Order in Respect of IFSL Ltd.

WTM/PS/05/ISD/APR/2015
BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under Sections 11(4) and 11B of the Securities and Exchange Board of India Act, 1992
read with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade
Practices relating to Securities Market) Regulations, 2003
In the matter of IFSL LIMITED
In respect of:
S.No.
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Noticees
IFSL Limited
Sonal Fincap Pvt. Limited
Dr. Jayant M. Muley
Mr. S.S. Dua
Mr. Mukesh Vora
Mr. Dilip Kulkarni
Mr. Ramdas Kshirsagar
Mr. Jagdish Uttam Parab
Mr. Premkumar Singh
Newleader Trading Co. Pvt. Limited
Sharpline Trading Co. Pvt. Limited
White Moon Mercantile Co. Pvt. Limited
Mr. Santosh Jagtap
Mr. Dattu Shitloe
Right Star Trading Co. Limited
Mr. Deepak Narvekar
Mr. Ganesh Raut
Fineline Mercantile Co. Pvt. Limited
Stockholm Mercantile Co. Pvt. Limited.
Mr. Rajkishore Singh
Mr. Jayesh Waghela
Vishal Kumar Textiles Limited
Mr. Ajit Suryavanshi
Mr. Ranjan Mandal
Mr. Jay Shah
Mr. Paras Chaplot
Cardiod Marketing Pvt. Limited
Mr. Vivekanand Daji Patankar
Mr. Santosh Pawar
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Mr. Kiran Dhanavade

Mr. Jaydeep Mane
Mr. Amar Adhav
Mr. Umesh Choukekar
Mr. Deepak Todkar
Mr. Mahesh Kokate
Mr. Santosh Narvekar
Mr. Sandeep Kadam
Mr. Prakash Yadav
Mr. Vijay Suryavanshi
Mr. Vinod Khetan
Ms. Anita Khetan
Mr. Haresh Posnak
Mr. Dadasaheb Gavhane
Mr. Lokesh Kapoor
Mr. Amit Mehta
Mr. Tejas Thakkar
Mr. Amul Sheth
Khodiyar Industries Limited
Mr. Vikas Narnaver
Mr. Jayesh Kumar Shah
Mr. Bachubhai Koyani
Mr. Dilipkumar Shantilal Mehta
Mr. Kamlesh Rasiklal Patel
Mr. Sureshbhai Baldha
Mr. Rajender Kumar Gajanand Adukia
Mr. Mukesh Soni
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____________________________________________________________________________
1.
Securities and Exchange Board of India (hereinafter referred to as 'SEBI') upon noticing
sudden spurt in the price and trading volume in the scrip of IFSL Limited (hereinafter
referred to as 'IFSL' or 'the Company') conducted a preliminary examination in the scrip.
The shares of IFSL were listed in the year 1996. It was observed that the price of the scrip
had increased in about 200 trading days from 15 to 233 during the period of September,
2004 to June, 2005. The shares of the Company underwent share split on July 01, 2005
wherein a share worth 10 was split into share worth 1. Thereafter, the price of the scrip
again increased from 26.70 as on July 01, 2005 to 33.65 as on September 13, 2005.
Page 2 of 32
The preliminary examination in the matter also revealed that the Company had attempted
to show profits by taking into account the sale of unquoted shares along with other
corporate announcements about unrelated business of implementing power projects
through the acquisition of a company (SanInfra Trading Pvt. Limited) of which no
documents were produced to substantiate the claim. The promoters of IFSL were found
simultaneously off loading their holdings in off market transactions to certain clients who
in turn had sold the shares in the market. In view of such prima facie observations, SEBI,
vide an ad interim ex-parte order dated September 28, 2005 (hereinafter referred to as the
'interim order') had inter alia directed the promoter of IFSL namely Sonal Fincap Pvt.
Limited (hereinafter referred to as 'Sonal Fincap') and the directors of IFSL viz. Mr. P. K.
