Adjudication Order Against 20 Entities in The Matter of Spectacle Infotek Limited

BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. EAD-2/DSR/RG/PU/320 -339/2014]
________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF
INDIA ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR
HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING
OFFICER) RULES, 1995.
In respect of
1. Labh Share and Stock Private Limited [PAN: AABCL7637A]
2. Shri Ketan Babulal Shah [PAN: AACPS0667F]
3. Shri Bharat Shantilal Thakkar [PAN: AAZPT9542R]
4. Shri Bipin Jayant Thaker [PAN: ABYPT4984H ]
5. Shri Vasudev Ramchandra Kamat [PAN: ADCPK2552N]
6. Shri Bharat G Vaghela [PAN: ADYPV0844N]
7. Shri Chirag Rajnikant Jariwala [PAN: AFMPJ7543L]
8. Shri Kishore Chauhan [PAN: AFPPC9703G]
9. Shri Bhavesh Pabari [PAN: AKGPP8679N]
10. Shri Prem Mohanlal Parikh [PAN: ALHPP3489N]
11. Shri Hemant Madhusudan Sheth [PAN: ANOPS8607E]
12. Shri Jigar Praful Ghoghari [PAN: ASFPG8598L]
13. Ms. Mala Hemant Sheth [PAN: AZXPS0694J]
14. Shri Ankit Sanchaniya [PAN: BLNPS3316L]
15. Shri Vivek Kishanpal Samant [PAN: BRSPS0294N]
16. Rajnandi Yarns Private Limited [PAN: AADCR0099J]
17. Shri Bipin Kumar Gandhi [PAN: AJHPG6989J]
18. Shri Gaurang Ajit Seth [PAN: BGEPS6596Q]
19. Shri Santosh Maruti Patil [PAN: AMAPP2722N]
20. Arcadia Share & Stock Brokers Pvt. Ltd. [PAN: AAACA4562G]
In the matter of
SPECTACLE INFOTEK LIMITED
________________________________________________________________
1. Securities and Exchange Board of India (hereinafter referred to as SEBI), had
pursuant to the detection of a huge rise in the traded volumes and/or price of
the shares of Spectacle Infotek Limited (hereinafter referred to as
Brought to you by http://StockViz.biz
Page 1 of 59
'SIL/company'), a company listed at the Bombay Stock Exchange limited

(BSE) and the National Stock Exchange (NSE), conducted an investigation into
the alleged irregularity in the trading in the shares of SIL and into the possible
violation of the provisions of the Securities and Exchange Board of India Act,
1992 (hereinafter referred to as the 'Act') and various Rules and Regulations
made there under during the period from May 01, 2010 to January 31, 2011. It
was observed that the price of the scrip unusually increased from `21.75 to
`162.80 and the daily high and low traded volume was 31 shares to 79,68,043
shares.
2. SEBI vide its interim order dated February 02, 2011 had restrained 39
persons/entities from accessing the securities market and further, had
prohibited them from buying, selling or dealing in securities in any manner
whatsoever, till further directions. The said interim order was later confirmed
by SEBI vide order dated July 08, 2011.
3. The investigation, inter alia, revealed that certain entities namely, 1) M/s.
Labh Share and Stock Private Limited, 2) Shri Ketan Babulal Shah, 3) Shri
Bharat Shantilal Thakkar, 4) Shri Bipin Jayant Thaker, 5) Shri Vasudev
Ramchandra Kamat, 6) Shri Bharat G. Vaghela, 7) Shri Chirag Rajnikant
Jariwala, 8) Shri Kishore Chauhan, 9) Shri Bhavesh Pabari, 10) Shri Prem
Mohanlal Parikh, 11) Shri Hemant Madhusudan Sheth, 12) Shri Jigar Praful
Ghoghari, 13) Ms. Mala Hemant Sheth, 14) Shri Ankit Sanchaniya, 15) Shri
Vivek Kishanpal Samant, 16) Rajnandi Yarns Private Limited, 17) Shri Bipin
Kumar Gandhi, 18) Shri Gaurang Ajit Seth and 19) Shri Santosh Maruti Patil
(hereinafter referred to as Noticee Nos. 1 to 19 and collectively referred to as
the Noticees), connected to each other by one way or the other, had dealt in
the scrip of SIL through multiple brokers in a fraudulent and manipulative
manner, without real change in ownership of shares, by indulging in number
of synchronized trades and heavily traded amongst themselves thereby,
creating artificial volumes and price rise in the scrip. The Noticee Nos. 1 to 19
were also observed to have done off-market transactions among themselves
for the purpose of meeting the settlement obligations of one another.
Page 2 of 59
4. It was further observed that certain Noticees had also indulged in trades
which were self trades in nature, while trading on both the exchanges i.e. BSE
and NSE, through multiple brokers one of them being Arcadia Share & Stock
brokers Private Limited (hereinafter referred to as Noticee No. 20), a
registered intermediary with SEBI thereby, creating artificial volume which
gave a false and misleading appearance of trading in the scrip of SIL on the
exchanges.
5. SEBI has, therefore, initiated adjudication proceedings against Noticee Nos. 1
to 19 for the alleged violation of Regulation 3 (a), (b), (c), (d), 4 (1) and 4 (2) (a),
(b), (e) & (g) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices
relating to Securities Market) Regulations, 2003 (hereinafter referred to as the
PFUTP Regulations) and against Noticee No. 20 for the alleged violation of
the provisions of Clause A (1), (2) & (3) of the Code of Conduct as specified
under Schedule II of the SEBI (Stock Brokers and Sub-Brokers) Regulations,
1992 (herein after referred to as the Broker Regulations) read with Regulation
7 of the said Regulations.
Appointment of Adjudicating Officer
6. I have been appointed as the Adjudicating Officer, in the place of the previous
Adjudicating Officer, vide order dated August 29, 2013 under Section 15 I of
the Act read with Rule 3 of the SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred
to as 'Rules') to inquire into and adjudge under Section 15 HA of the Act
against Noticee Nos. 1 to 19 for the alleged violation of the provisions of
PFUTP Regulations and under Section 15 HB of the Act against Noticee No. 20
for the alleged violation of the Broker Regulations.
Show Cause Notice, Reply and Personal Hearing
7. All the Noticees were
issued a common show cause notice (hereinafter
referred to as 'SCN') dated December 04, 2013 in terms of Rule 4(1) of the
Rules to show cause as to why an inquiry should not be held and penalty
should not be imposed on them for the aforesaid violations. The SCNs were
Page 3 of 59
sent by Speed Post Ack. Due and were duly delivered to the Noticees except
in the case of Noticee Nos. 6, 14, 16, 17 & 19 as the same were returned
undelivered. In view of the same, vide letter dated March 03, 2014, the SCNs
were affixed at the last known address of the said Noticees, reports thereof are
available on record.
8. Vide letter dated April 30, 2014, one Ms. Rupal K. Chauhan, wife of Noticee
No. 8 informed that the said Noticee had passed away on May 29, 2013 and
enclosed a copy of the certified death certificate of Noticee No. 8 as issued by
the Department of Health and Family Welfare, Government of Gujarat, in
support thereof. In view of the same, the adjudication proceedings initiated
against Noticee No. 8 stand abated. However, I shall examine the role of
Noticee No. 8 for the limited purpose of examining the role and findings
against the other Noticees in the matter.
9. The Noticee No. 1 submitted its reply in the matter vide letter dated January
10, 2014. Further, Noticee No. 3 vide letter dated October 16, 2014 filed his
reply in the matter. The Noticee Nos. 4 & 7 vide their separate but identical
letters dated April 21, 2014 filed their reply in the matter and further
requested for 4 weeks time to file their detailed reply. Accordingly, vide
separate letters dated November 13, 2014, and November 12, 2014, the said
Noticees filed their detailed replies in the matter. Further, the Noticee Nos. 9
and 13, vide separate letters dated August 17, 2014 and August 19, 2014,
respectively, filed their replies in the matter. Further, the Noticee No. 20, vide
its letter dated December 20, 2013, requested for 3 weeks time to file its reply
in the matter and accordingly, vide letter dated January 09, 2014 filed its reply
in the matter. The other Noticees did not file any replies in the matter.
10. Thereafter, in the interest of natural justice and in order to conduct an inquiry
as per Rule 4(3) of the Rules, an opportunity of personal hearing was granted
to the Noticee Nos. 6, 14, 16 and 17 on April 07, 2014 and Noticee Nos. 10, 12
and 19 on April 10, 2014 vide separate notices dated March 12, 2014. The said
notices were sent by hand delivery to Noticee No. 10 and by hand delivery &
Page 4 of 59
affixed to Noticee Nos. 6, 12, 14, 16, 17 and 19, affixture reports thereof are
available on record. A common Authorized Representative (AR) appeared on
behalf of the Noticee Nos. 10 & 12 on the scheduled date and made oral
submissions. Further, the said AR requested for 2 weeks time to file replies for
the said Noticees in the matter. Accordingly, the Noticee Nos. 10 and 12 were
advised to file their replies on or before April 24, 2014. Vide separate but
identical letters dated April 21, 2014 filed their replies in the matter and
further requested 4 weeks time file their detailed replies. The Noticee Nos. 6,
14, 16, 17 and 19 did not attend the hearing on the scheduled date. However,
vide letter dated November 13, 2014 the Noticee No. 14 filed his reply in the
matter. Further, vide letter dated August 28, 2014, the Noticee No. 16 also
filed its reply in the matter.
11. Subsequently, in the interest of natural justice an opportunity of personal
hearing was granted to the Noticee Nos. 1, 2, 3, 4, 5, 9, 10, 11, 12 13, 15, 16 and
20 on November 17, 2014 and Noticee Nos. 7 and 18 on November 18, 2014
vide separate notices dated November 03, 2014. The Noticee No. 20 filed its
additional reply dated November 15, 2014 (i.e. before the scheduled date of
hearing) in the matter. A common AR appeared on behalf of Noticee Nos. 1 &
20 on the scheduled date and reiterated the submissions made by the said
Noticees in their replies. Further, a common AR attended the scheduled
hearing on behalf of Noticee Nos. 5, 11, 12 and 18 and made oral submissions.
With respect to Noticee Nos. 5 and 18, the AR, vide separate letters dated
November 17, 2014, submitted their individual replies in the matter. I find that
the Noticee Nos. 11, 15 and 14 did not attend the hearing on the scheduled
date. However, vide letters dated November 09, 2014, November 09 & 11,
2014 and November 13, 2014, the said Noticees filed their replies in the matter.
The other Noticees did not attend the hearing on the scheduled date.
12. In view of the above, with respect to Noticee Nos. 2, 6, 17 and 19 I note that
the said Noticees have neither filed any replies nor availed the opportunity of
personal hearing granted to them (November 17, 2014 and April 7 & 10, 2014)
Page 5 of 59
in the matter. I note that the said Noticees have been granted sufficient time
to file their replies in the matter as the SCN in the present case was issued on
December 04, 2013 i.e. appx 1 year ago.
Therefore, I am proceeding further
against the said Noticees on the basis of material available on record in the
matter.
Consideration of Issues, Evidence and Findings
13. I have carefully perused the charges leveled against the Noticees in the SCN,
written submissions made and all the documents available on record. In the
instant matter, the following issues arise for consideration and determination:
a. Whether Noticee Nos. 1 to 7 and 9 to 19 have violated Regulation
3 (a), (b), (c), (d), 4 (1) and 4 (2) (a), (b), (e) & (g) of the PFUTP
Regulations?
b. Whether Noticee No. 20 has violated Clause A (1), (2) & (3) of the
Code of Conduct specified under Schedule II read with
Regulation 7 of the Broker Regulations?
c. Do the violations, if any, on the part of the Noticees attract
monetary penalty under Section 15HA and 15HB of the Act?
d. If so, what should be the quantum of monetary penalty that can
be imposed on the Noticees taking into consideration the factors
as mentioned under Section 15 J of the Act?
14. Before proceeding forward, I would like to refer to the relevant provision of
the PFUTP Regulations and the Broker Regulations, which read as under:
PFUTP Regulations
3. Prohibition of certain dealings in securities
No person shall directly or indirectly
(a) buy, sell or otherwise deal in securities in a fraudulent manner;
(b) use or employ, in connection with issue, purchase or sale of any security
listed or proposed to be listed in a recognized stock exchange, any
manipulative or deceptive device or contrivance in contravention of the
provisions of the Act or the rules or the regulations made there under;
Page 6 of 59
(c) employ any device, scheme or artifice to defraud in connection with

dealing in or issue of securities which are listed or proposed to be listed on a
recognized stock exchange;
(d) engage in any act, practice, course of business which operates or would
operate as fraud or deceit upon any person in connection with any dealing in
or issue of securities which are listed or proposed to be listed on a recognized
stock exchange in contravention of the provisions of the Act or the rules and
the regulations made there under.
4. Prohibition of manipulative, fraudulent and unfair trade practices
(1) Without prejudice to the provisions of regulation 3, no person shall
indulge in a fraudulent or an unfair trade practice in securities.
(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade
practice if it involves fraud and may include all or any of the following,
namely:
(a) indulging in an act which creates false or misleading appearance of
trading in the securities market;
(b) dealing in a security not intended to effect transfer of beneficial ownership
but intended to operate only as a device to inflate, depress or cause
fluctuations in the price of such security for wrongful gain or avoidance of
loss;
(c).............
(d).............
(e) any act or omission amounting to manipulation of the price of a scrip
(g) entering into a transaction in securities without intention of performing it
or without intention of change of ownership of such security;
Broker Regulations
Stock brokers to abide by Code of Conduct.
7. The stock broker holding a certificate shall at all times abide by the Code of
Conduct as specified in Schedule II.
SCHEDULE II
CODE OF CONDUCT FOR STOCK BROKERS
[Regulation 7]
A. General.
(1) Integrity: A stock-broker, shall maintain high standards of integrity,
promptitude and fairness in the conduct of all his business.
Page 7 of 59
(2) Exercise of due skill and care: A stock-broker shall act with due skill, care
and diligence in the conduct of all his business.
(3) Manipulation: A stock-broker shall not indulge in manipulative,
fraudulent or deceptive transactions or schemes or spread rumours with a
view to distorting market equilibrium or making personal gains.
15. I find from the SCN that SIL is a company listed on the BSE and NSE. On
analyzing the trading activity in the scrip of SIL on BSE, it was noticed that a
group of 19 entities identified as the Pabari-Parikh Group in the investigation
report, who were all connected to each other in one way or the other, had traded
heavily in the scrip of SIL through multiple brokers, one of them being Noticee
No. 20. The relationship between the 19 entities is detailed as under:
Client
Name
KYC Relation
1.Labh
Share and
Stock
Private
Limited
Sl. no. 1 has traded with

6, 7, 8, 9, 10, 12, 14, 15, 18
& 19, who all have
connection with
Bhavesh Pabari through,
KYC relation, fund
movement or off market
share transfer.
Introduced sl. no.14, 13,
12, 10 for trading a/c
and knows sl. No. 16
2.Bhupesh
Rathod
3.Ketan
Babulal
Shah
4.Rajnandi
Yarns
Private
Sl. no. 12 & 14 both

directors of Rajnandi
Yarns Pvt. Ltd.
Fund
Movem
ent
Share
movement
through
off market
Client
Name
KYC Relation
Fund
Moveme
nt
11.Bipink
umar
Gandhi
12.Bhaves
h Pabari
With Sl.
No. 18.
With sl.
no.13.
13.Prem
Mohanlal
Parikh
With sl.
no. 5, 6, 9,
10, 12, 13,
14.Heman
t
Madhusu
Page 8 of 59
Sl. no. 5 is his uncle &

sl. no. 19 is his brother
in law.
Sl. no. 13 is cousin of
sl. no.12
Yarns Pvt.
Ltd.(sl.no.4)
Share common Tel.
no. with sl. no. 18, 19,
6.
Sl. no. 2 introduced
him for trading a/c.
BR* with sl. no. 6, 9,
10, 13, 14, 16, 18.
Sl. no. 13 is cousin of
sl. no.12.
Common email with
sl. 18, 13 & 19.
Sl. no. 14 is nominee
of sl. no.13.
BR* with sl. no. 5, 6, 9,
10, 12, 14, 18, 19.
Yarns Pvt. Ltd.
Share
moveme
nt
through
off
market
With sl.
no. 12.
With sl.
no. 13, 14,
4, 5, 6, 18,
19, 11.
With sl.
no. 12,
14, 10.
With sl.
no. 12, 14,
10, 4, 5, 6,
14, 15, 18,
19.
With sl.
no. 12,
13, 10.
With sl.
no. 12, 13,
10, 4, 16,
Limited
5.Bharat
Shantilal
Thakkar
6.Bipin
Jayant
Thaker
7.Vasudev
Ramchandr
a Kamat
8.Bharat G
Vaghela
9.Chirag
Rajnikant
Jariwala
10.Kishore
Chauhan
14, 15, 18,

19.
dan Sheth
Same email with sl.

no. 18.
BR* with 2, 5, 13, 18,
19, 6, 9, 10, & sl. no.
16 is his wife & sl. no.
17 is his nephew.
Sl. no. 12 is his nephew.

