Revocation order in the matter of Dhyana Finstock Ltd

CORAM: MADHABI PURI BUCH, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 in the matter of Dhyana Finstock Limited

1. Securities and Exchange Board of India (“SEBI”) conducted an examination into the dealings in the scrip of Dhyana Finstock Limited (“Dhyana” / “Company”) on BSE Limited (“BSE”) during the period from June 12, 2014 to July 27, 2015 as there was significant rise in the traded volume and price of the scrip.

2. Upon preliminary inquiry, SEBI prima facie observed the following:

(a) The scrip of Dhyana got listed on BSE on June 13, 2014 under Direct Listing mode from Ahmedabad Stock Exchange (“ASE”) at a price of Rs. 251. Prior to listing on BSE, the company had made preferential allotment of 64,25,000 equity shares of Rs.10/- each to 49 entities on November 30, 2013 which were under lock-in on till November 30, 2014.

(b) After the release of compulsory lock-in period, the Preferential Allottees and the Promoter related entities / entities connected or related to Dhyana were provided exit at a high price by the entities allegedly related/connected amongst themselves and with Dhyana (“Exit Providers”);

(c) Since July 2015 several SMS were circulated among investing public to the effect of inducing them to buy the shares of Dhyana specially highlighting to make “Jackpot” profit on July 27, 2015. Under the influence of SMS tips investors placed buy orders on July 27, 2015 at price ranging from Rs. 396 – Rs. 406 resulting in purchase of 3,18,971 shares from the net sellers (persons who sells more number of shares than they buy). The 29 Net Sellers who were part of preferential allotees/exit provider/

Order in the matter of Dhyana Finstock Limited entities related to the Dhyana have sold 2,62,682 shares on July 27, 2014 representing 82.35% of total shares bought by the investors under the influence of SMSs. Thereby, ultimately shares acquired through preferential allotment and/or purchased to give exit to preferential allottees were sold to gullible investors by inducing them to buy shares by sending fraudulent/fake SMS.

(d) By virtue of the same, it was alleged that the company and persons in charge of its affairs created preferential allotment of shares as a mode to provide fictitious long term capital gains (“LTCG”) to its Preferential Allottees and Promoter related entities so as to convert their unaccounted income into accounted one; its Promoters/ Directors / Exit Providers / Preferential Allottees / Promoter related entities artificially increased the volume and price of the scrip and misused securities market system for making illegal gains and to convert ill-gotten gains into market gains to avail LTCG.

3. As the aforesaid activities of Dhyana and its Promoter / Directors / Promoter related entities / Preferential Allottees / Exit Providers were in violation of SEBI Act, 1992 (“SEBI Act”) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”) SEBI passed an Ad interim ex-parte order dated June 01, 2016 (hereinafter referred to as “interim order”) and restrained 76 entities including Dhyana and its Promoters and Directors from accessing the securities market and further prohibited them from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, till further directions.

4. Vide email dated July 28, 2015 as well as vide said interim order, SEBI also directed BSE to withhold the pay-out of funds for the trades executed on July 27, 2015 and keep the same in interest bearing escrow account and also release the securities to the buyers for the trades executed on July 27, 2015. It is noted that this covered 32 entities including 29 entities listed in para 5 below.

5. The name of the entities against whom the interim order were passed are as follows:

Order in the matter of Dhyana Finstock Limited

S. NO. NAME OF THE ENTITY PAN COMPANY 1 Dhyana Finstock Limited AABCP8561B DIRECTORS AND PROMOTERS OF DHYANA 2 Harshadkumar Patel AGMPP7021Q 3 Rajeshkumar Theophilbhai Christie AKAPC0179L 4 Pinakin Dahyabhai Makwana APJPM5729E 5 Pritesh Patel AJIPP7200L 6 Priyanka Nrupesh Tripathi AHVPT3728L 7 Purvesh Nareshbhai Chauhan AHKPC9950A 8 Jaratal Mayaben Ashokbhai AOCPJ0760Q 9 Ashokbhai G Jaratal AOCPJ0735R 10 Priti Jayakarbhai Christian AQBPC1558Q 11 Aneelkumar Albertbhai Patel ALOPP2057M 12 Shaluben Nikeshbhai Shah BPCPS1154K PREFERENTIAL ALLOTTEES 13 Ankit Mahendrabhai Shah ANTPS6591E 14 Jyotiben Mahendrabhai Shah ANHPS8282Q 15 Manish B Shah AAIPM4715G 16 Rupal M Shah AAEPR5198J 17 Kalpesh Ugarchand Gadhecha ABTPG3143L 18 Sanjay P Shah AMIPS4672G 19 Bhavini S Shah AEVPB8830Q 20 Zahir Farooq Hawa AAAPH2776E 21 Farooq Kasam Hawa AAAPH2775H 22 Noorbanu Farooq Hawa AAAPH8271Q 23 Azim Farooq Hawa AAAPH2774G 24 Kumar A AAEPK1457D 25 M Mathivanan AAEPM4368F 26 Raj Rattan ADXPR0831L 27 Uttam Chunnilal Jain AAFPJ3365A