Singh, Mr. Ramdas Kshisagar, Mr. Mukesh Vora, Mr. Dilip Kulkarni, Mr. Rishi Vashist,
Mr. N. Narendra and Mr. Rakesh Singhvi not to buy, sell or deal in the securities of IFSL,
directly or indirectly, till further directions, in this regard. IFSL was directed not to issue
any equity shares or any other instrument convertible into equity shares, in any manner or
not to alter its capital structure in any manner, till further directions. The clients, namely
New Leader Trading Co. Pvt. Limited, Sharpline Trading Co. Pvt. Limited, Right Star
Trading Co. Pvt. Limited, Stockholm Mercantile Co. Pvt. Limited, White Moon Mercantile
Co. Pvt. Limited, Mr. Amar Adhav, Mr. Deepak Narvekar, Mr. Umesh Choukekar, Mr.
Ganesh Raut, Mr. Deepak Todkar, Mr. Rajkishore Singh, Mr. Prakash Yadav, Mr. Jay Shah,
Vishalkumar Textiles Pvt. Limited and Mr. Jayesh Waghela were directed not to buy, sell or
deal in securities of IFSL, directly or indirectly, till further directions. The directions issued
vide the interim order were later confirmed vide Order dated June 16, 2006.
In the meantime, SEBI came to know that Mr. Jay Shah had dealt in the scrip of IFSL
during the period of prohibition. In view of this, SEBI vide another ad interim ex-parte order
dated October 24, 2005, inter alia directed Jay Shah not to buy, sell or deal in any securities,
directly or indirectly, till further directions, in this regard.
2.
On completion of the investigation for the period of March 08, 2005 to September 16,
2005, it was revealed that the promoters of IFSL in connivance with certain board of
directors of IFSL, created artificial rise in the price and volume in the scrip of IFSL
through the group of inter-connected entities/ clients. The investigation further revealed
that the two major groups of interrelated clients (categorized in the SCN as 'Group I' and
'Group II' on the basis of their connections and dealings) were dealing in the shares of
Page 3 of 32
IFSL during the period of examination. These have been categorized, on the basis of their
connections and dealings as detailed hereunder:
a. 'Group I' consists of clients namely Newleader Trading Co. Pvt. Limited, Sharpline Trading
Co. Pvt. Limited, White Moon Mercantile Co. Pvt. Limited, Mr. Vivekanand Daji Patankar,
Mr. Santosh Pawar, Mr. Kiran Dhanavade, Mr. Jaydeep Mane, Right Star Trading Co.
Limited, Mr. Dattu Shitloe, Mr. Amar Adhav, Mr. Deepak Narvekar, Mr. Umesh
Choukekar, Fineline Mercantile Co. Pvt. Limited, Mr. Ganesh Raut, Mr. Deepak Todkar,
Mr. Mahesh Kokate, Mr. Santosh Jagtap, Vishal Kumar Textiles Limited, Mr. Ajit
Suryavanshi, Stockholm Mercantile Co. Pvt. Limited, Mr. Rajkishore Singh, Mr. Santosh
Narvekar, Mr. Jayesh Waghela, Mr. Haresh Posnak, Mr. Sandeep Kadam, Mr. Prakash
Yadav, Mr. Vijay Suryavanshi, Mr. Ranjan Mandal, Mr. Jay Shah, Mr. Dadasaheb Gavhane,
Mr. Amit Mehta, Mr. Tejas Thakkar, Mr. Vinod Khetan, Ms. Anita Khetan, Mr. Lokesh
Kapoor, Cardiod Marketing Pvt. Limited and Mr. Paras Chaplot;
b. 'Group II' consists of clients namely Khodiyar Industries Limited, Mr. Amul Seth, Mr.
Vikas Narnaver, Mr. Jayesh Kumar Shah, Mr. Bachubhai Koyani, Mr. Dilipkumar Shantilal
Mehta, Mr. Kamlesh Rasiklal, Mr. Sureshbhai Baldha, Mr. Rajender Kumar and Mr.
Mukesh Soni.
3.