Same address with sl.
no.12.
Sl. no. 12 is his nominee.
Joint a/c with sl. no. 12.
BR* with sl. no. 6, 9, 10,
13, 14, 18, 19.
Same Tel. no. with sl. no.
12.
BR* with sl. no. 5, 9, 10,
12, 13, 14, 18, 19.
Sl. no. 5 share the same
address with sl. no.12.
With sl.
no. 12,
13, 18.
With sl.
no. 12, 7,
4.
15.Jigar
Praful
Ghoghari
With sl.
no. 4,
12.
With sl.
no. 4, 15,
9, 12, 13,
14.
With sl.
no.5
16.Mala
Hemant
Sheth
Sl. no. 16 is the wife of

sl. no. 14 and sl. no. 17
is the nephew.
17.Gauran
g Ajit
Seth
Same address & Tel.no.

as sl. no. 11 who has
share movement with
sl.no. 12.
Sl. No. 9 is nephew of sl.
no. 12 and shares same
Tel. no. with sl. no. 12.
Same Tel. no. with
sl.no.12.
Sl. no. 12 is his uncle.
BR* with sl. no. 5, 6, 10,
12, 14, 18, 19.
With sl.
no. 9.
Has common address

& Tel. no. with sl. no.
14. & sl. no. 14 and 12
both directors of
Rajnandi Yarns Pvt.
Ltd.(sl.no.4)
Same Tel. no. with sl.
no. 13 and also shares
Tel. no. with sl. no. 12
who is the nominee
for his a/c.
BR* with sl. no.5, 6, 9,
10, 12, 13, 14, 18.
Sl. no. 12 is the
brother in law &
shares common Tel.
no. & sl.no. 12 is the
nominee of sl. no. 19
for trading a/c &
bank a/c.
Shares email with sl.
no. 14.
Shares email with sl.
no. 13.
With sl.
no. 12,
14, 8, 4.
Join a/c with sl. no. 12

With sl.
no. 12,
Sl. no. 12 & 14 are
witness for demat a/c.
13, 14.
12, 13, 14, 18.
* BR - Business Relation
18.Ankit
Sanchani
ya
19.Vivek
Kishanpal
Samant
With sl.
no. 4, 6.
With sl.
no. 4, 12,
13, 14, 19.
18, 19, 15,

6,
With sl.
no. 4, 6,
13, 14, 18.
With sl.
no. 12,
13.
With sl.
no. 14.
With sl.
no. 12,
13.
With sl.
no. 4, 12,
13, 14, 9,
15, 19.
With sl.
no. 14.
With sl.
no. 4, 12,
14, 9, 10,
13, 18.
16. Additionally, it was revealed that the Pabari-Parikh Group entities, had indulged in
certain off-market transfers for 5,53,54,390 shares of Spectacle amongst
themselves during the period January 01, 2009 and January 31, 2011. These off market transfers among the group further confirmed the relationship/connection
between the said group.
17. I find from the trade log analysis that, the Pabari-Parikh Group entities had
purchased 57638998 shares accounting for 61.89% of the total volume traded and
Page 9 of 59
sold 63596198 shares accounting for 68.29% of the total volume traded of SIL
during the relevant period. Out of 19 Pabari-Parikh group entities, 18 PabariParikh group entities traded for 50482429 shares (i.e. 54.21% of the market
volume) accounting for 87.58 % of the total purchase of the group and 79.38% of
the total sale of the group within Pabari-Parikh group entities and 54.21% of the
market volume from within the group entities. Out of 50482429 shares within the
group entities, the buy and sell orders for 22539876 shares accounting for 24.20%
of the market volume, were placed within one minute time difference. Further, it
was noted that 22539876 shares constituted for 39.11% of the total purchases and
35.44% of the total sales of the Pabari-Parikh Group entities.
18. Further, out of 22539876 shares, for 3179058 shares which accounted for 3.41% of
the total market volume, the buy and sale orders were placed in synchronized
manner (i.e. difference between placement of order by buyer and seller within
one minute and order rate as well as order quantity of buy side and sale side
being same) by Noticee Nos. 1 to 15. The volume of 3179058 shares constituted for
5.52% of the total purchases and 5.00% of the total sales of the Pabari-Parikh
group entities. The summary of the said synchronized trades entered into by the
by Noticee Nos. 1 to 15 while trading on BSE is as under:
PANNO
AABCL7637A
AACPS0667F
AAZPT9542R
ABYPT4984H
ADCPK2552N
ADYPV0844N
AFMPJ7543L
Client Name
Labh Share and Stock
Private Limited
(Noticee No. 1)
Ketan Babulal Shah
(Noticee No. 2)
Bharat Shantilal Thakkar
(Noticee No. 3)
Bipin Jayant Thaker
(Noticee No. 4)
Vasudev Ramchandra
Kamat (Noticee No. 5)
Bharat G Vaghela
(Noticee No. 6)
Chirag Rajnikant
Jariwala
(Noticee No. 7)
Synchronised
Buy
% of
Market
Volume
% of
sync
to
total
buy
by
client
180671
0.19
25.71
10040
0.01
17.76
700
0.00
70.00
0.00
0.00
24451
0.03
1.75
41115
0.04
2.71
123874
0.13
2.57
211685
0.23
3.69
0.00
0.00
5000
0.01
47.39
1124246
1.21
12.35
454205
0.49
4.96
232387
0.25
4.91
186213
0.20
4.57
Page 10 of 59
Synchronised
Sale
% of
Market
Volume
% of
sync
to
total
sale
by
client
AFPPC9703G
AKGPP8679N
ALHPP3489N
ANOPS8607E
ASFPG8598L
AZXPS0694J
BLNPS3316L
BRSPS0294N
Kishore Chauhan
(Noticee No. 8)
Bhavesh Pabari
(Noticee No. 9)
Prem Mohanlal Parikh
(Noticee No. 10)
Hemant Madhusudan
Sheth (Noticee No. 11)
Jigar Praful Ghoghari
(Noticee No. 12)
Mala Hemant Sheth
(Noticee No. 13)
Ankit Sanchaniya
(Noticee No. 14)
Vivek Kishanpal Samant
(Noticee No. 15)
Grand Total
32156
0.03
1.46
1300
0.00
0.05
394745
0.42
4.45
403261
0.43
3.98
268146
0.29
5.98
338972
0.36
7.39
233072
0.25
3.38
748019
0.80
7.67
78496
0.08
4.40
163566
0.18
9.17
0.00
0.00
12560
0.01
24.19
303168
0.33
5.89
202345
0.22
4.23
182946
0.20
2.47
400777
0.43
4.30
3179058
3.41
5.52
3179058
3.41
5.00
19. I also find that Noticee Nos. 3, 4, 6, 7, 8, 9, 10, 11, 12, 14 & 15 had indulged in
certain trades which were self trades in nature (while dealing through their
multiple brokers including Noticee No. 20) and the details of the said fictitious
trades indulged into on BSE by the said Noticees are as under:
PAN
AAZPT9542R
ABYPT4984H
ADYPV0844N
AFMPJ7543L
AFPPC9703G
AKGPP8679N
ALHPP3489N
ANOPS8607E
ASFPG8598L
BLNPS3316L
BRSPS0294N
Grand Total
Name of the entity

Bharat Shantilal
Thakkar
(Noticee No. 3)
Bipin Jayant Thaker
(Noticee No. 4)
Bharat G Vaghela
(Noticee No. 6)
Chirag Rajnikant
Jariwala
(Noticee No. 7)
Kishore Chauhan
(Noticee No. 8)
Bhavesh Pabari
(Noticee No. 9)
(Noticee No. 10)
Hemant Madhusudan
Sheth (Noticee No. 11)
(Noticee No. 12)
Ankit Sanchaniya
(Noticee No. 14)
Vivek Kishanpal
Samant
(Noticee No. 15)
% of
Total
Buy
%
Total
Sale
% of
Market
Volume
No of
Self
trades
Total buy
Total sale
Self
trade
qty
1395519
1518102
2263
0.16
0.15
0.00
4817677
5740151
102739
2.13
1.79
0.11
26
9104535
9150961
41019
0.45
0.45
0.04
62
4731650
4077019
190575
4.03
4.67
0.20
34
2208192
2540507
1100
0.05
0.04
0.00
8861360
10144037
190735
2.15
1.88
0.20
77
4480527
4587734
87193
1.95
1.90
0.09
31
6890281
9754318
393404
5.71
4.03
0.42
78
1785017
1784362
36384
2.04
2.04
0.04
11
5145520
4787916
222268
4.32
4.64
0.24
61
7411826
56832104
9323368
63408475
228562
1496242
3.08
2.63
2.45
2.36
0.25
1.61
70
458
Page 11 of 59
20. For the above fictitious trades, it was noted that the brokers mentioned in the
table below were appearing on both sides of the trade i.e. acted as broker and
counter party broker. The number of instances wherein the Noticee No. 20 had
executed self trades on behalf of its clients was significant and the details of the
same are as under:
Buy and Sale Member Name
Client Name
Ankit Sanchaniya
(Noticee No. 14)
Bharat G Vaghela
(Noticee No. 6)
(Noticee No. 3)
Arcadia Share & Stock Brokers Pvt.
Bipin Jayant Thaker
(Noticee No. 4)
Ltd.
Arcadia Share & Stock Brokers Pvt. Ltd. (Noticee No. 20)
Total
Arch Finance Ltd.
(Noticee No. 10)
Arch Finance Ltd. Total
Fairwealth Securities Ltd.
Ankit Sanchaniya
(Noticee No. 14)
Bhavesh Pabari
(Noticee No. 9)
Hemant Madhusudan Sheth
(Noticee No. 11)
Kishore Chauhan
(Noticee No. 8)
(Noticee No. 10)
(Noticee No. 15)
Fairwealth Securities Ltd. Total

IFCI Financial Services Ltd.

(Noticee No. 11)
IFCI Financial Services Ltd. Total

Grand Total
Total Traded Qty
No of trades
3000
41019
62
2263
2530
48812
75
4398
4398
10
7378
11
5000
1100
1511
785
15784
23
3300
3300
72294
102
21. From the price volume data analysis at BSE, I note that the scrip of SIL was
traded on 192 trading days. Out of the 192 trading days, the group entities
had traded among themselves on 167 days, i.e. for 86.97% of the total number
of days the scrip was traded during the relevant period under investigation. It
was noted that the Noticee Nos. 1 to 19 contributed to the daily market
Page 12 of 59
volume of the scrip in the range from 83.74% on May 03, 2010 to 0.22% on
January 31, 2011. It was further alleged that out of 167 trading days, on 140
trading days the said Noticees had traded among themselves, thereby,
contributing more than 50% to the total market volume in the scrip during the
relevant period.
22. On further examination, I find that out of 167 trading days on which the
Pabari-Parikh Group had entered into trades in the scrip of SIL, on 158 trading
days both buy and sell orders were placed within time difference of one
minute. It was, therefore, alleged in the SCN that the Noticee Nos. 1 to 19 had
contributed to daily market volume of the scrip in the range from 7.42% on
May 04, 2010 to 7.44% on January 25, 2011. Out of 158 trading days, on 32
trading days, the trades executed by the Noticee Nos. 1 to 19 contributed more
than 50% of the total market volume of the scrip. Also out of 158 trading days,
on 98 trading days the trades executed by the Noticee Nos. 1 to 19 were
synchronized in nature. By executing synchronized trades among themselves,
the Noticee Nos. 1 to 19 contributed to total market volume of the scrip in the
range from 2.75% on May 03, 2010 to 13.02% on December 08, 2010. In
addition, the group entities contributed to more than 40% of the market
volume of the scrip by entering into synchronized trading on 2 trading days.
23. I further find that the price of the scrip opened at `119.90 and touched a high
of ` 178.00 i.e. there was an increase of ` 58.10. Thus, on 192 trading days and
on 226 occasions a new high price was discovered. Further I note that, out of
226 occasions, on 117 occasions (i.e. on 25 days out of 28 days), Noticee Nos. 3,
6, 7, 9, 11, 14, 15 & 18 contributed to increase in price by `52.30 (out of `58.10).
24. I find from the analysis of the trading activity in the scrip of SIL on NSE that a
group of 18 Pabari-Parikh Group entities i.e. Noticee Nos. 1 & 3 to
19,
connected to each other one way or the other and dealing through multiple
brokers, had purchased 45992205 shares which accounted for 56.77% of the
total volume traded and sold 51740181 shares which accounted for 63.86% of
the total volume traded in the scrip of SIL during the period under
Page 13 of 59
investigation. Further, as mentioned in para 16 above, the group entities had

also done certain off-market transactions which further confirm the nexus
between the said entities. The relationship between the 18 entities i.e. Noticee
Nos. 1 & 3 to 19, is detailed as under:
Client
Name
KYC Relation
1.Labh
Share and
Stock
Private
Limited
Sl. no. 1 traded with

sl. No. 1, 4, 5, 6, 7, 8,
10, 11, 13, 14, 17 & 18,
who all have
connection with
Bhavesh Pabari
through, KYC
relation, fund
movement or off
market share transfer
2.Rajnand
i Yarns
Private
Limited

