In The Matter Of P.M. Telelinnks Limited And 8K Miles Software Solutions Limited Vs

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Judgment

4,113 paragraphs · 17,284 words

BACKGROUND

Based on a preliminary enquiry, Securities and Exchange Board of India (SEBI) had passed an interim order dated April 18, 2013 (interim order) against inter alia Vijay Babulal Shah, Saurin Pravinbhai Shah, Bhavini Vijaykumar Shah, Jipal Pineshkumar Shah, Jagdish Ramanlal Patel, Daivik Jatinbhai Shah, Ravi Pukhraj Surana, Gulab Chand Pukhraj Surana, Dipin Surana and Hema Govindbhai Patel (hereinafter together referred to as 'the Noticees') in the matter of P.M. Telelinnks Limited (PMTL) and 8K Miles Software Solutions Limited (8KMiles)for the alleged violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (PFUTP Regulations). Vide the Interim Order, the Noticees were restrained from accessing the securities market and prohibited from buying, selling or dealing in securities market in any manner whatsoever. The said directions against the Noticees were confirmed by order dated December 30, 2013 (Confirmatory Order).

Pursuant to an investigation by SEBI in the trading in the scrip of PMTL and 8KMiles to ascertain any violation of the provisions of PFUTP Regulations, SEBI issued a common show cause notice (SCN) dated February 29, 2016 to the Noticees calling upon them to show cause as to why suitable directions under Sections 11B and 11(4) of the SEBI Act, 1992 should not be issued against them for the alleged violations of the provisions of PFUTP Regulations and other SEBI Regulations. The findings of the investigation, as provided in the SCN, are as follows:

Findings with respect to the scrip of PMTL

The period of investigation in respect of trading in the scrip of PMTL was taken as August 01, 2011 to September 28, 2012 (period examined in the Interim Order).

PMTL was incorporated as a private company on March 05, 1980 and was later converted to a public limited company on November 04, 1992. It was earlier known as Medak Stainless Rolling Pvt. Limited and thereafter changed to Ranka Alloy & Strips Private Limited and later to Surana Strips Private Limited. The business of the company is to manufacture processors, refiners, smelters, markers, moulders, converters, finishers, re-rollers etc. The details of directors of PMTL during the investigation period, as submitted by PMTL is tabulated below:

Name

Designation

Name

Designation

G.P. Surana

Managing Director

Casula Raj Kumar

Independent Director

Ravi Surana

Director

P. Chandra Mohan Rao

The price volume analysis of trading in the scrip of PMTL during the investigation period is as follows:

Period

Dates

Opening Price/Volume on first day

Closing Price/Volume on last day

Low Price/(Volume)

High Price/(Volume)

Avg. no. of shares traded daily

Pre Investigation period

01/05/2011-31/07/2011

Price

52.95

38.15

34.10 (26/07/2011)

56.25 (11/05/2010)

58,920

Vol

31,357

1,98,896

10 (02/06/2011)

469,723 (25/07/2011)

Investigation Period

01/08/2011-28/09/2012

Price

39.95

35.25

29.65 (18/09/2012)

195.00 (28/04/2012)

1,10,452

Vol

2,10,539

1,06,718

14 (23/07/2012)

12,60,410 (24/05/2012)

Post Investigation period

01/10/2012-31/12/2012

Price

35.85

37.30

27.25 (05/12/2012)

40.70 (20/12/2012)

86,466

Vol

70,805

1,08,942

2,634 (25/10/2012)

4,93,996 (19/12/2012)

The details of the top 10 gross buy clients and gross sell clients during the investigation period is tabulated as below:

Buy Client Name

Sell Total

% of Trd Vol

Sell Client Name

Sell Total

% of Trd Vol

Shah Bhavini Vijaykumar

25,70,104

7.97

Shah Bhavini Vijaykumar

27,07,030

8.39

Shah Jipal Pineshkumar

21,66,298

6.72

Shah Jipal Pineshkumar

20,12,911

6.24

Vijay Babulal Shah

19,38,757

6.01

Vijay Babulal Shah

18,70,040

5.80

Jagdish Ramanlal Patel

16,35,576

5.07

Jagdish Ramanlal Patel

15,93,358

4.94

Saurin Pravinbhai Shah

15,40,282

4.78

Saurin Pravinbhai Shah

14,45,520

4.48

Shaishil T Jhaveri

12,26,642

3.80

Shaishil T Jhaveri

12,26,642

3.80

Shah Daivik Jatin

8,36,143

2.59

Shah Daivik Jatin

8,27,557

2.57

Manish Ratilal Shah

6,61,061

2.05

Manish Ratilal Shah

7,46,124

2.31

Span Tradelink Pvt. Ltd.

6,58,393

2.04

Span Tradelink Pvt. Ltd.

6,21,553

1.93

Sharadbhai Ramanbhai Jhaveri

5,06,520

1.57

Sharadbhai Ramanbhai Jhaveri

5,66,805

1.76

Top 10 Buy Clients

1,37,39,776

42.60

Top 10 Sell clients

1,36,17,540

42.22

Remaining Clients

1,85,12,081

57.40

Remaning Clients

1,86,34,317

57.78

Total Traded Volume

3,22,51,857

100.00

Total Traded Volume

3,22,51,857

100.00

It was found that the client Bhavini Vijaykumar Shah was the top buyer and seller during the investigation period. The top 10 clients contributed 42.60% and 42.22% of the buy and sell side respectively during the investigation period. Except the said two buyers and sellers, all entities in the top 10 entities tabulated above are a part of the suspected clients.

It was also found that certain suspected entities had traded in the scrip during the investigation period and were found to have been connected to the suspected entities on the basis of Know Your Client (KYC) details and bank transactions as tabulated below:

Sr. No

Client Name

Basis of connection

Bhavini Vijaykumar Shah (Noticee No. 3)

1 is 4's spouse

3-10, 13, 14, and 17 - 21 have common contact number - 9978834974

10-27 have common email:[email protected]

11-34 have common contact number-9824046454

Bank transactions between 3 and 35

5 entered into bank transactions with 1, 3, 4, 6, 7, 10, 12, 15, 21, 23, 24, 26, 33 and 36

3 entered into bank transactions with 1, 5, 7, 12-15, 18-21, 23, 24 and 26

37-41 are promoter group entities

38 and 41 transferred money to 3 and 5 through their firm PM Telecom

Shares transferred in the off-market by 37 to 22

2, 3, 8, 9, 13, 14, 22 and 26 have common mobile number 9067421515

Entities 1-36 are collectively referred to as Ahmedabad Group and entities 37-41 are collectively referred to as Surana Group. Entities 1-41 are collectively referred to as Suspected Entities.

Thottathil Puthanpoirayil Saira

Saurin Pravinbhai Shah (Noticee No 2)

Shah Vijay Babulal (Noticee No. 1)

Shah Daivik Jatin (Noticee No. 6)

Span Tradelink Private Limited

Jipal Pineshkumar Shah (Noticee No. 4)

Mona Vimesh Modi

Falguni T Modi

Thakorlal Atmaram Modi

Shah Daxaben Vasantkumar

Chhatrasinh C Yadav

Urmilaben G Patel

Hema Govindbhai Patel (Noticee No. 10)

Umeshbhai Chhatrasinh Yadav

Madhuben Khodabhai Patel

Arvindbhai Khodabhai Patel

Patel Sanjaybhai Narandas

Pankaj Narayandas Patel

Ronak Pankajkumar Patel

Rekhaben Sanjaybhai Patel

Jagdish Ramanlal Patel (Noticee No. 5)

Yadav Vishnu Chhattarsingh

Lalitaben Fulabhai Patel

Vikram Govindbhai Patel

Neha Pasand Patel

Sonal Kiritbhai Patel

Jashavantlal Chunilal Patel

Ranjanben Pankaj Patel

Harshida Jashavantlal Patel

Patel Rekhaben P

Nahush Budhabhai Patel

Budhabhai Radhabhai Patel

Manjulaben Arvindbhai Patel

Shaishil Tusharkumar Jhaveri

Vedawala Sangitaben Pareshkumar

Gulab Chand Pukhraj Surana (Noticee No. 8)

Dipin Surana (Noticee No. 9)

Meena Surana

Pranali Surana

Ravi Pukhraj Surana (Noticee No. 7)

The details of the trading by the above-mentioned entities are as follows:

Name

Gross Buy

Sell

Quantity

Value

Avg Rate

Quantity

Value

Avg Rate

Shah Bhavini Vijaykumar

25,70,104

29,49,42,227

114.76

27,07,030

28,95,77,258

106.97

Shah Jipal Pineshkumar

21,66,298

22,12,51,554

102.13

20,12,911

22,69,00,102

112.72

Vijay Babulal Shah

19,38,757

21,91,58,427

113.04

18,70,040

21,34,33,417

114.13

Saurin Pravinbhai Shah

15,40,282

18,59,43,194

120.72

14,45,520

17,44,27,440

120.67

Jagdish Ramanlal Patel

16,35,576

17,77,18,762

108.66

15,93,358

17,01,51,711

106.79

Shaishil Tusharkumar Jhaveri

12,26,642

17,31,26,275

141.14

12,26,642

17,23,16,784

140.48

Shah Daivik Jatin

8,36,143

12,41,11,047

148.43

8,27,557

12,17,26,474

147.09

Span Tradelink Pvt. Ltd.

6,58,393

9,08,79,988

138.03

6,21,553

8,50,24,738

136.79

Lalitaben Fulabhai Patel

4,17,999

6,03,65,766

144.42

4,23,688

5,83,67,160

137.76

Yadav Vishnu Chhattarsingh

3,93,864

5,21,82,486

132.49

3,78,345

4,84,73,444

128.12

Sonal Kiritbhai Patel

3,47,197

5,04,60,901

145.34

3,20,845

4,78,38,423

149.10

Thaorlal Atmaram Modi

4,94,691

4,51,82,220

91.33

4,86,309

4,01,91,091

82.65

Neha Pasand Patel

2,75,844

4,03,59,481

146.31

2,38,391

3,53,41,722

148.25

Budhabhai Radhabhai Patel

2,54,222

3,92,91,706

154.56

2,55,393

3,64,78,046

142.83

Pankaj Narayandas Patel

2,38,408

3,88,55,288

162.98

1,71,076

2,82,21,224

164.96

Ronak Pankajkumar Patel

1,75,859

2,83,80,425

161.38

1,53,760

2,40,56,352

156.45

Urmilaben G Patel

1,77,848

2,78,85,313

156.79

1,37,146

2,19,09,302

159.75

Patel Hema Govindbhai

1,69,407

2,55,41,951

150.77

1,57,944

2,38,20,494

150.82

Shah Daxaben Vasantkumar

2,18,687

2,04,30,705

93.42

1,86,893

1,70,38,962

91.17

Rekhaben Sanjaybhai Patel

1,03,823

1,17,97,911

113.63

1,54,869

1,82,51,972

117.85

Yadav Umeshbhai Chhatrasinh

70,197

1,13,84,615

162.18

41,811

65,03,973

155.56

Sanjaybhai Narandas Patel

1,12,783

1,12,48,569

99.74

93,058

1,10,05,962

118.27

Yadav Chhatrasinh Cheeranjilal

61,912

1,02,67,590

165.84

58,035

70,50,746

121.49

Nahush Budhabhai Patel

78,599

99,91,283

127.12

1,03,106

1,11,42,774

108.07

Patel Madhuben Khodabhai

58,370

96,82,162

165.88

52,235

87,60,029

167.70

Vedawala Sangitaben Pareshkumar

1,34,781

68,28,029

50.66

47,568

25,20,303

52.98

Mona Vimesh Modi

36,134

57,60,498

159.42

21,648

25,15,698

116.21

Falguni T Modi

36,536

56,93,347

155.83

47,500

38,90,963

81.92

Arvindbhai Khodabhai Patel

34,100

45,88,705

134.57

26,700

21,46,195

80.38

Thottathil Puthanpoirayil Saira

22,707

33,35,440

146.89

10,000

14,45,000

144.50

Manjulaben Arvindbhai Patel

24,127

29,86,296

123.77

16,250

5,30,563

32.65

Ranjanben Pankajbhai Patel

25,200

14,08,659

55.90

25,200

15,90,490

63.11

Rekhaben Pareshkumar Patel

6,686

11,07,753

165.68

24,000

20,18,000

84.08

Harshida Jashavantlal Patel

4,065

6,86,791

168.95

16,900

12,44,030

73.61

Vikram Govindbhai Patel

5,600

4,03,000

71.96

7,670

5,11,210

66.65

Jashavantlal Chunilal Patel

1,691

2,65,013

156.72

15,510

13,79,027

88.91

Subtotal - Ahmedabad Group

1,65,53,532

2,01,35,03,376

121.64

1,59,76,461

1,91,78,01,076

120.04

Gulab Chand Pukhraj Surana

1,477

98.45

1,475

98.35

Pranali Surana

1,200

100.00

1,10,012

37,51,604

34.10

Dipin Surana

47,000

21,71,011

46.19

Meena Surana

46,000

20,12,270

43.74

Subtotal - Surana

2,677

99.14

2,03,027

79,36,360

39.09

Total - Suspected entites

1,65,53,559

2,01,35,06,053

121.64

1,61,79,488

1,92,57,37,436

119.02

10.