Based on the findings of investigation, SEBI inter alia issued separate show cause notices
(hereinafter referred to as SCN) (all dated November 01, 2010), the details of which are
mentioned below:
a. SCN under Section 11(4) and 11B of the Securities and Exchange Board of India Act, 1992
(hereinafter referred to as SEBI Act) read with Regulation 11 of the Securities and
Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market) Regulations, 2003 (hereinafter referred to as 'PFUTP Regulations'),
Regulation 44 of the Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeover) Regulations, 1997 (hereinafter referred to as 'Takeover Regulations')
and Regulation 11 of the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 1992 (hereinafter referred to as 'Insider Trading Regulations') to
IFSL Limited and its promoters and directors namely Sonal Fincap, Dr. Jayant M. Muley,
Mr. S.S. Dua, Mr. Mukesh Vora, Mr. Dilip Kulkarni, Mr. Ramdas Kshirsagar, Mr.
Premkumar Singh and Mr. Jagdish Uttam Parab (hereinafter collectively referred to as 'the
Company and its promoter/ directors and individually by their respective names);
b. SCN under Section 11(4) and 11B of the Securities and Exchange Board of India Act, 1992
(hereinafter referred to as SEBI Act) read with Regulations 11 of the PFUTP Regulations
Page 4 of 32
to Mr. Jaydeep Mane, Mr. Dattu Shitloe, Mr. Kiran Dhanavade, Mr. Haresh Posnak, Mr.
Ajit Suryavanshi, Mr. Lokesh Kapoor, Mr. Santosh Pawar, Khodiyar Industries Limited,
Mr. Sureshbhai Baldha, Cardiod Marketing Pvt. Limited, Mr. Vijay Suryavanshi, Mr.
Mahesh Kokate, Mr. Dadasaheb Gavhane, Newleader Trading Co. Pvt. Limited, White
Moon Mercantile Co. Pvt. Limited, Mr. Deepak Narvekar, Mr. Ganesh Raut, Mr. Deepak
Todkar, Mr. Jayesh Waghela, Mr. Sandeep Kadam, Mr. Prakash Yadav, Mr. Mukesh Soni,
Mr. Jay Shah, Mr. Paras Chaplot, Mr. Bachubhai Koyani, Mr. Tejas Thakkar, Mr. Santosh
Jagtap, Mr. Santosh Narvekar, Mr. Ranjan Mandal, Mr. Vinod Khetan, Mr. Kamlesh
Rasiklal, Mr. Rajender Kumar, Mr. Dilipkumar Shantilal Mehta, Mr. Vivekanand Daji
Patankar, Mr. Jayesh Kumar Shah, Mr. Amit Mehta, Sharpline Trading Co. Pvt. Limited,
Mr. Amar Adhav, Mr. Umesh Choukekar, Fineline Mercantile Co. Pvt. Limited, Mr.
Rajkishore Singh, Ms. Anita Khetan, Vishal Kumar Textiles Limited, Mr. Amul Seth, Mr.
Vikas Narnaver, Right Star Trading Co. Limited and Stockholm Mercantile Co. Pvt.
Limited (hereinafter collectively referred to as 'the inter-connected clients' and individually
by their respective names).
4.
The SCNs alleged that IFSL had made various premature and false public announcements
towards its activities in power sector and the promoter of the Company had transferred
huge quantities of its shares to certain clients, who in turn had created an artificial rise in
the price and volume of IFSL. The SCNs also alleged that some of the directors of IFSL
had actively traded in the scrip of IFSL while acting as part of the inter-connected group of
client . The SCNs, alleged that the acts of the Company and its promoter/ directors were in
violation of the Regulations 3(a), 3(b), 3(c), 3(d), 4(2)(a), 4(2)(b), 4(2)(e), 4(2)(k), 4(2)(r) of
the PFUTP Regulations, Regulation 13(3), 13(6) of the Insider Trading Regulations and
Regulation 12 of the Takeover Regulations.
The SCNs to the inter-connected clients alleged that the clients belonging to the two
groups (found connected by the common phone number, common address, off market
transfer of shares, introduction to brokers, etc.) were acting in concert and created artificial
volumes and price rise in the scrip of IFSL. It has also been alleged that certain clients had
received shares from the promoter through off-market deals, which were off-loaded in the
market with the aid of other connected clients. The SCNs, therefore, alleged that the interconnected clients were acting in concert and that the same contributed to the increase in
the volume and price rise in the scrip of IFSL, which constitutes the violation of
Regulations 3(a), 3(b), 3(c), 3(d), 4(2)(a), 4(2)(b) and 4(2)(e) of the PFUTP Regulations.