Order in the matter of Dhyana Finstock Limited

S. NO. NAME OF THE ENTITY PAN 28 Reenu Jain AEYPJ8903R 29 Sanjay Nandlalbhai Parelia Huf AATHS5168J 30 Gunjan Rajendra Patel BFPPP4718F 31 Manharbhai Vallabhbhai Vaghani ABOPV3650L 32 Mahesh V Vaghani AAWPV3196N 33 Haresh Bhikhabhai Vaghani ABPPV4917M 34 Sanjay Bhikhabhai Vaghani AABPV4486G 35 Chetna H Chandan AHGPC9842D 36 Pradipkumar Harakchand Doshi AAHPD4722B 37 Dilipkumar Manilal Chokshi AAKPC1264A 38 Jayprakash Maneklal Patel ABCPP1959N 39 Ashwinkumar K. Patel AGAPP9577F 40 Rajesh Pukhraj Raka (Huf) AAFHR7898G 41 Mohit Airen ABXPA1053F 42 Alok Gupta ACHPG2799K 43 Gaurav Manoj Agrawal AQMPA9216A 44 Ashok Kumar Sethi AGTPS5503P 45 Kantilal Amulkhdas Vohera ACHPV3687R 46 Kantilal Amulkhdas Vohera Huf AAFHK8045N 47 Suresh Chinde Gowda AHVPG4424G DHYANA GROUP 48 Parin Infrastructure Pvt Ltd AAGCP6796D 49 Mainak Comtrade Pvt Ltd AAGCM5750N 50 Baldevbhai Shankerlal Patel ACIPP5953F 51 Shailesh Baldevbhai Patel AOEPP2788Q 52 Harshaddkumar Baldevbhai Patel AOKPP9234R 53 Ramilaben Baladevbhai Patel AUHPP8735C 54 Jayshreeben Shah BQMPS6009Q 55 Gautamsingh Zala AAIPZ3605N 56 Birju Pravinchandra Sanghvi ALLPS1169E 57 Hiral Manish AZQPM9451N 58 Hiteshkumar Mahipatlal Patel APOPP1463R 59 Manish Shah BFOPS3849R

Order in the matter of Dhyana Finstock Limited

S. NO. NAME OF THE ENTITY PAN 60 Ronak Nayankumar Shah FKQPS0981B 61 Rohitkumar Shantilal Shah EHJPS4683H 62 Kiritbhai Shah AWRPS2401E 63 Fancy Augustine Christian AOSPC1308R 64 Taru Pallav Projects Private Limited AADCT4840M 65 Pranatpal Tradelink Private Limited AAFCP5109D 66 Ankit Rajeshbhairajput ASWPR1312C 67 Naranbhai Panchal AMQPP0054P 68 Hareshkumar P Patel BFMPP8817G 69 Chandrikaben Panchal BXQPP2080R 70 Rinkeshkumar Panchal BYCPP1543E 71 Gaurang Pathak BLSPP1179H 72 Jayshree Kishorbhai Dholakia AMLPD5973G 73 Kishorbhai Sonabhai Dholakiya ANHPD1507F 74 Anilbhai Bhalabhai Baria BWMPB2794M 75 Shalomiben Anilbhai Bariya BWMPB3400Q 76 Rajendra Dahyalal Pathak ACKPP8546L

6. The directions issued against Priyanka Nrupesh Tripathi (entity at serial no. 6) were revoked vide SEBI’s Order dated May 26, 2017.

7. The directions against the remaining 75 entities were confirmed vide Orders dated August 24, 2016, October 10, 2016, October 28, 2016, November 01, 2016 and May 26, 2017.

8. Pursuant to the interim order, SEBI conducted a detailed investigation of the entire scheme employed in the instant matter, connection amongst the debarred entities, funds used for the price manipulation of the scrip of Dhyana, etc., so as to ascertain the violation of securities laws.

9. Upon completion of investigation by SEBI, the following are noted as regards 34

Order in the matter of Dhyana Finstock Limited entities (mentioned below) who were identified as Preferential Allottees, Exit Providers and entities connected/related to Dhyana vide the interim order: (a) SEBI’s investigation did not find any adverse evidence against them. (b) SEBI’s investigation also did not find their any role in price manipulation & volume manipulation in the scrip of Dhyana. (c) Hence, violation of provisions of SEBI Act, PFUTP Regulations, etc., were not observed in respect of the following 34 entities.