From the table above, it was observed that the Ahmedabad Group had bought 1,65,53,532 shares (51.33% of market volume) and sold 1,59,76,461 shares (49.54% of market volume) and the Surana Group sold 2,03,000 shares (on net basis) which constitutes 0.63% of market volume.

11.

It was found that the entities of Ahmedabad group, including Noticee Nos. 1 to 5, had executed self-trades of 2,09,186 shares (contributing-8.65 to net LTP) during the investigation period (i.e., August 01, 2011 to September 28, 2012) i.e., trades wherein the same client appeared on both buy and sell side of the trades. Details of self-trades by entities who had repeatedly executed self-trades (quantity of more than 10,000 shares, more than 5 count of trades executed for two or more days) are tabulated below:

Entity Name

Total Self Trade Volume

Total Self Trade Count

Self-Trade count from same Terminal

No of days on which self trades done

% Of Self Traded Qty. To Market Vol.

LTP Difference

Shaishil T Jhaveri

64,107

0.20%

-0.85

Jagdish Ramanlal Patel

36,193

0.11%

-3.75

Vijay Babulal Shah

31,363

0.10%

5.75

Shah Bhavini Vijaykumar

30,358

0.09%

-3.85

Saurin Pravinbhai Shah

15,657

0.05%

0.4

Shah Jipal Pineshkumar

10,496

0.03%

-3.1

Grand Total

1,88,174

268

0.58%

-5.00

12.

It was also found that the these two groups carried out synchronized trades which are detailed below:

Group

Gross Buy Qty of Suspected Entities

Gross Sell Qty of Suspected Entities

Gross Total

Total Traded Qty among the suspected entities

Sync Traded Qty by suspected entities

Sync Trades as % of total traded Qty among the suspected entities

Sync Trades as % of total market volume

Sum of LTP by sync trades

Sum of NHP* by Sync Trades

Ahmedabad

1,65,53,532

1,59,76,461

3,25,29,993

93,94,126

45,67,384

48.62

14.16

-93.35

Surana

2,03,027

2,03,054

Suspected

1,65,53,559

1,61,79,488

3,27,33,047

94,96,596

45,67,384

48.09

14.16

-93.35

*NHP: New High Price

13.

The investigation revealed that the total synchronized trades (where the buy and sell order quantities and rates were identical and orders for these transactions were placed within time gap of up to one minute) by the suspected entities as a group - involving 35 clients and 352 client pairs during the investigation period was 14.16% of total market volume. The highest volume contribution by synchronized trades by a client pair was less than 0.80% and therefore entities whose buy and sell quantity in all synchronized trades amongst the suspected entities exceeds 2% of the market volume were shortlisted. There were five such entities, which were Noticees No. 1 to 5 and details of their trading amongst themselves have been tabulated below:

Gross Buy Qty

Gross Sell Qty

Gross Total

Total Traded Qty among the entities

Sync Traded Qty

Sync Trades as % of total traded Qty amongst the entities

Sync Trades as % of total market volume

Sum of LTP by sync trades

Sum of NHP by Sync Trades

98,51,017

96,28,859

1,94,79,876

33,45,932

15,62,625

46.70

4.85

15.50

7.30

14.

It is alleged on the basis of the above that Noticees No. 1 to 5 have entered into 1,040 synchronised trades on 163 days resulting in artificial volume and price rise.

15.

During the period of investigation, the price of scrip moved from Rs. 39.95 to Rs. 195.00 (Rs. 155.05 or 388.11% increase) through first trades as well as intra-day price movements. Details of the Ahmedabad Group entities that have dealt in the scrip and contributed to the new high price during the investigation period are tabulated below:

Name

NHP

NHP% to market NHP

No. of trades

Quantity

Jipal Pineshkumar Shah

25.55

16.48%

2,389

Shah Vijay Babulal

22.05

14.22%

29,878

Jagdish Ramanlal Patel

17.50

11.29%

7,611

Shah Daivik Jatin

15.85

10.22%

6,738

Saurin Pravinbhai Shah

13.70

8.84%

10,318

Nahush Budhabhai Patel

4.80

3.10%

Lalitaben Fulabhai Patel

2.85

1.84%

Bhavini Vijaykumar Shah

2.05

1.32%

1,296

Sub-total - Ahmedabad group

104.35

67.30%

174

58,270

Other entities

50.70

32.70%

35,404

Total

155.05

100.00%

245

93,674

16.

Of the 245 trades establishing New High Price (hereinafter referred to as 'NHP') during the investigation period, Ahmedabad Group was buyer to 174 trades contributing Rs. 104.35 (i.e., 67.30% of total NHP during the relevant period) to NHP. Since Mr. Jipal Pineshkumar Shah, Mr. Shah Vijay Babulal, Mr. Jagdish Ramanlal Patel, Mr. Shah Daivik Jatin and Mr. Saurin Pravinbhai Shah have repeatedly established NHP, these five entities have allegedly contributed to artificial price rise.

17.

Last traded price (LTP) analysis was carried out for the entire investigation period. The details of trades by suspected entities and their trades that resulted in influencing the LTP during the investigation period are tabulated below:

(LTP in amount Rs.)

Name

All trades

LTP Diff. >0

LTP Diff. < 0

LTP Diff. =0

LTP impact

Trade Qty

No. of trades

LTP impact

% to Mkt +ve

Trade Qty

No. of trades

-ve LTP impact

Trade Qty

No. of trades

Trade Qty

No. of trades

Saurin Pravinbhai Shah

1,098.90

15,40,282

7,826

2,147.70

16.45

2,78,864

2,722

1,048.80

8,74,085

2,026

3,87,333

3,078

Shah Bhavini Vijaykumar

776.20

25,70,104

6,289

1,371.30

10.50

6,01,484

2,032

595.10

12,08,265

1,391

7,60,355

2,866

Vijay Babulal Shah

726.15

19,38,757

6,749

1,503.75

11.52

4,36,140

2,229

777.60

8,73,390

1,703

6,29,227

2,817

Jagdish Ramanlal Patel

545.35

16,35,576

4,361

1,095.00

8.39

4,36,648

1,403

549.65

7,09,784

1,058

4,89,144

1,900

Shah Daivik Jatin

492.75

8,36,143

3,029

894.20

6.85

1,37,170

1,141

401.45

4,15,906

919

2,83,067

969

Shah Jipal Pineshkumar

477.85

21,66,298

5,478

1,037.40

7.94

4,29,644

1,583

559.55

10,07,152

1,205

7,29,502

2,690

Span Tradelink Private Limited

135.40

6,58,393

1,143

274.05

2.10

1,44,806

374

138.65

3,79,354

291

1,34,233

478

Shah Daxaben Vasantkumar

90.05

2,18,687

807

177.45

1.36

22,302

312

87.40

1,09,928

228

86,457

267

Budhabhai Radhabhai Patel

68.35

2,54,222

707

129.55

0.99

68,721

260

61.20

1,44,385

116

41,116

331

Nahush Budhabhai Patel

38.25

78,599

202

53.85

0.41

6,324

15.60

56,547

15,728

Urmilaben G Patel

37.80

1,77,848

384

67.50

0.52

30,270

166

29.70

1,11,340

36,238

136

Yadav Vishnu Chhattarsingh

36.40

3,93,864

1,130

114.65

0.88

65,215

259

78.25

1,62,546

312

1,66,103

559

Lalitaben Fulabhai Patel

34.45

4,17,999

776

119.40

0.91

82,421

199

84.95

2,70,013

219

65,565

358

Patel Hema Govindbhai

34.45

1,69,407

825

67.85

0.52

40,775

148

33.40

1,05,386

129

23,246

548

Vedawala Sangitaben Pareshkumar

34.05

1,34,781

645

60.60

0.46

4,743

118

26.55

14,687

122

1,15,351

405

Sonal Kiritbhai Patel

25.90

3,47,197

520

75.80

0.58

68,729

155

49.90

1,99,233

149

79,235

216

Yadav Umeshbhai Chhatrasinh

16.25

70,197

20.25

0.16

34,297

4.00

19,549

16,351

Pankaj Narayandas Patel

11.85

2,38,408

172

46.15

0.35

64,894

34.30

1,49,583

23,931

Patel Madhuben Khodabhai

4.45

58,370

14.05

0.11

4,139

9.60

45,291

8,940

Sanjaybhai Narandas Patel

2.50

1,12,783

5.70

0.04

29,894

3.20

28,193

54,696

Thaorlal Atmaram Modi

2.35

4,94,691

459

42.75

0.33

83,077

40.40

2,53,758

1,57,856

276

Yadav Chhatrasinh Cheeranjilal

0.90

61,912

8.45

0.07

19,498

7.55

27,763

14,651

Ranjanben Pankajbhai Patel

0.40

25,200

1.20

0.01

10,098

0.80

5,050

10,052

Gulab Chand Pukhrj Surana

Harshida Jashavantlal Patel

(0.00)

4,065

0.25

0.00

810

0.25

1,360

1,895

Pranali Surana

(0.40)

0.40

Jashavantlal Chunilal Patel

(0.95)

1,691

0.05

330

1.00

821

540

Vikram Govindbhai Patel

(1.05)

5,600

1.05

5,600

Rekhaben Sanjaybhai Patel

(2.00)

1,03,823

4.60

0.04

31,728

6.60

48,799

23,296

Manjulaben Arvindbhai Patel

(2.15)

24,127

2.15

24,127

Thottathil Puthanpoirayil Saira

(2.20)

22,707

0.30

0.00

1,101

2.50

20,600

1,006

Rekhaben Pareshkumar Patel

(2.25)

6,686

0.20

0.00

2.45

5,588

1,012

Ronak Pankajkumar Patel

(5.30)

1,75,859

189

16.15

0.12

29,174

21.45

86,470

60,215

Arvindbhai Khodabhai Patel

(5.55)

34,100

5.55

34,100

Mona Vimesh Modi

(8.45)

36,134

8.45

19,589

16,545

Falguni T Modi

(8.80)

36,536

1.35

0.01

2,000

10.15

22,810

11,726

Neha Pasand Patel

(18.20)

2,75,844

398

37.30

0.29

55,138

55.50

1,74,691

109

46,015

208

Shaishil Tusharkumar Jhaveri

(124.35)

12,26,642

795

69.00

0.53

2,62,140

145

193.35

5,85,948

287

3,78,554

363

Grand Total

4,509.35

1,65,53,559

43,337

9,457.80

72.42

34,82,660

13,688

4,948.45

82,01,703

10,805

48,69,196

18,844

18.

The details of Noticees No. 1 to 6 which contributed 5% or above to positive LTP is tabulated below:

Name

All trades

LTP Diff. >0

LTP Diff. < 0

LTP Diff. =0

LTP impact

Trade Qty

No. of trades

LTP impact

% to Mkt+ve

Trade Qty

No. of trades

-ve LTP impact

Trade Qty

No. of trades

Trade Qty

No. of trades

Top 6

4,117.20

1,06,87,160

33,732

8,049.35

61.65

23,19,950

11,110

3,932.15

50,88,582

8,302

32,78,628

14,320

Other 32

392.15

58,66,399

9,605

1,408.45

10.79

11,62,710

2,578

1,016.30

31,13,121

2,503

15,90,568

4,524

Total

4,509.35

1,65,53,559

43,337

9,457.80

72.44

34,82,660

13,688

4,948.45

82,01,703

10,805

48,69,196

18,844

19.

Noticees No. 1 to 6 were the main contributors to price increase. Their trades resulted in net LTP contribution of Rs. 4,117.20. They bought shares at higher price to LTP in the scrip on 11,110 instances which resulted into positive LTP contribution of Rs. 8,049.35 (61.65% of market positive LTP). They bought shares at lower price to LTP in the scrip on 8,302 instances which resulted into negative LTP contribution of Rs. 3,932.15. They bought 32,78,628 shares at price equal to LTP in 14,320 instances.

20.

On the basis of the above, it is alleged that Noticees No. 1 to 6 have traded at prices above LTP and contributed to artificial price. It was also observed that the traded quantity for the trades above LTP constituted only 21.71% of their total buy quantity. Therefore, these entities have allegedly increased the price of the scrip by repeatedly entering into trades for lesser number of shares.

21.

Analysis of the first trades executed by the Noticee nos. 1 to 6 was carried out, which is as follows:

Client

Above LTP

At or below LTP

All First Trades

LTP

No. of Trades

Trade Qty

Net LTP

No. of Trades

Trade Qty

Net LTP

No. of Trades

Trade Qty

Saurin Pravinbhai Shah

255.15

1,761

(9.10)

306

246.05

2,067

Vijay Babulal Shah

141.35

1,738

(0.65)

3,243

140.70

4,981

Shah Jipal Pineshkumar

85.45

6,470

(2.70)

5,786

82.75

12,256

Jagdish Ramanlal Patel

82.90

411

(14.65)

212

68.25

623

Shah Daivik Jatin

56.30

2,055

(0.65)

55.65

2,056

Bhavini Vijaykumar Shah

41.85

6,036

(1.20)

300

40.65

6,336

22.