Page 5 of 32
Accordingly, the SCNs called upon the Company, its promoter/ directors and the interconnected clients, to show cause as to why action under Section 11B and 11(4) of the
SEBI Act, including directions restraining them from buying, selling or dealing in the
securities in any manner for a particular period or any other direction(s) as deemed
appropriate by the competent authority should not be initiated against them. The
Company, its promoter/ directors and inter-connected clients were advised to file their
reply within a period of 21 days of the receipt thereof. It was also informed that in case of
failure, it would be presumed that they had no explanation/ submission to offer and that
SEBI may proceed with the matter on the basis of material available on record.
5.
The SCNs were sent to the Company, its promoter/ directors and inter-connected clients
by way of 'Registered Post Acknowledgement Due' at their last known addresses. The
SCNs were delivered to the noticees namely Mr. Lokesh Kapoor, Mr. Ganesh Raut, Mr.
Deepak Todkar, Mr. Jayesh Waghela, Mr. Jay Shah, Mr. Paras Chaplot, Mr. Vinod Khaitan
and Ms. Anita Khaitan. The SCNs issued to the other noticees were returned undelivered
by the postal department. Since, the Company and its promoter/ directors were not found
at their last known address, the SCNs were uploaded on the SEBI website under the head
Unserved Summons/ Notices and were also affixed at the last known addresses of the
Company, its promoter/ directors and inter-connected clients so as to enable these to
submit their reply. In the absence of any reply, SEBI also issued a public notice in the
national and regional daily newspapers on February 15, 2012, intimating about the SCNs,
requiring thereby, the Company, its promoter/ directors and the inter-connected clients to
reply to the SCNs within 15 days of the publication, thereof. I note that, the public notice
was issued as a mode of substituted service on the Company and its promoter/ directors,
with an advice that in the absence of any reply to the respective SCN, the matter would be
proceeded ex-parte.
6.
Before proceeding further, an opportunity of personal hearing was granted to Mr. Vinod
Khetan, Ms. Anita Khetan and Mr. Lokesh Kapoor on July 17, 2012. However, none of
these turned up for the personal hearing. In the meantime, Mr. Vinod Khetan and Ms.
Anita Khetan vide respective letters both dated July 12, 2012, requested for a copy of the
SCN and an opportunity of personal hearing. The request of Mr. Vinod Khetan and Ms.
Anita Khetan was acceded to and accordingly a copy of the SCN were forwarded to them.
Thereafter, an opportunity of personal hearing was granted to Mr. Vinod Khetan, Ms.
Page 6 of 32
Anita Khetan, Mr. Lokesh Kapoor and Mr. Paras Chaplot before me on February 18, 2013.
This time again, Mr. Vinod Khetan and Ms. Anita Khetan failed to appear for the personal
hearing. The hearing notice in respect of Mr. Paras Chaplot and Mr. Lokesh Kapoor could
not be delivered.
In the interest of natural justice, one more opportunity of personal hearing was granted to
Mr. Vinod Khetan, Mr. Anita Khetan, Mr. Lokesh Kapoor and Mr. Paras Chaplot on
March 14, 2013. On this date, Mr. Vinod Khetan and Mr. Anita Khetan appeared for the
personal hearing through their authorised representative Mr. A. Vyas, who made oral
submissions. The authorised representative appearing for Mr. Vinod Khetan and Ms. Anita
Khetan also requested for seven (7) days' time for filing of the written submissions, which
was duly granted. However, no written submissions have been filed by these till date.
In the meantime, the noticee namely Mr. Paras Chaplot vide his letter dated March 13,
2013, requested for certain documents. The same were provided to him vide SEBI letter
dated July 09, 2014. Thereafter, vide his letter dated July 21, 2014, Mr. Paras Chaplot
requested for an extension of time for filing of his reply and rescheduling of the personal
hearing.
7.
In the interests of natural justice, one more opportunity of personal hearing was granted to
Mr. Lokesh Kapoor and Mr. Paras Chaplot on August 04, 2014. On August 04, 2014, the
authorised representative of Mr. Lokesh Kapoor appeared and made oral submissions. The
authorised representative appearing for Mr. Lokesh Kapoor was also granted one week's
time for filing of the written submissions.
