Thus, the trades executed by Kundan at market price were 3 times of the volume traded and 5 times of the number of trades in comparison to trades executed at price higher than LTP. (iii) Jay had placed only 8 orders constituting only 0.01% of the total market orders. It had placed 23,098 shares at LTP. Only 1,908 shares were placed at the price higher than LTP. Thus, the trades executed by Jay at market price were 11 times of the volume traded in comparison to trades executed at price higher than LTP. (iv) HSM had placed only 300 orders constituting only 0.36% of the total market orders. The SCN alleges that 3.73 lac shares executed by HSM in 46 trades created artificial volume. A volume of 3.73 lac shares out of total volume of 14.54 crore shares was less than 0.01%. Further, 30 out of the 46 trades had a time difference greater than 1 minute. 39 out of the 46 trades had quantity difference ranging from 500 to 80,000 shares.

18 trades had even price difference between sell orders and buy orders. Further, in all these trades, HSM appeared on the sell side and had taken delivery of all shares and change of beneficial ownership had taken place. II. MARUTI (i) Out of the total volume of 14.54 crore shares during the investigation period, Maruti had traded for 2.36 lac shares. Thus, a creation of 0.01% volume in the scrip can only be a coincidence and not any manipulation. (ii) Maruti had placed only 6.16% of the total market orders. Further, Maruti had placed 13,83,528 shares in 3,762 orders at LTP. Only 5,76,929 shares in 974 orders were placed at price higher than LTP. This clearly shows that there were no manipulative trades as majority of trades were at LTP. 8. I have carefully considered the SCNs, the replies to the SCNs, submission made during the hearing and relevant material available on record. I note that Mr. Harsh Shirish Maniar and Mr. Jay Shirish Maniar are the only directors in all these companies namely; Chandra, Kundan, Jay, HSM and Shanti and these companies have common address at Achal Bhuvan, 3rd floor, 21 Modi Street, Fort, Mumbai.

Thus, they are connected to each other. Maniar group, Maruti and Acme had financial dealings and 'off-market' transfer of shares with each other leading to the credence that they were connected to each other. Further, all these entities have traded in the said five scrips mostly through trading members namely; Krishvi Securities P. Ltd. (‘Krishvi’) and M/s Chandravadan J. Dalal (‘CJ Dalal'), both trading members of BSE. Deepak Chandravadan Dalal (proprietor of CJ Dalal) and Anita Deepak Dalal (Director of the Krishvi) are husband and wife. Thus, CJ Dalal and Krishvi are connected /related to each other. 9. Having found the connection amongst various entities as above, I proceed to examine the trades of the noticees in five scrips during relevant investigation period in the following paragraphs. 10. I note that there is no dispute as to the trades of the noticees described in the SCNs. However, the issues for consideration are whether those trades were circular, synchronized and reversed and whether they led to creation of artificial volumes and price manipulation in the respective scrips as alleged in the SCNs.

The issues can be decided on examination of the facts and circumstances of the case and relevant regulations applicable thereon. Trading in the scrip of 'Temptation'

11. I find that in the scrip of 'Temptation', Chandra, Kundan, Jay, Maruti and Acme had indulged in 'market' as well as in 'off-market' transactions. During November 07, 2008 to November 20, 2008 they traded in this scrip through trading members CJ Dalal, Krishvi and Lalkar Securities P. Ltd. (‘Lalkar’) as described in the following Tables:- Table II- Market Transactions: Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 07-Nov-08 Chandra CJ Dalal Krishvi Acme 8,500 10-Nov-08 Kundan CJ Dalal Krishvi Acme 3,125 11-Nov-08 Maruti CJ Dalal Krishvi Chandra 8,500 12-Nov-08 Jay Krishvi CJ Dalal Kundan 3,125 14-Nov-08 Kundan CJ Dalal Lalkar Maruti 8,500 18-Nov-08 Maruti CJ Dalal Lalkar Chandra 11,625 20-Nov-08 Acme CJ Dalal Lalkar Maruti 11,250

Table III- Off Market Transactions: Execution Date Buyer Name Seller Name Quantity 18-Nov-08 Chandra Jay 3,125 18-Nov-08 Chandra Kundan 8,500

12. The above mentioned trades are pictorially presented as follows:- Maruti 11,250 sh. 20/11/08 Acme

8,500 shares on 07/11/08 3,125 shares on 10/11/08 Chandra Kundan

11,625 shares on 18/11/08 8,500 shares on 11/11/08 Maruti 3,125 shares on 12/11/08 8,500 shares on 14/11/08 Chandra 8,500 shares on 18/11/08 Kundan 11,625 shares (off-market) Jay 3,125 shares on 18/11/08 (off-market)

13. The 'off-market' and the 'market' transactions of Chandra, Kundan, Jay, Maruti and Acme for the period November 25, 2008 to December 04, 2008 are as under:- Table-IV Off-Market Transactions: Execution Date Buyer Name Seller Name Quantity 25-Nov-08 Chandra Acme 11,250 Table-V Market Transactions: Trade Date Buy Client Buy Sell Member Sell Client Quantity Name Member Name Name Name 25-Nov-08 Maruti CJ Dalal Lalkar Chandra 11,250 28-Nov-08 Jay CJ Dalal Krishvi Maruti 11,250 01-Dec-08 Chandra CJ Dalal Krishvi Jay 11,250 02-Dec-08 Maruti CJ Dalal Krishvi Chandra 11,226 03-Dec-08 Kundan CJ Dalal Krishvi Maruti 11,324 04-Dec-08 Acme Krishvi CJ Dalal Kundan 11,325 14. These trades are pictorially presented as under:- Kundan Acme 11,325 shares on 04/12/08 11,250 shares on 25/11/08 11,324 shares on 03/12/08 Maruti Chandra 11,226 shares on 02/12/08 11,250 shares on 25/11/08 11,250 Chandra shares on Jay 11,250 shares Maruti on 28/11/08 01/12/08

15. I further find that on December 8, 2008, Venture, the promoter of 'Temptation' transferred 3,10,000 shares of 'Temptation' through 'off-market' transfer to Shanti. Out of these 3,10,000 shares, Shanti transferred 40,000 shares through 'off-market' transfer to Chandra in two tranche i.e. 10,000 shares on December 11, 2008 and 30,000 shares on December 15, 2008. These 40,000 shares of 'Temptation' were introduced in the 'market' and then traded amongst Chandra, Kundan, Jay, Maruti and Acme through circular trading. On December 24, 2008, these 40,000 shares were transferred back by Chandra to Shanti through 'off -market' transfer. On December 30, 2008, Shanti transferred 40,000 shares of 'Temptation' to Venture in off-market. These 'off-market' and 'market' transactions in the scrip of 'Temptation' are described in the following tables:-

Table-VI 'Off-Market' Transactions:

Execution Date Buyer Name Seller Name Quantity 11-Dec-08 Chandra Shanti 10,000 15-Dec-08 Chandra Shanti 30,000 17-Dec-08 Chandra Acme 30,000 17-Dec-08 Chandra Kundan 27,500 19-Dec-08 Chandra Jay 67,500 24-Dec-08 Chandra Acme 40,000 24-Dec-08 Chandra Acme 17,500 24-Dec-08 Shanti Chandra 40,000 30- Dec-08 Venture Shanti 40,000 31-Dec-08 Maruti Chandra 10,000 01-Jan-09 Chandra Kundan 18,200 05-Jan-09 Chandra Jay 17,774 06-Jan-09 Chandra Acme 8,976 07-Jan-09 Chandra Acme 26,750 12-Jan-09 Chandra Jay 26,750 14-Jan-09 Chandra Acme 19,200 14-Jan-09 Jay Acme 8,000 16-Jan-09 Chandra Jay 16,455 20-Jan-09 Chandra Acme 16,955 20-Jan-09 Jay Acme 7,500 21-Jan-09 Chandra Jay 2,500 22-Jan-09 Chandra Kundan 20,000 23-Jan-09 Chandra Acme 1,200 28-Jan-09 Chandra Kundan 3,100 29-Jan-09 Chandra Acme 23,375 02-Feb-09 Chandra Acme 3,100 02-Feb-09 Chandra Jay 14,677 04-Feb-09 Chandra Kundan 17,777 06-Feb-09 Chandra Jay 17,691 10-Feb-09 Chandra Jay 86 10-Feb-09 Chandra Kundan 16,277 12-Feb-09 Chandra Jay 24,700 13-Feb-09 Maruti Chandra 700 16-Feb-09 Chandra Kundan 8,828

Table-VII 'Market' Transactions:

Trade Buy Client Buy Member Sell Member Sell Client Quantity Date Name Name Name Name 5-Dec-08 Jay CJ Dalal Krishvi Acme 12,485 8-Dec-08 Maruti Krishvi CJ Dalal Jay 12,500 10-Dec-08 Chandra CJ Dalal Krishvi Maruti 12,496 11-Dec-08 Acme Krishvi CJ Dalal Chandra 12,500 11-Dec-08 Acme Krishvi CJ Dalal Maruti 10,000 11-Dec-08 Maruti CJ Dalal Lalkar Chandra 10,000 15-Dec-08 Acme Krishvi Lalkar Chandra 30,000 15-Dec-08 Kundan Krishvi CJ Dalal Acme 27,500 17-Dec-08 Jay Krishvi Lalkar Chandra 57,500 17-Dec-08 Jay CJ Dalal Lalkar Chandra 10,000 19-Dec-08 Acme Krishvi Lalkar Chandra 67,500 24-Dec-08 Maruti CJ Dalal Lalkar Chandra 17,500 29-Dec-08 Chandra Krishvi CJ Dalal Maruti 17,500 01-Jan-09 Jay CJ Dalal Lalkar Chandra 18,200 01-Jan-09 Maruti CJ Dalal CJ Dalal Kundan 1,024 02-Jan-09 Acme Krishvi CJ Dalal Kundan 8,976 05-Jan-09 Acme CJ Dalal Lalkar Chandra 14,750 07-Jan-09 Jay CJ Dalal Lalkar Chandra 26,750 12-Jan-09 Acme CJ Dalal Lalkar Chandra 26,750 14-Jan-09 Chandra CJ Dalal MR Share Jay 8,000 19-Jan-09 Jay CJ Dalal Lalkar Chandra 2,500 20-Jan-09 Kundan CJ Dalal MR Share Jay 7,500 20-Jan-09 Kundan CJ Dalal Lalkar Chandra 14,317 21-Jan-09 Acme CJ Dalal Lalkar Chandra 1,200 22-Jan-09 Jay CJ Dalal Lalkar Chandra 20,000 23-Jan-09 Kundan CJ Dalal Lalkar Chandra 3,100 27-Jan-09 Acme CJ Dalal MR Share Jay 258 27-Jan-09 Acme CJ Dalal Krishvi Jay 13,375 28-Jan-09 Acme Krishvi CJ Dalal Kundan 3,100 28-Jan-09 Kundan CJ Dalal Lalkar Chandra 3,100 29-Jan-09 Jay CJ Dalal Lalkar Chandra 23,375 02-Feb-09 Kundan CJ Dalal Lalkar Chandra 17,777 04-Feb-09 Jay CJ Dalal Lalkar Chandra 17,777 06-Feb-09 Kundan CJ Dalal Lalkar Chandra 16,277 10-Feb-09 Jay CJ Dalal Lalkar Chandra 24,600 12-Feb-09 Kundan CJ Dalal Lalkar Chandra 14,700 13-Feb-09 Kundan CJ Dalal Krishvi Chandra 3,600 13-Feb-09 Kundan CJ Dalal Krishvi Maruti 700

16. The above trades are pictorially presented as under:- Acme – 11,325 Venture 05/12/08 Jay – 12,485 08/12/08 Shanti – 3,10,000 08/12/08 Maruti – 12,500 11/12/08 15/12/08 Chandra – (10,000) 10/12/08 Chandra – 12,496 11/12/08 Maruti – 10,000 11/12/08 Acme – 12,500 Acme – 10,000 Chandra – (30,000) 15/12/08 Kundan – 27,500 15/12/08 17/12/08 Acme – 30,000 Chandra – (27,500) 17/12/08 17/12/08 Chandra – (30,000) Jay –57,500 19/12/08 Chandra – (67,500) 19/12/08 Acme – 67,500 Chandra – (40,000) 24/12/08 24/12/08 Chandra – (17,500) Shanti – (40,000) 24/12/08 30/12/08 Maruti – 17,500 Venture – (40,000) 29/12/08 Chandra – 17,500 Chandra 30/12/08 31/12/08 Kundan – 18,200 Maruti – (10,000) 31/12/08 01/01/09

………….continued on the next page

………continued from the flow chart on the earlier page

Chandra – (18,200) Kundan – 9,900 01/01/09 01/01 /09 02/01/09 Jay – 18,200 Maruti – (1,024) Acme – (8,976) 05/01/09 06/01/09 Chandra – (17,774) 05/01/09 Acme – 14,750 07/01/09 Chandra – (26,750) 07/01/09 Jay – 26,750 12/01/09 Chandra – (26,750) 12/01/09 Acme – 26,750 14/01/09 14/01/09 Chandra – (19,200) Jay – (8,000) 14/01/09 Chandra – 8,000

17. From the above transactions, a clear pattern of circular trading is evident in the trades amongst the above clients, viz; Chandra, Kundan, Jay, Maruti, Acme and Shanti (off-market) in the manner:- A>B>C>D>A. It is also noted that in the circular transactions during November 07, 2008 to November 20, 2008 and November 25, 2008 to December 04, 2008 there was minor difference in the quantity of shares (375 and -75, respectively) sold and received back by Acme. 18. I note that such pattern of circular trading in the scrip of 'Temptation' continued for 23 trading days in the months of November and December 2008 amongst these entities and they traded for 4,47,831 shares (circular quantity) in 230 trades which constituted 14% of total traded volume in these two months i.e. 30,44,625 shares. I further note that such pattern of circular trading in this scrip continued for 20 trading days during January and February 2009 amongst these entities wherein they traded for 2,91,706 shares (circular quantity) in 50 trades which constituted 9.54% of the total traded volume in these two months i.e. 30,56,312 shares.

19. From the above examination, I observe that there was repeated pattern of circular trading over a period of time amongst ‘connected clients’. In the facts and circumstances of this case, both ‘market’ as well as ‘off-market’ transactions need to be taken into account to understand the nature of the transactions. I also observe that these entities have transferred few shares in 'off-market' only to camouflage the nature of circular transactions by attempting to break the chain of circular transfer of shares of 'Temptation' in 'market' transactions. I find that the ‘connected clients’ adopted device to receive back slightly less or more number of shares than sold in an attempt to give an impression that the trades were not the circular ones. In my view, exact matching of quantity sold and received back is not always necessary to treat such trades as circular ones particularly when a series of such trades had taken place over a period of time amongst ‘connected clients’ as in this case. In my view, therefore, minor difference in quantity sold and purchased and vice-versa will not change the nature and intention of these trades which are clearly circular in nature.

20. I also note that in the SCNs it has been alleged that Chandra, Kundan, Jay, Maruti and Acme had entered into following trades in the scrip of 'Temptation' during November 25, 2008 to December 30, 2008:- Table-VIII Details of Synchronized Trades:

Trade Trade Trade Trade Order Order Order Buy Buy Sell Sell Traded CP CP CP Time Qty Rate Date No Rate Time Time Qty Rate Client Member Member Client Qty Order Order Order Diff Diff Diff Name Name Name Name Time Qty Rate 25-Nov-08 1 204.95 12:13:22 12:13:22 11250 204.95 Maruti CJ Dalal Lalkar Chandra 11250 12:13:12 11250 204.95 0:00:10 0 0.00 8-Dec-08 92 174.95 15:16:39 15:16:38 12500 174.95 Maruti Krishvi CJ Dalal Jay 12500 15:16:38 12500 174.95 0:00:00 0 0.00 11-Dec-08 51 166.75 15:25:44 15:25:40 5000 166.75 Acme Krishvi CJ Dalal Maruti 5000 15:25:42 5000 166.75 0:00:02 0 0.00 15-Dec-08 22 167.70 14:29:40 14:29:39 30000 167.7 Acme Krishvi Lalkar Chandra 30000 14:29:39 30000 167.7 0:00:00 0 0.00 15-Dec-08 24 167.75 14:55:47 14:55:46 5000 167.75 Kundan Krishvi CJ Dalal Acme 5000 14:55:43 5000 167.75 0:00:03 0 0.00 15-Dec-08 25 167.75 14:56:00 14:55:59 7000 167.75 Kundan Krishvi CJ Dalal Acme 7000 14:55:55 7000 167.75 0:00:04 0 0.00 17-Dec-08 66 157.00 14:20:59 14:20:59 5000 157 Jay Krishvi Lalkar Chandra 5000 14:20:58 5000 157 0:00:01 0 0.00 17-Dec-08 67 157.00 14:21:14 14:21:07 5000 157 Jay Krishvi Lalkar Chandra 5000 14:21:13 5000 157 0:00:06 0 0.00 17-Dec-08 68 156.00 14:21:31 14:21:31 5000 156 Jay Krishvi Lalkar Chandra 5000 14:21:29 5000 156 0:00:02 0 0.00 17-Dec-08 69 156.00 14:21:43 14:21:42 2500 156 Jay Krishvi Lalkar Chandra 2500 14:21:41 2500 156 0:00:01 0 0.00 17-Dec-08 70 157.00 14:26:18 14:26:17 10000 157 Jay Krishvi Lalkar Chandra 10000 14:26:16 10000 157 0:00:01 0 0.00 17-Dec-08 71 157.00 14:26:29 14:26:28 10000 157 Jay Krishvi Lalkar Chandra 10000 14:26:27 10000 157 0:00:01 0 0.00 17-Dec-08 72 156.00 14:27:32 14:27:31 10000 156 Jay Krishvi Lalkar Chandra 10000 14:27:31 10000 156 0:00:00 0 0.00 17-Dec-08 73 156.00 14:27:53 14:27:53 10000 156 Jay Krishvi Lalkar Chandra 10000 14:27:49 10000 156 0:00:04 0 0.00 19-Dec-08 69 154.00 11:31:42 11:31:41 10000 154 Acme Krishvi Lalkar Chandra 10000 11:31:39 10000 154 0:00:02 0 0.00 19-Dec-08 70 154.00 11:32:03 11:32:02 10000 154 Acme Krishvi Lalkar Chandra 10000 11:32:00 10000 154 0:00:02 0 0.00 19-Dec-08 114 150.25 13:42:25 13:42:24 10000 150.25 Acme Krishvi Lalkar Chandra 10000 13:42:22 10000 150.25 0:00:02 0 0.00 19-Dec-08 115 150.25 13:42:40 13:42:37 10000 150.25 Acme Krishvi Lalkar Chandra 10000 13:42:39 10000 150.25 0:00:02 0 0.00 19-Dec-08 116 150.25 13:42:58 13:42:57 10000 150.25 Acme Krishvi Lalkar Chandra 10000 13:42:57 10000 150.25 0:00:00 0 0.00 19-Dec-08 118 149.75 13:43:28 13:43:27 17500 149.75 Acme Krishvi Lalkar Chandra 17500 13:43:27 17500 149.75 0:00:00 0 0.00 30-Dec-08 49 172.75 15:25:56 15:25:55 7500 172.75 Kundan CJ Dalal Lalkar Chandra 7500 15:25:52 7500 172.75 0:00:03 0 0.00

21. From the above transactions, I find that the above mentioned ‘connected clients’ had placed buy and sell orders for the same number of shares, for the same price and at almost the same time and thus had indulged in synchronized trades. I note that during November 25, 2008 to December 30, 2008 there were 21 synchronized trades for 2,03,250 shares of 'Temptation'. These 21 synchronized trades themselves contributed 6.70% to the total traded volume in the scrip and 45% of the quantity of shares traded through circular trades amongst the ‘connected clients’ during this period. Therefore, arguments of the noticees in this regard are without basis and are, therefore, not acceptable. 22. I note that on November 07, 2008 Acme placed a sell order for 8,500 shares of 'Temptation' which matched with 182 buy orders of Chandra wherein Chandra continuously placed the substantial number of buy orders for one share and more, repeatedly. This pattern of trading wherein the trades also happened at the same price with the same counter party ‘connected clients’ in synchronized manner within a span of 18 minutes (15:40:16 to 15:59:38) seems abnormal and non-genuine.