It can be seen from above table that the these entities contributed Rs. 706.20 to net LTP respectively through first trades in 224 trading days out of total 292 trading days during the investigation period. It was observed in the investigation that these entities were indulging in first trades on 224 occasions of the 292 trading days (i.e., 76.71%). Of the 224 days when they were buyers for the first trades, they contributed positive LTP on 204 occasions and resulted in artificial price rise of Rs. 735.15.

23.

Analysis of the top five trades in terms of contribution to LTP by each of the six entities identified above was carried out and the same is provided as follows:

(a) Saurin Pravinbhai Shah:

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next buy price

29.06.12

18000179000332

09:08:23

09:06:58

193.00

161.50

31.50

Pre-open

28.04.12*

18000082000068

11:08:29

11:00:25

198.10

195.00

165.10

29.90

23.04.12

19000219002383

09:08:22

09:01:20

196.65

190.00

163.90

26.10

03.04.12

22000058000547

09:08:22

09:00:24

191.60

178.50

159.70

18.80

29.06.12

12000137002416

09:29:06

174.65

163.00

11.65

2,500

161.25

* Special live trading on Saturday from 11AM - 28.04.2012. Sub-Total

117.95

Of the 5 buy trades tabulated above, 4 were in the pre-open session and one trade was in the normal market. At the time of entry for 3 out of 4 orders in the pre-open session mentioned above, there were no other buyers in the pre-open session other than the suspected entities. For the one order, the order price range entered by other buyers was Rs. 164-163.8 (2 orders) while Saurin entered buy order at 195.65.

(b) Vijay Babulal Shah

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next buy price

02.04.12

16000042000370

09:08:22

09:03:59

191.40

178.95

159.50

19.45

Pre-open

10.04.12

20000262002888

09:08:22

09:00:48

205.80

183.95

171.50

12.45

02.04.12

12000050003491

09:19:06

166.50

166.00

158.00

8.00

5500

158

02.04.12

12000050003377

09:18:43

167.95

160.00

7.95

100

127.65

09.04.12

23000052005394

09:24:10

170.95

163.00

7.95

250

168

Sub-Total

55.80

Of the 5 buy trades above, the first 2 trades above were in the pre-open session where the buy order price entered by other than suspected entities was Rs. 127.65 (1 order) and Rs. 163.15 (3 orders) while Mr. Saurin entered buy order at Rs. 191.40 and 205.80 respectively.

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next buy price

24.02.12

13000250007977

09:18:23

152.00

143.55

8.45

500

2000

144

21.05.12

15000124001651

09:16:54

183.00

174.85

8.15

169.20

17.10.11

17000036023034

15:29:41

15:29:40

82.00

74.20

7.80

2000

28.02.12

12000050003324

09:20:31

160.00

158.70

151.05

7.65

5000

18,820

148.25

25.06.12

12000137000384

09:08:16

09:06:59

198.45

172.80

165.40

7.40

Pre-open

Sub-Total

39.45

7,506

2,517

24.

In the two cases where the number of shares transacted was more than 100 shares, the counterparty was Daivik Jatin Shah i.e., a connected entity and one of the suspected entities. In other trades, the entity contributed significantly to LTP by transacting small number of shares. For the trade in the pre-open session, no buy order was entered by any other person.

(d) Jagdish Ramanlal Patel

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next buy price

26.03.12

13000054001743

09:08:21

09:01:26

197.00

177.90

164.20

13.70

Pre-open

26.03.12

13000054003608

09:15:53

174.00

164.00

10.00

1000

164

28.02.12

11000051000257

09:08:24

09:06:50

163.45

156.00

148.95

7.05

Pre-open

21.03.12

14000061000411

09:16:06

09:16:03

163.00

157.15

5.85

150

158.05

20.04.12

11000179000344

09:08:30

09:00:57

195.35

169.00

163.50

5.50

Pre-open

Sub-Total

42.10

172

171

25.

For the pre-open session trade on March 26, 2012, apart from the buy orders entered by Mr. Jagdish, there were 7 buy orders for 1,005 shares in total in the price range of Rs. 160-140 as against buy order price of Rs. 197 for 10 shares placed by Mr. Jagdish. Further, for the trade on April 20, 2012, there was only one other order by other than the captioned entity that had placed a buy order for 1 share at Rs. 163 as against buy order price of Rs. 195.35 for 10 shares placed by Mr. Jagdish.

(e) Shah Jipal Pineshkumar

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next buy price

17.01.12

12000061000035

09:15:07

09:15:03

133.00

121.70

11.30

200

110

13.07.12

13000133000266

09:08:16

09:06:21

186.95

164.00

155.80

8.20

Pre-open

30.01.12

12000253004398

09:26:28

140.85

135.05

5.80

135.05

12.10.11

12000045000943

09:17:55

71.30

71.00

65.55

5.45

300

65.60

12.10.11

23000047001490

09:19:33

70.85

70.70

65.70

5.00

395

65.70

Sub-Total

35.75

26.

For the pre-open session trade on July 13, 2012, three other buy orders by entities other than the captioned entity were pending in the system for 325 shares at Rs. 131-124.65 as against buy order price of Rs. 186.95 for 1 share placed by Mr. Jipal.

(f) Shah Daivik Jatin

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next buy price

28.04.12

19000075000448

11:16:14

190.00

165.00

25.00

25,000

3,000

165.15

28.04.12

16000063000702

11:15:41

194.00

175.10

18.90

5,015

165.00

01.03.12

22000089001812

09:08:25

09:00:49

180.00

175.95

164.35

11.60

Pre-open

02.03.12

22000257002931

09:08:24

09:01:56

181.25

174.00

164.80

9.20

29.02.12

13000216005163

09:08:31

09:01:00

179.00

170.95

163.35

7.60

Sub-Total

72.30

25,075

3,060

27.

For the three trades in the pre-open session, except for 1 buy order by an entity other than the suspected entities for 200 shares at Rs. 148 on February 29, 2012 when Daivik had placed orders at 179, there were no buy orders by any entity other than Daivik's buy orders.

28.

From the above, it is found that for buy orders placed in the pre-open session, either there were no other buyers other than the suspected entities or the buy order price offered by entities other than the suspected entities was much lesser than the buy price offered by the suspected entities. Further, all trades in the pre-open session were for up to 10 shares and they contributed to LTP significantly. It was found that in the normal trading session, the entities bought miniscule quantities of shares (except in one trade of Shah Daivik Jatin) despite the fact that the quantities of shares available on sale were much higher than those bought by them. By buying in small quantities but at a price much above the LTP, the entities above contributed to price rise. It was seen that the order prices in the buy orders mentioned above were much higher than the next best order available in the system. Orders with very minimal quantities were placed at prices much higher than the market price and thereby causing artificial increase in the price of the scrip. This finding is supported by the table below capturing range of order quantities for the trades contributing to LTP by the aforesaid six entities:

Buy orders quantity range

No. of Trades

Sum of + LTP in Rs.

% to the total +LTP by the client Rs. 851.96

Sum of Trade Quantity (%)

Upto10

7,623

6,595.10

81.93%

14,449 (0.62)

11-50

1,352

585.15

7.27%

35,285 (1.52)

51-100

527

188.60

2.34%

36,636 (1.58)

101-1000

934

357.15

4.44%

2,61,100 (11.25)

Above 1000

674

323.35

4.02%

19,72,480 (85.02)

Grand Total

11,110

8,049.35

100.00%

23,19,950 (100)

29.

On the basis of the above, it is alleged that Noticee Nos. 1 to 6 intended to and had caused artificial price rise in the scrip during the investigation period.

Promoters' role, trading and disclosure violations:

30.

As per the shareholding details filed by the Company for the quarter ended March 31, 2012, ten promoter and the promoter group entities were holding 49.76% of the capital of PMTL. However, no disclosure was filed with the Company (confirmed by the Company vide mail dated November 13, 2014) and BSE (confirmed by BSE vide mail dated September 22, 2014). Further, Mr. Dipin Surana (Noticee No. 9) sold shares during the investigation period for which he was required to make disclosure under the SEBI (Prohibition of Insider Trading) Regulations, 1992 (PIT Regulations) but he did not do so. The details of change in shareholding along with the disclosure violations are tabulated below:

Date

Particulars

Change in holding

Shareholding

Disclosure required under Regulation

Value

01-Aug-11

Opening Balance

5,21,000

5.17

01-Aug-12

Sale of shares

15,000

0.15

727,142

5,06,000

5.02

PIT 13(4A)*

02-Aug-12

Sale of shares

14,000

0.14

641,308

4,92,000

4.88

PIT 13(4A)*

03-Aug-12

Sale of shares

9,073

0.09

395,129

4,82,927

4.79

Nil

06-Aug-12

Sale of shares

2,417

0.02

100,064

4,80,510

4.77

Nil

07-Aug-12

Sale of shares

510

0.01

20,069

4,80,000

4.76

PIT 13(4A) Rs. 5,15,262

08-Aug-12

Sale of shares

2,000

0.02

91,200

4,78,000

4.74

Nil

09-Aug-12

Sale of shares

2,000

0.02

95,700

4,76,000

4.72

Nil

10-Aug-12

Sale of shares

2,000

0.02

100,400

4,74,000

4.70

Nil

31.

Further, in violation of Clause 4.2 of the Code of Conduct ('CoC') adopted by the company to prevent insider trading ('CoC - PIT'), Mr. GP Surana (Managing Director and Noticee no. 8) has taken opposite positions i.e., bought and sold shares within six months. Mr. GP Surana bought and sold 15 shares on December 28, 2011 on market.

Paying Money and Securities by promoter entities

32.

On June 28, 2011, one of the promoters of PMTL, Mr. Gulab Chand Pukhraj Surana (Noticee No. 8) transferred 2,50,000 shares of the PMTL to Mr. Jagdish Ramanlal Patel (Noticee No. 5) i.e., an entity of the Ahmedabad Group and no consideration was paid by the buyer, which was admitted by Jagdish R. Patel in his letter to SEBI. Further, from the bank statement of PM Telecom (a firm in which the authorized signatories are the promoters of PMTL i.e., Mr. Gulab Chand Pukhraj Surana, Mr. Dipin Surana and Mr. Ravi Pukhraj Surana), it was found that Rs. 10 Lakhs was transferred to Mr. Daivik Jatin Shah (Noticee No. 6) on June 24, 2011 and Rs. 1 Crore was transferred to Saurin Pravinbhai Shah (Noticee No. 2) (Rs. 30 Lakhs each on February 03, 2012 and February 07, 2012 and Rs. 15 Lakhs and 25 Lakhs on February 15 and February 16, 2012 respectively). The money so received was majorly either transferred to brokers to meet the pay-in obligation or transferred to other members of the Ahmedabad Group.

33.

Therefore, it was alleged that the aforesaid transactions (money and shares) by the three promoters i.e., Mr. Gulab Chand Pukhraj Surana, Mr. Dipin Surana and Mr. Ravi Pukhraj Surana were to induce the entities of the Ahmedabad group to deal in the security of PMTL with an object of inflating the price of such security.

34.

Further, for the shares transferred by Mr. Gulab Chand Pukhraj Surana in off-market to Mr. Jagdish Ramanlal Patel, no consideration was paid by Mr. Jagdish Ramanlal Patel and therefore the said transaction does not satisfy the requirement of Spot Delivery Contract as defined under Section 2(i) of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as 'SCRA').

35.

In view of the observations made in the above paragraphs, it is alleged that the Noticee No. 1 to 5 have violated Regulations 3(a), (b), (c), (d), 4(1), 4(2)(a)(b) (e) and (g) of PFUTP Regulations. It is also alleged that the Noticee No. 6 and 10 have violated Regulations 3(a), (b), (c) (d), 4(1), 4(2)(a) and (e) of the PFUTP Regulations. Additionally, Noticee no. 5 has also alleged to have violated Section 2(i) read with Section 13, 16 and 18 of the SCRA.

36.

Further, it is alleged that the Noticees No. 7 to 9 have violated Regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and (d) of the PFUTP Regulations. It is also alleged that they have violated Regulation 30(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations). It is also alleged that Noticee No. 9 has additionally violated Regulation 13 (4A) of the PIT Regulations. It is also alleged that Noticee No 8 has violated Section 2(i) read with Section 13, 16 and 18 of the SCRA and Clause 4.2 of the Code of Conduct adopted by the company to prevent insider trading read with Regulation 12 (1) of the PIT Regulations.

Findings with respect to the scrip of 8KMiles

37.

The focus of investigation was to ascertain whether there was any violation of the provisions of PFUTP Regulations in the trading in the scrip of 8KMiles by entities debarred by the interim order dated April 18, 2013 subsequently confirmed vide order dated December 30, 2013 during the period January 04, 2012 to September 28, 2012.

38.