Thereafter, one more opportunity of personal hearing was granted to Paras Chaplot on
September 01, 2014. However, he failed to appear for the personal hearing on the date
fixed. As sufficient opportunities of personal hearing were already granted to him, the
matter was proceeded ex-parte based on the material available on record. In the meantime,
Mr. Paras Chaplot vide his letter dated September 10, 2014, submitted that he had received
the hearing intimation subsequent to the hearing date as he was not in the town at the time
of its delivery. Considering the request, he was granted one more opportunity of personal
hearing on November 17, 2014. On this date again, Mr. Paras Chaplot failed to appear for
the personal hearing. In view of this, I am compelled to proceed with the matter ex-parte
based on the material available on record in respect of Mr. Paras Chaplot and other interconnected clients.
Page 7 of 32
I have seen the attempts made by SEBI to deliver the SCNs to the noticees and note the
steps taken to serve the SCNs to the Company, its promoter/ directors, who were not
traceable at their last known addresses. I note that the principles of natural justice had been
duly complied with for delivering the SCNs. Further, as the subject matter of the case is
old, I am compelled to proceed with the matter ex-parte as against the persons/ entities who
had failed to submit any reply, based on the material available on record.
8.
I also note that as considerable time had elapsed from the date of hearing granted to Mr.
Vinod Khetan and Ms. Anita Khetan, in the interest of natural justice, SEBI issued a letter
dated December 03, 2014, to these two asking thereby whether they require another
opportunity of personal hearing or submit further written submissions. In reply, Mr. Vinod
Khetan and Ms. Anita Khetan vide respective letters dated December 21, 2014 requested
for four weeks time to submit the written submissions. I note that, till date, SEBI has not
received the written submission of Mr. Vinod Khetan and Ms. Anita Khetan.
9.
The submissions of Mr. Vinod Khetan, Ms. Anita Khetan and Mr. Lokesh Kapoor in brief
are as under:
a. Submission of Mr. Vinod Khetan and Ms. Anita Khetan (clients belonging to 'Group
I')
- The SCN has not alleged that these were connected with the inter-connected clients
forming part of 'Group I' with the same address/ phone number.
- There is no proof that any of the 37 entities allegedly part of 'Group I' had introduced
Vinod Khetan or Ms. Anita Khetan to the respective broker.
- None of the annexures to the SCN show that Vinod Khetan or Ms. Anita Khetan had
increased the price of the scrip of IFSL.
b. Submission of Mr. Lokesh Kapoor (client belonging to 'Group I')
- His transactions in the scrip of IFSL are nine year old. In the year 2005, he had dealt in
few scrips including Today's Pen Limited, Mega Corporation Limited and IFSL and also
received SCN regarding his transactions in the said three scrips. He had been discharged
and proved non guilty in the matters of Today's Pen Limited and Mega Corporation
Limited.
- Proof of delivery or proof of attempt to deliver the summons are not enclosed with the
SCN. The information as sought in summons are already available to SEBI.
Page 8 of 32
- His role/ wrong doing has not been explained in the entire SCN. The SCN do not
contain any specific charges against him.
- He had received 1,17,927 shares in off market from Mr. Raj Kishore Singh. He had
purchased 3,40,472 shares (0.07% of the total market volume during the entire
investigation period i.e. from March 08, 2005 to September 16, 2005) at an average price
of 250.24 and sold 3,81,498 shares (0.07% of the total market volume during the entire
investigation period i.e. from March 08, 2005 to September 16, 2005) at an average price
of 244.20. He had traded in the narrow price range of 244 to 250. He had dealt only
before the stock split and have not traded after stock split. The same shows that his
trades were immaterial, insignificant and had no adverse impact on market equilibrium.
- He had received off-market shares in consideration of old receivable from one Mr. Vishal
Malaviya. He does not know Mr. Raj Kishore Singh and while receiving the shares, he
was not knowing that the shares were received from Raj Kishore Singh's account.
- There is no allegation of synchronised trades against him. The details like order quantity,
order price, order time of buyer and seller are not mentioned in the analysis of
incremental trades.