I am of the view that these ‘connected clients’ had used a device / artifice to create artificial volume and misleading appearance of trading in the scrip through synchronized trades. 23. I further note that on July 2, 2008 Chandra received 1 lac shares of 'Temptation' in 'off-market' from Venture. On July 4, 2008 Chandra transferred these 1 lac shares to Venture in 'off-market'. After receipt of these shares from Venture in 'off market' on July 02, 2008, Chandra had also entered into reversal of trades with Maruti through 'market' transactions the details of which are as under:- Table-IX Reversed Trades: Trade Trade Trade Trade Order Order Order Buy MembeCounter CP Non Traded CP CP CP Time Qty Rate Date No Rate Time Time Qty Rate Client r Code Party Client Qty Order Order Order Diff Diff Diff Name MemberN ame Time Qty Rate Code 2-Jul-08 72 307.80 13:47:32 13:47:31 25000 308.00 Maruti CJ DalalLalkar Chandra 25000 13:47:24 25000 307.80 0:00:07 0 0.20 2-Jul-08 104 324.75 14:23:36 14:23:35 25000 324.95 Maruti CJ DalalLalkar Chandra 24500 14:23:23 25000 324.75 0:00:12 0 0.20 2-Jul-08 124 323.00 14:58:21 14:58:20 25000 325.00 Maruti CJ DalalLalkar Chandra 24850 14:58:07 25000 323.00 0:00:13 0 2.00 2-Jul-08 127 323.75 15:03:40 15:03:38 25000 325.00 Maruti CJ DalalLalkar Chandra 25000 15:03:30 25000 323.75 0:00:08 0 1.25 4-Jul-08 44 323.00 12:57:54 12:57:53 100000 323.40 Chandra CJ DalalCJ DalalMaruti 100000 12:57:43 100000323.00 0:00:10 0 0.40

24. In my view, the above transactions were reversal of trades between Chandra and Maruti for creating artificial volume in the scrip of 'Temptation'. I note that the total market volume in this scrip on July 2 and 4, 2008 was 1,47,851 shares and 1,44,078 shares, respectively and thus these reversed trades contributed approximately 65% to the total market volume traded on those two days.

25. I further note that on July 2, 2008 itself Chandra received 3.17 crore from Lalkar being the consideration for the shares sold by it to Maruti and out of this amount, 2.96 crore was transferred to Maruti. Thereafter, 2 crore was transferred to CJ Dalal and 0.96 crore to Krishvi. The noticees have contended that the payment made to Maruti was on account of advance given to Maruti as they were short of funds and approached for short term lending. The noticees have not produced any evidence to support their argument. I, find that the above market transactions involve sale of shares between Chandra and Maruti wherein Maruti incurred pay-in obligations. I am of the view that the amount received by Maruti from Chandra was transferred to trading member C J Dalal to fulfill its pay-in obligations. 26. From the pattern of repeated circular and synchronized trades and the above mentioned reversed trades amongst the ‘connected clients’, it can be safely inferred that they traded in a co-ordinated and concerted manner. In my view, reversal of trades does not necessarily have to take place on the same date in close proximity of time as in case of synchronized trades.

Further, synchronization of trading is not necessary in case of reversal of trades as sought to be contended by the noticees. In the scrip of 'Bang'. 27. I note that during October 2008 to December 2008, the total traded volume in the scrip of Bang on BSE was 15,61,178 shares. The trading volume of ‘connected clients’ viz; Chandra, Kundan, Jay, Maruti and Acme ranged between 86.86% to 99.91% of the total volume on BSE during this period. Further, as described in the SCNs these entities had indulged in ‘market’ as well as in ‘off-market’ transactions in the scrip during October 2008 to December 2008 through trading members CJ Dalal, Krishvi and Lalkar. Some of those ‘market’ and the ‘off-market’ transactions done by these entities in this scrip for the period October 31, 2008 to November 18, 2008 are as under:- Table-X 'Market' Transaction: Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 31-Oct-08 Acme CJ Dalal CJ Dalal Maruti 2256 3-Nov-08 Jay CJ Dalal Krishvi Maruti 20000 5-Nov-08 Acme CJ Dalal Krishvi Jay 11000 6-Nov-08 Kundan CJ Dalal Krishvi Acme 3800 6-Nov-08 Kundan CJ Dalal Krishvi Chandra 500 6-Nov-08 Kundan CJ Dalal Krishvi Jay 6000 6-Nov-08 Kundan CJ Dalal Krishvi Maruti 37803 7-Nov-08 Chandra CJ Dalal Krishvi Acme 11,770 7-Nov-08 Chandra CJ Dalal Krishvi Maruti 15,000 10-Nov-08 Chandra CJ Dalal Krishvi Kundan 48,468 11-Nov-08 Jay CJ Dalal Krishvi Chandra 27,820 12-Nov-08 Acme Krishvi CJ Dalal Chandra 30,000 12-Nov-08 Jay Pravin Shah CJ Dalal Chandra 10,000 14-Nov-08 Kundan CJ Dalal Lalkar Chandra 21,000 14-Nov-08 Kundan CJ Dalal Krishvi Jay 6,999 17-Nov-08 Maruti Krishvi CJ Dalal Acme 22,000 17-Nov-08 Maruti Krishvi CJ Dalal Jay 8,000 17-Nov-08 Maruti SPS CJ Dalal Chandra 4,500 17-Nov-08 Maruti SPS CJ Dalal Jay 2,000 17-Nov-08 Maruti Pravin Shah CJ Dalal Acme 8,000 18-Nov-08 Maruti CJ Dalal Lalkar Chandra 32,973

Table-XI 'Off Market' Transaction: Execution Date Buyer Name Seller Name Quantity 14-Nov-08 Chandra Jay 11,000 14-Nov-08 Chandra Jay 10,000 18-Nov-08 Chandra Kundan 28,973 28. The above trades are pictorially presented as under:- Maruti - 75,175 3/11/08 20000 37803 31/10/08 2256 7/11/08 Jay - 23000 6/11/08 6/11/08 5/11/08 11000 6000 15000 Acme – 15670 3800 Kundan - 48788 6/11/08 11770 Chandra - 27820 7/11/08 48468 27820 11/11/08 10/11/08 Jay - 27999 14/11/08 14/11/08 Chandra - 70032 21000 (off-mkt) 17/11/08 12/11/08 12/11/08 14/11/08 6999 4500 Acme - 30000 Jay - 10000 21000 30000 17/11/08 10000 Kundan – 28653 (18/11/08) 17/11/08 18/11/08 Maruti - 80935 32973 Chandra - 28653 (off-mkt)

29. From the above transactions, a clear pattern of circular trading is evident in the trades amongst the above clients, viz; Chandra, Kundan, Jay, Maruti and Acme in the manner:- A>B>C>D>A. I find that these entities traded (159 trades in 35 trading days) for 13,76,266 shares through circular trading, which constituted 88% of the total traded volume in the scrip during October to December 2008. I also note that their day-wise contribution ranged from 42.80% to 100%. I find similar pattern of circular trades by these entities in this scrip as in the scrip of 'Temptation'. I, therefore, hold the same view with respect to the circular trades in this scrip as in the case of 'Temptation' as found above.

30. The total market volume during the investigation period (March 2008 to February 2009) in the scrip of Bang was 2,65,28,074. I note that Chandra, Kundan, Jay, HSM, Maruti and Acme had traded amongst themselves for 60,68,929 shares contributing 22.87% of the total market volume. I also note that these entities has indulged in the following 33 trades which matched in terms of price, quantity and time:-

Table-XII Synchronized Trades:

Trade Trade Trade Trade Order Order Order Buy Buy Sell Sell Traded CP CP CP Time Qty Rate Date No Rate Time Time Qty Rate Client MemberM emberC lient Quantit Order Order Order Diff Diff Diff Name Name Name Name y Time Qty Rate 13-Mar-08 453 101 12:43:40 12:43:40 15000 101 Kundan CJ DalalLalkar Chandra 14964 12:43:21 15000 101 00:00:19 0 0 13-Mar-08 866 98.75 14:25:48 14:25:48 15000 98.75 Kundan CJ DalalLalkar Chandra 15000 14:25:37 15000 98.75 00:00:11 0 0 13-Mar-08 884 99 14:33:37 14:33:37 30000 99 Kundan CJ DalalLalkar Chandra 29710 14:33:19 30000 99 00:00:18 0 0 13-Mar-08 1412 99 16:09:35 16:09:35 10000 99 Maruti SPS CJ DalalKundan 6914 16:09:27 10000 99 00:00:08 0 0 13-Mar-08 1425 99 16:09:56 16:09:55 10000 99 Maruti SPS CJ DalalKundan 8115 16:09:49 10000 99 00:00:06 0 0 13-Mar-08 1430 99 16:10:03 16:10:03 10000 99 Maruti SPS CJ DalalKundan 1785 16:09:49 10000 99 00:00:14 0 0 17-Mar-08 952 100.1 14:30:42 14:30:41 10000 100.1 Chandra CJ DalalLalkar Maruti 10000 14:30:37 10000 100.1 00:00:05 0 0 28-Mar-08 876 126.5 11:57:51 11:57:51 5000 126.5 Maruti CJ DalalSPS Chandra 4552 11:57:43 5000 126.5 00:00:08 0 0 28-Mar-08 882 126.5 11:58:46 11:58:45 4000 126.5 Maruti CJ DalalSPS Chandra 3501 11:58:10 4000 126.5 00:00:35 0 0 28-Mar-08 983 126.5 12:44:03 12:43:18 2000 126.5 Maruti CJ DalalSPS Chandra 1970 12:44:02 2000 126.5 00:00:44 0 0 30-Apr-08 1463 217.5 14:59:15 14:59:15 3000 217.5 Maruti CJ DalalKrishvi Chandra 2806 14:59:09 3000 217.5 00:00:06 0 0 06-May-08 1653 223 14:57:53 14:57:44 25000 223 Chandra SPS Krishvi Kundan 24386 14:57:52 25000 223 00:00:08 0 0 06-May-08 1663 223 14:58:06 14:58:02 25000 223 Chandra SPS Krishvi Kundan 24925 14:58:05 25000 223 00:00:04 0 0 09-May-08 1215 224 14:42:16 14:41:46 2000 224 Maruti CJ DalalSPS Chandra 53 14:42:16 2000 224 00:00:30 0 0 21-May-08 460 245.5 10:39:11 10:39:11 62000 245.5 Maruti CJ DalalCJ DalalKundan 62000 10:39:09 62000 245.5 00:00:01 0 0 03-Jun-08 213 241.5 11:01:54 11:01:53 42000 241.5 HSM CJ DalalCJ DalalJay 42000 11:01:52 42000 241.5 00:00:01 0 0 06-Jun-08 399 242.75 14:35:39 14:35:36 25000 242.75 Jay MR SharCeJ DalalMaruti 25000 14:35:39 25000 242.75 00:00:03 0 0 06-Jun-08 418 243 14:53:24 14:53:02 5000 243 Kundan Krishvi CJ DalalMaruti 4896 14:53:24 5000 243 00:00:22 0 0 06-Jun-08 419 243 14:53:24 14:53:09 5000 243 Kundan Krishvi CJ DalalMaruti 104 14:53:24 5000 243 00:00:15 0 0 06-Jun-08 426 243 14:53:49 14:53:26 5000 243 Kundan Krishvi CJ DalalMaruti 4850 14:53:49 5000 243 00:00:23 0 0 09-Jun-08 844 244 15:17:02 15:16:54 1000 244 Chandra CJ DalalKrishvi Kundan 1000 15:17:02 1000 244 00:00:07 0 0 09-Jun-08 847 244.5 15:17:17 15:17:09 2000 244.5 Chandra CJ DalalKrishvi Kundan 2000 15:17:17 2000 244.5 00:00:08 0 0 09-Jun-08 849 244.5 15:17:39 15:17:33 2000 244.5 Chandra CJ DalalKrishvi Kundan 2000 15:17:38 2000 244.5 00:00:05 0 0 09-Jun-08 851 244.5 15:17:53 15:17:51 2000 244.5 Chandra CJ DalalKrishvi Kundan 1000 15:17:43 2000 244.5 00:00:08 0 0 09-Jun-08 853 244.25 15:17:55 15:17:42 2000 244.25 Chandra CJ DalalKrishvi Kundan 1000 15:17:55 2000 244.25 00:00:12 0 0 09-Jun-08 854 244.5 15:18:01 15:17:56 2000 244.5 Chandra CJ DalalKrishvi Kundan 2000 15:18:00 2000 244.5 00:00:05 0 0 09-Jun-08 855 244.25 15:18:11 15:17:42 2000 244.25 Chandra CJ DalalKrishvi Kundan 1000 15:18:10 2000 244.25 00:00:28 0 0 09-Jun-08 876 244.25 15:19:23 15:19:22 5000 244.25 Chandra CJ DalalKrishvi Kundan 1000 15:19:05 5000 244.25 00:00:17 0 0 09-Jun-08 887 244 15:20:49 15:20:49 7500 244 Chandra CJ DalalKrishvi Kundan 7500 15:20:39 7500 244 00:00:10 0 0 11-Jun-08 595 262.5 11:34:35 11:34:33 39919 262.5 Maruti CJ DalalCJ DalalJay 39919 11:34:34 39919 262.5 00:00:01 0 0 07-Jul-08 23 240 15:24:26 15:24:26 1000 240 Kundan Krishvi CJ DalalMaruti 870 15:24:17 1000 240 00:00:09 0 0 26-Aug-08 48 237.5 15:41:09 15:41:08 1000 237.5 Jay CJ DalalKrishvi Maruti 1000 15:40:44 1000 237.5 00:00:24 0 0 24-Nov-08 9 220.95 11:11:11 11:11:10 500 220.95 Kundan CJ DalalKrishvi Chandra 500 11:10:26 500 220.95 00:00:45 0 0

10-Dec-08 21 180 15:29:50 15:29:50 18000 180 Kundan CJ DalalLalkar Chandra 18000 15:29:17 18000 180 00:00:32 0 0 22-Dec-08 75 163.7 15:41:01 15:41:01 10000 163.7 Chandra CJ DalalKrishvi Jay 9998 15:40:12 10000 163.7 00:00:49 0 0 13-Jan-09 42 124.45 13:55:20 13:55:20 5000 124.45 Acme CJ DalalLalkar Chandra 5000 13:55:16 5000 124.45 00:00:04 0 0 14-Jan-09 16 123.25 10:33:51 10:33:50 1 123.25 Jay CJ DalalCJ DalalMaruti 1 10:33:43 1 123.25 00:00:08 0 0 15-Jan-09 16 117 11:49:17 11:49:17 5000 117 Jay CJ DalalLalkar Chandra 5000 11:49:13 5000 117 00:00:03 0 0 15-Jan-09 23 116.25 11:56:56 11:56:56 10000 116.25 Jay CJ DalalLalkar Chandra 10000 11:56:53 10000 116.25 00:00:03 0 0 19-Jan-09 313 130 15:02:40 15:02:40 13400 130 Jay CJ DalalLalkar Chandra 13400 15:02:32 13400 130 00:00:08 0 0 21-Jan-09 2463 138.5 15:25:58 15:25:58 20000 138.5 Acme CJ DalalLalkar Chandra 20000 15:25:55 20000 138.5 00:00:03 0 0 23-Jan-09 399 140.5 12:48:05 12:48:05 4000 140.5 Chandra CJ DalalKrishvi Acme 4000 12:47:58 4000 140.5 00:00:07 0 0 28-Jan-09 197 136.25 13:18:12 13:18:12 7500 136.25 Acme Krishvi Lalkar Chandra 7499 13:18:08 7500 136.25 00:00:04 0 0 28-Jan-09 247 137.75 14:20:47 14:20:46 7500 137.75 Acme Krishvi Lalkar Chandra 7500 14:20:45 7500 137.75 00:00:01 0 0 25-Feb-09 32 84.5 10:21:48 10:21:47 37290 84.5 Jay CJ DalalLalkar Chandra 37190 10:21:47 37290 84.5 00:00:00 0 0

31. From the pattern of above transactions, I find that Chandra, Kundan, Jay, HSM, Maruti and Acme had indulged in synchronized trades with respect to price, quantity and time for 2,90,954 shares of 'Bang' in the above 33 trades.

32. I also note that on June 16, 2008 HSM bought 13,497 shares from Maruti and 44,993 shares from Chandra and thereafter it sold 49,886 shares to Maruti on June 18, 2008 and 27,000 shares on June 20,2008 as described below:- Table-XIII Reversed Trades: Trade Buy Client Buy Member Sell Member Sell Client Quantity Date Name Name Name Name 16-Jun-08 HSM Indiabulls CJ Dalal Maruti 13497 16-Jun-08 HSM Indiabulls SPS Chandra 29299 16-Jun-08 HSM Indiabulls Lalkar Chandra 15964 18-Jun-08 Maruti CJ Dalal Indiabulls HSM 49886 20-Jun-08 Maruti CJ Dalal Indiabulls HSM 27000

33. The SCN to HSM has alleged that aforesaid transactions between HSM and other ‘connected clients’ were by way of reversal of trades. The noticees have denied that the aforesaid transactions were by way of reversal of trades. I find that the above trades amongst the ‘connected clients’ are substantial and those transactions were done during the period when the ‘connected clients’ were indulging in synchronized trades. In my view, though the quantity of shares bought and sold did not match exactly, the probability of these transactions being reversed trades between these ‘connected clients’ as part of premeditated plan /device and artifice to create artificial volume in the scrip, is high.

34. In view of the above, I find that these ‘connected clients’ indulged in circular trades, synchronized trades and several other trades as mentioned above in the scrip of 'Bang' to create artificial volume in the scrip.

In the scrip of 'Confidence'

35. I note that the total traded volume in the scrip of 'Confidence' during the investigation period (January 01,2008 to February 28,2009) was 15,27,32,567 shares out of which Chandra, Kundan, Jay, Maruti and Acme had traded 6,71,72,730 shares i.e. 43.98% of the total traded volume. Further, these five ‘connected clients’ had traded amongst themselves for 1,89,27,230 shares i.e. 28.17% of their total traded volume and 12.40% of the total market volume in the scrip during the investigation period.