8KMiles was incorporated as Rosebuds Commercials Ltd. and renamed as P.M. Strips Ltd. in January 2009 and further changed to 8K Miles Software Solutions Ltd. in March 2011. The present promoters of the company acquired shares by way of a public announcement in 2010-11 and became promoters. 8KMiles' offers cloud consulting, engineering and migration services. It is also an Amazon Web Services Systems Integrator. Noticee no. 8 is the erstwhile Managing Director of the 8 K Miles while Noticee No. 7 is the erstwhile director.

39.

The investigation observed that 8K Miles came out with an issue of bonus shares during the quarter ended June 2012. Noticee Nos. 1 to 5 and 7 to 9 appeared in the top 10 gross buy clients and gross sell clients during the investigation period pre-bonus issue in the scrip of 8K Miles while Noticee Nos. 4 and 10 appear in the top 10 gross buy clients and gross sell clients during the investigation period post-bonus issue in the scrip of 8K Miles.

40.

The price volume details as found in the investigation are tabulated below.

Period

Dates

Opening Price/Volume on first day of the period

Closing Price/Volume on last day of the period

Low Price/Volume during the period

High Price/Volume during the period

Avg. no. of shares traded daily during the period

Pre Investigation period

(04/10/2011-03/01/2012)

Price

48.00

41.00

39.70 (29/12/2011)

51.95 (04/10/2011)

3,709

Vol

1,308

511

1 (19/10/2011)

65,755 (08/11/2011)

Investigati on Period (Pre-Bonus)

(04/01/2012-21/06/2012)

Price

41.95

61.40

39.90 (06/01/2012)

64.60 (21/06/2012)

21,344

Vol

200

14,018

10 (28/02/2012)

2,32,977 (09/03/2012)

Investigati on Period (Post-Bonus)

(22/06/2012 - 28/09/2012)

Price

38.60

21.35

17.65 (04/09/2012)

42.50 (27/06/2012)

22,181

Vol

1,503

1,082

47 (08/09/2012)

2,01,368 (01/08/2012)

Post Investigation period

(29/09/2012-31/12/2012)

Price

22.40

56.20

20.15 (03/10/2012)

62.15 (27/12/2012)

36,511

Vol

8,570

24,513

1,707 (02/11/2012)

35,659 (17/10/2012)

41.

Details of top 10 gross buy clients and gross sell clients during the investigation period, as noted in the findings of investigation, pre-bonus issue are tabulated as below:

Buy Client Name

Total

% of Trd Vol

Sell Client Name

Total

% of Trd Vol

Pankaj Narayandas Patel

1,57,773

6.37

Comfort Intech Limited

2,40,150

9.7

Shah Jipal Pineshkumar

1,49,197

6.03

Ravi Pukhraj Surana

1,77,089

7.15

Bhavini Vijaykumar Shah

1,39,909

5.65

Shah Jipal Pineshkumar

1,53,042

6.18

Saurin Pravinbhai Shah

1,24,864

5.04

Pankaj Narayandas Patel

1,44,948

5.85

Nishil Surendrabhai Marfatia

1,20,000

4.85

Saurin Pravinbhai Shah

1,40,283

5.67

Niraj Nagindas Shah

93,000

3.76

Dipin Surana

1,28,353

5.18

Ronak Pankajkumar Patel

83,500

3.37

Bhavini Vijaykumar Shah

1,10,276

4.45

Jagdish Ramanlal Patel

82,576

3.34

Surendra Mangaldas Marfatia

1,00,000

4.04

Vedawala Sangitaben Pareshkumar

80,500

3.25

Jagdish Ramanlal Patel

83,319

3.37

Vijay Babulal Shah

72,402

2.92

Gulabchand Pukhraj Surana HUF

81,907

3.31

Top 10 Buy Clients

11,03,721

44.58

Top 10 Sell clients

13,59,367

54.9

Remaining Clients

13,72,150

55.42

Remaining Clients

11,16,504

45.1

Total Traded Volume

24,75,871

100

Total Traded Volume

24,75,871

100

42.

Details of top 10 gross buy and gross sell clients during the investigation period as noted in the findings of investigation, post-bonus issue are tabulated as below:

Buy Client Name

Total

% of Trd Vol

Sell Client Name

Total

% of Trd Vol

Sandeep Krishna Tandon

1,00,000

6.53

Vedawala Sangitaben Pareshkumar

2,34,594

15.33

Nikesh K Shah (HUF)

78,189

5.11

Nishil Surendrabhai Marfatia

2,02,301

13.22

Falguni Nikesh Shah

66,669

4.36

Shah Nikhil Dhirajlal HUF

1,16,664

7.62

Aruna Venkatraman Iyer

60,000

3.92

Rangawala Aslambhai Yusufbhai

75,546

4.94

Hema Govindbhai Patel

58,317

3.81

Hema Govindbhai Patel

61,919

4.05

Nilesh Kumarpal Shah

54,000

3.53

Lalitaben Fulabhai Patel

55,880

3.65

Nikesh Kumarpal Shah

51,459

3.36

Shah Jipal Pineshkumar

54,443

3.56

Nilesh Kumarpal Shah (HUF)

51,300

3.35

Rangwala Shaina Munuf

45,326

2.96

Shah Jipal Pineshkumar

50,000

3.27

Neha Pasand Patel

43,500

2.84

Sailesh H. Doshi

31,100

2.03

Ronak Pankajkumar Patel

38,000

2.48

Top 10 Buy Clients

6,01,034

39.27

Top 10 Sell clients

9,28,173

60.65

Remaining Clients

9,29,453

60.73

Remaining Clients

6,02,314

39.35

Total Traded Volume

15,30,487

100.00

Total Traded Volume

15,30,487

100.00

43.

It was found that in the pre-bonus period, the top 10 clients contributed 44.58% and 54.90% of the buy and sell side respectively. In the post-bonus period, the top 10 clients contributed 39.27% and 60.65% of the buy and sell side respectively.

44.

The suspected entities that had traded in the scrip during the investigation period and were found to have been connected to the suspected entities on the basis of Know Your Client (KYC) details or bank transactions have been identified and tabulated below:

Sr. No.

Client Name

PAN

Basis of connection

Shah Daxaben Vasantkumar

AKQPS8635P

1-14 have common contact number - 9824046454

10-21 have common contact number - 9978834974

21 is 22's spouse

6, 7, 13, 14, 16, 17 and 23 have common contact number-9978834974

23 and 24 entered into off-market transfers with 2

17 entered in to bank transactions with 2, 3, 4, 6, 10 12, 13, 14, 18, 20 and 22

18 entered in to bank transactions with 2, 3, 4, 6, 9, 15, 17, 19, 20, 21, 22 and 24

25-31 are erstwhile promoter group entities and immediate family members

25 and 26 transferred money to 17 and 18 through their firm PM Telecom

Shares of PMTL transferred in the off-market by 28 to 7

Entities 1-24 are collectively referred as Ahmedabad Group', 25-31 as Surana Group' and 1-31 as Suspected entities'.

Umeshbhai Chhatrasinh Yadav

AEWPY0505J

Yadav Vishnu Chhattarsingh

ACGPY8943E

Lalitaben Fulabhai Patel

AQDPP3951E

Sonal Kiritbhai Patel

AOEPP2753D

Neha Pasand Patel

AOEPP2155H

Jagdish Ramanlal Patel

AAWPP0600R

Nahush Budhabhai Patel

AIUPP9247J

Budhabhai Radhabhai Patel

AASPP6000H

Pankaj Narayandas Patel

AAWPP0599D

Patel Sanjaybhai Narandas

ATKPP2023K

Ronak Pankajkumar Patel

ATKPP2021M

Urmilaben G Patel

ATKPP2887M

Hema Govindbhai Patel

AQGPP6610B

Thaorlal Atmaram Modi

ABQPM0795D

Mona Vimesh Modi

AJXPM4343C

Saurin Pravinbhai Shah

BKYPS3545K

Shah Daivik Jatin

BXYPS2715J

Span Tradelink Private Limited

AAMCS1234M

Jipal Pineshkumar Shah

BMWPS2515R

Shah Vijay Babulal

AOMPS1703C

Bhavini Vijaykumar Shah

CDAPS8340A

Thottathil Puthanpoirayil Saira

AAAPZ2960N

Vedawala Sangitaben Pareshkumar

AJWPV1553G

Dipin Surana

AINPS9083Q

Ravi Pukhraj Surana

AINPS9085J

Gulabchand Pukhraj Surana HUF

AAAHG8506R

Gulab Chand Pukhraj Surana

AINPS9082R

Meena Surana

AINPS9084K

Priyanka Surana

AYXPS5190G

Pranali Surana

BLPPS7588J

45.

Summary of the trades of these entities, as noted in the findings of investigation, is as follows:

Partic ulars

Gross Buy

Gross buy % to Market vol.

Gross Sell

Gross Sell % to Market vol.

Net Trade

Net trade % to Market vol.

Gross trade

Gross trade % to Market vol.

Pre-Bonus

10,49,929

42.41

15,38,550

62.14

-4,88,621

19.74

25,88,479

52.27

Post Bonus

2,17,533

14.21

6,29,700

41.14

-4,12,147

26.93

8,47,233

27.68

46.

In the pre-bonus period, the 31 identified clients had purchased 10,49,929 shares at an average rate of Rs. 55.10 per share (42.41% of market volume) and sold 15,38,550 shares at an average rate of Rs. 55.42 (62.14% of market volume). In the post-bonus period, the 31 identified clients had purchased 2,17,533 shares at an average rate of Rs. 28.08 per share (14.21% of market volume) and sold 6,29,700 shares at an average rate of Rs. 25.17 (41.14% of market volume).

47.

The details of the trades of these entities, as noted in the findings of the investigation, are as follows:

A. Pre-Bonus - (January 04, 2012 - June 21 2012)

Name

Gross Buy

Sell

Quantity

Value

Avg Rate

Quantity

Value

Avg Rate

Pankaj Narayandas Patel

1,57,773

91,68,386

58.11

1,44,948

79,24,601

54.67

Saurin Pravinbhai Shah

1,24,864

69,05,460

55.30

1,40,283

78,81,027

56.18

Shah Jipal Pineshkumar

1,49,197

82,57,503

55.35

1,53,042

85,20,536

55.67

Bhavini Vijaykumar Shah

1,39,909

66,95,653

47.86

1,10,276

60,19,866

54.59

Ronak Pankajkumar Patel

83,500

47,45,500

56.83

60,700

33,75,235

55.61

Jagdish Ramanlal Patel

82,576

44,75,655

54.20

83,319

48,17,921

57.83

Vedawala Sangitaben Pareshkumar

80,500

44,79,600

55.65

Vijay Babulal Shah

72,402

40,24,177

55.58

67,949

37,80,937

55.64

Hema Govindbhai Patel

58,601

33,70,369

57.51

20,462

11,18,815

54.68

Urmilaben Govindbhai Patel

56,510

32,48,845

57.49

55,743

31,20,841

55.99

Thottathil Puthanpoirayil Saira

23,052

12,80,080

55.53

55,038

31,92,773

58.01

Budhabhai Radhabhai Patel

19,609

11,23,626

57.30

14,010

7,80,495

55.71

Span Tradelink Private Limited

1,056

59,145

56.01

5,646

2,84,703

50.43

Shah Daivik Jatin

294

16,538

56.25

293

16,577

56.58

Nahush Budhabhai Patel

3,419

56.99

Patel Sanjaybhai Narandas

597

59.70

Yadav Umeshbhai Chhatrasinh

10,000

5,35,000

53.50

Shah Daxaben Vasantkumar

150

8,775

58.50

Sub Total - Ahmedabad Group

10,49,913

5,78,54,554

55.10

9,21,859

5,13,78,102

55.73

Ravi Pukhraj Surana

206

51.46

1,77,089

93,74,531

52.94

Dipin Surana

1,28,353

70,94,454

55.27

Gulabchand Pukhraj Surana Huf

384

54.85

81,907

44,74,226

54.63

Priyanka Surana

64,980

37,08,858

57.08

Gulab Chand Pukhraj Surana

275

55.04

63,462

34,78,285

54.81

Pranali Surana

50,000

28,68,572

57.37

Meena Surana

50,900

28,94,465

56.87

Sub Total - Surana Group

865

54.06

6,16,691

3,38,93,390

54.96

Sub-Total (Suspected entities)