- He had entered 6 trades during March 08, 2005 to May 06, 2005, and a huge time
difference i.e. of more than one minute to more than two hours was there. Ms. Anjali
Batra is counterparty in 3 of 6 trades. She is not included in the list of connected
entities. The available analysis of the trades and chart does not suggest his role in
manipulation of price.
- His trades under scrutiny are 17,540 shares as compared to his total trading of 7,21,970
shares. As per the analysis on record, rest of his trades i.e. 7,04,430 shares are clean.
- He had not traded in continuous trading pattern and most of his deals were delivery base.
10.
I have carefully considered the SCNs dated November 01, 2010 issued to the Company, its
promoter/ directors and the inter-connected clients, the oral submissions wherever made
and the material available on record. Considering the above, the charges raised in the SCN
are being dealt below in seriatim:
a. Whether IFSL and its directors had made premature/ false announcements and also
concealed the information about the promoter's holding in the Annual General Meeting
notice to the shareholders and Bombay Stock Exchange (hereinafter referred to as
'BSE')?
Page 9 of 32
b. Whether Mr. Ramdas Kshirsagar while acting as 'Chairman' and other directors had taken
control of IFSL, without making the requisite disclosures under the Takeover
Regulations?
c. Whether the promoter of IFSL namely Sonal Fincap had transferred the shares of IFSL
in off-market to a group of inter-connected clients who had offloaded these in the market
which increased the price and volume in the scrip of IFSL?
d. Whether the inter-connected clients forming part of the two groups had executed
synchronized/ structured trades and influenced the volume and price in the scrip of
IFSL?
11.
Whether IFSL and its directors had made premature/ false announcements and
also concealed the information about the promoter's holding in the Annual General
Meeting notice to the shareholders and Bombay Stock Exchange (hereinafter
referred to as 'BSE')?
a. I have seen the list of major announcements made by IFSL at BSE as alleged in the SCN,
the same are also being reproduced below for ready reference:
TABLE A
Date & time
May 09, 2005
June
2005
03,
June 14, 2005
June 29, 2005

July 05, 2005
July 19, 2005
Major Announcements
Meeting of the Board of Directors of the Company will be held on May 16,
2005, inter alia, to consider split up/subdivision of equity shares.
Meeting of the Board of Directors of the Company will be held on June 10,
2005, inter alia, to consider the following:
1. The acquisition of San-Infra Trading Pvt. Limited, a solid waste to energy
power company. San-Infra proposes to enter into a power purchase agreement
for generation of power out of waste material for the state electricity board.
2. Appointment of a valuer to value San-Infra.
The Board of Directors of the Company at its meeting held on June 10, 2005,
inter alia, has :
1. Appointed Deloitte Haskins & Sells as valuer to value San Infra
2. Acquisition of San Infra, a power company will be considered on the basis of
valuation report to be submitted by Deloitte Haskins & Sells, the valuers.
3. Appointment of following persons as Additional Directors:
a) Mr. Dilip Kulkarni
b) Mr. Mukesh Vora
IFSL Board recommends a dividend of 10 % on the Equity Shares.
The Company is in the process of developing 800 Million Renewable
Energy Power Project with Kalyan Dombivali Municipal Corporation. ...
The Company will develop the said Power Station through its wholly owned
subsidiary San Infra Pvt. Limited.
The Company in association with ENTEC Biogas GMBH, Austria has received
a letter of Intent to execute 1000 TPD MSW energy project at Jakarta, Indonesia
on turnkey basis from M/s. Metra Impex Co LLC, Dubai, issued on behalf of
M/s. Indoenviro Waste Management Co, Jakarta. Indoenviro Waste
Management Co is promoted by BOSAWA and KODEL group of Indonesia.
Page 10 of 32
Aug 29, 2005
Aug 31, 2005
Sept 27, 2005
BOSAWA and KODEL group are engaged in shipping and conventional energy
plants, hydel electricity, cement, fabrication and other activities.
The plant is designed to produce 12 MW Electricity and 250 TPD Bio Fertilizer
after blending with other green wastes. The order value is around Rs 2250 mn.