36. During October 2008 to December 2008, the total traded volume in this scrip was 3,64,53,486 shares. As described in the SCNs Chandra, Kundan, Jay, Maruti and Acme had indulged in ‘market’ as well as in ‘off-market’ transactions in the scrip during October 2008 to December 2008. Some of those ‘market’ and the ‘off-market’ transactions done by these entities in this scrip are as under:-

Table-XIV 'Market' Transactions:

Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 27-Oct-08 Acme CJ Dalal Lalkar Maruti 7,65,608 29-Oct-08 Maruti CJ Dalal Krishvi Acme 4,86,897 31-Oct-08 Kundan Krishvi CJ Dalal Acme 1,49,587 3-Nov-08 Jay CJ Dalal Lalkar Maruti 7,00,000 5-Nov-08 Acme CJ Dalal Krishvi Jay 9,93,295 7-Nov-08 Chandra CJ Dalal Krishvi Acme 9,64,294 11-Nov-08 Maruti CJ Dalal Lalkar Chandra 9,75,000

Table- XV 'Off-Market' Transactions:

Execution Date Buyer Name Seller Name Quantity 04-11-2008 Maruti Acme 68,374 04-11-2008 Maruti Kundan 143,481

37. These trades can be pictorially presented as under:-

Chandra 9,75,000 shares Maruti on 11/11/08 9,64,294 shares 7,65,608 shares on 27/10/08 on 07/11/08 Acme Acme 4,86,897 shares 68,374 shares off mkt 1,49,587 shares 9,93,295 shares on 29/10/08 on 04/11/08 on 31/10/08 on 05/11/08 7,00,000 shares Maruti 1,43,481 shares Kundan Jay on 03/11/08 on 04/11/08 off-market

38. I find that these trades amongst five ‘connected clients’ were done in 100 trades on 30 trading days for 1,02,55,515 shares which constituted 28.80% of total traded volume during October 2008 to December 2008. I note from above transactions that a pattern of circular trading is clearly observed amongst these clients in this scrip also like in the scrips of 'Temptation' and 'Bang'. I, therefore, hold the same view with respect to the circular trades in this scrip also as in respect of those scrips.

39. I also note that Chandra, Kundan and Jay, Maruti and Acme had also executed following trades that matched in terms of order time, quantity and price. These trades are as under:- Table-XVI Synchronized Trades: Trade Trade Trade Trade Order Order Order Buy Buy Sell Sell Traded CP CP CP Time Qty Rate Date No Rate Time Time Qty Rate Client Member Membe Client Quantity Order Order Order Diff Dif Diff Name Name r Name Name Time Qty Rate f 10-Mar-08 574 13.80 16:28:59 16:28:59 10000013.80 ChandraKrishvi CJ Dalal Maruti 97431 16:28:53 100000 13.80 00:00:06 0 0 28-Mar-08 194 13.50 12:26:56 12:26:56 45000013.50 Maruti CJ Dalal MR Jay 449900 12:26:43 450000 13.50 00:00:13 0 0 08-May-08 180 16.00 15:21:04 15:20:53 10000016.00 Chandra SPS CJ Dalal Maruti 92200 15:21:04 100000 16.00 00:00:11 0 0 12-Jun-08 309 16.00 15:04:26 15:04:26 10000016.00 Jay CJ Dalal CJ Dalal Maruti 100000 15:04:13 100000 16.00 00:00:13 0 0 19-Jun-08 158 16.70 15:24:17 15:24:17 10000016.70 Maruti CJ Dalal MR Jay 49900 15:23:26 100000 16.70 00:00:51 0 0 19-Jun-08 160 16.70 15:24:17 15:24:17 10000016.70 Maruti CJ Dalal MR Jay 49600 15:24:06 100000 16.70 00:00:11 0 0 19-Jun-08 164 16.70 15:25:24 15:25:24 10000016.70 Maruti CJ Dalal MR Jay 90650 15:24:31 100000 16.70 00:00:53 0 0 26-Aug-08 166 11.58 15:28:25 15:28:24 4340011.58 Jay CJ Dalal Krishvi Maruti 43400 15:28:23 43400 11.58 00:00:01 0 0 31-Oct-08 303 9.37 15:13:07 15:13:05 149587 9.37 KundanKrishvi CJ Dalal Acme 149587 15:13:06 149587 9.37 00:00:01 0 0

40. I find that the above trades were synchronized with respect to price, quantity and time.

In the scrip of 'Cals' 41. The total traded quantity in this scrip during the investigation period (June 01, 2008 to February 28, 2009) was 85,78,47,441 shares out of which Maniar Group (i.e. Chandra, Kundan, Jay, Shanti and HSM), Maruti and Acme traded for 57,82,62,980 shares i.e. 67.41% of the total traded volume through trading members CJ Dalal and Krishvi. These entities had traded amongst themselves for 18,44,54,844 shares i.e. 31.90% of their total traded volume.

42. During the investigation period, Chandra, Kundan, Jay, Maruti and Acme had indulged in ‘market’ as well as in ‘off-market’ transactions in the scrip as described in the SCNs. Some of those ‘market’ and the ‘off-market’ transactions done by these entities in this scrip are as under:- (a) Trades executed by Chandra, Kundan and Maruti in December 2008 Table-XVII

Trade Date Buy Client Buy Member Sell Member Sell Client Traded Name Name Name Name Quantity 2-Dec-08 Maruti CJ Dalal Krishvi Chandra 941926 3-Dec-08 Kundan CJ Dalal Krishvi Maruti 992000 4-Dec-08 Chandra Pravin Shah CJ Dalal Kundan 989467

The above trades can be pictorially presented as under:-

Chandra

9,89,467 shares on 04/12/08 9,41,926 shares on 02/12/08

9,92,000 shares Kundan on 03/12/08 Maruti (b)Trades among Chandra, Kundan, Jay, Maruti and Acme during January - February 2009 Table-XVIII Trade Date Buy Client Buy Member Sell Member Sell Client Traded Name Name Name Name Quantity

22-Jan-09 Jay CJ Dalal Krishvi Kundan 24,44,809

23-Jan-09 Maruti CJ Dalal Krishvi Jay 24,89,946 27-Jan-09 Acme CJ Dalal Krishvi Chandra 24,69,551 27-Jan-09 Acme CJ Dalal Krishvi Maruti 23,43,973 29-Jan-09 Jay CJ Dalal Krishvi Acme 48,03,559 29-Jan-09 Jay CJ Dalal Krishvi Chandra 28,22,998 02-Feb-09 Kundan CJ Dalal Krishvi Jay 81,10,574

The above trades can be pictorially presented as under:-

81,10,574 shares on Jay Kundan 02/02/09 24,44,809 shares on 22/01/09 28,22,998 shares on 48,03,559 shares on 29/01/09 29/01/09 Jay 24,89,946 shares on 23/01/09 23,43,972 shares on 27/01/09 Maruti Chandra Acme 24,69,551 shares Chandra on 27/01/09

43. From the above transactions, I find a pattern of circular trading amongst Chandra, Kundan, Jay, Maruti and Acme in this scrip also as found in respect of other scrips as discussed above.

44. During investigation period, these entities had also traded in 1,77,59,435 shares of the scrip in the following manner:- Table-XIX -Synchronized Trades:

Trade Trade Trade Trade Order Order Orde Buy Buy Sell Sell Traded CP CP CP Time Qty Rate Date No Rate Time Time Qty r Client Member Membe Client Quantity Order Order Order Diff Dif Diff Rate Name Name r Name Name Time Qty Rate f 9-Jul-08 136 4.19 15:29:59 15:29:52 800000 4.19 Chandra Krishvi CJ Dalal Maruti 796501 15:29:58 800000 4.19 0:00:06 0 0.00 11-Jul-08 254 4.17 15:51:38 15:51:34 300000 4.17 Acme Krishvi CJ Dalal Maruti 299500 15:51:38 300000 4.17 0:00:03 0 0.00 30-Jul-08 248 4.04 15:47:30 15:47:29 600000 4.04 Chandra Krishvi CJ Dalal Maruti 589800 15:47:23 600000 4.04 0:00:06 0 0.00 14-Aug-08 287 3.90 14:21:56 14:21:56 500000 3.9 Kundan Krishvi CJ Dalal Chandra 300251 14:21:35 500000 3.9 0:00:21 0 0.00 14-Aug-08 291 3.90 14:22:01 14:21:56 500000 3.9 Kundan Krishvi CJ Dalal Chandra 199746 14:22:00 500000 3.9 0:00:05 0 0.00 14-Aug-08 315 3.90 14:28:12 14:28:11 100000 3.9 Kundan Krishvi CJ Dalal Chandra 87743 14:28:05 100000 3.9 0:00:06 0 0.00 26-Aug-08 89 3.84 13:32:44 13:32:44 100000 3.84 Jay CJ Dalal Krishvi Maruti 100000 13:32:44 100000 3.84 0:00:00 0 0.00