10,49,929

5,78,55,419

55.10

15,38,550

8,52,71,493

55.42

Others

14,25,942

7,88,94,268

55.33

9,37,321

5,14,78,195

54.92

Total

24,75,871

13,67,49,687

55.23

24,75,871

13,67,49,687

55.23

B. Post-Bonus - (June 22, 2012 - September 28, 2012)

Name

Gross Buy

Sell

Quantity

Value

Avg Rate

Quantity

Value

Avg Rate

Hema Govindbhai Patel

58,317

15,46,398

26.52

61,919

15,53,688

25.09

Shah Jipal Pineshkumar

50,000

16,97,500

33.95

54,443

13,74,629

25.25

Budhabhai Radhabhai Patel

22,567

6,20,914

27.51

19,984

4,93,631

24.70

Vedawala Sangitaben Pareshkumar

17,095

3,87,529

22.67

2,34,594

55,41,282

23.62

Patel Sanjaybhai Narandas

16,146

3,66,272

22.69

16,162

4,14,264

25.63

Lalitaben Fulabhai Patel

12,806

3,25,252

25.40

55,880

13,72,635

24.56

Sonal Kiritbhai Patel

9,000

2,71,305

30.15

7,900

1,98,750

25.16

Pankaj Narayandas Patel

6,300

1,93,725

30.75

6,300

1,58,670

25.19

Vijay Babulal Shah

2,721

1,10,037

40.44

16,925

4,36,665

25.80

Saurin Pravinbhai Shah

2,669

1,00,281

37.57

9,054

2,32,130

25.64

Yadav Umeshbhai Chhatrasinh

1,919

76,670

39.95

18,840

4,45,700

23.66

Jagdish Ramanlal Patel

1,727

36,403

21.08

7,065

2,25,012

31.85

Shah Daivik Jatin

1,721

39,805

23.13

Bhavini Vijaykumar Shah

1,118

22,880

20.46

20,107

6,78,629

33.75

Yadav Vishnu Chhattarsingh

1,022

23,174

22.68

15,982

4,06,885

25.46

Shah Daxaben Vasantkumar

458

10,358

22.62

23.30

Thaorlal Atmaram Modi

300

6,210

20.70

Neha Pasand Patel

43,500

10,87,839

25.01

Ronak Pankajkumar Patel

38,000

11,68,500

30.75

Mona Vimesh Modi

3,044

58,121

19.09

Sub Total - Ahmedabad Group

2,05,886

58,34,713

28.34

6,29,700

1,58,47,052

25.17

Dipin Surana

7,667

1,91,127

24.93

Meena Surana

4,000

83,327

20.83

Sub Total - Surana Group

11,667

2,74,454

23.52

Sub-Total (Suspected entities)

2,17,553

61,09,167

28.08

6,29,700

1,58,47,052

25.17

Others

13,12,934

3,30,90,043

25.20

9,00,787

2,33,52,158

25.92

Total

15,30,487

3,91,99,210

25.61

15,30,487

3,91,99,210

25.61

48.

LTP analysis was carried out for the suspected entities for pre-bonus and post-bonus period within the investigation period. The details of buy trades of the suspected entities and their impact on LTP are tabulated in the table below:

Pre-Bonus

Name

All trades

LTP Diff. >0

LTP Diff. < 0

LTP Diff. =0

LTP impact

Trade Qty

No. of trades

LTP impact

% to Mkt+ve

Trade Qty

No. of trades

-ve LTP impact

Trade Qty

No. of trades

Trade Qty

No. of trades

Saurin Pravinbhai Shah

284.60

1,24,864

662

486.75

33.88

25,600

305

202.15

46,908

196

52,356

161

Vijay Babulal Shah

195.80

72,402

424

323.45

22.51

1,705

168

127.65

34,165

123

36,532

133

Jagdish Ramanlal Patel

91.05

82,576

237

156.30

10.88

26,060

116

65.25

28,028

28,488

Shah Jipal Pineshkumar

85.55

1,49,197

170

104.50

7.27

25,872

18.95

41,947

81,378

Shah Daivik Jatin

31.40

294

48.80

3.40

17.40

247

Gulabchand Pukhraj Surana Huf

20.95

1.46

Hema Govindbhai Patel

17.80

58,601

23.20

1.62

403

5.40

17,850

40,348

Span Tradelink Pvt. Ltd.

17.45

1,056

17.70

1.23

331

0.25

605

120

GP Surana

11.45

0.80

TP Saira

10.90

23,052

28.05

1.95

17.15

804

22,208

Nahush Budhabhai Patel

10.10

21.25

1.48

11.15

Pankaj Narayandas Patel

6.80

1,57,773

11.50

0.80

9,324

4.70

40,869

1,07,580

Ravi Pukhraj Surana

5.45

0.38

Bhavini Vijaykumar Shah

3.40

1,39,909

9.40

0.65

25,104

6.00

80,076

34,729

Patel Sanjaybhai Narandas

2.80

0.20

Urmilaben G Patel

(0.85)

56,510

0.85

10,010

46,500

Vedawala Sangitaben Pareshkumar

(1.00)

80,500

1.00

47,571

32,929

Budhabhai Radhabhai Patel

(1.85)

19,609

1.85

0.13

3.70

14,370

5,150

Pankaj N Patel

(2.65)

83,500

2.65

32,000

51,500

Total

789.15

10,49,929

1,745

1,273.40

88.63

1,14,619

776

484.25

3,95,464

491

5,39,846

478

49.

It was found from the above table that trades of group entities during the pre-bonus investigation period resulted in LTP contribution of Rs. 789.15. The group bought 1,14,619 shares (10.92%) at higher prices to LTP in the scrip on 776 (44.47%) instances and bought 3,95,464 shares (37.67%) at lower prices to LTP on 491 instances (28.14%). Buy trades for 5,39,846 shares (51.42%) were without any LTP contribution on 478 instances (27.39%).

Post-Bonus

Name

All trades

LTP Diff. >0

LTP Diff. < 0

LTP Diff. =0

LTP impact

Trade Qty

No. of trades

LTP impact

% to Mkt+ve

Trade Qty

No. of trades

-ve LTP impact

Trade Qty

No. of trades

Trade Qty

No. of trades

Hema Govindbhai Patel

70.60

58,317

545

82.15

21.90

6,371

151

11.55

5,738

46,208

337

Saurin Pravinbhai Shah

62.75

2,669

110

84.90

22.55

22.15

1,853

740

Budhabhai Radhabhai Patel

8.45

22,567

18.40

4.91

8,567

9.95

9,535

4,465

Vijay Babulal Shah

13.45

2,721

16.65

4.44

3.20

107

2,585

Yadav Vishnu Chhattarsingh

10.10

1,022

10.40

2.77

263

0.30

455

304

Jagdish Ramanlal Patel

8.45

1,727

8.45

2.25

566

1,161

Bhavini Vijaykumar Shah

4.55

1,118

5.40

1.44

344

0.85

300

474

Vedawala Sangitaben Pareshkumar

4.95

17,095

5.05

1.35

0.10

16,983

Shah Daxaben Vasantkumar

3.00

458

3.40

0.91

0.40

405

Lalitaben Fulabhai Patel

1.00

12,806

2.40

0.64

2,555

1.40

2,249

8,002

Patel Sanjaybhai Narandas

0.25

16,146

2.05

0.55

236

1.80

3,452

12,458

Shah Daivik Jatin

1.15

1,721

1.65

0.44

0.50

220

1,500

Meena Surana

1.10

4,000

1.10

0.29

1,050

2,950

Yadav Umeshbhai Chhatrasinh

(0.50)

1,919

0.50

0.13

1.00

100

1,814

Shah Jipal Pineshkumar

0.35

50,000

0.35

0.09

5,000

45,000

Dipin Surana

0.05

7,667

0.05

0.01

1,000

6,667

Pankaj Narayandas Patel

6,300

Sonal Kiritbhai Patel

9,000

Thaorlal Atmaram Modi

(0.35)

300

0.35

200

100

Total

189.35

2,17,553

1,037

242.90

64.67

26,148

308

53.55

24,289

174

1,67,116

555

* For computing LTP contribution through the first trade on ex-bonus basis (bonus in the ratio of 2:3), the LTP is computed considering the theoretical price based on the close price on the previous day i.e., Rs. 62.00 which is calculated as Rs. 37.20.

50.

It was found from the above table that trades of group entities during the post-bonus investigation period resulted in LTP contribution of Rs. 189.35. The group bought 26,148 shares (12.02%) at higher prices to LTP in the scrip on 308 (29.60%) instances and bought 24,289 shares (11.17%) at lower prices to LTP on 174 instances (16.88%). Buy trades for 1,67,116 shares (76.82%) were without any LTP contribution on 555 instances (53.52%). In view of the above, it is alleged that the main contributors to artificial price increase were Noticees Nos. 1, 2, 4 and 5 in the pre-bonus period and Noticee No. 2 and 10 in the post-bonus period.

51.

During the period of investigation, the price of scrip increased by Rs. 26.55 [Pre-bonus from Rs. 41.95 to Rs. 64.60 (22.65) and post-bonus from Rs. 38.60 to Rs. 42.50 (3.90)]. Contribution to NHP by the Noticees is tabulated below:

Period

Name

NHP

NHP%

No. of trades

Quantity

Pre Bonus

Saurin Pravinbhai Shah

8.05

35.53

1089

Pre Bonus

Vijay Babulal Shah

7.45

32.88

291

Pre Bonus

Jagdish Ramanlal Patel

3.35

14.79

Pre Bonus

Span Tradelink Private Limited

0.05

0.22

Pre Bonus

Total

18.90

83.42

1,490

Post Bonus

Vijay Babulal Shah

2.75

70.52

Post Bonus

Saurin Pravinbhai Shah

0.65

16.67

Post Bonus

Yadav Umeshbhai Chhatrasinh

0.50

12.81

Post Bonus

Total

3.90

100.00

Total

22.80

85.88

1,499

52.

There were 29 trades establishing new highs during the investigation period. Of the above, the suspected entities were buyers to the transactions for 22 trades. Total contribution to new high price by the suspected entities aggregateed to Rs. 22.80 i.e., 85.88% of new high prices established. The Noticee Nos. 1, 2 and 5 have contributed significantly to NHP.

53.

Of the 185 first trades during the investigation period, buyers in 116 first trades were the suspected entities. Of the 116 trades, the LTP contribution in 109 first trades was positive. The details of such first trades with positive LTP are tabulated below:

Name

Pre-Bonus

Post-Bonus

LTP

LTP %

No. of trades

Trade Quantity

LTP

LTP %

No. of trades

Trade Quantity

Saurin Pravinbhai Shah

68.60

127.27

1,245

13.40*

34.23

Vijay Babulal Shah

43.55

79.28

353

3.35

8.52

Jagdish Ramanlal Patel

27.00

49.50

234

Shah Daivik Jatin

11.85

21.18

1.65

4.91

Nahush Budhabhai Patel

9.60

16.91

Jipal Pineshkumar Shah

8.00

14.91

Yadav Vishnu Chhattarsingh

2.75

11.99

Thottathil Puthanpoirayil Saira

3.35

5.92

Hema Govindbhai Patel

2.35

9.90

Patel Sanjaybhai Narandas

2.80

4.92

0.65

2.58

Vedawala Sangitaben Pareshkumar

1.10

4.94

Budhabhai Radhabhai Patel

0.80

3.21

Bhavini Vijaykumar Shah

0.25

1.18

Total

174.75

319.89

1898

26.30

81.46

54.

The details of other seven first trades are tabulated below:

Name

LTP

LTP%

No. of trades

Quantity

Saurin Pravinbhai Shah

(4.85)

(8.63)

Vijay Babulal Shah

(1.25)

(2.18)

Bhavini Vijaykumar Shah*

(0.90)

(2.05)

35,001

Total

(7.00)

(12.86)

35,015

* Includes 1 trade in post-bonus period for 1 share with nil LTP contribution. All other trades were in the pre-bonus period.

55.

It is found from the above table that Noticee nos. 1, 2 and 5 contributed to price rise by repeatedly entering into first trades through first trades on 62 and 11 trading days respectively in the pre and post bonus period out of total 185 trading days during the investigation period.

56.

The Noticee nos. 1, 2, 4, 5 & 10 had entered into 872 trades and increased the price of the scrip by contributing positively to LTP. Therefore, an analysis of the top five trades in terms of contribution to LTP by each of them was carried out on a sample basis and the same is provided below:

Buyer Name

Date

Buy Order No.