Yarns Pvt. Ltd.
3.Bharat
Shantilal
Thakkar
Sl. no. 10 is his

nephew.
Same address with sl.
no.10.
Sl. no. 10 is his
nominee.
Joint a/c with sl. no.
10.
11, 13, 17, 18.
Same Tel. no. with sl.
no. 10.
10, 11, 13, 17, 18.
4.Bipin
Jayant
Thaker
Fund
Move
ment
Share
moveme
nt
through
off
market
Client
Name
KYC Relation
10.Bhave
sh Pabari
Sl. no. 3 is his uncle

& sl. no. 18 is his
brother in law.
Sl. no. 11 is cousin
of sl. no.10
directors of
Rajnandi Yarns Pvt.
Ltd.(sl.no.2)
Share common Tel.
no. with sl. no. 17,
18, 4.
8, 11, 13, 15, 17.
Sl. no. 11 is cousin
of sl. no.10.
Common email
with sl. 17, 11 & 18.
Sl. no. 13 is nominee
of sl. no.11.
7, 8, 10, 13, 17, 18.
Sl. no. 12 traded
with sl. No. 6, 17 &
18, who all have
connection with
Bhavesh Pabari
through, KYC
relation, fund
movement or off
market share
transfer
directors of
Rajnandi Yarns Pvt.
Ltd.
Same email with sl.
no. 17.
BR* with 3, 11, 17,
18, 4, 7, 8, & sl. no.
15 is his wife & sl.
no. 16 is his
nephew.
With sl.
no. 3, 4, 7,
8, 10, 11,
13, 14, 17,
18.
11.Prem
Mohanla
l Parikh
With
sl. no.
10, 11,
17.
With sl.
no. 10, 5,
2.
12.Santo
sh
Maruti
Patil
With
sl. no.
2, 10.
With sl.
no. 2, 14,
7, 10, 11,
13.
13.Hema
nt
Madhus
udan
Sheth
Page 14 of 59
Fund
Movem
ent
Share
moveme
nt
through
off
market
With sl.
no. 11,
13, 2, 3,
4, 17, 18,
9.
With sl.
no. 10,
13, 8.
With sl.
no. 10,
13, 8, 2,
3, 4, 13,
14, 17,
18.
With sl.
no. 10,
11, 8.
With sl.
no. 10,
11, 8, 2,
15, 17,
18, 14, 4.
5.Vasude
v
Ramchan
dra
Kamat
6.Bharat
G
Vaghela
7.Chirag
Rajnikant
Jariwala
8.Kishore
Chauhan
Sl. no. 3 share the

same address with sl.
no.10.
With sl.
no.3.
Same address &

Tel.no. as sl. no. 9
who has share
movement with sl.no.
10.
Sl. No. 7 is nephew of
sl. no. 10 and shares
same Tel. no. with sl.
no. 10.
Same Tel. no. with
sl.no.10.
Sl. no. 10 is his uncle.
10, 13, 17, 18.
With
sl. no.
7.
With
sl. no.
10, 13,
6, 2.
Join a/c with sl. no. 10

Sl. no. 10 & 13 are
witness for demat
a/c.
10, 11, 13, 17.
With
sl. no.
10, 11,
13.
9.Bipinku
mar
Gandhi
14.Jigar
Praful
Ghoghar
i
With sl.
no. 2, 4,
11, 13,
17.
15.Mala
Hemant
Sheth
Sl. no. 15 is the wife

of sl. no. 13 and sl.
no. 16 is the
nephew.
With sl.
no. 2, 4.
16.Gaura
ng Ajit
Seth
With sl.
no. 2, 10,
11, 13, 18.
17.Ankit
Sanchani
ya
With sl.
no. 10.
18.Vivek
Kishanp
al
Samant
Has common
address & Tel. no.
with sl. no. 13. & sl.
no. 13 and 10 both
directors of
Rajnandi Yarns Pvt.
Ltd.(sl.no.2)
Same Tel. no. with
sl. no. 11 and also
shares Tel. no. with
sl. no. 10 who is the
nominee for his a/c.
BR* with sl. no.3, 4,
7, 8, 10, 11, 13, 17.
Sl. no. 10 is the
brother in law &
shares common Tel.
no. & sl.no. 10 is the
nominee of sl. no.
18 for trading a/c &
bank a/c.
Shares email with
sl. no. 13.
Shares email with
sl. no. 11.
*BR-Business relation.
With sl.
no. 10,
11.
With sl.
no. 13.
With sl.
no. 10,
11.
With sl.
no. 2, 10,
11, 13, 7,
14, 18.
With sl.
no. 13.
With sl.
no. 2, 10,
13, 7, 8,
11, 17.
25. I find that during the relevant period, the abovementioned 18 group entities had
purchased and sold a total of 45992205 shares and 51740181 shares, respectively,
on NSE. They traded for 39239127 shares ( i.e. 48.43% of the market volume)
accounting for 85.32% of the total purchases of the group and for 75.84% of the
total sales of the group, within the group entities, accounting for 48.43% of the
market volume from within the group entities. Out of 39239127 shares traded in
scrip of SIL within the group entities, for 14853157 shares constituting 18.33% of
the market volume, the buy and sale orders were placed within one minute time
difference. 14853157 shares constituted for 32.29% of the total purchases and
Page 15 of 59
28.71% of the total sales of the 18 Pabari-Parikh Group entities. Further, it was
noted that out of 14853157 shares, for 3594922 shares accounting for 4.44% of the
total market volume, the buy and sale orders were placed in synchronized
manner (i.e. difference between placement of order by buyer and seller within
one minute and order rate as well as order quantity of buy side and sale side
being same) by Noticee Nos. 1, 3 to 15 & 19. 3594922 shares constituted for 7.82%
of the total purchases and 6.95% of the total sales of the 18 Pabari-Parikh Group
entities. The summary of the said synchronized trades entered into by the Noticee
Nos. 1, 3 to 15 & 19 while trading on NSE is as under:
PAN No
Client Name
synchronised
buy trades
% of
Market
Volume
AABCL7637A
163281
BLNPS3316L

Private Limited
(Noticee No.1)
(Noticee No.3)
Bipin Jayant Thaker
(Noticee No.4)
Vasudev Ramchandra
Kamat
(Noticee No.5)
Bharat G Vaghela
(Noticee No.6)
Chirag Rajnikant Jariwala
(Noticee No.7)
Kishore Chauhan
(Noticee No.8)
Bhavesh Pabari
(Noticee No.9)
(Noticee No.10)
Santosh Maruti Patil
(Noticee No.19)
Hemant Madhusudan
Sheth
(Noticee No.11)
(Noticee No.12)
Mala Hemant Sheth
(Noticee No.13)
Ankit Sanchaniya
(Noticee No.14)
BRSPS0294N
AAZPT9542R
ABYPT4984H
ADCPK2552N
ADYPV0844N
AFMPJ7543L
AFPPC9703G
AKGPP8679N
ALHPP3489N
AMAPP2722N
ANOPS8607E
ASFPG8598L
AZXPS0694J
synchronised
sale trades
% of
Market
Volume
0.20
% of
sync
to
total
buy
by
client
30.90
46500
0.06
% of
sync
to
total
sale
by
client
95.95
25750
0.03
3.01
71120
0.09
8.59
276949
0.34
5.82
322577
0.40
6.00
0.00
0.00
2500
0.00
27.93
1277904
1.58
17.13
599693
0.74
8.05
339022
0.42
6.71
367990
0.45
6.23
37149
0.05
1.63
143119
0.18
3.78
126200
0.16
4.03
301140
0.37
7.69
252719
0.31
7.33
249652
0.31
6.88
1000
0.00
6.65
0.00
0.00
320262
0.40
5.69
544491
0.67
9.47
51820
0.06
3.20
116796
0.14
8.86
12500
0.02
98.43
25000
0.03
93.46
250945
0.31
4.76
361351
0.45
5.23
459421
0.57
7.87
442993
0.55
6.70
Page 16 of 59
(Noticee No.15)
Grand Total
3594922
4.44
7.82
3594922
4.44
6.95
26. It was also observed that Noticee Nos. 1, 3, 4, 6 to 11, 14 & 15 had indulged in
certain trades which were self trades in nature while trading through their
multiple brokers including Noticee No. 20. The details of the said fictitious trades
indulged into on NSE by the said Noticees are as under:
PAN
AABCL7637A
AAZPT9542R
ABYPT4984H
ADYPV0844N
AFMPJ7543L
AFPPC9703G
AKGPP8679N
ALHPP3489N
ANOPS8607E
BLNPS3316L
BRSPS0294N
Grand Total
Name of the entity

Private Limited
(Noticee No.1)
(Noticee No.3)
Bipin Jayant Thaker
(Noticee No.4)
Bharat G Vaghela
(Noticee No.6)
(Noticee No.7)
Kishore Chauhan
(Noticee No.8)
Bhavesh Pabari
(Noticee No.9)
(Noticee No.10)
Hemant Madhusudan
Sheth
(Noticee No.11)
Ankit Sanchaniya
(Noticee No.14)
(Noticee No.15)
% of
Total
Buy
%
Total
Sale
% of
Market
Volume
No of
Self
trades
Total buy
Total sale
Self
trade
qty
528486
48465
77
0.01
0.16
0.00
856100
828413
2100
0.25
0.25
0.00
4757443
5374442
125664
2.64
2.34
0.16
78
7459507
7453490
46114
0.62
0.62
0.06
93
5055146
5910781
197101
3.90
3.33
0.24
108
2278639
3790421
76387
3.35
2.02
0.09
23
3134691
3913748
31777
1.01
0.81
0.04
22
3446372
3631238
141135
4.10
3.89
0.17
78
5633024
5748297
16934
0.30
0.29
0.02
11
5266567
6903099
307909
5.85
4.46
0.38
310
5834049
44250024
6608664
50211058
279414
1224612
4.79
2.77
4.23
2.44
0.34
1.51
142
870
27. For the above fictitious trades, it was noted that the brokers mentioned in the
table below were appearing on both sides of the trade i.e. acted as broker and
counter party broker. The number of instances wherein the Noticee No. 20 had
executed self trades on behalf of its clients was significant and the details of the
same are as under:
Buy and Sale Member Name
Arcadia Share & Stock Brokers Pvt.
Ltd.
Client Name
Ankit Sanchaniya
(Noticee No.14)
Page 17 of 59
Total Traded Qty

20768
No of trades
69
Bharat G Vaghela
(Noticee No.6)
(Noticee No.3)
Bipin Jayant Thaker
(Noticee No.4)
(Noticee No.11)
Labh Share and Stock Private
Limited (Noticee No.1)
Arcadia Share & Stock Brokers Pvt. Ltd. (Noticee No. 20)
Bhavesh Pabari
Arch Finance Ltd.
(Noticee No.9)
Total
Arch Finance Ltd. Total
Fairwealth Securities Ltd.
Ankit Sanchaniya
(Noticee No.14)
Bhavesh Pabari
(Noticee No.9)
(Noticee No.7)
(Noticee No.11)
(Noticee No.10)
(Noticee No.15)
Fairwealth Securities Ltd. Total

IFCI Financial Services Ltd.

(Noticee No.11)
10
1114
1098
77
1
171
69181
4900
4900
5
5
344
1873
212
1645
3328
601
2
18
1946
1946

(Noticee No.3)
Master Capital Services Limited Total

Religare Securities Ltd.
93
8003
IFCI Financial Services Ltd. Total

Master Capital Services Limited
46114
2090
2090

(Noticee No.15)
Religare Securities Ltd. Total

Grand Total
31
31
86151
200
traded on 192 trading days at NSE. Out of 192 trading days, the group entities
had traded among themselves on 159 days, i.e. 83% of the total number of
days the scrip was traded during the relevant period. By trading among
themselves, the group entities had contributed to daily market volume traded
in the scrip in the range from 79.12% on May 03, 2010 to 1.06% on January 17,
2011. Out of 159 trading days on which the group entities traded among
Page 18 of 59
3
3
1
1
28. From the price volume data analysis on NSE, I note that the scrip of SIL was
2
2
themselves, on 127 trading days the 18 Pabari-Parikh Group entities

contributed for more than 50% to the total market volume of the scrip during
the relevant period.
29. Further, out of 159 trading days on which the Pabari-Parikh Group traded, I
note that on 149 trading days both buy and sell orders were placed within
time difference of one minute. By trading amongst themselves, the group
entities contributed to daily market volume of the scrip in the range from
20.23% on May 03, 2010 to 1.93% on December 08, 2010. I also note that out of
149 trading days, on 19 trading days Pabari-Parikh Group entities contributed
for more than 50% of the total market volume by placing both buy and sell
order within one minute time difference. On further examination, it was also
noted that out of 149 trading days, on 100 trading days the trades executed by
the Pabari-Parikh Group entities were synchronized in nature. By executing
synchronized trades among themselves, the Pabari-Parikh Group entities
contributed to the total market volume in the range from 0.84% on May 10,
2010 to 1.93% on December 08, 2010. The group entities contributed for more
than 50% of the market volume by entering into synchronized trading on 3
trading days.
30. I further note that out of 130787 trades executed during the period under
investigation, 31253 trades were places at a price less than the Last Traded
Price (LTP) (Summation TP-LTP= ` - 26548.60), 68053 trades were placed at a
price equal to LTP and 31481 trades were placed at a price greater than LTP
(Summation TP-LTP= Rs. 26450.85). Upon further examination, it was also
noted that out of 130787 trades, the 18 Pabari-Parikh Group entities entered
into 41149 buy transactions while dealing through multiple brokers.
Additionally, I also note that out of 41149 trades, 8504 trades were placed at a
price less than LTP (contributing a gross fall in price by ` - 6681.20), 24690
trades were placed at a price equal to LTP and 7955 trades were placed at a
price greater than LTP (contributing a gross increasing in price by ` 6229.65).
The details of individual contributions by entering into buy transactions
Page 19 of 59
towards changing the price of the scrip, including the major contribution to
net positive LTP differential by Noticee Nos. 9 & 11 are as under:
Gross
increase
in price
No of
trades
less
than
LTP
Gross
fall in
price
No of
trades
at LTP
Net
impact
294
141.30
272
-135.85
207
5.45
23
0.50
-2.00
18
-1.50
1345
114
19.40
67
-26.10
1164
-6.70
Bipin Jayant Thaker
4065
721
671.70
731
-679.70
2613
-8.00
Vasudev Ramchandra Kamat
0.00
0.00
0.00
Bharat G Vaghela
10329
2622
2060.20
3105
-2422.50
4602
-362.30
3226
431
313.45
385
-330.35
2410
-16.90
Kishore Chauhan
1276
102
53.10
146
-81.15
1028
-28.05
Bipinkumar Gandhi
40
22
13.45
10
-5.45
8.00
Bhavesh Pabari
2664
591
450.65
496
-349.40
1577
101.25
2401
301
141.30
338
-234.55
1762
-93.25
Santosh Maruti Patil
55
23
16.35
23
-18.05
-1.70
3339
624
463.40
549
-363.50
2166
99.90
848
49
15.15
48
-24.30
751
-9.15
Mala Hemant Sheth
0.60
-0.05
0.55
Gaurang Ajit Seth
30
0.05
-1.60
27
-1.55
Ankit Sanchaniya
7456
1864
1733.25
2034
-1836.40
3558
-103.15
3276
193
135.80
293
-170.25
2790
-34.45
Grand Total
41149
7955
6229.65
8504
-6681.20
24690
-451.55
Name of the entity