Sr. No. Name of the Entities PAN 1 Sanjay Bhikhabhai Vaghani AABPV4486G 2 Kumar A AAEPK1457D 3 Rupal M Shah AAEPR5198J 4 Kantilal Amulkhdas Vohera HUF AAFHK8045N 5 Rajesh Pukhraj Raka (HUF) AAFHR7898G 6 Uttam Chunnilal Jain AAFPJ3365A 7 Pradipkumar Harakchand Doshi AAHPD4722B 8 Manish B Shah AAIPM4715G 9 Dilipkumar Manilal Chokshi AAKPC1264A 10 Mahesh V Vaghani AAWPV3196N 11 Jayprakash Maneklal Patel ABCPP1959N 12 Manharbhai Vallabhbhai Vaghani ABOPV3650L 13 Haresh Bhikhabhai Vaghani ABPPV4917M 14 Mohit Airen ABXPA1053F 15 Alok Gupta ACHPG2799K 16 Kantilal Amulkhdas Vohera ACHPV3687R 17 Raj Rattan ADXPR0831L 18 Bhavini S Shah AEVPB8830Q 19 Reenu Jain AEYPJ8903R 20 Ashwinkumar K. Patel AGAPP9577F 21 Ashok Kumar Sethi AGTPS5503P 22 Chetna H Chandan AHGPC9842D 23 Purvesh Nareshbhai Chauhan AHKPC9950A 24 Suresh Chinde Gowda AHVPG4424G 25 Aneelkumar Albertbhai Patel ALOPP2057M 26 Sanjay P Shah AMIPS4672G 27 Jyotiben Mahendrabhai Shah ANHPS8282Q 28 Ankit Mahendrabhai Shah ANTPS6591E

Order in the matter of Dhyana Finstock Limited

29 Ashokbhai G Jaratal AOCPJ0735R 30 Jaratal Mayaben Ashokbhai AOCPJ0760Q 31 Fancy Augustine Christian AOSPC1308R 32 Pinakin Dahyabhai Makwana APJPM5729E 33 Gaurav Manoj Agrawal AQMPA9216A 34 Shaluben Nikeshbhai Shah BPCPS1154K

10. Considering the fact that there are no adverse findings against the aforementioned 34 entities with respect to their role in the manipulation of the scrip of Dhyana, I am of the considered view that the directions issued against them vide interim order dated June 01, 2016 which were confirmed vide Orders dated August 24, 2016, October 10, 2016, October 28, 2016, November 01, 2016 and May 26, 2017 qua the aforementioned 34 entities need not be continued.

11. I also note that the investigation did not find any adverse evidence / findings against Jignesh Sudhirbhai Shah, Niravkumar Surendrakumar Shah and Shah Palakben Niravkumar and also did not find their any role in the price-volume manipulation of the scrip of Dhyana.

12. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11, 11(4) and 11B of the SEBI Act, hereby issue the following directions:

(a) revoke the Confirmatory Orders dated August 24, 2016, October 10, 2016, October 28, 2016, November 01, 2016 and May 26, 2017 qua aforesaid 34 entities (mentioned at paragraph 9 above) with immediate effect and BSE shall release the pay-out of sale proceeds for the trades executed on July 27, 2015 in respect of Jyotiben Mahendrabhai Shah (PAN: ANHPS8282Q), Ankit Mahendrabhai Shah (PAN: ANTPS6591E), Fancy Augustine Christian (PAN: AOSPC1308R); (b) BSE shall also release the pay-out of sale proceeds for the trades executed on July 27, 2015 in respect of Jignesh Sudhirbhai Shah (PAN: BBNPS1083E),

Order in the matter of Dhyana Finstock Limited

Niravkumar Surendrakumar Shah (PAN: APMPS5755B), Shah Palakben Niravkumar (PAN: BKSPS8111B).

13. The revocation of the directions issued vide the abovementioned orders (at paragraph 12) is only in respect of the entities mentioned at paragraph 9 of this order in the matter of Dhyana Finstock Limited. As regards remaining entities in the scrip of Dhyana, violations under SEBI Act, PFUTP Regulations, etc., were observed and SEBI shall continue its proceedings against them. Hence, the directions issued vide Orders dated August 24, 2016, October 10, 2016, November 01, 2016 and May 26, 2017 against the remaining 41 entities shall continue.

14. A copy of this Order shall be served on the Stock Exchanges and Depositories, for necessary action.

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DATE: APRIL 24, 2018 MADHABI PURI BUCH PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the matter of Dhyana Finstock Limited