Trade Time

Buy Order Time

Buy Order Price

Trade Price

LTP at Order Entry

LTP Diff

LTP %

Buy Order Qty

Trade Qty

Avl. Sell Qty

Next best buy price

Saurin Pravin-bhai Shah

11.04.12

12000134006976

09:16:05

59.70

55.10

4.60

8.35

199

Nil

04.05.12

12000130013388

09:37:03

52.00

48.00

4.00

8.33

800

47.95

06.07.12

20000087011313

09:22:01

39.00

36.00

3.00

8.33

186

36.00

09.04.12

12000151023226

10:34:51

59.50

55.00

4.50

8.18

240

Nil

16.05.12

13000112007307

09:26:29

56.75

52.55

4.20

7.99

198

Nil

16.05.12

21000115007430

09:26:42

56.75

52.55

4.20

7.99

197

Nil

16.05.12

21000115007486

09:27:05

56.75

52.55

4.20

7.99

196

Nil

16.05.12

13000112007568

09:27:18

56.75

52.55

4.20

7.99

195

Nil

32.90

65.15

2,211

Vijay Babulal Shah

13.04.12

12000135008368

09:20:05

56.85

51.60

5.25

10.17

400

52.05

31.01.12

19000135021071

10:00:31

56.50

51.60

4.90

9.50

100

1,300

Nil

31.01.12

15000112014438

09:38:46

56.75

52.05

4.70

9.03

1,845

Nil

31.01.12

14000134032378

09:42:40

56.75

52.10

4.65

8.93

1,745

Nil

24.01.12

19000286053463

10:28:24

49.95

46.00

3.95

8.59

200

Nil

23.45

46.22

192

5,490

Shah Jipal Pinesh-kumar

30.01.12

12000121033332

10:16:28

56.50

52.10

4.40

8.45

1,000

Nil

30.01.12

19000134049542

11:52:23

56.85

53.25

3.60

6.76

100

1,360

52.10

03.02.12

16000119001481

09:16:30

56.70

53.20

3.50

6.58

800

53.25

14.02.12

12000255033858

10:39:16

58.35

55.00

3.35

6.09

197

55.00

18.06.12

20000185004642

09:20:32

60.60

57.20

3.40

5.94

54.90

18.25

33.82

108

3,391

Jagdish Ramanlal Patel

19.04.12

12000128019340

10:02:37

53.45

49.60

3.85

7.76

49.60

19.04.12

12000128019719

10:03:38

53.45

49.60

3.85

7.76

Nil

17.08.12

14000108169867

15:19:27

21.10

19.60

1.50

7.65

200

19.70

19.04.12

16000123033572

10:01:26

53.45

49.70

3.75

7.55

100

49.70

19.04.12

21000126014557

10:01:39

53.45

49.70

3.75

7.55

49.70

16.70

38.27

204

466

Hema Govind-bhai Patel

01.08.12

16000095118999

14:00:50

27.00

25.00

2.00

8.00

1,229

24.75

01.08.12

14000098040509

13:44:29

27.00

25.05

1.95

7.78

1,155

24.70

01.08.12

16000095123319

14:09:22

26.40

24.55

1.85

7.54

500

Nil

01.08.12

16000095086448

12:24:01

26.75

25.00

1.75

7.00

440

24.70

01.08.12

16000095124775

14:11:50

14:11:49

26.25

24.55

1.70

6.92

475

24.55

01.08.12

12000082057424

14:12:00

26.25

24.55

1.70

6.92

425

Nil

10.95

44.16

160

4,224

Total

102.25

227.62

700

572

15,782

57.

From the table above, it was found that the entities bought miniscule quantities of shares despite the fact that the quantities of shares available on sale were much higher than those bought by them. By buying in small quantities but at a price far away from LTP, the entities above contributed to price rise. There were only two trades that were for 100 shares or more and both the trades matched with a connected entity (viz., Ms. Bhavini Vijaykumar Shah). All the buy orders tabulated above were entered at the best available sell order price but the buy order quantity was miniscule and always much lesser than the quantity available on sale at the time of respective buy order entry. From the analysis of the order log for positive LTP trades of these entities, it was found that the the order price in the buy orders mentioned above were much higher than the next best order available in the system.

58.

Further, orders with very minimal quantities were placed at prices much higher than the market price and thereby causing artificial increase in the price of the scrip. This is corroborated from the table below capturing range of order quantities for the trades contributing to LTP and thereby artificial price rise by the four entities in the pre-bonus period and the two entities in the post-bonus period (five distinct entities):

Buy orders quantity range

No. of Trades

Sum of + LTP in Rs.

% to the total +LTP by the client Rs. 1,238.05

Sum of Trade Quantity (%)

1-10

662

1043

84.25%

1,674 (1.95)

11-50

151

146.45

11.83%

4,056 (4.73)

51-100

28.65

2.31%

1,863 (2.17)

101-1000

15.7

1.27%

6,781 (7.91)

Above 1000

4.25

0.34%

71,310 (83.22)

Grand Total

872

1,238.05

100.00%

85,684 (100)

59.

In view of the pattern explained above, it is alleged that the above-mentioned five entities intended to and caused artificial price rise in the scrip of the company during the investigation period. Thus, in view of the findings stated in the above paragraphs, it is alleged that the Noticee No. 1, 2, 4, 5 and 10 have violated Regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and (e) of the PFUTP Regulations.

REPLIES AND PERSONAL HEARINGS:

60.

The SCN was duly served on the Noticees by Registered Post Ack. Due/Affixture/Email. Thereafter, SEBI received letters dated April 03, 2016; April 01, 2016, April 01, 2016 and July 21, 2016 from Darshana Pinesh Shah (mother of Jipal Pinesh Shah), Daivik Jatin Shah, Saurin Praveen Shah and Dipin Surana respectively, inter alia acknowledging receipt of SCN. However, none of the Noticees submitted any reply on merits in respect of the charges in the SCN. An opportunity of personal hearing was granted to the Noticees by scheduling the same on October 23, 2017, for which the notices were served by Speed Post/Hand Delivery. In response to the same, Shri G.P. Surana, Shri Ravi Surana and Shri Dipin Surana vide their letters dated September 22, 2017 requested for adjournment of hearing. Further, Saurin Pravinbhai Shah, Hema Govind Patel and Jagdish Ramanlal Patel vide emails dated October 20, 2017 and October 22, 2017 inter alia denied the allegations against them as specified in the SCN. Subsequently, Shri Vijay Babulal Shah, Shri Daivik Shah, Saurin P. Shah, Hema G. Patel and Jagdish R Patel attended the personal hearing before me on October 23, 2017. During the personal hearing, Vijay Babulal Shah appeared in person and made submissions whereas the other four Noticees appeared through their authorized representative, Shri Vikas Bengani, who undertook to submit written submissions on their behalf within two weeks' time. Thereafter, Daivik Shah vide his letter dated November 16, 2017 made written submissions in respect of the SCN. However, no replies was received from Saurin P. Shah, Hema G. Patel and Jagdish R. Patel. Daivik Jatin Shah vide letter dated January 05, 2018 also made a request to SEBI for permission to sell shares of 8K Miles, which was denied by the Competent Authority. Subsequently, G.P. Surana, Dipin Surana and Ravi Surana vide their individual letters each dated February 19, 2018 filed their replies to the SCN.

61.

Another opportunity of personal hearing was provided to Ravi Surana, G.P. Surana, Dipin Surana, Bhavini Vijaykumar Shah and Shah Jipal Pineshkumar by scheduling the same on June 19, 2018. The notices for the same were served upon the said Noticees by Hand Delivery. Bhavini Vijaykumar Shah and Shah Jipal Pineshkumar failed to attend the said hearing whereas Ravi Surana, G.P. Surana and Dipin Surana attended the hearing and made submissions through their authorized representatives, Shri Chetan R. Shah and Ms. Unnati Upadhyay. Ravi Surana, G.P. Surana and Dipin Surana also made further written submissions vide letters dated July 19, 2018. The submissions made by various Noticees through their written submissions and/or during the personal hearing are summarized below.

62.

Vijay Babulal Shah, during the personal hearing submitted inter alia the following:

(a) The real culprit was Jatin Shah who did not figure in the list of Noticees.

(b) Jatin Shah had used his and others' signatures and demat accounts for his personal trades. Some of the other Noticees were related to Jatin Shah. For example, Daivik Shah is Jatin Shah's son. He had come into contact with Jatin Shah when he was a sub-broker in Arcadia Share Brokers.

63.

Daivik Jatin Shah vide his letter dated November 16, 2017 submitted inter alia the following:

(a) The allegations of self-trades, synchronized trades made in the SCN against other Noticees have not been made against him. The allegations in the SCN against him are restricted to the charge that he was connected to the Ahmedabad Group through common telephone number and fund movements and that he acted in tandem with other entities of the Ahmedabad Group to artificially inflate the price of the scrip of PMTL by trading above the LTP. No charges are made out against him regarding the alleged manipulation in the scrip of 8KMiles.

(b) Pursuant to the interim order, he has already undergone debarment from the capital markets for over a period of four years and six months which is penal in nature. Further, adjudication proceedings have also been initiated against him. In light of these facts, he may be released from the debarment without going into the merits of the case.

(d) He has incurred a loss of Rs. 23.84 Lakh in the investigation period as computed and set out in the investigation report.

(e) The transfer of Rs. 10 Lakh transferred into his account from the promoters of PMTL, as referred to in the SCN, was done on the basis of a loan cum guarantee Agreement for a period of 2 years, as he needed money to buy certain property. No malafide can be assigned to this transaction. While substantial portion of such amount was returned to the promoters of PMTL, the remaining was written off due to his weak financial position. The loan transaction between him and the promoters of PMTL cannot be held to be a connecting factor between him and the promoters for alleging manipulation. The loan transaction also does not connect him to the members of the Ahmedabad Group for alleging manipulation.

(f) While no charges have been made against him in respect of trading in the scrip of 8KMiles, his trades in the scrip of PMTL are a minuscule percentage of total trading in the scrip. Such trades were undertaken over fourteen months in an honest way to earn profit but resulted in losses.

(g) SEBI has relied on selective extracts from the trade and order logs to allege the charge of manipulation against him, without looking at the totality of his trades.

(h) He denies that he was part of any group, including Ahmedabad Group, as alleged in the SCN. He had traded in various scrips during the investigation period. Being an individual trader, the alleged misdeeds of the Ahmedabad Group cannot be thrust upon him.

(i) The phone number in question had not been furnished by him to any stock broker. He is not aware who the number belongs to or any other information about the same.

(j) Apart from holding transfer of funds between him and the members of the Ahmedabad Group as a factor establishing his connection with them, the SCN provides no details of how the funds were used by such persons. The transfer of funds with members of the Ahmedabad Group were primarily in the form of loans and their repayment and it is erroneous to consider such flow of funds as basis of connection with the Ahmedabad Group for alleged manipulation.

(k) His trades in the scrip of PMTL were genuine. His orders in the scrip of PMTL which were above LTP were put in normal course of trading and were not aimed at inflating the prices or do any manipulation.

64.

Ravi Surana, G.P. Surana and Dipin Surana vide their written submissions dated February 19, 2018 and July 19, 2018 and during the personal hearing have submitted inter alia the following:

(a) The Noticees deny all the allegations against them, made in the SCN.

(b) They have no role to play in the price rise during the investigation period. They have been included in the SCN because they are the promoters of PMTL and were the promoters of 8KMiles in the past and because they have transacted in the scrip of PMTL during the investigation period.

(c) As regards the transfer of 2,50,000 shares of PMTL by G.P. Surana to Jagdish Ramanlal Patel for which consideration was not received from Jagdish Ramanlal Patel, the said transaction was carried out on June 28, 2011 which is much prior to the investigation period. The BSE vide notice dated June 21, 2011 had suspected trading in the scrip of PMTL during June 29, 2011 and July 05, 2011 due to non-compliance of Listing Agreement. Since G.P. Surana was in urgent need of money to tide over the company's liquidity crunch, he entered into a transaction in haste with Jagdish Patel who agreed to purchase the shares of the company for a sum of Rs. 62.5 Lakh with the condition that the shares be delivered to him as soon as possible, without confirming his ability to pay or his past track record. Upon the execution of the deal, G.P. Surana delivered the shares to Jagdish Patel. However, Jagdish Patel failed to pay the consideration amount within the stipulated time. G.P. Surana suffered losses in the transaction and he cannot be held responsible for the failure of a third party to meet his obligations.

(d) The transfer of shares of PMTL to Jagdish Patel by G.P. Surana was a business decision and he was not aware of the end use of shares by him. G.P. Surana had no role to play in the trading done by Ahmedabad Group and he was not even aware of the same.

(e) As regards the transfer of Rs. 10 Lakh to Daivik Jatin Shah and Rs. 1 Crore to Saurin Pravinbhai Shah by G.P. Surana's firm PM Telecom, which on receipt by the two entities was allegedly transferred to brokers to meet the pay in obligation or transferred to other members of the Ahmedabad Group, the Noticees submit that G.P. Surana along with Dipin Surana and Ravi Surana are the authorized signatories in PM Telecom. However, G.P. Surana took all day to day decisions for PM Telecom and was responsible for all decisions. In this regard, in so far as transfer of Rs. 10 Lakh to daivik Shah is concerned, the same was done as loan to Daivik Shah in the normal course of business and no adverse inference should be drawn in respect of the same. The transfer of Rs. 1 Crore to Saurin P. Shah was also a loan, out of which the Noticees have already received Rs. 14 lakh and are in the process of receiving the balance amount shortly. Regarding the allegation that the said amounts were used to meet the pay-in obligations by Daivik Shah and Saurin Shah, the Noticees are not aware of the same and are not responsible for such use by Daivik Shah and Saurin Shah. No adverse inference should be drawn from the same. The funds transferred to the said two Ahmedabad Group entities were either before the period of investigation or at the time when the price of PMTL was already quite high. The allegation that the Noticees induced other Noticees to trade in the scrip of PMTL by providing funds with an objective to inflate prices defies logic. The act of giving loan to Saurin Shah cannot be alleged to have induced trading in scrip of PMTL, since much of the trading was already done pripr to the loan being given. The SCN does not specifically allege that the amounts received by the said two entities have been utilized for purchase of shares of PMTL specifically. It merely alleges that money so received was majorly either transferred to brokers to meet pay-in obligation or transferred to the other members of the Ahmedabad Group.