Limited
No of
trades
no of
trades
above
LTP
773
Rajnandi Yarns Private Limited
31. In addition to above, I further note that the price of the scrip on NSE opened
at `118.70 and touched a high of ` 169.00, i.e. there was increase of ` 50.30. I
note that on 192 trading days, a new high price was discovered for 82
occasions. Consequently, I also note that out of 82 occasions, on 30 occasions
(i.e. on 16 days out of 26 days), Noticee Nos. 6, 7, 9, 11, 14 & 15 contributed
majorly to increase the price.
32. It was, therefore, alleged in the SCN that the Noticee Nos. 1 to 19, by indulging in
manipulative trade practices on both the exchanges as mentioned above, had
violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) (b) (e) & (g) of the PFUTP
Regulations thereby, created artificial volumes and price in the scrip of SIL and
further alleged that the Noticee No. 20, by executing the manipulative trades on
behalf of the Noticee Nos. 1 to 19, had violated Clauses A(1), (2) & (3) of the Code
Page 20 of 59
of Conduct for Stock Brokers as specified under schedule II read with Regulation
7 of the Broker Regulations.
Submissions made by the Noticees:
Noticee No.1:
33. Noticee No. 1 vide its reply dated January 10, 2014 while denying being part of
the Pabari-Parikh Group, submitted that it has neither received nor given any
funds to Noticee No. 9 and therefore, is not connected to the Pabari -Parikh
Group in any way. It has also neither received nor transferred any shares by way
of off-market transactions. The Noticee submitted that it has done net delivery
based business in the scrip of SIL through a NSE and BSE registered broker i.e.
Noticee No.20 and the Noticee placed orders with the said broker who in turn
executed trades for the Noticee. The Noticee being a client could not have been a
party to said synchronized transactions. Further, the Noticee submitted that it
had executed trades only on 8 days out of the total of 180 days during which the
scrip was traded. Further, as regards the allegation of self trades executed on
December 7, 2010, the Noticee No. 1 submitted that its total volume traded in the
scrip on BSE was 2,87,763 out of the total volume traded on the said date (i.e.
6,34,654 shares) while the total volume traded on NSE was 350021 out of the total
volume traded in the scrip on the said date i.e. 6,96,042. Further, the self trade of
77 shares is very insignificant in volume.
Noticee No.3:
34. Vide letter dated October 16, 2014, the Noticee No. 3 submitted his reply to the
SCN. The Noticee stated that he has been debarred from buying, selling and
dealing in the securities market vide SEBI order dated February 02, 2011 and the
same was later confirmed vide SEBI order dated July 08, 2011 and that by
initiating adjudication proceedings in the matter, although the earlier debarment
is still in force, it amounts to "double jeopardy". The Noticee denied being
connected to the alleged Pabari-Parikh Group and stated that he has traded in the
scrip of SIL independently. He also submitted that the trading done by him in the
scrip of SIL on BSE and NSE are negligible in volume. The Noticee being a trader
Page 21 of 59
and into the business of jobbing had traded in lot of other scrips apart from SIL
before and after the investigation.
35. As regards the allegation of the said Noticee's association with the Pabari Parikh
Group, he admitted to having business relation with few entities and sharing the
same postal address with that of Noticee No. 9. He also admitted having
transferred funds with Noticee No. 9 along with few other entities. Further, the
Noticee also admitted carrying out off-market transfers with a few entities. On
the other hand, the Noticee denied carrying out any funds transactions for
purchase/sale in the scrip of SIL with Noticee No. 9 and other entities. Further
the Noticee No. 3 submitted that he has only bought 1395519 shares and sold
1518102 shares which constitutes only 1.50% and 1.63% of the total market
volume traded in the scrip of SIL during the investigation period. The Noticee
submitted that it is alleged in the SCN that he had received/transferred a total of
784500 shares (1.42%) out of the total 5.53 crore shares through off market
transfers. It is the case of the Noticee that this could not have affected the trading
in the market by resulting in a huge rise in the trading volume.
36. The Noticee submitted as regards the synchronized trades that were executed on
BSE that, as far as his buy is concerned, his trading within the group is only 1.32%
of the total market volume, while the orders which were placed in less than one
minute were also 0.44% of the total market volume. Further, the synchronized
trading carried out by the Noticee was only 0.03% of the total market volume.
Similarly, as far as his sale is concerned, his trading within the group is only
1.63% of the total market volume, while the orders which were placed in less than
one minute were also 0.46% of the total market volume and his synchronized
trading was only 0.04% of the total market volume. The Noticee stated that the
said volumes of trading were very negligible in quantity which could not have
created artificial market volume.
37. The Noticee submitted with respect to the details of trades illustrated in
Annexure D that, his buy and sell within the alleged group of entities are only
Page 22 of 59
0.03% and 0.04% respectively and that he had instructed his broker to execute the
orders on the anonymous trading platform of the stock exchanges and therefore,
he was not aware of the counter party. Moreover, in majority of his trading the
time difference was more than one minute i.e. ranging from one and a half
minute to more than one and a half hours for the shares purchased and similarly,
ranging from two minutes to more than forty minutes for the shares sold. Further,
in majority of the orders there was a large difference in the quantity ordered and
the price, consequently, the Noticee submitted that abovementioned trades
cannot be synchronized trades in nature. In addition, the Noticee stated that the
said synchronized trading was carried out by him only on 9 days out of the total
98 trading days.
38. As regards the synchronized trades executed between the Pabari Parikh Group of
entities the Noticee submitted that only four transactions on the buy side for a
total of 24,451 shares which accounted for 0.03% and five transactions on the sell
side for a total of 41,115 shares which is accounted for 0.04% of the total market
volume, were executed by his broker. Furthermore, with respect to the allegation
of self trades, the Noticee no. 3 submitted that he had executed 6 self trades for a
volume of 2,263 shares which cannot be counted in percentage. Further, out of 6
orders in 3 orders, the buy orders were different from the sell orders. Upon
analysis of the trades carried out by the Noticee on June 01, 2010, the Noticee
submitted that he had placed 333 shares worth of buy orders and 80,000 shares
worth of sell orders while the quantity of order which got matched were merely
150 orders. Only on 2 days out of the 180 days did the orders get matched
inadvertently.
39. With respect to the trades carried out by the Noticee on NSE, the said Noticee
submitted that, he has only bought 8,56,100 shares and sold 8,28,413 shares
which was 1.06%
and 1.02% of the total market shares of SIL during the
investigation period. As regards the synchronized trades that were executed on

NSE, the Noticee submitted that, as far as his buy is concerned, his trading within
the group is only 1.01% of the total market volume and his synchronized trading
Page 23 of 59
is also only 1.01% of the total market volume. Similarly, as far as his sale is
concerned, his trading within the group is only 0.92% of the total market volume
and his synchronized trading is also only 0.09% of the total market volume. The
Noticee further stated that in more than 90% of the Noticee's trading the price of
the buy and the sell trade has not matched and therefore cannot be synchronized.
40. The Noticee submitted regarding his synchronized trades with the Pabari Parikh
Group as illustrated in Annexure F that, he bought shares of SIL which accounted
for only 0.03% and sold shares of SIL which accounted for only 0.09% which
were executed by his broker. The alleged synchronized trades were executed by
the Noticee only on 5 days out of the total 100 trading days. Furthermore, with
respect to the alleged self trades, the Noticee stated that the 4 self trades executed
by him for a volume of 2,100 shares cannot even be counted in percentage. Upon
analysis it was observed by the Noticee that there was a large difference between
in the buy order and the sell order quantities and further, out of 4 orders in 3
orders, the buy order rate was different from the sell order rate. Upon further
analysis of his trading on May 20, 2010, the Noticee stated that he had placed buy
orders for 7500 shares and sell orders for 5,000 shares while the quantity of order
which got matched was merely 340 shares. Only on 2 days out of the 180 days did
the orders get matched inadvertently.
Noticee No. 4:
41.
Vide letter dated April 21, 2014, the Noticee No. 4 had submitted that he has
been debarred from buying, selling and dealing in the securities market vide
SEBI order dated February 02, 2011 which was confirmed vide SEBI order dated
July 08, 2011. Further, he stated that as the investigation period is 4 years old, he
is in the process of collating the data and will be filing his detailed reply in the
matter. Accordingly, vide letter dated November 13, 2014, the Noticee No. 4
filed his detailed reply in the matter. The Noticee submitted that he is into the
business of jobbing and arbitrage activities in the stock market.
Page 24 of 59
42.
As regards the allegation of off market dealings within the group, the
Noticee submitted that he had paid and received consideration for the same,
however, he had no commercial relationship or understanding of any nature
with them. He also submitted that the off market dealings with Noticee Nos.
11 & 16 was carried out to meet urgent exigencies of fund requirements and
do not relate to any of the Noticees trades in the market. Further, the
Noticee submitted that he had carried out transactions in the scrip
independently and the above mentioned off market transactions have not
had any impact on the market price of SIL. Additionally, the Noticee stated
that he had traded in several other scrips and hardly any linkages or
similarities were found on dealing with the alleged Pabari-Parikh entities.
Therefore, for merely executing few stray off market transactions, the
Noticee submitted that he cannot be linked to the group. With respect to the
allegation of synchronized trades, the Noticee submitted that the
synchronization of the orders with the group were purely coincidental as he
was not aware of the counter parties. Therefore, these synchronized trades
cannot have had any impact on the market equilibrium, as the value and the
volume were insignificant compared to the total volume in the scrip during
the investigation period.
43.
As regards the synchronized trades allegedly executed by him individually,

the Noticee submitted that on BSE only 1,23,874 shares (0.13%) were
synchronized out of his total buy volume of 48,17,677 shares (5.17%) and on
NSE only 2,76,949 shares (0.34%) were synchronized out of his total buy
volume of 47,57,443 shares (5.87%). Similarly, on BSE only 2,11,685 shares
(0.23%) were synchronized out of his total sell volume of 57,40,151 shares
(6.16%) and on NSE only 3,22, 577 shares (0.40%) were synchronized out of
his total buy volume of 53,22,577 shares (6.63%). He also submitted that, as
he was not aware of the counter party, the synchronized trades were mere
coincidence.
Page 25 of 59
44.
Further, as regards the self-trades allegedly executed by him, the Noticee

submitted that, the details furnished in Annexure G of the SCN are different
from the facts and figures as can be seen from the data extracted for the
trades relating to him, as the buy and sell orders for the same have been
placed from different broker terminals during different duration of time
with different quantity and different rate as they were carrying out arbitrage
trading on both the exchanges. Further, with respect to the trade time the
Noticee stated that there is a vast difference in buy order placing time, sell
order placing time and the execution of the said orders into trades, which
goes to show that again the buy/ sell order and trade time do not match. The
Noticee submitted that the buy order quantity and the sell order quantity
having a huge difference resulting into a very small quantity in itself shows
that the alleged self-trades may have gotten executed owing to the Noticees
jobbing and arbitrage business. Therefore, it was during the due course of
his business that the Noticees huge volume matched a small quantity of
orders without his knowledge at the prevailing market price.
45.
With respect to the allegation of no change in beneficial ownership while