26-Aug-08 90 3.84 13:32:58 13:32:57 50000 3.84 Jay CJ Dalal Krishvi Maruti 50000 13:32:57 50000 3.84 0:00:00 0 0.00 26-Aug-08 91 3.84 13:33:08 13:33:08 75000 3.84 Jay CJ Dalal Krishvi Maruti 75000 13:33:08 75000 3.84 0:00:00 0 0.00 26-Aug-08 92 3.84 13:33:19 13:33:19 80000 3.84 Jay CJ Dalal Krishvi Maruti 80000 13:33:19 80000 3.84 0:00:00 0 0.00 26-Aug-08 93 3.84 13:33:31 13:33:31 60000 3.84 Jay CJ Dalal Krishvi Maruti 60000 13:33:30 60000 3.84 0:00:01 0 0.00 26-Aug-08 94 3.84 13:33:44 13:33:44 100000 3.84 Jay CJ Dalal Krishvi Maruti 100000 13:33:43 100000 3.84 0:00:01 0 0.00 26-Aug-08 95 3.84 13:33:52 13:33:52 35000 3.84 Jay CJ Dalal Krishvi Maruti 35000 13:33:52 35000 3.84 0:00:00 0 0.00 28-Aug-08 287 3.49 15:17:59 15:17:59 10000003.49 Chandra CJ Dalal Krishvi Maruti 1000000 15:17:53 10000003.49 0:00:06 0 0.00 1-Sep-08 246 3.29 14:08:00 14:07:59 100000 3.29 Kundan CJ Dalal Pravin Chandra 100000 14:07:57 100000 3.29 0:00:03 0 0.00 1-Sep-08 250 3.32 14:20:36 14:20:36 100000 3.32 Kundan CJ Dalal Pravin Chandra 100000 14:20:32 100000 3.32 0:00:04 0 0.00 1-Sep-08 262 3.29 14:33:07 14:33:06 100000 3.29 Kundan CJ Dalal Pravin Chandra 100000 14:33:05 100000 3.29 0:00:01 0 0.00 1-Sep-08 271 3.28 14:39:21 14:39:21 100000 3.28 Kundan CJ Dalal Pravin Chandra 99806 14:39:18 100000 3.28 0:00:03 0 0.00 1-Sep-08 276 3.29 14:51:10 14:51:09 100000 3.29 Kundan CJ Dalal Pravin Chandra 100000 14:50:58 100000 3.29 0:00:11 0 0.00 1-Sep-08 295 3.33 15:10:34 15:10:34 120000 3.33 Kundan CJ Dalal Pravin Chandra 120000 15:10:29 120000 3.33 0:00:05 0 0.00 1-Sep-08 374 3.48 15:16:32 15:16:17 100000 3.48 Kundan CJ Dalal Pravin Chandra 22859 15:16:31 100000 3.48 0:00:14 0 0.00 4-Sep-08 179 3.76 15:26:05 15:26:00 500000 3.76 Maruti Pravin Krishvi Kundan 450160 15:26:05 500000 3.76 0:00:04 0 0.00 4-Sep-08 183 3.76 15:26:31 15:26:26 150000 3.76 Maruti Pravin Krishvi Kundan 100162 15:26:30 150000 3.76 0:00:04 0 0.00 4-Sep-08 185 3.76 15:27:12 15:26:26 150000 3.76 Maruti Pravin Krishvi Kundan 49837 15:27:11 150000 3.76 0:00:45 0 0.00 4-Sep-08 187 3.76 15:27:12 15:27:06 150000 3.76 Maruti Pravin Krishvi Kundan 95163 15:27:11 150000 3.76 0:00:05 0 0.00 10-Sep-08 108 4.16 13:04:29 13:04:28 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 100000 13:04:19 100000 4.16 0:00:09 0 0.00 10-Sep-08 109 4.16 13:04:42 13:04:42 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 100000 13:04:35 100000 4.16 0:00:06 0 0.00 10-Sep-08 110 4.16 13:04:55 13:04:55 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 100000 13:04:48 100000 4.16 0:00:06 0 0.00 10-Sep-08 112 4.16 13:05:08 13:05:08 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 90000 13:05:01 100000 4.16 0:00:07 0 0.00 10-Sep-08 113 4.16 13:05:22 13:05:08 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 10000 13:05:21 100000 4.16 0:00:13 0 0.00 10-Sep-08 114 4.16 13:05:26 13:05:25 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 90000 13:05:21 100000 4.16 0:00:05 0 0.00 10-Sep-08 115 4.16 13:05:38 13:05:25 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 10000 13:05:38 100000 4.16 0:00:13 0 0.00 10-Sep-08 116 4.16 13:05:43 13:05:42 100000 4.16 Maruti CJ Dalal CJ Dalal Kundan 90000 13:05:38 100000 4.16 0:00:04 0 0.00 10-Sep-08 128 4.15 13:08:55 13:08:54 20000 4.15 Maruti CJ Dalal CJ Dalal Kundan 19000 13:08:49 20000 4.15 0:00:05 0 0.00 10-Sep-08 129 4.14 13:09:22 13:09:21 10000 4.14 Maruti CJ Dalal CJ Dalal Kundan 10000 13:09:16 10000 4.14 0:00:06 0 0.00 6-Oct-08 232 5.00 16:11:49 16:11:48 20000005 Maruti CJ Dalal Krishvi Chandra 1923211 16:11:08 20000005 0:00:41 0 0.00 23-Oct-08 206 3.27 14:31:37 14:31:37 500000 3.27 Acme CJ Dalal Lalkar Maruti 476114 14:30:59 500000 3.27 0:00:38 0 0.00 23-Oct-08 207 3.27 14:31:42 14:31:42 500000 3.27 Acme CJ Dalal Lalkar Maruti 23886 14:30:59 500000 3.27 0:00:43 0 0.00 23-Oct-08 208 3.27 14:31:42 14:31:42 500000 3.27 Acme CJ Dalal Lalkar maruti 476114 14:31:14 500000 3.27 0:00:28 0 0.00 23-Oct-08 210 3.27 14:31:48 14:31:47 500000 3.27 Acme CJ Dalal Lalkar Maruti 23885 14:31:14 500000 3.27 0:00:33 0 0.00 23-Oct-08 211 3.27 14:31:48 14:31:47 500000 3.27 Acme CJ Dalal Lalkar Maruti 476115 14:31:30 500000 3.27 0:00:18 0 0.00 23-Oct-08 212 3.27 14:31:53 14:31:53 500000 3.27 Acme CJ Dalal Lalkar Maruti 23885 14:31:30 500000 3.27 0:00:23 0 0.00 23-Oct-08 213 3.27 14:31:53 14:31:53 500000 3.27 Acme CJ Dalal Lalkar Maruti 476115 14:31:45 500000 3.27 0:00:08 0 0.00 5-Nov-08 812 2.59 15:25:31 15:25:15 500000 2.59 Chandra SPS CJ Dalal Maruti 497500 15:25:31 500000 2.59 0:00:16 0 0.00 22-Jan-09 402 0.67 13:10:11 13:10:11 25000000.67 Jay CJ Dalal Krishvi Kundan 2444809 13:09:53 25000000.67 0:00:17 0 0.00 16-Feb-09 579 0.52 10:42:45 10:42:45 800000 0.52 Kundan CJ Dalal CJ Dalal Chandra 592083 10:42:33 800000 0.52 0:00:11 0 0.00 19-Feb-09 578 0.44 13:43:39 13:43:39 11000000.44 Kundan CJ Dalal Krishvi Chandra 1066850 13:43:27 11000000.44 0:00:12 0 0.00

24-Feb-09 569 0.45 12:56:01 12:55:54 500000 0.45 Chandra CJ Dalal Krishvi Acme 240500 12:56:00 500000 0.45 0:00:06 0 0.00 26-Feb-09 18 0.42 10:00:45 10:00:44 24964500.42 Jay CJ Dalal Krishvi Chandra 2485940 10:00:45 24964500.42 0:00:01 0 0.00 27-Feb-09 102 0.43 10:13:35 10:13:16 10000000.43 Chandra CJ Dalal Krishvi Jay 801900 10:13:34 10000000.43 0:00:18 0 0.00

45. From the above transactions, I find that in those trades the difference in the quantity, and price was zero and difference in time between buy and sell orders was almost negligible, maximum being 45 seconds. These trades were, thus, synchronized with respect to quantity, price and time of trade amongst Chandra, Kundan, Jay, Maruti and Acme.

46. Chandra and Kundan had also executed following trades through trading members CJ Dalal and Krishvi:- Table-XX Reversed Trades: Trade Date Buy Client Buy Member Sell Member Sell Client Quantity Name Name Name Name 4-Feb-09 Chandra CJ Dalal Krishvi Kundan 74,14,942 6-Feb-09 Kundan CJ Dalal Krishvi Chandra 65,00,000 10-Feb-09 Chandra CJ Dalal Krishvi Kundan 52,96,814 12-Feb-09 Kundan CJ Dalal Krishvi Chandra 60,00,000

47. From the above Table I find that there is clear pattern of reversal of trades (as A>B>A) in the above transactions between Chandra and Kundan.

48. I also note that HSM received 7,00,000 shares and 8,00,000 shares of 'Cals' in 'off-market' on July 15, 2008 from Jay and Chandra, respectively. Thereafter, HSM sold these shares in 'market' in 8 trading sessions out of which 2,04,741 shares were sold to the 'connected clients'. The details of 'off-market' and 'market' transactions done by these entities in this scrip are as under: Table XXI- Off Market Transactions: Execution Date Buyer Name Seller Name Quantity 15-Jul-08 HSM Chandra 8,00,000 15-Jul-08 HSM Jay 7,00,000

Table XXII- Market Transactions: Trade Buy Client Buy Member Name Sell Member Sell Client Quantity Date Name Name Name 22-Aug-08 Acme Krishvi Indiabulls Sec. HSM 1,00,000 29-Aug-08 Chandra Krishvi Indiabulls Sec. HSM 41,596

1-Sep-08 Kundan C. J. Dalal Indiabulls Sec. HSM 63,145 5-Nov-08 Maruti C. J. Dalal Indiabulls Sec. HSM 26,648 12-Nov-08 Maruti C. J. Dalal Indiabulls Sec. HSM 20,000 12-Nov-08 Maruti Krishvi Indiabulls Sec. HSM 104 1-Dec-08 Chandra Pravin V. Shah Indiabulls Sec. HSM 33,110 4-Dec-08 Chandra Pravin V. Shah Indiabulls Sec. HSM 71,747

49. Similarly, HSM also received 6,75,000 shares from Chandra on October 7, 2008 and 10,00,000 shares from Kundan on October 24, 2008 in 'off-market'. These shares were then sold by HSM in 'market' in 13 trading sessions out of which 1,51,609 shares were sold to the 'connected clients'.

50. I find from the aforesaid transactions that HSM had executed reversal of trades with the 'connected clients' and by these trades they have created artificial volume in the scrip of 'Cals'. The noticees have denied that the aforesaid transactions were by way of reversal of trades. In my view, the above trades were amongst the ‘connected clients’ and though the quantity of shares bought and sold did not match exactly, the probability of these transactions being reversed trades between HSM and these ‘connected clients’ as part of premeditated plan /device and artifice to create artificial volume in the scrip, cannot be ruled out.