(f) The Noticees had no role whatsoever to play in the trading done by the Ahmedabad Group and they are neither aware nor responsible for the same.

(g) Except the transactions between G.P. Surana and the three persons, viz. Jagdish Patel, Daivik Shah and Saurin Shah, the Noticees never had any transaction with any other entity which was allegedly part of the Ahmedabad Group. There is no direct or indirect connection established in the SCN between the Noticees and the Ahmedabad Group.

(h) The Noticees had no role to play in any price rise or creation of artificial volume during the investigation period. There were only two transactions for 30 shares in the account of G.P. Surana (buy and sell of 15 shares on the same day) during the period under investigation, which were done unintentionally. This was a freak trade by his broker as he had punched a wrong client code. As soon as G.P. Surana was informed by the broker, he immediately directed him to reverse the position which was done. Thus, he cannot be alleged to have violated the provisions of SCRA and clauses of Model Code of Conduct for Prevention of Insider Trading, as alleged in the SCN.

(i) The Noticees did not make any profit. They sold only a minuscule quantity of shares at low prices during the investigation period and continue to hold shares. If the Noticees were involved in the manipulations, they could have sold the entire holding at much higher prices during the period of price rise.

(j) As regards the alleged violation of the provisions of Regulation 30(2) the SAST Regulations, the new SAST Regulations, 2011 were notified in September 2011 and April 2012 was the first year wherein disclosures were required to be filed with the stock exchange also, apart from disclosures to the company, as stipulated under the SAST Regulations, 1997. In the year 2012, while the promoters filed disclosures with the company as per the format under SAST Regulations, 1997 which reflected their shareholding, filing of disclosures with the stock exchanges skipped their attention. The same was unintentional and there was no malafide intention behind it. Further, the disclosure under Clause 35 of the Listing Agreement filed by PMTL for the quarter ending March 31, 2012 disclosed the Noticees' shareholding as part of the Promoter & Promoter Group. Further, the said disclosure under Regulation 30(2) has now been made for the year ended March 31, 2012, after the receipt of the SCN.

(k) As regards the alleged violation of provisions Regulation 13(4A) of the PIT Regulations by Dipin Surana in respect of sale of shares by him in August 2012, as mentioned in the SCN, PMTL had intimated BSE on July 19, 2012 that the promoters intended to sell a part of their holding as a result of which their holding would come down to 41.44% from 49.75%. The said intimation was filed by the company with BSE only after Dipin Surana had intimated his intention to sell some of the shares held by him. The company also reflected the same shareholding pattern for the quarter ending September 2012. Dipin Surana disclosed the details of his shareholding on quarterly basis under Regulation 8(2) of the SAST Regulations, 1997 to the company and the company disclosed the same to the exchange under Regulation 8(3). Though the disclosures were not in the prescribed format, the same establishes that Dipin Surana did not have any malafide intention to conceal the information from the retail investors. Further, the monies realized after the sale of shares were not used by him for any personal gain but were used for another listed company, Golconda Engineering Enterprise Ltd. which needed fund urgently. Dipin Surana has now made disclosures relating the said transactions under the PIT Regulations after receipt of the SCN, and therefore, as on date, no violation persists. There was no intention to conceal the information from investors.

(l) The SCN has wrongly clubbed the Noticees with other entities who have executed huge trades in the scrip of PMTL and have carried out manipulative trades. They deny that they have induced other Noticees to deal in the securities of PMTL during the investigation period to inflate the price of the scrip.

CONSIDERATION:

65.

I have examined the facts of the case and the allegations against the Noticees, as mentioned in the SCN, and have considered the detailed submissions made by Noticee nos. 6 to 9 (viz. Daivik Jatin Shah, Ravi Surana, G.P. Surana and Dipin Surana) in their defence, which have been taken on record. As regards the rest of the Noticees, I note while the Noticee no. 1 has made only certain cursory submissions during the personal hearing, the Noticee nos. 2, 3, 4, 5, and 10 (viz. Saurin Pravinbhai Shah, Bhavini Vijaykumar Shah, Shah Jipal Pineshkumar, Jagdish Ramanlal Pateland Hema Govindbhai Patel) have either not responded to the SCN or simply denied the allegations in general, without making any submission on merit. Since sufficient opportunities to present their case before me have already been provided to all the Noticees, I proceed to decide the matter at hand by taking into consideration the material on record, including the submissions, if any, of the Noticees. Further, since the charges in the SCN pertain to manipulations in two different scrips, the same have been dealt with scrip wise, one by one.

P.M. Telelinnks Limited (PMTL)

66.

I note that in respect of the scrip of PMTL, in the paragraphs 3 to 25 above, the detailed findings of the investigations, as recorded in the SCN, bring out as to how manipulative transactions were carried out in the scrip by various entities, including the Noticee nos. 1 to 6 and 10, who were part of 'the Ahmedabad Group', as defined in the Table under para 8 above. Further, the said Ahmedabad Group entities were allegedly part of a larger group of 'Suspected Entities' who are alleged to have played a role in the entire manipulation in the scrip. The Noticee nos. 7 to 9, which are defined as 'Surana Group' entities, together with the Ahmedabad Group entities constitute the said Suspected Entities. It is alleged in the SCN that while the Ahmedabad Group entities, which include the Noticee nos. 1 to 6 and 10, had executed the manipulative trades in question, the Surana Group entities, comprising of Noticee nos. 7 to 9 had induced the Ahmedabad Group entities to execute such manipulative trades.

67.

I note that in paras 3 to 25 above, it has already been brought out in great detail as to how the trades of Noticee nos. 1 to 6 and 10 had created artificial volume and manipulated the price of the scrip. It has been brought out therein as to how these entities were connected to each other, had executed self-trades and synchronized trades and had artificially inflated the price of the scrip through first trades and by placing orders at incremental prices thereby establishing New High Price (NHP) and raising the LTP. The same are self-explanatory and need no further elaboration. However, none of the said Noticees, except the Noticee nos. 1 & 6, has provided any explanation or defence in respect of the same.

68.

In the above respect, the Noticee no. 1 has defended himself by merely contending that one Jatin Shah was the real culprit who had used his and others' signatures and demat accounts for his personal trades. However, he has not submitted any corroborative evidence in support of the same. Thus, the defence of the Noticee no. 1 appears flimsy and cannot be relied upon.

69.

As regards the Noticee no. 6, I note that he has contended that there is no allegation of self-trades or synchronized trades against him in the SCN. He has further denied the allegation against him that he was connected to the Ahmedabad Group entities though a common telephone number and fund movements between and that he acted in tandem with entities of Ahmedabad Group to artificially inflate the price of the scrip of PMTL by trading above LTP. In this regard, he has contended that he is unaware about the phone number in question and that the fund transfers between him and the Ahmedabad Group entities were primarily in the form of loans and their repayments. I note that paras 15 to 25 above have already brought out details of how Noticee no. 6, along with other entities of Ahmedabad Group, had influenced the price of the scrip through his trades. Further, though Noticee no. 6 has contended that his bank transactions with other entities of the Ahmedabad Group were primarily loan transactions and their repayments, the said explanation does not appear plausible in the absence of sufficient corroborative evidences. I have considered the submissions of the Noticee but find them to be grossly unsatisfactory and implausible.

70.

As regards the Noticee nos. 7 to 9, the primary allegation against them in the SCN is that being the promoters of PMTL, they had aided and abetted the entities of the Ahmedabad Group by inducing them to carry out the alleged manipulative trades in the scrip of PMTL. It has been alleged that G.P. Surana (Noticee no. 8) had transferred 2,50,000 shares of PMTL in off-market to Jagdish Ramanlal Patel (Noticee no. 5), an entity of the Ahmedabad Group, without any consideration. Further, a firm belonging to Noticee nos. 7 to 9 had transferred Rs. 10 Lakh to Daivik Jatin Shah (Noticee no. 6) and Rs. 1 Crore to Saurin Pravinbhai Chah (Noticee no. 2), both of whom were part of Ahmedabad Group entities. The investigation had found that the money so received by the two entities was majorly either transferred to brokers to meet the pay-in obligation or transferred to other members of the Ahmedabad Group. It is alleged that the abovementioned transactions by the noticee nos. 7 to 9, involving transfer of shares and funds to entities of the Ahmedabad Group was aimed at inducing them to deal in the scrip of PMTL with an object of inflating the price of the scrip.

71.

While the trades of the Ahmedabad Group entities have already been found to be manipulative and fraudulent, the issue which needs to be looked into is whether the Noticee nos. 7 to 9 had induced these entities to carry out such trades, by providing them with funds and securities in off-market. In this regard, the Noticee nos. 7 to 9 have contended that the transfer of 2.5 Lakh shares by G.P. Surana to Jagdish Patel was done by him on his own in the off-market for an agreed consideration amount of Rs. 62.5 Lakh to meet the urgent requirements of funds. They further contended that the said deal did not materialize as Jagdish Patel failed to pay the consideration amount and that no negative inferences should be drawn in this regard. They have also contended that the decision to give Rs. 10 Lakh to Daivik Shah and Rs. 1 Crore to Saurin P. Shah (entities of Ahmedabad Group) was taken entirely by G.P. Surana, who had advanced these amounts as loans to these entities. According to Noticee nos. 7 to 9, they cannot be held responsible for how the said shares and funds were ultimately utilized by the recipient entities.

72.

I have considered the submissions of the Noticee nos. 7 to 9 as mentioned above. At the outset, I find that the Noticee's contention that only G.P. Surana was responsible for the said transfer of shares and funds to the entities of Ahmedabad Group does not appear to be reliable. It is noted that the Noticee nos. 7 to 9 are the promoters of PMTL and appear to be closely connected/related to each other. It is noted that the firm which transferred funds to Daivik Shah and Saurin P. Shah had all the said three Noticees as its authorized signatories. Even if for a moment it is accepted that the transfer of shares by G.P. Surana to Jagdish Patel was done entirely by himself, without the involvement of Noticee no. 7 and 9, the said Noticees cannot shrug off their responsibility in respect of transfer of funds to Daivik Shah and Saurin Shah by a firm where all the three Noticees were authorized signatories. It merely reflects an attempt by G.P. Surana (Noticee no. 8) to shield Noticee nos. 7 & 9 by owning up entire responsibility. Further, the close connection between the Noticee nos. 7 to 9 leads to a firm belief that all the three Noticees were acting in tandem with each other.

73.

Coming to the next issue of whether the transfers of shares and funds to the entities of the Ahmedabad Group, as mentioned above, were aimed at inducing them to carry out manipulative trades and artificial price inflation in the scrip of PMTL, I note that the Noticee nos. 7 to 9 have failed to substantiate their claims that the above-mentioned transfer of shares and funds were genuine sale transactions and loan transactions. The Noticees have failed to provide sufficient documentary evidences in support of their contentions. G.P. Surana has forwarded a copy of the DIS Slip used by him for transfer of 2.5 Lakh Shares to Jagdish Patel and has contended that the same mentions a consideration amount of Rs. 62.5 lakhs to be paid by the transferee. However, on closer examination of the same, I do not find any figure of such nature mentioned therein as the consideration amount. The Noticee nos. 7 to 9 have contended that the transfer of a total sum Rs. 1 Crore to Saurin P. Shah was a loan transaction pursuant to an oral agreement between them. I find that it is highly improbable that such large sums were advanced merely on the basis of an oral agreement. Further, all through their replies, the Noticees have referred to the financial difficulties faced by them at various stages. Given the same, it is equally highly improbable that the entities which were themselves in need of money would advance huge loans to others, that too on the basis of oral agreements. Thus, I find that the submissions of the Noticee nos. 7 to 9 do not inspire much confidence and are not trust worthy. The nature of the transactions between them and the Ahmedabad Group entities and the surrounding circumstances clearly indicate that the Noticee nos. 7 to 9 by providing shares and funds to the entities of Ahmedabad Group had induced them to deal in the scrip of PMTL in a fraudulent and manipulative manner.

74.

In view of the abovementioned observations and findings, I conclude that the Noticee nos. 1 to 5 have violated the provisions of Regulation 3(a), (b), (c), (d), 4(1), 4(2)(a), (b), (e) & (g) of the PFUTP Regulations 2003 and the Noticee nos. 6 and 10 have violated Regulation 3(a), (b), (c), (d), 4(1), 4(2)(a) & (e) of the PFUTP Regulations 2003. I further conclude that the Noticee nos. 7 to 9 have violated Regulation 3(a), (b), (c), (d), 4(1), 4(2)(a) and (d) of the PFUTP Regulations, 2003.

75.

The abovementioned provisions of the PFUTP Regulations, 2003 read as follows:

"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 there under;

(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.

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;

(d) paying, offering or agreeing to pay or offer, directly or indirectly, to any person any money or money's worth for inducing such person for dealing in any security with the object of inflating, depressing, maintaining or causing fluctuation in the price of such security;

(e) any act or omission amounting to manipulation of the price of a security;

(g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security;

76.