executing the trades, the Noticee submitted that, the total number of shares
traded on BSE is 9,31,32,003 out of which the total delivery quantity volume
was 5,44,84,576 which works out to almost 58.50% of the total market
volume as available on the BSE website. The same shows that the major
amount of volume carried out on the said exchange during the investigation
period was delivery based. Therefore, it is the case of the Noticee that there
was a change in beneficial ownership for the trades carried out by him. As
regards the large volume said to have been created by the Noticee, he
submitted that the same was created in the scrip by him due to his arbitrage
activities and considering his holding in SIL shares his volume in the scrip is
normal.
Page 26 of 59
Noticee No. 5:
46. The Noticee No. 5 submitted his reply to the SCN vide letter dated November 17,
2014. The Noticee stated that he is a doctor by profession and Noticee No.3 (Shri
Bharat Shantilal Thakkar), being one of his patients, had advised him to deal in
capital markets. The said Noticee Nos. 5 and 3 were clients of the broker Angel
Shares Broking however, the investment decisions were taken independently.
Noticee No. 5 further submits that he had sold 19, 500 shares (accounting for
0.02%) of the total market volume in the scrip of SIL during the period under
investigation. Further, all his trades were delivery based which were met with the
pay in obligation of broker in time, hence it is the case of the Noticee that there
cannot be any artificial volume or misleading appearance of trading in the scrip
of SIL. Further, the Noticee denied executing any circular and/or synchronized
trades in the scrip of SIL or entering into reversal trades through different brokers
using different client codes. He also denied his association with the alleged
Pabari-Parikh Group, especially, with Noticee No.9. Further, he stated that he
received 20,000 shares of SIL on September 10, 2009 in off- market transaction
from Noticee No.3 against which consideration was paid by Noticee No. 5 to
Noticee No.3. Further, the Noticee submitted that his trading in the scrip of SIL is
very miniscule to have impacted the market thereby, creating artificial volume.
Noticee No. 7:
47. Noticee No. 7 vide his letter dated April 21, 2014 submitted that he has been
debarred from buying, selling and dealing in the securities market vide SEBI
order dated February 02, 2011. Further, he stated that as the investigation period
is 4 years old , he is in the process of collating the data and will be filing his
detailed reply in the matter. Accordingly, vide letter dated November 12, 2014,
the Noticee No. 7 filed his detailed reply in the matter. The, inter alia, submitted
that he is into the business of jobbing and arbitrage activities in the stock market.
He has met all the pay-in obligations of shares and securities from his own
account and has never defaulted in any manner. All the trading done by him was
well within his financial capabilities and not speculative. The Noticee also
submitted that he has traded in several other scrips including SIL before and after
the investigation. He also earned a small margin of arbitrage profit and had no
Page 27 of 59
other interest in SIL. Further, the Noticee denied being connected / associated
with the alleged Pabari-Parikh Group and stated that his investment decisions
were taken independently by him. He further submitted that the above
mentioned ad-interim ex-parte order was later confirmed vide SEBI order dated
July 08, 2011 and consequentially, he is still debarred from trading in the
securities market. Additionally, it is submitted by the Noticee that by initiating
adjudication proceedings in the matter although the earlier debarment being still
in force is nothing but double jeopardy.
48. With respect to the trades carried out by the Noticee on BSE, he submitted that he
had bought only 4731650 shares and sold 4077019 shares of the total market
volume of 121235196 shares of SIL, while his total buy volume is 5.08% while his
total sale volume is 4.38% of the total market volume. Further, with respect to the
trading carried out by the Noticee No. 7 on NSE, he submitted that he had only
bought 5055146 shares and sold 5910781 shares which is 6.24% and 7.30% of the
total market shares of SIL during the investigation period. In addition, with
respect to the trades mentioned in Annexure C to the SCN, the Noticee submitted
that his total buy volume was 5.08% and sell volume was 4.38% of the total
market volume traded in the scrip of SIL. Further, with respect to the alleged
synchronized trades, the Noticee submitted that the shares which were traded in
synchronized manner on buy side of his trades constituted for only 025% of the
total volumes traded and on the sell side it constituted for 0.20% of the total
traded volume in the scrip of SIL. The said volumes of trading were negligible in
quantity, therefore could not be carried out with manipulative intent. He also
submits that his trades have not disturbed the market equilibrium.
49. With respect to the trade details provided in Annexure D of the SCN, the Noticee
he had instructed his broker to execute the orders on the anonymous trading
platform of the stock exchanges and therefore, he was not aware of the counter
party. Moreover, in majority of his trading the time difference was more than one
minute i.e. ranging from few seconds to more than three and a half hours for the
shares purchased and similarly, ranging from a few seconds to forty seven
Page 28 of 59
minutes for the shares sold. As regards the synchronized trades, the Noticee No.7
submitted that his buy percentage was 0.25% and sale percentage was 0.20% of
the total market volume of the synchronized trades as provided in Annexure F to
the SCN and therefore cannot create artificial volume. Further, with respect to the
allegation of self trades, the Noticee No. 7 submitted that as he was carrying out
arbitrage trading and taking advantage of price difference on different exchanges,
such kind of trades are bound to get executed from different terminals of
different brokers. Therefore, the quantity of self trades depicted have been
executed at the prevailing market price due to the Noticee's jobbing and arbitrage
business, without his knowledge, showing that he has no malafide intention. The
Noticee stated that such trades cannot be manipulative in nature.
50. As regards the trading details among the 19 entities at NSE provided at Annexure
E of the SCN, the Noticee submitted that his total buy quantity was 339022 shares
amounting to 0.42% and his total sale quantity was 367990 shares amounting to
0.45% of the total traded volume in the scrip of SIL which was very miniscule and
negligible.
Noticee No.9:
51. The Noticee No. 9 vide letter dated August 17, 2014 submitted his reply in the
matter. The Noticee stated that he is a cloth merchant, who joined the stock
market in 1996 as an investor, jobber cum trades and arbitrager. He makes all his
investment decisions independently. Since, the Noticee neither received any
alerts from the exchanges nor complaints from any investors, he presumed that
he was within the permissible trading limits while trading in the scrip of SIL.
With regard to price fluctuation, the Noticee submitted that he had carried out
trades mostly at every price level that was after price rise and fall price. The said
Noticee submitted that he has been debarred from buying, selling and dealing in
the securities market vide SEBI order dated February 02, 2011. With regard to the
synchronized trades, the noticee stated that the same were negligible in quantity.
As regards no change in beneficial ownership, the Noticee submitted that he has
taken and given delivery of shares on net basis on pay in and out day without
Page 29 of 59
any default. With regard to self trades, the Noticee submitted that there are only a
few stray instances of such alleged trades. The buy and the sell orders were
placed by different brokers.
52. As regards the synchronized trades allegedly executed by him individually, the
Noticee submitted that on BSE only 3,94,745 shares (0.42%) were synchronized
out of his total buy volume of 88,61,360 shares (9.51%) and on NSE only 1,26,200
shares (0.16%) were synchronized out of his total buy volume of 31,34,691 shares
(3.87%). Similarly, on BSE only 4,03,261 shares (0.43%) were synchronized out of
his total sell volume of 1,01,44,037 shares (10.89%) and on NSE only 3,01,140
shares (0.37%) were synchronized out of his total buy volume of 39,13,748 shares
(4.83%). Thus, the Noticee stated that the same were very minuscule percentages
to have affected the volumes in the market during the period.
53. Further, as regards the self-trades allegedly executed by him, the Noticee
submitted that, there are only few stray instances of such trades. Further, it is the
case of the Noticee that as the buy order quantity and the sell order quantity
which has been alleged to have matched has vast variance, the same cannot be
treated as self trades. Further, the said matching had taken place wherein the buy
order member is different from sell order member.
54. With respect to the allegation of being part of the Pabari-Parikh Group, the
Noticee submitted he is not associated with the Pabari Parikh Group in any way,
because even though he is a director in Noticee No. 16 (Rajnandi Yarns Pvt. Ltd)
along with Noticee No. 11 (Shri Hemant Madhusudhan Sheth), he makes his
investment decisions independently and also cannot be blamed for any act or
omission of Noticee No. 11. Further, the Noticee stated that Noticee No. 3 (Shri
Bharat Shantilal Thakkar) is not his real uncle as they do not share a common
address/ telephone number or e-mail id. Additionally, as regards the off market
dealing with few of the other Noticees, the Noticee submitted that the same were
carried out to meet certain urgent exigencies of fund requirements and they do
not relate to the Noticee's trades in the market. Further, the Noticee's off market
Page 30 of 59
transactions with Noticee Nos. 11 (Shri Hemant Madhusudhan Sheth) and 16

(Rajnandi Yarns Pvt. Ltd) were temporary loans that were returned during the
investigation period itself.
55. As regards the price rise, the Noticee submitted that he is a net seller in the
market as he had bought 1,19,96, 051 shares and sold 1,40,57,785 shares. The
Noticee did not make any profit during the said investigation period as the price
of the scrip had fallen to ` 20.70. The Noticee further submitted that because the
Noticee's trade volumes were large in number, some transactions executed by
him may have matched with the Pabari Parikh Group entities and therefore, it
cannot be inferred that the said Noticee is related to them. The Noticee submitted
that the trading done by him was in the ordinary course of business.
Noticee No. 10:
56. Vide letter dated April 21, 2014 the Noticee No. 10 had submitted that he has
been debarred from buying, selling and dealing in the securities market vide SEBI
order dated February 02, 2011. Further, he stated that as the investigation period
is 4 years old, he is in the process of collating the data and will be filing his
detailed reply in the matter. Accordingly, vide letter dated November 12, 2014,
the Noticee No. 10 filed his detailed reply in the matter. The Noticee submitted
that he is into the business of jobbing and arbitrage activities in the market and he
had neither received any investor complaints nor any queries were raised as
regards his trading in the shares of SIL. The said Noticee also stated that vide
SEBI order dated July 08, 2013 he is still debarred from trading in the securities
market.
57. With regard to the off market dealing with the entities mentioned in the SCN, the
Noticee submitted that he had paid and received consideration for the same and
that he had no commercial relationship or understanding of any nature with
them. Further, the Noticee submitted that he had carried out transactions in the
scrip of SIL independently and the above mentioned off market transactions have
not had any impact on the market price of SIL. The Noticee submitted that his
Page 31 of 59
alleged relationship with one Shri Bhupesh Rathod (not a related party in the
present case) has not been established but for stating that his name was filled as
an introducer while filing his KYC documents with one of the brokers through
which the Noticee traded namely, S P Jain Securities Pvt. Ltd. The Noticee
clarifies that his name was preferred only on the ground that he was already a
registered client with the broker. Therefore, for merely executing few stray off
market transactions, he cannot be linked to the group. The Noticee submitted that
he has traded in several other scrips and hardly any linkages or similarities were
found with the said entities while carrying out trades in the other scrips. The
Noticee also submitted that the synchronization of the orders with the group
were purely coincidental as he was not aware of the counter parties and these
synchronized trades have had no impact on the market equilibrium, as the value
and the volume were insignificant compared to the total volume in the scrip
during the investigation period.
58. Further, the Noticee submitted that on BSE only 2,68,146 shares (0.29%) were
synchronized out of his total buy volume of 44,80,527 shares (4.81%) and on NSE
only 2, 52, 719 shares (0.31%) were synchronized out of his total buy volume of
34,46,372 shares (4.25%). Similarly, the Noticee submitted that on BSE only
3,38,972 shares (0.36%) were synchronized out of his total sell volume of 45,87,734
shares (4.93%) and on NSE only 2,49,652 shares (0.31%) were synchronized out of
his total sell volume of 36,31,238 shares (4.48%). He also submitted that as he was
not aware of the counter party, the said synchronized trades were coincidental in
nature and the value/volume of the said trades was negligible when compared to
the market volume.
59.

from the facts and figures as can be seen from the data extracted for the trades
relating to him, as the buy and sell orders for the same have been placed from
different broker terminals during different duration of time with different
quantity and different rate as they were carrying out arbitrage trading on both
Page 32 of 59
the exchanges. Further, with respect to the trade time the Noticee stated that
there is a vast difference in buy order placing time, sell order placing time and
the execution of the said orders into trades, which goes to show that again the
buy/ sell order and trade time do not match. The Noticee submitted that the
buy order quantity and the sell order quantity having a huge difference
resulting into a very small quantity in itself shows that the alleged self-trades
may have gotten executed owing to the Noticees jobbing and arbitrage
business. Therefore, it was during the due course of his business that the
Noticees huge volume matched a small quantity of orders without his
knowledge at the prevailing market price.
60.

was 5,44,84,576 which works out to almost 58.50% of the total market volume as
available on the BSE website. The same shows that the major amount of volume
carried out on the said exchange during the investigation period was delivery
based. Therefore, it is the case of the Noticee that there was a change in
beneficial ownership for the trades carried out by him. As regards the large
volume said to have been created by the Noticee, he submitted that the same
was created in the scrip by him due to his arbitrage activities and considering
his holding in SIL shares his volume in the scrip is normal.
Noticee No. 11:
61. Noticee No. 11 filed his detailed reply in the matter vide his letter dated
November 09, 2014, wherein he, inter alia, submitted that he is into the
business of jobbing and arbitrage activities in the market and he had neither
received any investor complaints nor were any query was raised as regards
his trading in the shares of SIL. The said Noticee also stated that vide SEBI
order dated July 08, 2013 he is still debarred from trading in the securities
market. The said Noticee submitted that SIL was a profit making company
Page 33 of 59
with established dividend track record and its shares were traded in B group
in BSE, therefore, he decided to deal in the shares of SIL.
62. With regard to the off market dealing with Noticee Nos. 4, 10, 13, 14 & 16 the
Noticee submitted that he had paid and received consideration for the same, and
that he had no commercial relationship or understanding of any nature with
them. Noticee No. 13 (Ms. Mala Hemant Sheth) is the wife of the said Noticee
(Hemant Madhusudhan Sheth) and therefore, all the transfers / dealings made
with her are strictly within the family. Further, the Noticee submitted that he had
carried out transactions in the scrip of SIL independently and the above
mentioned off market transactions have not had any impact on the market price
of SIL. Therefore, for merely executing few stray off market transactions the
Noticee cannot be linked to the group. With respect to the allegation of being
part of the Pabari-Parikh Group, the Noticee submitted he is not associated with
the Pabari Parikh Group in any way, because even though he is a director in
Noticee No. 16 (Rajnandi Yarns Pvt. Ltd) along with Noticee No. 09 (Shri
Bhavesh Pabari), he makes his investment decisions independently and also
cannot be blamed for any act or omission of Noticee No. 09. Additionally he
submitted that his alleged relationship with Bhupesh Rathod (not a related party
in the present case) has not been established but for stating that his name was
filled as an introducer while filing his KYC documents with one of the brokers
through which the Noticee traded namely, S P Jain Securities Pvt. Ltd. The
Noticee clarifies that his name was preferred only on the ground that he was
already a registered client with the broker. The Noticee submitted that he has
traded in several other scrips and hardly any linkages or similarities were found
with the said group entities while dealing in the said other scrips.
63. With regard to the allegation of synchronised trading, the Noticee submitted
that the said synchronized trades carried out with the group were purely
coincidental as he was not aware of the counter parties and these
synchronized trades cannot have had any impact on the market equilibrium,
as the value and the volume were insignificant compared to the total volume
Page 34 of 59
in the scrip during the investigation period. Further, the Noticee submitted
that on BSE only 2,33,072 shares (0.25%) were synchronized out of his total
buy volume of 68,90,281 shares (7.40%) and on NSE only 3,20,262 shares
(0.40%) were synchronized out of his total buy volume of 56,33,024 shares
(6.95%). Similarly, the Noticee submitted that on BSE only 7,48,019 shares
(0.80%) were synchronized out of his total sell volume of 97,54,318 shares
(10.47%) and on NSE only 5,44,491 shares (0.67%) were synchronized out of
his total sell volume of 57,48,297 shares (7.10%). The value/ volume of the
said trades were negligible when compared to the market volume and
therefore, it is the case of the Noticee that they could not have created any
impact on the volumes in the scrip of SIL on the exchange.
64.

from the facts and figures as can be seen from the data extracted for the trades
relating to him, as the buy and sell orders for the same have been placed from
different broker terminals during different duration of time with different
quantity and different rate as they were carrying out arbitrage trading on both
the exchanges. Further, with respect to the trade time the Noticee stated that
there is a vast difference in buy order placing time, sell order placing time and
the execution of the said orders into trades, which goes to show that again the
buy/ sell order and trade time do not match. The Noticee submitted that the
buy order quantity and the sell order quantity having a huge difference
resulting into a very small quantity in itself shows that the alleged self-trades
may have gotten executed owing to the Noticees jobbing and arbitrage
business. Therefore, it was during the due course of his business that the
Noticees huge volume matched a small quantity of orders without his
knowledge at the prevailing market price.
65.