In the scrip of 'SPSL'

51. During the investigation period, Chandra, Kundan and Maruti had traded in the scrip of SPSL in the following manner:-

Table-XXIII Synchronized Trades:

Trade Trade Trade Trade Order Order Order Buy Buy Sell Sell Traded CP CP CP Time Qty Rate Date No Rate Time Time Qty Rate Client Member Membe Client Quantity Order Order Order Diff Dif Diff Name Name r Name Name Time Qty Rate f 10-Oct-07 1540 434.00 12:45:09 12:45:08 35000 434.00 ChandraCJ Dalal CJ Dalal Maruti 35000 12:45:07 35000 434.00 00:00:01 0 0.00 5-Nov-07 1709 360.00 13:58:32 13:57:48 15000 360.00 ChandraCJ Dalal Pravin Maruti 13549 13:58:32 15000 360.00 00:00:44 0 0.00 14-Jan-08 669 392.50 13:50:40 13:50:39 25000 392.50 ChandraKrishvi CJ Dalal Maruti 25000 13:50:40 25000 392.50 00:00:01 0 0.00 14-Jan-08 715 391.50 13:54:22 13:54:21 20000 391.50 Chandra Pravin CJ Dalal Maruti 20000 13:54:22 20000 391.50 00:00:01 0 0.00 14-Jan-08 718 391.50 13:54:41 13:54:40 3000 391.50 Chandra Pravin CJ Dalal Maruti 3000 13:54:41 3000 391.50 00:00:01 0 0.00 14-Jan-08 722 391.00 13:55:52 13:55:50 7000 391.00 Chandra Pravin CJ Dalal Kundan 7000 13:55:51 7000 391.00 00:00:01 0 0.00 14-Jan-08 723 391.00 13:56:06 13:56:04 10000 391.00 Chandra Pravin CJ Dalal Kundan 10000 13:56:06 10000 391.00 00:00:02 0 0.00 15-Jan-08 635 379.00 14:47:55 14:47:54 10000 379.00 KundanCJ Dalal Pravin Chandra 10000 14:47:54 10000 379.00 00:00:00 0 0.00 15-Jan-08 636 379.00 14:48:16 14:48:16 10000 379.00 KundanCJ Dalal Pravin Chandra 10000 14:48:05 10000 379.00 00:00:11 0 0.00

15-Jan-08 638 378.50 14:48:38 14:48:37 10000 378.50 KundanCJ Dalal Pravin Chandra 10000 14:48:29 10000 378.50 00:00:08 0 0.00 30-Jan-08 56 324.00 10:33:39 10:33:38 25000 324.00 Maruti CJ Dalal Lalkar Chandra 24138 10:33:29 25000 324.00 00:00:09 0 0.00 30-Jan-08 58 324.00 10:33:54 10:33:54 25000 324.00 Maruti CJ Dalal Lalkar Chandra 860 10:33:29 25000 324.00 00:00:25 0 0.00 30-Jan-08 151 324.00 10:47:41 10:47:41 25000 324.00 Maruti CJ Dalal Lalkar Chandra 24690 10:47:12 25000 324.00 00:00:29 0 0.00 30-Jan-08 162 324.00 10:49:14 10:49:14 25000 324.00 Maruti CJ Dalal Lalkar Chandra 24169 10:48:53 25000 324.00 00:00:21 0 0.00

52. I find that in the trades described in the Table above, the difference in the quantity, and price was nil and difference in time between buy and sell orders was almost negligible, maximum being 44 seconds. These trades were, thus, synchronized with respect to quantity, price and time of trade amongst Chandra, Kundan and Maruti and contributed substantially to the market volume on those trading days. I find that through these trades Chandra, Kundan and Maruti had contributed to the total market volume on various days as under:- Table-XXIV Volume Details:

Date Synchronized Total Market Synchronized Volume as volume of Volume % to Market Volume clients 10-Oct-07 35,000 5,17,350 6.77% 5-Nov-07 13,549 2,45,590 5.52% 14-Jan-08 65,000 2,10,684 30.85% 15-Jan-08 30,000 1,26,384 23.74% 30-Jan-08 73,857 1,58,963 46.46%

53. I further note that during the investigation period, HSM and Maruti had indulged in certain other trades between themselves as described below Table-XXV Market Transactions:

Trade Buy Buy Member Sell Member Sell Traded Market % Market Date Client Name Name Client Qty. Volume Volume Name Name 19-Oct-07 HSM Indiabulls Sec. CJ Dalal Maruti 99,975 3,11,316 32.11% 26-Oct-07 HSM Indiabulls Sec. CJ Dalal Maruti 23,343 3,16,862 7.37% 29-Oct-07 HSM Indiabulls Sec. CJ Dalal Maruti 40,394 5,04,963 8.00% 29-Oct-07 HSM Indiabulls Sec. Pravin Shah Maruti 19,990 5,04,963 3.96% 19-Dec-07 HSM Indiabulls Sec. CJ Dalal Maruti 40,497 5,64,931 7.17% 20-Dec-07 Maruti CJ Dalal Indiabulls Sec. HSM 26,705 9,53,077 2.80% 31-Dec-07 Maruti CJ Dalal Indiabulls Sec. HSM 35,367 3,03,407 11.66% 2-Jan-08 HSM Indiabulls Sec. CJ Dalal Maruti 79,833 12,16,050 6.56%

54. I observe that HSM bought 2,24,199 shares from Maruti and sold 62,072 shares to Maruti. Then HSM again bought 79,833 shares from Maruti. Thus, I find that HSM had executed reversal of trades with Maruti and by these trades they have created artificial volume in the scrip of 'SPSL'. The noticees have denied that the aforesaid transactions between HSM and Maruti were by way of reversal of trades. In my view, the above trades were amongst the ‘connected clients’ and though the quantity of shares bought and sold did not match exactly, the probability of these transactions being reversed trades between these ‘connected clients’ as part of premeditated plan /device and artifice to create artificial volume in the scrip, is high.

55. I also note that on October 24, 2007, Maruti sold 1,46,808 shares to another connected client Beejay Investment & Financial Consultants P. Ltd. (‘Beejay’) and on October 29 and 30, 2007 bought back 89,727 shares and 78,204 shares respectively from Beejay in a purportedly reversal of trades. These transactions are as under:-

Table-XXVI Reversed Trades: Trade Date Buy Client Buy Sell Member Sell Client Name Traded Name Member Name Quantity Name 24-Oct-07 Beejay Globe Cap. CJ Dalal Maruti 1,46,808 29-Oct-07 Maruti CJ Dalal Globe Cap. Beejay 89,727 30-Oct-07 Maruti CJ Dalal Globe Cap. Beejay 78,204

56. I note that Maruti had executed reversal of transactions with Beejay and have created artificial volume in the scrip of SPSL.

57. The provisions PFUTP Regulations which are alleged to have been violated by the noticees are reproduced below:

PFUTP REGULATIONS.

“3. Prohibition of certain dealings in securities No person shall directly or indirectly- (a) buy, sell or otherwise deal in securities in a fraudulent manner; (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made thereunder; (c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange;

(d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under.”

4. Prohibition of manipulative, fraudulent and unfair trade practices “(1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities. (2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely:- (a) indulging in an act which creates false or misleading appearance of trading in the securities market; (b) dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; (c).............. (d)............. (e) any act or omission amounting to manipulation of the price of a security; (f).............. (g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security.”

58. In the facts and circumstances of this case, there is a need to look into the matter holistically. On careful examination of the trades of the Maniar group and Maruti in the five scrips, I note that these entities by trading amongst themselves and with Acme through circular/synchronized/reversal trades have created artificial volumes in these five scrips. I am of the opinion that the above trades of the noticee are of too much of a coincidence in anonymous screen based trading system. Such transactions are possible only through coordinated and deliberate synchronization of orders by the involved parties. I find that such repeated matching of time, rate and quantity in anonymous screen based trading could be possible only with the involvement of the noticees. I, therefore, find that entering into such circular, synchronized and reversed trades is an attempt to tamper with the free, fair and transparent price discovery system of the stock exchange. Such practices where the transactions are put in with a premeditated understanding, have potential to distort the price discovery process at the stock exchange and disturbs the market equilibrium.I have taken into account the following observations of Hon'ble SAT in its order dated December 13, 2010 in Appeal no. 190/2010 - Ajmera Associates Pvt. Ltd. Vs. SEBI :

"... 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....." ………….( Emphasis supplied)

59. In the screen based trading the manipulative or fraudulent intent can be inferred from various factors such as conduct of the party, pattern of transactions, etc. Such intention may be demonstrated from the attending circumstances as observed by Hon'ble SAT in Ketan Parekh Vs. SEBI, Appeal no. 2/2004 decided on July 14, 2006 in the following words- "The nature of transactions executed, the frequency with which such transactions are undertaken, the value of the transactions, ........., the conditions then prevailing in the market are some of the factors which go to show the intention of the parties. This list of factors, in the very nature of things, cannot be exhaustive. Any one factor may or may not be decisive and it is from the cumulative effect of these that an inference will have to be drawn."

60. In the instant case, the nature of transactions, volume of the transactions and the frequency with which these transactions were undertaken by the noticees who were connected with each other cannot but lead to the conclusion that the aforesaid transactions in the five scrips were undertaken by the noticees for creation of artificial volume to give false or misleading appearance of trading in these scrips without intention of change in beneficial ownership.

61. I note that trading amongst the ‘connected clients' in the five scrips had impacted the market volume in the five scrips as under:

(a) In the scrip of 'Temptation', during the period from March 2007 to July 2007 (when ‘connected clients' did not have any significant trading volume), the average monthly traded quantity of the scrip on BSE was 71,580 shares whereas, during August 2007 to February 2009, when the 'connected clients' had started trading significantly, the average monthly traded quantity increased to 12,14,133 shares. Thus, there was 17 times increase in average monthly traded quantity when ‘connected clients' were trading in the scrip. Out of the average monthly traded quantity of 12,14,133 shares during August 2007 to February 2009, as much as 5,08,158 shares (constituting 41.85% of market traded quantity) were contributed by the ‘connected clients'. (b) During the investigation period of 'Bang', the volume contributed by the 'connected clietns' was 1,52,37,202 shares where as the market volume during this period was 2,65,70,064 shares i.e. 57.34%. (c) In the scrip of Confidence, during January - December 2007 the average monthly traded volume on BSE was 52,52,464 shares out of which ‘connected clients' contributed 3,20,204 shares.