As regards the other charges in the SCN in respect of various Noticees, I note from that the Noticee no. 8 (G.P. Surana) is alleged to have violated Clause 4.2 of the Code of Conduct adopted by PMTL to prevent insider trading, read with Regulation 12(1) of the PIT Regulations. I note that Clause 4.2 of the Model Code of Conduct For Prevention of Insider Trading For Listed Companies prescribed under Regulation 12(1) of the PIT Regulations provides inter alia that all directors of a company who buy or sell any number of shares of the company shall not enter into an opposite transaction during the next six months following the prior transaction. I further note that the allegations of violation of the said Clause 4.2 against G.P. Surana has arisen on account of his purchase and sale on 15 shares of PMTL on the same date during the investigation period. In this regard, I have considered the submissions of the Noticee that it was a freak trade which had happened due to an error on part of the stock broker. Considering the same and also taking note of the fact the shares involved in the said transactions were limited to a minuscule quantity of 15 shares, I accept the Noticee's plea in this regard and thus drop the said charges against him.

77.

The SCN also alleges that G.P. Surana (Noticee no. 8) transferred 2,50,000 shares of PMTL to Jagdish Ramanlal Patel (Noticee no. 5) on June 28, 2011 in off-market, without any consideration, which resulted in violations of the provisions of Section 13, 16, and 18 read with Section 2(i) of the SCRA by them. The abovementioned provisions of the SCRA read as under:

SCRA

"2. (i) "spot delivery contract" means a contract which provides for,-

(a) actual delivery of securities and the payment of a price therefor either on the same day as the date of the contract or on the next day, the actual period taken for the despatch of the securities or the remittance of money therefor through the post being excluded from the computation of the period aforesaid if the parties to the contract do not reside in the same town or locality;

(b) transfer of the securities by the depository from the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository;

Contracts in notified areas illegal in certain circumstances.

13.

If the Central Government is satisfied, having regard to the nature or the volume of transactions in securities in any State or States or area that it is necessary so to do, it may, by notification in the Official Gazette, declared this section to apply to such State or States or area, and thereupon every contract in such State or States or area which is entered into after the date of the notification otherwise than between members of a recognised stock exchange or recognised stock exchanges in such State or States or area or through or with such member shall be illegal: ... ... ...

Power to prohibit contracts in certain cases.

16.

(1) If the Central Government is of opinion that it is necessary to prevent undesirable speculation in specified securities in any State or area, it may, by notification in the Official Gazette, declare that no person in the State or area specified in the notification shall, save with the permission of the Central Government, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the manner, if any, specified therein.

(2) All contracts in contravention of the provisions of sub-section (1) entered into after the date of notification issued thereunder shall be illegal.

Exclusion of spot delivery contracts from sections 13, 14, 15 and 17.

18.

(1) Nothing contained in sections 13, 14, 15 and 17 shall apply to spot delivery contracts.

(2) Notwithstanding anything contained in sub-section (1), if the Central Government is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot delivery contracts also in any State or area (whether section 13 has been declared to apply to that State or area or not), it may, by notification in the Official Gazette, declare that the provisions of section 17 shall also apply to such State or area in respect of spot delivery contracts generally or in respect of spot delivery contracts for the sale or purchase of such securities as may be specified in the notification, and may also specify the manner in which, and the extent to which, the provisions of that section shall so apply."

78.

I note that under the abovementioned provisions, an off-market sale or purchase of securities is prohibited unless it is a spot delivery contract, as defined under Section 2(i) of the SCRA. In a spot delivery contract, the actual delivery of the securities and the payment of price therefor has to be completed on the same day as the date of the contract or the next day. In the instant case, G.P. Surana had transferred 2,50,000 shares of PMTL to Jagdish Ramanlal Patel on June 28, 2011. However, no consideration was paid by Jagdish Ramanlal Patel to G.P. Surana within the stipulated time. I have gone through the submissions made by G.P. Surana in this regard. He has contended that he had transferred the said securities to Jagdish Patel for an agreed sum of Rs. 62.50 Lakh and that he had done so without confirming Jagdish Patel's ability to pay the consideration amount. He has further contended that since Jagdish Patel failed to fulfil his obligation to pay the consideration amount, G.P. Surana should not be held accountable for the lapse. I note that while G.P. Surana has contended that he had transferred the shares to Jagdish Patel for a price of Rs. 62.50 Lakh under a deal, he has failed to produce sufficient documentary evidence in support of the same. Further, even assuming that G.P. Surana and Jagdish Patel had entered into such a deal, the same does not absolve either party to the transaction from the liability arising out of non-fulfilment of conditions stipulated for a spot delivery contract. Spot delivery contracts are strictly defined under Section 2(i) of the SCRA and the conditions provided therein have be followed strictly by both the parties executing such contracts, failing which a contract does not qualify as a spot delivery contract. Further, once G.P. Surana (Noticee no. 8) has admitted that he did not verify Jagdish Patel's ability to pay the consideration amount, he cannot claim immunity from the liability arising out of Jagdish Patel's failure to pay the consideration amount for the shares within the stipulated time. Even further, considering the role of Jagdish Patel and G.P. Surana in the entire manipulation, as established above, the explanations offered by G.P. Surana do not appear plausible. I note that Jagdish Patel has not offered any explanation in respect of the abovementioned charges. In view of the above, I conclude that Jagdish Patel (Noticee no. 5) and G.P. Surana (Noticee no. 8), by entering in to a transaction as mentioned above, have violated the provisions of Section 13, 16 & 18 read with Section 2(i) of the SCRA.

79.

As per the SCN, the Noticee nos. 7 to 9 are also alleged to have violated provisions of Regulation 30(2) of the SAST Regulations, 2011. Regulation 30(2) read with Regulation 30(3) of the SAST Regulations, 2011 provides that the promoter of every target company shall together with persons acting in concert with him, disclose their aggregate shareholding and voting rights as of thirty-first day of March, in the target company in the prescribed format to the stock exchange and to the target company, within 7 working days from the end of each financial year. However, the Noticee nos. 7 to 9, who were part of the promoter entities, failed to disclose their shareholding, as on March 31, 2012, to the company and to the exchange (BSE), in terms of Regulation 30(2) read with 30(3) of the SAST Regulations, as confirmed by the company and the BSE.

80.

In the above regard, I note that while the Noticee nos. 7 to 9 have contended that they had filed disclosures with the company (PMTL) as per format specified under SAST Regulations, 1997, they have admitted that they had unintentionally missed filing the disclosure to the exchange under SAST Regulations, 2011. They have further contended that PMTL had filed appropriate disclosure to the exchange under Clause 35 of the Listing Agreement, wherein the shareholding pattern of the promoters, as on March 31, 2012 was disclosed. They have also submitted that they have made required disclosures in the prescribed format after receiving g the SCN. The Noticee nos. 7 to 9 have thus contended that there was no violation of the provisions of Regulation 30(2) read with 30(3) of SAST Regulations, 2011 on their part. I have considered the submissions made by the Noticees in this regard. I note that the obligation on promoters to file disclosures to the company and to the exchange under the provisions of the SAST Regulations is independent of the obligation of a company to file disclosures to the exchange under Listing Agreement. Filing of disclosure under one provision does not discharge the disclosure liability of other under a different provision. Thus, I conclude that by not filing the required disclosures in respect of their shareholding as on March 31, 2012, the Noticee nos. 7 to 9 have violated the provisions of Regulation 30(2) read with 30(3) of the 4 SAST Regulations, 2011.

81.

The SCN also alleges that Dipin Surana (Noticee no. 9) has violated the provisions of Regulation 13(4A) of the PIT Regulations. Regulation 13(4A) of the PIT Regulations provides the following:

"Any person who is a promoter or part of promoter group of a listed company, shall disclose to the company and the stock exchange where the securities are listed in Form D, the total number of shares or voting rights held and change in shareholding or voting rights, if there has been a change in such holdings of such person from the last disclosure made under Listing Agreement or under sub-regulation (2A) or under this sub-regulation, and the change exceeds Rs. 5 lakh in value or 25,000 shares or 1% of total shareholding or voting rights, whichever is lower."

82.

As per the SCN, the shareholding of Dipin Surana (Noticee no. 9), a promoter entity, had changed on various occasions for which he was required to make disclosures under Regulation 13(4A) of the PIT Regulations, which he failed to do. The details of the change in shareholding are provided in the Table under para 26 above. In this regard, Dipin Surana has contended that before the said changes in shareholding, the promoters had informed PMTL about their intention to sell shares of the company, which in turn was informed by PMTL to the exchange (BSE). The said intimation from PMTL to BSE also contained a revised shareholding pattern, after the proposed sale. Adequate disclosures regarding the intention to sell as well as sale of his shares were also made by him to the company which in turn reflected the same in the shareholding pattern of the quarter ending September 2012. The Noticee has further submitted that he had disclosed the details of his shareholding on quarterly basis under Regulation 8(2) of the SAST Regulations, 1997 to PMTL and PMTL disclosed the same to the exchange on quarterly basis under Regulation 8(3) of the SAST Regulations, 1997 and that the said reports reveal the said changes in shareholding between June 2012 and September 2012. The Noticee has further submitted that the said required disclosures under the PIT Regulations have been made after the receipt of the SCN.

83.

I have considered the submissions made by the Noticee, Dipin Surana. I note that he has primarily contended that the disclosures made to the company by the promoters of their intention to sell shares as well as quarterly disclosures made by him to the company under Regulation 8(2) of the SAST Regulations, 1997 and those made by the company to the exchange under 8(3) of the SAST Regulations suffice for the disclosures required to be made under Regulation 13(4A) of the PIT Regulations. However, I note that, as stated earlier, the disclosure made under one regulation does not discharge the liability to make disclosures under another regulation. The disclosure requirements under different provisions/regulations have their own individual sanctity and have to be mandatorily discharged independent of each other. In this regard, it is pertinent to note that the disclosures under Regulation 13(4A) have to be made by the promoter to the exchange within 2 working days of sale/purchase, whereas the disclosures required to be made under Regulation 8(2) & 8(3) of the SAST Regulations, 1997 are yearly in nature. Thus, the disclosures under one regulation would not suffice for those required to be made under another regulation. In view of the above, I find that by failing to disclose to the exchange the changes in his shareholding, as mentioned in the SCN, Dipin Surana (Noticee no. 9) has violated the provisions of Regulation 13(4A) of the PIT Regulations.

8K Miles Software Solutions Limited (8KMiles):

84.

Having decided on the allegations against the Noticees in respect of the scrip of PMTL, I now proceed to decide on the allegations pertaining to the scrip of 8KMiles. I note that in respect of the scrip of 8KMiles, in paragraphs 33 to 55 above, the findings of the investigations as recorded in the SCN, bring out the details of the manipulations carried out in the scrip by the Noticee nos. 1, 2, 4, 5 and 10, who were part of 'the Ahmedabad Group', as defined in the Table under para 40 above. In the said paragraphs, it has already been brought out in detail as to how the trades of Noticee nos. 1, 2, 4, 5 and 10, who were connected to each other, had artificially inflated the price of the scrip through first trades and by placing orders at incremental prices thereby establishing New High Price (NHP) and raising the LTP. The same are self-explanatory and need no further elaboration. However, none of the said Noticees, except the Noticee no. 1, has provided any explanation or defence in respect of the same. Even the submissions made by the Noticee no. 1 are perfunctory in nature as he has merely contended that one Jatin Shah was the real culprit who had used his and others' signatures and demat accounts for his personal trades. However, as mentioned above, he has not submitted any corroborative evidence in support of the same and has not made any submissions on merit. Thus, the defence of the Noticee no. 1 appears flimsy and cannot be relied upon. Since the other Noticees (i.e. nos. 2, 4, 5 and 10) have either not responded to the SCN or have not made any submission on merit, except generally denying the allegations, the prima facie findings of the investigation against them in respect of the scrip of 8KMiles stand proved.

85.

In view of the above, I conclude that the allegations of violation of the provisions of regulations 3(a), (b), (c), (d), 4(1), 4(2)(a) and (e) of the PFUTP Regulations, 2003 against Noticee nos. 1, 2, 4, 5 and 10 stand established.

86.

Since there are no allegations against the Noticee nos. 3, 6, 7, 8 and 9 in respect of the scrip of 8KMiles, I don't find any need to make any observations pertaining to them in this respect.

DIRECTIONS:

87.

In view of the above, in order to protect the interest of investors and the integrity of the securities market, I, in exercise of powers conferred upon me under Section 19 read with Sections 11, 11(4) and 11B of the SEBI Act, 1992 and Regulation 11 of the PFUTP Regulations, hereby restrain the Noticee nos. 1 to 10 from accessing the securities market and further prohibit them from buying, selling or otherwise dealing in securities, either directly or indirectly, for a period of six years. However, considering the fact that Noticee nos. 1 to 10 have been undergoing such debarment since April 13, 2013 by virtue of directions issued vide the Interim Order dated April 13, 2013 read with Confirmatory Order dated December 30, 2013, the period of debarment already undergone by the Noticees shall be set off against the debarment period of six years, as imposed above.

88.

The above directions shall come into force with immediate effect. A copy of this order shall be served upon the stock exchanges and the depositories for necessary action and compliance.