Page 35 of 59
was 5,44,84,576 which works out to almost 58.50% of the total market volume as
available on the BSE website. The same shows that the major amount of volume
carried out on the said exchange during the investigation period was delivery
based. Therefore, it is the case of the Noticee that there was a change in
beneficial ownership for the trades carried out by him. As regards the large
volume said to have been created by the Noticee, he submitted that the same
was created in the scrip by him due to his arbitrage activities and considering
his holding in SIL shares his volume in the scrip is normal.
Noticee No. 12:
66.
Vide letter dated April 21, 2014 the Noticee No. 12 had submitted that he has
been debarred from buying, selling and dealing in the securities market vide
SEBI order dated February 02, 2011. Further, he stated that as the
investigation period is 4 years old, he is in the process of collating the data
and will be filing his detailed reply in the matter. Accordingly, vide letter
dated August 14, 2014, the Noticee No. 12 filed his detailed reply in the
matter. The said Noticee, inter alia, submitted that he is into the business of
jobbing and arbitrage activities in the market. The said Noticee submitted
that SIL was a profit making company with established dividend track
record and its shares were traded in B group in BSE, therefore he decided to
deal in the shares of SIL.
67.
With regard to the off market dealing with Noticee Nos. 4, 6, 10, 11 & 14, the
Noticee submitted that he had paid and received consideration for the same
and that he had no commercial relationship or understanding of any nature
with them. Further, the Noticee submitted that he had carried out
transactions in the scrip independently and the above mentioned off market
transactions cannot have had any impact on the market price of SIL.
Therefore, for merely executing few stray off market transactions, the he
cannot be linked to the group. The Noticee further submitted that he has
traded in several other scrips and hardly any linkages or similarities were
found with the said entities while trading in the said other scrips.
Page 36 of 59
68.
With regard to the charge of carrying out synchronized trades, the Noticee
submitted that the said trades with the group were purely coincidental as he
was not aware of the counter parties and the said trades have had no impact
on the market equilibrium, as the value and the volume were insignificant
compared to the total volume in the scrip during the investigation period.
The Noticee submitted that on April 01, 2010, only 43,355 shares out of his
buy volume of 9,47,718 shares were synchronized. Similarly, only 27,400
shares out of his sell volume of 5,82,260 shares were synchronized on March
10, 2010 (15000 shares), March 17, 2010 (3000 shares) and April 22, 2010
(9400 shares). He also submitted that as he was not aware of the counter
party, the synchronization were coincidental and the value/volume of the
said trades were negligible when compared to the market volume traded in
the scrip of SIL. Therefore, the said trades could not have created volumes in
the said scrip and impacted trading in the scrip of SIL on the exchange.
69.
Further, as regards the self-trades allegedly executed by the Noticee, he

submitted that only on a single day 9990 shares coincidentally matched with
the Noticee's 10,000 shares. The Noticee stated that instead of putting
another buy order of 10000 shares by mistake a sell order was punched,
however, no harm or damage has been caused to anyone and the said trade
had in no way impacted the market equilibrium as the count and quantity
were insignificant.
Noticee No. 13:
70. Vide letter dated August 19, 2014, the Noticee No. 13 submitted her reply in the
matter and submitted that she is into the business of business of jobbing and
arbitrage activities in the market. Further, the said Noticee submitted that she has
order dated February 02, 2011. The Noticee's demat account is still frozen.
Additionally, she stated that by initiating adjudication proceedings in the matter
although the earlier debarment being still in force amounts to "double jeopardy".
Page 37 of 59
With respect to the allegation of being connected / related to the Pabari-Parikh

group, the Noticee denied having any movement of funds between her and
Noticee No. 9 (Shri Bhavesh Pabari). The Noticee No. 13 admits being wife of
Noticee No. 11 (Shri Hemant Madhusudhan Sheth) but denies having any
business / professional connection with him.
71. Further, the Noticee submitted that on BSE she bought only 29,531 shares which
accounted for 0.03% of the total market volume and sold only 51,921 shares which
accounted for 0.06% of the total market volume traded in the scrip of SIL. She also
submitted that her buy volume accounted for 0.72% and sell volume accounted
for 0.54 % of the total market volume within the group in off market. With regard
to trading within the group, the Noticee submitted that her total buy within the
group is only 0.02% of the total market volume and the orders placed for less than
one minute are also 0.02% of the total market volume, while there are no buy
transactions through synchronized trades. Similarly her total sale within the
group is only 0.02% of the total market volume and the orders placed less than
one minute are also 0.02% of the total market volume, whereas, her sale through
synchronized trading is only 0.01%.
72. With regard to the allegation of synchronized trades, the Noticee submitted that
she had bought 0.03% shares and sold 0.06% shares of the market volume traded
in the scrip. Out of her total trading, only in a couple of trades executed, the time
difference was less than one minute and in all others the time difference was
more than one minute i.e. ranging from more than two minutes to more than five
hours and twenty five minutes for the shares purchased and ranging from one
minute to more than three minutes for the shares sold. In majority of the orders,
there was a huge difference in the quantity ordered, hence, it is the case of the
Noticee that the same cannot be synchronized trades. As regards the
synchronized trades illustrated in the SCN, the said Noticee submitted that she
executed only three transactions of sale for a total of 12, 560 shares constituting
0.01% of the total traded volume in the scrip of SIL. The Noticee stated that since,
the value and the volume of the alleged synchronized trades executed by the said
Page 38 of 59
Noticee is insignificant compared to the total volume in the scrip during the
investigation period, it could not have had any impact on the trading of SIL on
the exchange.
73. As regards the Noticee's trades on NSE, she submitted that she bought 12,699
shares which accounted for 0.02% of the total market volume and sold only 26,750
shares which accounted for 0.03% of the total market volume traded in the scrip
of SIL. The Noticee No. 13 also submitted that her buy volume amounted to only
0.72% and sell volume amounted to only 0.54 % of the total market volume
within the group in off market. Further, the Noticee stated that her total buy
within the group is only 0.02% of the total market volume for the orders placed in
less than one minute and synchronized trades was 0.02% of the total market
volume. Similarly, her total sale with the group is only 0.03% of the total market
volume and the orders placed less than one minute and synchronized trades was
0.03% of the total market volume. With respect to the alleged synchronized trades
the Noticee submitted that she had bought 0.02% and sold 0.03% of the market
volume. The Noticee No. 13 had only one trade of 12,500 shares amounting to
0.02% with Noticee No. 6 (Shri Bharat G Vaghela). The said Noticee further
submitted that she executed only one transactions of buy totaling 12,500 shares
amounting to 0.02% of the total traded volume and she executed only
two
transactions for a total of 25,000 shares amounting to 0.03% of the total market
volume. Since, the value and the volume of the alleged synchronized trades
executed by the said Noticee on NSE were insignificant compared to the total
volume in the scrip during the investigation period, it is the case of the Noticee
that the said trades could not have had any impact on the trading of SIL on the
exchange. Further, the Noticee submitted that she has executed synchronized
trades only on two days out of the total 100 trading days on which the alleged
group carried out synchronized trading.
Noticee No. 14:
74. Noticee No. 14 filed his detailed reply in the matter vide his letter dated
November 13, 2014, wherein he, inter alia, submitted that he has been debarred
Page 39 of 59
from buying, selling and dealing in the securities market vide SEBI order dated
February 02, 2011. Further, the said Noticee stated that vide SEBI order dated July
08, 2013 he is still debarred from trading in the securities market. The Noticee
submitted that by initiating adjudication proceedings in the matter although the
earlier debarment being still in force amounts to "double jeopardy". The Noticee
also submitted that he is not a part of any group and he had carried out
transactions in the scrip independently. He stated that his trading as per the SCN
was negligible in quantity in comparison to the total traded volume in the market
and he has also dealt in several other scrips prior to and after the period of
investigation.
75. With regard to the connection to the other entities, he submitted that the off
market dealings with some of the other Noticees was carried out to meet urgent
exigencies of fund requirements and do not relate to any of the Noticees trades in
the market. Therefore, for merely executing few stray transactions matched that
of a groups he cannot be linked to the group as his transactions were done
independently.
76. The Noticee further submitted that he is into the business of jobbing and arbitrage
activities in the market and he had neither received any investor complaints nor
were any query was raised as regards his trading in the shares of SIL. As regards
his alleged off market dealings with the group, the Noticee submitted that he had
paid and received consideration for the same and that he had no commercial
relationship or understanding of any nature with them. Further, the Noticee
submitted that he had carried out transactions in the scrip independently and the
above mentioned off market transactions have not had any impact on the market
price of SIL. The Noticees submitted that he has traded in several other scrips and
hardly any linkages or similarities were found with the alleged group entities
while dealing in the said other scrips. Therefore, for merely executing few stray
off market transactions, the he cannot be linked to the group. With respect to the
synchronized trades carried out by the noticee, he submitted that the said trades
were purely coincidental as he was not aware of the counter parties. The Noticee
Page 40 of 59
submitted that on BSE only 3,03,168 shares (0.33%) were synchronized out of his
total buy volume of 51,45,520 shares (5.52%) and on NSE only 2,50,945 shares
(0.31%) were synchronized out of his total buy volume of 52,66,567 shares
(6.50%). Similarly, the Noticee submitted that on BSE only 2,02,345 shares (0.22%)
were synchronized out of his total sell volume of 47,87,916 shares (5.14%) and on
NSE only 3,61,351 shares (0.45%) were synchronized out of his total sell volume
of 69,03,099 shares (8.52%). Therefore, these synchronized trades had no impact
on the market equilibrium and the value / volume were insignificant compared
to the total volume in the scrip during the investigation period.
77.

from the facts and figures as can be seen from the data extracted for the
trades relating to him, as the buy and sell orders for the same have been
placed from different broker terminals during different duration of time
with different quantity and different rate as they were carrying out arbitrage
trading on both the exchanges. Further, with respect to the trade time the
Noticee stated that there is a vast difference in buy order placing time, sell
order placing time and the execution of the said orders into trades, which
goes to show that again the buy/ sell order and trade time do not match. The
Noticee submitted that the buy order quantity and the sell order quantity
having a huge difference resulting into a very small quantity in itself shows
that the alleged self-trades may have gotten executed owing to the Noticees
jobbing and arbitrage business. Therefore, it was during the due course of
his business that the Noticees huge volume matched a small quantity of
orders without his knowledge at the prevailing market price.
78.

was 5,44,84,576 which works out to almost 58.50% of the total market
volume as available on the BSE website. The same shows that the major
Page 41 of 59
amount of volume carried out on the said exchange during the investigation
period was delivery based. Therefore, it is the case of the Noticee that there
was a change in beneficial ownership for the trades carried out by him. As
regards the large volume said to have been created by the Noticee, he
submitted that the same was created in the scrip by him due to his arbitrage
activities and considering his holding in SIL shares his volume in the scrip is
normal.
Noticee No. 15:
79. The Noticee No. 15, vide letter dated November 09, 2014 submitted that, he is into
the business of jobbing and arbitrage activities in the market and has traded only
within the permissible norms. He submitted that has been debarred from buying,
selling and dealing in the securities market vide SEBI order dated February 02,
2011. By initiating adjudication proceedings in the matter although the earlier
debarment being still in force, the Noticee submitted that the same amounts to
"double jeopardy". Further, the Noticee denied the allegation of being a part of
the Pabari Parikh Group, despite knowing them from before owing to his line of
work and he has taken the decision of dealing in the scrip of SIL on his own. He
submitted that the trading done by him in the scrip was for negligible percentage
in comparison to the total traded volume in the market. The Noticee denied
carrying out any fund movement for purchase/sale with Noticee No.9 (Shri
Bhavesh Pabari) and other entities. Further, with respect to the off market
transactions, the Noticee submitted that the off market transfers are out of the
purview of the trading mechanism and therefore, they cannot affect the market
equilibrium.
80. Further, the Noticee submits that on BSE he had bought 74,11,826 shares and sold
93,23,368 shares which constituted for 7.96% and 10.01% of the total market
volume of the shares of SIL during the investigation period. This huge volume in
SIL shares is due to the Noticee's day to day trading and arbitrage activities,
however, it cannot be considered to be huge when compared to the total market
volume. Therefore, the same could not be treated to have created artificial market
Page 42 of 59
volume in the scrip of SIL. As regards the synchronized trades, the Noticee
submitted that on BSE, as far as his buy is concerned, his trading within the
group was 7.21% of the total market volume, while the orders placed in less than
one minute accounted for 3.25% of the total market volume. Further, his
synchronized trading was only 0.20% of the total market volume. Similarly, as far
as his sale is concerned, his trading within the group was 7.96% of the total
market volume, while orders placed in less than one minute accounted for 3.25%
of the total market volume. The synchronized trading was only 0.20% of the total
market volume. The said quantities being very negligible could not have created
artificial market volume in the said scrip. Moreover, in majority of his trades the
time difference was more than one minute i.e. ranging from one and a half
minute to more than one and a half hour for the shares to be purchased and
similarly, ranging from two minutes to more than forty minutes for the shares to
be sold. Further, in majority of the orders there was a large difference in the
quantity order and the price and hence, cannot be treated as synchronized trades
in nature.
81. With respect to the alleged self trades, the Noticee submitted that his buy and sell
within the alleged group of entities are only 7.21% and 07.51% respectively and
that he had instructed his broker to execute the order on the anonymous trading
platform of the stock exchanges. Therefore, the Noticee was not aware of the
counter party. The Noticee submitted that only few transactions of buy for a total
of 1,82,946 shares which accounted for 0.20% and few transactions of sale for a
total of 4,00,777 shares which is only 0.43% of the total market volume, were
executed by his broker. Furthermore, the self trades executed by the said Noticee
for a volume of 2, 28, 562 shares cannot even be counted in percentage, as there is
a large difference between in the buy order and the sell order quantity. Since, the
Noticee was doing arbitrage between BSE and NSE, it may have so happen that
his pending order in one exchange may have incidentally matched with the then
placed buy order with a different broker. Upon analyzing the self trades executed
on June 04, 2010, it is observed by the Noticee that he has given a buy order of
50,000 shares and a sell order of 5,000 shares and the quantity of orders matched
Page 43 of 59
as the alleged self trade is 5,000 shares. Also, the Noticee's orders got matched
only on a few days out of the total 180 days. The said matching of orders was a
mere coincidence. As regards the allegation of synchronized trades executed by
the Noticee along with the Pababri Parikh Group, he submitted that the said
trades were executed only on a few days out of the total 98 days of trading done
by the group.
82. As regards the said Noticee's contribution to the price rise, it is his submission
that, on January 18, 2011, a large amount of the Noticee's holding i.e. 13,00,000
shares purchased at a much higher price were sold at ` 22.40 in one stock and the
Noticee had incurred a huge loss.
83. Moreover, with respect to the trading carried out on NSE, the said Noticee
submits that he had bought 58,34,049 shares and sold 66,08,664 shares which is
7.20% and 8.16% of the total market volume traded in the acrip of SIL during the
investigation period. The Noticee submitted that the said volume was due to the
Noticee's day to day trading and arbitrage in SIL shares. However, if compared to
the total market volume, it cannot be considered to be huge and therefore, it is the
case of the Noticee that the same cannot be treated to have created artificial
market volume in the said scrip. In more than 90% of the Noticee's trading the
price of the buy and the sell trade has not matched and therefore, cannot be
synchronized.
84. As regards the synchronized trades alleged to have executed on NSE, the Noticee
submitted that, as far as his buy is concerned, his trading within the group was
6.41% of the total market volume and his synchronized trading was only 0.57% of
the total market volume. Similarly, as far as his sale is concerned, his trading
within the group contributed 7.33% to the total market volume and his
synchronized trading was
0.55% of the total market volume, which were
negligible in quantity. The Noticee further submitted that he had bought shares
of SIL which amounted to only 0.57% and sold shares of SIL which amounted to
0.55% which were executed by his broker. The alleged synchronized trades
Page 44 of 59
executed by the Noticee were only on a few days for a volume of 2,79,414 shares
which cannot even be counted in percentage.
85. With respect to the alleged self trades, the Noticee submitted that his buy and sell
within the alleged group of entities are only 6.41% and 7.33% respectively and
that he had instructed his broker to execute the order on the anonymous trading
platform of the stock exchanges. Therefore, he was not aware of the counter
party. Further, the Noticee submitted that the trades wherein the Noticee had
bought shares from other group entities constituted 1.01% and the trades wherein
the Noticee had sold shares to other group entities constituted for 0.92% which
are also negligible in quantity.
Noticee No.16:
86. Vide its letter dated August 28, 2014, the Noticee No. 16 submitted that it has
order dated February 02, 2011 and the same was confirmed vide order dated July
08, 2011. The Noticee states that by initiating adjudication proceedings in the
matter although the earlier debarment being still in force is a "double jeopardy".
The Noticee submitted that as alleged in the SCN, the Noticee Nos. 9 & 11 (Shri
Bhavesh Pabari and Shri Hemant Madhusudhan Sheth) are its directors and had
carried out certain off market transfers in the scrip of SIL. However, it is the case
of the Noticee that it is a company and according to the Companies Act, 1956, a
company is a separate legal entity and an artificial person and it cannot be held
responsible for the acts of omission or commission carried out by its directors/
other representatives. From the SCN it is evident that Noticee Nos. 9 & 11 have
been issued the SCN in their individual capacity and not as directors/authorized
representatives. Therefore, the Noticee denied being part of the alleged Pabari
Parikh Group on the said ground.
87. The Noticee further submitted that at BSE, it had bought 39,500 shares through
only one broker i.e. Religare Securities Ltd which constituted 0.04% of the total
market volume traded in the scrip. This volume cannot have created artificial
Page 45 of 59
volumes in the scrip as the same was miniscule. The Noticee also denied carrying
out any off market transactions. The Noticee submitted that its trading within the
group is only 0.04% of the total market volume and none of its trades are
synchronized. Also, no synchronized trades could have been carried out by it as
there is a difference in price and quantity entered into the system. As regards the
allegation of self trades executed by the Noticee, it submitted that it has bought
only 0.04% of the total market volume and has not sold any shares on the stock
exchange. With respect to the allegation of its contribution to the total market
volume on May 13, 2010, the Noticee submitted that its trading in the scrip of SIL
was 7.6% of the total market volume for around 5,20,000 shares. Therefore, the
Noticee stated that its trading was only on one day out of the total 167 trading
days and therefore, cannot be treated to have created artificial volumes in the
scrip of SIL.
88. At NSE, the Noticee submitted that it had bought 73,900 shares through one
broker i.e. Religare Securities Ltd which constituted 0.09% of the total market
volume traded in the scrip. This volume could not have created artificial volumes
as the same is negligible. Further, with respect to the trading within the group
entities, the Noticee submitted that as far as its buy is concerned, its trading
within the group was for 0.09% of the total market volume and none of its trades
were synchronized. The Noticee had traded on two days out of the of 192 trading
days. With respect to the allegation of the Noticee's contribution to the total
market volume on May 13, 2010 and August 7, 2010, the Noticee submitted that
its trading was for 9.25% and 10.67%, respectively, on the said dates out of the
total market volume of 4,26,579 and 3,22,531 shares. Therefore, the Noticee
denied creation of artificial market volume and disturbing the market
equilibrium by trading in the scrip of SIL.
Noticee No. 18:

89. The Noticee No. 18, vide his reply dated November 17, 2014, submitted that he
holds a masters degree in Finance and has had 4 years of experience in the
Financial and Brokerage Sector. He denies sharing a common address and
Page 46 of 59
telephone number with Noticee No. 11 (Shri Hemant Madhusudhan Sheth). He

submitted that Noticee No. 11 is a Director of Noticee No. 16 (Rajnandi Yarns Pvt.
Ltd) alongwith Noticee No.9 (Shri Bhavsh Pabari). However, the Noticee is
neither connected to Noticee No.9 or Noticee No. 16. Further, the Noticee denied
having received any funds or off market shares from any of the group entities
including Noticee Nos. 9 and 16. The Noticee submitted that he has traded in the
market independently and made all the financial decisions on his own. The
Noticee admitted trading for 34,250 shares (0.04%) on buy side and 17,702 shares
(0.02%) on sell side on BSE. Further, the Noticee admitted purchasing 20,235
shares (0.02%) and selling 2,039 shares (0.02%) of SIL on NSE. The Noticee
submitted that none of his trades were either synchronized or self trades/wash
trades and that he has not carried out any off market transactions in the scrip of
SIL.
Noticee No. 20:
90. Vide letter dated January 09, 2014, the Noticee No. 20 submitted its reply in the
matter. The Noticee submitted that it is a stock broker and had traded in the scrip
of SIL in the normal and ordinary course of its stock broking business. The trades
were executed by the Noticee in the then existing clients accounts on receipt of
their instructions and authorization. The Noticee submitted that it had no
knowledge of any pattern or method of placing orders and that the clients were
inter connected with each other. As on date, it is not dealing for the stated clients
and has improved its monitoring, control and surveillance systems to ensure that
no such activities are carried out by its clients through any of its terminals.
Further, it submitted that it will be filing its detailed reply in due course in the
said matter.
91. Accordingly, vide its letter dated November 15, 2014, the Noticee No. 20 filed its
detailed reply in the matter, wherein it submitted that, 10 out of the 19 Pabari
Parikh Group entities (Noticee Nos. 1, 3, 4, 6, 9, 11, 13, 14, 17 & 18) had carried out
transactions through the Noticee in the scrip of SIL during the relevant period.
The Noticee submitted that upon perusal of their KYC documents it was
Page 47 of 59
observed that the date of opening of the trading account of each client is different
and further address/s, e-mail id/s and phone number/s of each client is separate,
distinct and independent. The Noticee has no relationship with any of the
abovementioned clients and has acted only in the capacity of a broker. With
respect to the allegation of executing synchronized trades and self trades through
it, The Noticee submitted that it did not act as the counter party broker for most
of the synchronized trades and self trades. Further, the Noticee denied being
connected or related to any of the counter party brokers.
92. With respect to the alleged self trades executed by the Noticee for its clients, the
Noticee submitted that the volume of self trades on BSE was 48,812 shares which
constituted 042% of the Noticee's gross volume and 0.05% of the market volume.
On NSE, the total volume of self trades was for 69,181 shares which constituted
for 0.63% of the Noticee's gross volume and 0.09% of the market volume traded in
the scrip of SIL. The Noticee submitted that the said trades were executed at the
then prevailing market price and there was a time difference between the counter
buy/sell order. The buy and sell order quantity was also different. Further, the
Noticee stated that the said volume of self trades executed by it was negligible
when compared to the market volume and therefore cannot be said to have had
any impact on the market volume.
93. Further, with respect to the alleged synchronized trades executed by the Noticee
on behalf of its clients, the Noticee submitted that on BSE its synchronised buy
was for 14,37,401 shares which accounted for 1.54% of the total market volume
and traded and on the sell side, the synchronized trades were for 5,14,346 shares
which constituted for 0.55% of the total volume traded in the scrip of SIL.
Similarly, on NSE, its synchronised trades on buy side were for 16,72,891 shares
which constituted for 2.07% of the market voume and on sell side, the
synchronised trades were for 8,30,334 shares which constituted for 1.02% of the
market volume traded in the scrip of SIL. The Noticee submitted that the volume
of the alleged synchronized trades was negligible in comparison to the market
volume.
Page 48 of 59
FINDINGS:
94. I find from the SCN and the material available on record that during the relevant
period, the Noticee Nos. 1 to 19, who were all connected to each other and
referred to as the Pabari Parikh group entities in the investigation report, had
traded significantly in the shares of SIL i.e. purchased 57638998 shares
constituting for 61.89% of the total traded volume and sold 63596198 shares
constituting for 68.29% of the total traded volume on BSE and the Noticee Nos. 1,
3 to 19, connected to one another in one way or the other and dealing through
multiple brokers, had purchased 45992205 shares constituting 56.77% of the total
traded volume and sold 51740181 shares constituting 63.86 % of the total traded
volume on NSE. I find that the relationship table as mentioned in paras 15 and 24
above clearly shows that the said Noticees were connected to each other either by
way of having similar addresses/telephone numbers, relatives, business
associates and/or having fund movements between themselves. Further, the
relationship of the Noticee Nos. 1 to 19 is established through the off market
transactions executed between them as mentioned in para 16 above.
95. I note that Noticee Nos. 1 to 19 had traded for 50482429 shares (54.21% of the
market volume) accounting for 87.58% of the total purchases of the group and
79.38% of the total sales of the group, within Pabari Parikh Group entities on
BSE. Out of 50482429 shares traded on BSE within the group entities, the buy and
sell orders for 22539876 shares accounting for 24.20% of the market volume were
placed within one minute time difference. I note that 22538976 shares constituted
for 39.11% of the total purchases and 35.44% of the total sales of the Pabari Parikh
Group entities.
96. Further, on NSE, I note that Noticee Nos. 1, 3 to 19 had traded for 39239127
shares (48.43% of the market volume) accounting for 85.32% of the total
purchases of the group and 75.84% of the total sales of the group, within Pabari
Page 49 of 59
Parikh Group entities. Out of 39239127 shares traded on NSE within the group
entities, the buy and sell orders for 14853157 shares accounting for 18.33% of the
market volume were placed within one minute time difference. I note that
14853157 shares constituted for 32.29% of the total purchases and 28.71% of the
total sales of the Pabari Parikh Group entities. I find from the above that, the
quantity of shares traded by the Noticee Nos. 1 to 19 within the group on BSE
and by Noticee Nos. 1, 3 to 19 on NSE further substantiate the fact that they all
had a meeting of minds and traded in the scrip of SIL in collusion with each
other. Therefore, I do not find any merit in the submissions made by the Noticees
that they had no relationship with each other and had traded in the scrip of SIL
independently, without any knowledge of the counter party client/broker and in
the ordinary course of business.
97. I further find that the Noticee Nos. 1 to 15 had indulged in certain synchronized
trades in
the shares of SIL on BSE thereby, creating false and misleading
appearance of trading in the scrip. Out of 2,25,39,876 shares, for 31,79,058 shares,
which accounted for 3.41% of the total market volume, the buy and sell orders
were placed in a synchronized manner. The volume of 31,79,058 shares
constituted for 5.52% of the total purchases and 5.00% of the total sales of the 15
Pabari Parikh Group entities. Further, I also note that on NSE, Noticee Nos. 1, 3
to 15 & 19 had indulged in certain synchronized trades in the shares of SIL. Out
of 1,48,53,157 shares, for 35,94,922 shares, which accounted for 4.44% of the total
market volume, the buy and sell orders were placed in a synchronized manner.
The volume of 35,94,922 shares constituted 7.82% of the total purchases and
6.95% of the total sales of the 15 Pabari Parikh Group entities.
98. On perusal of synchronized trades as given in paras 18 (on BSE) and 25 (on NSE)
above and the order and trade log, I find that the Noticee Nos. 1 to 15 (on BSE)
and Noticee Nos. 1,3 to 15 & 19 (on NSE) did indulge in manipulative activities
in the said scrip on BSE and NSE, respectively and traded in a synchronized
manner within the group without any intention of change in beneficial
ownership of shares and I do not find merit in the contention of the Noticees.
Page 50 of 59
99. I find that during the relevant period the shares of SIL were traded on BSE on 192
trading days. Out of 192 trading days, the group entities viz. the Noticee Nos. 1
to 19 had traded among themselves on 167 days, i.e. 86.97% of the total number
of days the scrip was traded during the period under investigation. I find that the
Group entities by trading in the scrip had contributed to the daily market volume
of the scrip in the range from 83.74 % on May 03, 3010 to 0.22% on January 31,
2011. Further, out of 167 trading days, on 140 trading days the Noticee Nos. 1 to
19 by trading among themselves had contributed for more than 50% to the total
traded volume in the scrip. Out of 167 trading days, on 158 trading days, both the
buy orders and the sell orders were placed within the time difference of one
minute. The Noticee Nos. 1 to 19 by trading in the scrip of SIL had contributed to
daily market volume of the scrip in the range from 7.42% on May 04, 2010 to
7.44% on January 25, 2011. Out of 158 trading days, on 32 trading days, the
Pabari Parikh Group entities contributed for more than 50% of the total market
volume by placing both the buy orders and the sell orders were placed within the
time difference of one minute. Further, out of 158 trading days, on 98 trading
days, the trades executed by the Noticee Nos. 1 to 19 were synchronized in
nature. By executing synchronized trades among the group entities, the Noticee
Nos. 1 to 19 had contributed to the total market volume of the scrip in the range
from 2.75% on May 03, 2010 to 13.02% on December 08, 2010. By entering into
synchronized trades on two trading days, the group entities contributed for more
than 40% of the market volume.
100. Further, the scrip of SIL was traded on 192 days on NSE. Out of 192 trading days,
the Noticee Nos. 1, 3 to 15 & 19 had traded among themselves on 159 days, i.e.
83% of the total number of days the scrip was traded during the period under
investigation. I find that the Group entities by trading in the scrip had
contributed to the daily market volume of the scrip in the range from 79.12 % on
May 03, 3010 to 1.06% on January 17, 2011. Further, out of 159 trading days, on
127 trading days the Noticee Nos. 1, 3 to 15 & 19 by trading among themselves
had contributed for more than 50% to the total traded volume in the scrip. Out of
159 trading days, on 149 trading days, both the buy orders and the sell orders
Page 51 of 59
were placed within the time difference of one minute. The Noticee Nos. 1, 3 to 15
& 19 by trading in the scrip of SIL had contributed to daily market volume of the
scrip in the range from 20.23% on May 03, 2010 to 1.93% on December 08, 2010.
Out of 149 trading days, on 19 trading days, the said Noticees had contributed
for more than 50% of the total market volume by placing both the buy orders and
the sell orders were placed within the time difference of one minute. Further, out
of 149 trading days, on 100 trading days, the trades executed by the Noticee Nos.
1, 3 to 15 & 19, were synchronized in nature. By executing synchronized trades
among the group entities, the Noticee Nos. 1, 3 to 15 & 19 had contributed to the
total market volume of the scrip in the range from 0.84% on May 10, 2010 to
1.93% on December 08, 2010. By entering into synchronized trades on three
trading days, the group entities contributed for more than 50% of the market
volume.
101. In view of the above, I do not find any merit in the contentions of the Noticees
that they had entered into trades individually and that the synchronized trades
indulged into by the Noticees were negligible in volume when compared to the
total volumes traded in the scrip of SIL. I find that the manipulative trading
practices indulged in by the Noticees cannot be viewed independently and have
to be viewed collectively as the overall impact of the synchronized trading done
by the Noticee Nos. 1 to 19 on the market in the scrip of SIL was quite significant.
Further, I also find that such pattern of trading cannot be executed without prior
meeting of minds and prior understanding between the Noticee Nos. 1 to 19.
102. I find from paras 19 and 20 (BSE trading) and paras 26 and 27 (NSE trading)
above that the Noticee Nos. 3, 4, 6 to 11, 12, 14 & 15 on BSE and Noticee Nos. 1, 3,
4, 6 to 11, 14 & 15 on NSE had entered into certain trades which were self trades
in nature i.e. totally fictitious trades wherein the entity appears on both the buy
and the sell side of the trades. On BSE, the said Noticees had executed 458 self
trades for a quantity of 14,96,242 shares thereby, inflating the volumes in the
scrip by 1.61%. On NSE, the Noticee Nos. 1, 3, 4, 6 to 11, 14 & 15 had entered into
870 self trades for a quantity of 12,24,612 shares thereby, inflating the volumes in
Page 52 of 59
the scrip by 1.51%.I further find that the said Noticees had executed the said
fictitious trades on both the exchanges through multiple brokers. However, the
Noticee No. 20 was the broker who had executed significant number of self
trades i.e. 75 self trades for 48,812 shares for the Noticee Nos. 3, 4, 6 & 14 on BSE
and 171 self trades for 69,181 shares for the Noticee Nos. 1, 3, 4, 6, 11 & 14 on
NSE. I do not find any merit in the submissions of the Noticee No. 20 that the
said trades were executed on behalf of the clients without any knowledge of
manipulation and were only executed upon the instructions of the clients. I find
that the number of occasions on which the Noticee No. 20 appeared as the broker
and counter-party broker in the fictitious trades during the period under
investigation was significant and cannot be said to be an innocent act. Therefore,
I find that by executing the self trades, the Noticee Nos. 1, 3, 4, 6, 7, 8, 9, 10, 11, 12,
14 & 15 had further created a false market and gave a misleading appearance of
trading in the scrip and Noticee No. 20 had not acted in accordance with the code
of conduct as prescribed under the Broker Regulations.
103. I further find that, on BSE, the price of the scrip opened at `119.90 and touched a
high of ` 178.00, i.e. there was an increase of ` 58.10 resulting in a new high price
on 192 trading days and 226 occasions. Out of 226 occasions, on 117 occasions
(i.e. on 25 days out of 28 days), Noticee Nos. 3, 6, 7, 9, 11, 14, 15 & 18 had
contributed to increase in the price by `52.30 (out of `58.10). Further, on NSE, I
find that the price of the scrip had opened at `118.70 and touched a high of `
169.00, i.e. there was increase of ` 50.30. On 192 trading days, a new high price
was discovered for 82 occasions. Out of 82 occasions, on 30 occasions (i.e. on 16
days out of 26 days), the Noticee Nos. 6, 7, 9, 11, 14 & 15 contributed majorly to
increase the price. I find that the contribution of the said Noticees in the price rise
was quiet significant on both the exchanges and the same is sufficient to establish
that the price of the scrip increased on the said exchanges because of placing of
the orders by the said Noticees in a manipulative manner. Therefore, I do not
find merit in the submissions made by the said Noticees and I conclude that the
trading done by Noticee Nos. 3, 6, 7, 9, 11, 14, 15 & 18 is in violation of
Regulation 4(2)(e) of the PFUTP Regulations.
Page 53 of 59
104. Further, I find from the LTP analysis that out of 130787 trades executed during
the period under investigation, 31253 trades were placed at a price less than the
LTP (Summation TP-LTP= ` - 26548.60), 68053 trades were placed at a price equal
to LTP and 31481 trades were placed at a price greater than LTP (Summation TPLTP= ` 26450.85). Out of 130787 trades, 18 Pabari-Parikh Group entities viz.
Noticee Nos. 1 and 3 to 19 had entered into 41149 buy transactions while dealing
through multiple brokers. I further find that out of 41149 trades, 8504 trades were
placed at a price lesser than the LTP (contributing a gross fall in price by
` - 6681.20), 24690 trades were placed at a price equal to LTP and 7955 trades
were placed at a price greater than LTP (contributing a gross increasing in price
by ` 6229.65). Upon analysis of the individual contribution to the change in price
of the scrip by entering into buy transactions of the said Noticees, I find that the
Noticee Nos. 9 and 11 had majorly contributed to the net positive LTP
differential. From the foregoing, I conclude that by placing buy orders at a price
greater than the LTP, the said Noticees have manipulated the price of the scrip
and thereby, violated Regulation 4(2)(e) of the PFUTP Regulations.
105. I also note that certain Noticees have stated in their submissions that they have
been restrained from trading in the securities market vide SEBI order dated
February 02, 2011 which was confirmed by SEBI on July 08, 2011 and the said
debarment order is still in force. Further, I also note that these Noticees have
submitted that the present adjudication proceedings results in double jeopardy.
At this juncture, I rely on the judgment of the Hon'ble High Court of Bombay in
the case of SEBI VS. Cabot International Capital Corporation (2004) wherein it
was observed that "the adjudication for imposition of penalty by Adjudication Officer,
after due inquiry, is neither a criminal nor a quasi criminal proceeding. The penalty
leviable under this Chapter or under these sections, is penalty in cases of default or failure
of statutory obligation or in other words, breach of civil obligation. The provisions and
scheme of penalty under SEBI Act and the regulations, there is no element of criminal
offence or punishment as contemplated under criminal proceedings." In view of this, I
do not find merit in the contention of the Noticees.
Page 54 of 59
106. Also, I note that some of the Noticees had requested for a copy of the entire
investigation report and certain documents which were relied upon while the
issuing the SCN in the matter. Here, I note that the relevant extract of the
investigation report formed part of the SCN. I further note that the following
information was provided to the Noticees along with the SCN in a Compact Disk
(CD).
a) Order appointing the Adjudicating Officer (Annexure 1)
On BSE trading:
b) Details of purchase and sale of 19 Pabari Parikh Group entities dealing
through multiple brokers (Annexures A and B)
c) Details containing off market transfers (Annexure BB)
d) Trading details of the 19 Pabari Parikh entities (Annexure C)
e) Trade and Order details of trading within Pabari Parikh Group entities
(Annexure D)
f) Trading among 18 entities (Annexure E)
g) Trade and Order details of the synchronized trades (Annexure F)
h) Details of Trade and Order log containing self trades (Annexure G)
i) Details of the day wise volume contribution to the total traded volume
(Annexure H)
On NSE trading:
j) Details of purchase and sale of 18 Pabari Parikh Group entities dealing
through multiple brokers (Annexures A and B)
k) Trading details of the 18 Pabari Parikh entities (Annexure C)
l) Trade and Order details of trading within Pabari Parikh Group entities
(Annexure D)
m) Trading among 18 entities (Annexure E)
n) Trade and Order details of the synchronized trades (Annexure F)
o) Details of Trade and Order log containing self trades (Annexure G)
p) Details of the day wise volume contribution to the total volume traded
(Annexure H).
Page 55 of 59
Therefore, I find all the material relevant in the present matter was already
provided to the Noticees.
107. From the foregoing, I find that the Noticee Nos. 1 to 19 by trading amongst
themselves indulged in synchronized trading on numerous occasions, resulting
no change of beneficial ownership thereby, creating artificial volume in the scrip
of SIL which gave a false and misleading appearance of trading in the scrip.
Further, I also find that the Noticee Nos. 3, 4, 6, 7, 8, 9, 10, 11, 12, 14 & 15 (on BSE)
and Noticee Nos. 1, 3, 4, 6 to 11, 14 & 15 (on NSE) had entered into self trades
and inflated the volumes in the market thereby giving a false and misleading
appearance of trading in the scrip of SIL. Also, the Noticee Nos. 3, 6, 7, 9, 11, 14,
15 & 18 (on BSE) and Noticee Nos. 6, 7, 9, 11, 14 & 15 (on NSE) by executing
trades (which created new high price and affected the LTP) manipulated the
price of the scrip of SIL and violated the provisions of Regulation 4(2)(e) of the
PFUTP Regulations. Therefore, I conclude that the Noticee Nos. 1 to 19 have
violated provisions of Regulation 3 (a), (b), (c), (d), 4 (1) and 4 (2) (a), (b) & (g) of
the PFUTP Regulations and additionally, the Noticee Nos. 3, 6, 7, 9, 11, 14, 15 &
18 have violated Regulation 4(2)(e) of the PFUTP Regulations thus, liable for
monetary penalty as prescribed under Section 15 HA of the Act which reads as
under:
Penalty for fraudulent and unfair trade practices.
15HA. If any person indulges in fraudulent and unfair trade practices relating to
securities, he shall be liable to a penalty of twenty-five crore rupees or three times the
amount of profits made out of such practices, whichever is higher.
108. I note that the Code of Conduct prescribed under the Broker Regulations
mandates that a stock broker shall maintain high standards of integrity,
promptitude and fairness and shall act with due skill, care and diligence in the
conduct of his business. The code further mandates that a broker shall not, inter
alia, indulge in manipulative transactions with a view to distort the market
equilibrium. Therefore, I conclude that Noticee No. 20 by executing fictitious
trades, in the nature of self and synchronized trades, on behalf of its clients has
Page 56 of 59
violated the provisions as mentioned under Clause A (1), (2) & (3) of the Code of
Conduct specified under Schedule II read with Regulation 7 of the Broker
Regulations thus, liable for monetary penalty as prescribed under Section 15 HB
of the Act which reads as under:
Penalty for contravention where no separate penalty has been provided
15HB. Whoever fails to comply with any provisions of this Act, the rules or the
regulations made or directions issued by the Board thereunder for which no separate
penalty has been provided, shall be liable to a penalty which may extend to one crore
rupees.
109. Here, it is important to refer to the observations of the Honble Supreme Court of
India in the matter of SEBI v. Shri Ram Mutual Fund [2006] 68 SCL 216(SC)
wherein, the Hon'ble Court, inter alia, held: In our considered opinion, penalty is
attracted as soon as the contravention of statutory obligation as contemplated by the Act
and the Regulations is established and hence the intention of the parties committing such
violation becomes wholly irrelevant....
110. While determining the quantum of penalty under Section 15 HA and 15 HB of
the Act, it is important to consider the factors stipulated in Section 15J of Act,
which reads as under:
15J - Factors to be taken into account by the adjudicating officer:
While adjudging quantum of penalty under section 15-I, the adjudicating officer shall
have due regard to the following factors, namely:(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made
as a result of the default;
b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.
111. I observe, from the material available on record, that it is not possible to quantify,
any gain or unfair advantage accrued to the Noticees or the extent of loss
suffered by the investors as a result of the defaults of the Noticees. However, I
find that the defaults are repetitive in nature. Further, the Noticees have traded
in the scrip in a manner meant to create artificial volumes and liquidity which
are important criterions capable of misleading the investors. In fact,
Page 57 of 59
liquidity/volumes in a particular scrip raise the issue of 'demand' in the