During January 2008 - February 2009, the average monthly traded volume on BSE increased to 1,09,09,469 shares out of which ‘connected clients' contributed 45,25,728 shares. The average traded volume on BSE increased by 56,57,005 shares (i.e. 1,09,09,469 minus 52,52,464). The average traded volume of ‘connected clients' increased by 42,05,524 shares (i.e. 45,25,728 minus 3,20,204). Thus, 75% of the increase in BSE traded volume happened because of increase in traded volumes by ‘connected clients'. The trades of the ‘connected clients' constituted as much as 41.48% of the total traded quantity on BSE during the period January 2008 – February 2009. (d) In the scrip of Cals, the ‘connected clients' started trading from May 27, 2008, before which there was no trading by them since January 1, 2008. The market traded volume increased from 5,60,300 shares (January 2008 – April 2008) to 9,53,16,382 shares (June 2008 – February 2009) i.e. about 170 times. Since the stock of Cals got split into 10:1 on May 30, 2008 (the exchange trading post split was effective from trade date of May 28, 2008) the number of shares traded post-split could logically be about 10 times more than the traded volume during pre-split period.

But in this case, the traded volume went up by 170 times. (e) In the scrip of SPSL, during January 2007 to August 2007, when ‘connected clients' contributed an average monthly volume of 750 shares, the BSE average monthly traded volume was 31,29,088 shares. Thereafter, during September

2007 to February 2008, the average monthly volume contributed by the ‘connected clients' increased to 30,23,651 shares while the BSE traded volume increased to 75,44,070 shares i.e. when average volume of the ‘connected clients' increased by 30,22,901 shares (30,23,651 minus 750), the average volume of BSE increased by 44,14,982 shares (75,44,070 minus 31,29,088). In other words, as much as 68% (30,22,901 divided by 44,14,982) of the increase in market volume was contributed by ‘connected clients'.

62. As discussed above, amongst the 'connected clietns', the trading of Maniar group and Maruti were substantial and significant in the five srips. The details of market volume and contributions of Maniar group and Maruti in the five scrips during the relevant investigation periods are mentioned below:

Table- XXVII Volume of Maniar group and Maruti

Sr. no. Name of Market Contribution of Contribution of scrip volume Maniar Group Maruti during investigation period 1. Confidence 63276288 29675242 (46.90%) 26597989 (42.03%) 2. Bang 26528074 9184689 (34.62%) 7606530 (28.67%) 3. Cals 857847441 293401667 (34.20%) 164917043 (19.22%) 4. SPSL 16561284 1282768 (7.74%) 12482242 (75.37%) 5. Temptation 23068520 1331436 (5.77%) 758958 (3.29%)

63. The noticees have submitted that off-market transactions do not create any artificial volume or impact market price or volume in any way. I have already held above that off -market transactions in this case were done to camouflage the nature of trades that were clearly circular. I also find that even if the quantity traded in off-market transactions are excluded, the total traded volume of the noticees are substantial.

64. The noticees have further submitted that there has been transfer of beneficial ownership as all sales have been backed by delivery. I, note that the shares sold by one connected client were bought by another connected client and in turn were received back by the seller through circular /reversed trades. Further, the shares traded through synchronized trades remained with one or the other connected client. I am, therefore, of the view that there has been no intention to transfer beneficial ownership pursuant to trades in the five scrips amongst the connected clients. Moreover, the trades in question cannot be said to be genuine, under the facts and circumstances of this case, even if the trades in question were backed by payment and delivery of shares.

65. I note that in the SCNs it has also been alleged that the Maniar group and Maruti had manipulated the price of the scrips of 'Bang', 'Confidence', 'Cals' and 'SPSL'. The noticees have contended that only selective trades that were executed at price higher than the LTP is not conclusive to establish the charge of price manipulation as alleged in the SCNs. In this regard, they have relied upon the following observations of the Hon'ble SAT in its order dated July 14, 2006 in the matter of Ketan Parekh Vs. SEBI :- “The charge leveled against the appellant therein was that he had indulged in manipulating upwards the price of the scrip of Lupin Laboratories Ltd. and the same was established on the basis of charts showing that buy orders had been placed at prices higher that the last traded price. While reversing the order of the Board, this Tribunal observed that merely because some buy orders had been placed at a price higher that the last traded price in the scrip would not lead to the inference that the price was being manipulated upwards. It could indicate the desire of the appellant to purchase the shares and it is with that object in view that he may put in buy orders at the higher rate.

The Board did not challenge the finding recorded by the Tribunal.” 66. I find from Annexure to the SCNs that the total trades executed by the noticees at the price higher than LTP are less than the total trades executed by them at price lower than LTP and at the LTP. For instance, in the scrip of 'Bang', during the period March 17, 2008 to June 17, 2008, I note that Chandra, Kundan, Jay and HSM had traded for 16,56,970 shares in 3,028 trades which were executed at LTP or at price lower than LTP as compared to 8,51,006 shares in 794 trades at price higher than LTP. I also note that Maruti had traded for 15,99,725 shares in 8,807 trades which were executed at LTP or at price lower than LTP as compared to 7,68,144 shares in 1,573 trades at price higher than LTP. Similarly, in the scrip of 'Confidence', during the period March 18, 2008 to May 22, 2008, I note that Chandra, Kundan and Jay had traded for 26,10,852 shares in 550 trades which were executed at or price lower than the LTP as compared to 5,21,110 shares in 142 trades at price higher than LTP. I also note that Maruti had traded for 25,98,652 shares in 572 trades which were executed at LTP or at price lower than LTP as compared to 7,49,169 shares in 231 trades at price higher than LTP.

From these facts, I find that the Chandra, Kundan, Jay, HSM and Maruti placed more shares and orders at LTP or at price lower than LTP than at price higher than LTP. Hence, the charge of price manipulation does not stand established. I, therefore, find that with regard to the allegations of manipulation of price under regulations 4(2) (b) and (e) of PFUTP, as observed above, there is no substantial evidence in the SCNs to establish the alleged violation. 67. I, however, find that Chandra, Kundan, Jay, HSM and Shanti along with Maruti and Acme have executed trades with a pre-determined game plan to match the trades which were not genuine transactions. These circular, reversed and synchronized trades carried out by the Maniar group and Maruti were undertaken for creation of artificial volumes in the scrips of 'Temptation', 'Bang', 'Confidence', 'Cals' and 'SPSL' to give false or misleading appearance of trading in these scrips without the intention of transfer of beneficial ownership. Mr. Harsh Shirish Maniar and Mr. Jay Shirish Maniar being common and only directors in these entities namely Chandra, Kundan, Jay, HSM and Shanti were in charge of the day to day management of these companies and are, therefore, liable and responsible for all the acts and commissions of these entities Similarly, Mr. K Varadarajan being director of Maruti is liable and responsible for all the acts and commissions of Maruti.

68. In view of the above, I find that Maniar group, Maruti and Mr. K Varadarajan have violated regulations 3(a) (b), (c) and (d) and 4(1), 4(2) (a) and (g) of the PFUTP Regulations while carrying on trades in the scrips of 'Temptation', 'Bang', 'Confidence', 'Cals' and 'SPSL' during the relevant investigation periods. 69. I also note that the interim order was passed by SEBI on June 04, 2009 which was later confirmed on September 18, 2009 and September 30, 2009 vide which Maniar group and Maruti respectively were restrained from accessing the securities market. Thus, the Maniar group and Maruti have already undergone the restraint for more than three years. Considering the quantum of transactions undertaken by HSM and Shanti, in my view, the period of restraint already undergone by them vide the said orders is sufficient for the violations committed by them. However, in respect of Chandra, Kundan, Jay, Mr. Harsh Shirish Maniar, Mr. Jay Shirish Maniar and Maruti, in my view, considering the facts and circumstances of the case and quantum of trading done by them, restraining them from buying, selling and dealing in securities and accessing the securities market for a period of four years from the date of the interim order dated June 04, 2009 would be appropriate for the violations committed by them.

Mr. K. Varadarajan was not covered in the interim order dated June 04, 2009. Restraining Mr. K Varadarajan from buying, selling and dealing in securities and accessing the securities market for a period of three years from the date of this order would be appropriate in the present facts and circumstances of the case.

70. 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, I, hereby issue the following directions: (a) restrain the following entities from accessing the securities market and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner till June 03, 2013 :-. (i) Chandra Financial Services P. Ltd. (PAN: AABCC5331Q) (ii) Kundan Leasing & Finvest P. Ltd. (PAN: AAACK7448R) (iii) Jay Investrade P. Ltd. (PAN: AAACJ5150H) (iv) Mr. Harsh Shirish Maniar (PAN: AABPM3940R) (v) Mr. Jay Shirish Maniar (PAN: AMKPM0946R) (vi) Maruti Securities Ltd. (PAN: AABCM3651M) (b) restrain Mr. K. Varadarajan (PAN: ADOPK6730C) from accessing the securities market and further prohibit him 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 three years from the date of this order. (c) The directions passed by SEBI vide orders dated June 04, 2009 and September 18, 2009 against HSM Financial Services P. Ltd. and Shanti Financial Services P. Ltd. shall be discontinued. 71. Show Cause Notices dated July 05, 2011 and July 12, 2009 issued to the noticees are accordingly disposed of. 72. A copy of this order shall be served on all recognized stock exchanges and depositories to ensure that the direction given in para 70 above are complied with. 73. This order shall come into force with immediate effect.

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