securities market. The greater the liquidity, the higher the investors' attraction
towards investing in that scrip. Hence, any investor could have been carried
away by the unusual fluctuations in the volumes and induced into investing in
the said scrip. Besides, this kind of activity seriously affects the normal price
discovery mechanism on the stock exchange platform. People who indulge in
manipulative, fraudulent and deceptive transactions should be suitably
penalized for the said acts of omissions and commissions.
ORDER
112. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under section 15-I (2) of the Act
read with Rule 5 of the said Rules, I conclude that the proceedings against
Noticee No. 8 i.e. Shri Kishore Chauhan stand abated. Further, I hereby impose
the following monetary penalties on the other Noticees:
S.No
1
2
3
4
5
6
7
8
9
10
11
Names of the Noticees
Penal provisions
as per the Act.

Limited (Noticee No. 1)
Shri Ketan Babulal Shah
(Noticee No. 2)
Shri Bharat Shantilal Thakkar
(Noticee No. 3)
Shri Bipin Jayant Thaker
(Noticee No. 4)
Shri Vasudev Ramchandra
Kamat
(Noticee No. 5)
Shri Bharat Vaghela
(Noticee No. 6)
Shri Chirag Rajnikant Jariwala
(Noticee No. 7)
Shri Bhavesh Pabari
(Noticee No. 9)
Shri Prem Mohanlal Parikh
(Noticee No. 10)
Shri Hemant Madhusudan Sheth
(Noticee No. 11)
Shri Jigar Praful Ghoghari
15 HA
5,00,000
15 HA
5,00,000
15 HA
6,00,000
15 HA
5,00,000
15 HA
5,00,000
15 HA
6,00,000
15 HA
6,00,000
15 HA
6,00,000
15 HA
5,00,000
15 HA
6,00,000
15 HA
5,00,000
Page 58 of 59
Penalty Amount
In (`)
12
13
14
15
16
17
18
19
(Noticee No. 12)

Ms. Mala Hemant Sheth
(Noticee No. 13)
Shri Ankit Sanchaniya
(Noticee No. 14)
Shri Vivek Kishanpal Samant
(Noticee No. 15)
Rajnandi Yarns Private Limited
(Noticee No. 16)
Shri Bipin Kumar Gandhi
(Noticee No. 17)
Shri Gaurang Ajit Seth
(Noticee No. 18)
Shri Santosh Maruti Patil
(Noticee No. 19)
Arcadia Shares & Stock Brokers
Pvt. Ltd. (Noticee No. 20)
15 HA
5,00,000
15 HA
6,00,000
15 HA
6,00,000
15 HA
5,00,000
15 HA
5,00,000
15 HA
6,00,000
15 HA
5,00,000
15 HB
2,00,000
1,00,00,000
(Rupees One
Crore Only)
TOTAL
113. In my view the penalties imposed on the Noticees are commensurate with the
defaults committed by them.
114. The penalty amount as mentioned above shall be paid by the Noticees through
duly crossed demand drafts drawn in favour of SEBI Penalties Remittable to
Government of India and payable at Mumbai, within 45 days of receipt of this
order. The said demand drafts shall be forwarded to the Division Chief,
Enforcement Department - DRA-II, Securities and Exchange Board of India, SEBI
Bhavan, Plot No. C4-A, G Block, Bandra Kurla Complex, Bandra (E), Mumbai
400 051.
115. In terms of the Rule 6 of the Rules, copies of this order are sent to the Noticees
and also to Securities and Exchange Board of India.
Date: December 22, 2014

Place: Mumbai
D. SURA REDDY
GENERAL MANAGER &
ADJUDICATING OFFICER
Page 59 of 59

Adjudication Order Against 20 Entities in The Matter of Spectacle Infotek Limited

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Adjudication Order Against 20 Entities in The Matter of Spectacle Infotek Limited

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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

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'SIL/company'), a company listed at the Bombay Stock Exchange limited

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issued a common show cause notice (hereinafter

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Therefore, I am proceeding further

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(c) employ any device, scheme or artifice to defraud in connection with

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Sl. no. 1 has traded with

Sl. no. 12 & 14 both

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Sl. no. 5 is his uncle &

14, 15, 18,

Same email with sl.

Sl. no. 12 is his nephew.

Sl. no. 16 is the wife of

Same address & Tel.no.

Has common address

Join a/c with sl. no. 12

18, 19, 15,

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Name of the entity

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Fairwealth Securities Ltd.

Fairwealth Securities Ltd. Total

Hemant Madhusudan Sheth

IFCI Financial Services Ltd. Total

Total Traded Qty

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investigation. Further, as mentioned in para 16 above, the group entities had

Sl. no. 1 traded with

Sl. no. 10 & 13 both

Sl. no. 10 is his

Sl. no. 3 is his uncle

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Sl. no. 3 share the

Same address &

Join a/c with sl. no. 10

Sl. no. 15 is the wife

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Labh Share and Stock

Vivek Kishanpal Samant

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Name of the entity

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Total Traded Qty

Arch Finance Ltd. Total

Fairwealth Securities Ltd.

Fairwealth Securities Ltd. Total

Hemant Madhusudan Sheth

Bharat Shantilal Thakkar

Master Capital Services Limited Total

IFCI Financial Services Ltd. Total

Vivek Kishanpal Samant

Religare Securities Ltd. Total

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themselves, on 127 trading days the 18 Pabari-Parikh Group entities