The project construction will start in October 2005 and it is expected that the
electricity generation will start in the beginning of the next fiscal.
i) IFSL secures an 8 MW power project at Kalyan.
ii) The company would gain Rs. 1600 million on the Carbon Credit advantage
on the Kyoto protocol.
iii) Gross expected revenue from the project to be in the region of 4000
million over the project life cycle etc.
The register of members & share transfer Books of the Company will remain
closed from September 24, 2005 to September 30, 2005 (both days inclusive) for
the purpose of Payment of Dividend and 19th Annual General Meeting of the
Company to be held on September 30, 2005.
IFSL Ltd has announced that the Company has signed a MoU with FAHLKE
Control Systems GMBH for jointly executing a 1000 TPD Municipal Solid
Waste to Energy Project in Canada. The Company's share of the project is
valued at an estimated at USD 37 million.
... ...
From above, it is noted that IFSL had made various announcements towards its activities,
the details of these and the discussion about their authenticity are discussed below. I note
that IFSL during the course of investigation had failed to provide details about the
announcements or San Infra to SEBI.
i. IFSL vide the public announcement dated June 03, 2005, had proposed to acquire a
company namely San-Infra. For the same, it proposed to appoint a valuer for the
preparation of a valuation report. Later, on
June 14, 2005, by way of another
announcement, the Board of Directors of IFSL appointed 'Deloitte Haskins and Sells'
as valuer to value San Infra.
I note that during the course of investigation, IFSL has submitted before SEBI that the
valuation was carried out by a Chartered Accountant, however, it has failed to submit a
copy of the valuation report inspite of being specifically asked about it by SEBI. SEBI in
order to independently verify the facts had also asked 'Deloitte Haskins and Sells' to
submit a copy of the valuation report of San-Infra. To this, 'Deloitte Haskins and Sells'
replied to SEBI that they have not carried out any such valuation for IFSL. This shows
that the announcement by IFSL regarding valuation by 'Deloitte Haskins and Sells' is
false.
ii. IFSL on July 05, 2005, announced that it is in the process of developing 800 million
'Renewable Energy Power Project' with Kalyan Dombivali Municipal Corporation
Page 11 of 32
(hereinafter referred to as 'KDMC'). It was also said that the power station will be
developed through its 'wholly owned subsidiary' namely San Infra.
In this regard, I note that till the date of this announcement there was no information/
intimation to show that IFSL had actually acquired San-Infra or San-Infra has become
the wholly owned subsidiary of IFSL. The announcements as noted above relating to
the power projects indicated that IFSLs venture in the power project was at a
preliminary stage. It is seen that IFSL was never in the power project activity.
IFSL in its filing with BSE on June 03, 2005, had mentioned San-Infra to be a solid
waste to energy power company. However, from the database of the company filings as
maintained by the Department of Company Affairs (DCA) it was observed that SanInfra was registered only in 2002 and was in the business of 'retail trade not elsewhere
classified'. The power generation activities are not be considered in the nature of retail
trade.
I also note that as per the annual report for the year 2004-2005, the project with KDMC
was expected to be operational from October 2006. However, vide another
announcement to BSE on August 29, 2005, IFSL had made projections that 'gross
expected revenue from the project to be around 4,000 million over the project life
cycle'. Such huge projection of revenue just after the announcement of project and
pending acquisition of San-Infra, gives a clear impression that IFSL had made
premature positive announcements without highlighting the risk factors involved in
such projects.
iii. On September 27, 2005, IFSL made another announcement that it has signed an MoU
with one FAHLKE Control Systems GMBH, Germany for jointly executing 1,000 TPD
(tons per day) 'municipal solid waste to energy' project in Canada. In this announcement
one Mr. Dilip Kulkarni, Chief Executive Officer of IFSL also said that this project will
extend the foot prints of IFSL beyond India and Asia where IFSL already enjoys a
significant presence.
I note that as on the date of such announcement, IFSL had not done/ executed any
business in the nature of 'energy production' and it had no real presence/ experience in
waste to energy space. Till that date, IFSL had made only a few announcements in this
regard, as discussed above and it was only involved in buying and selling of domestic
Page 12 of 32
listed companies. In view of the same, it can be concluded that the projects which were
yet to be operational and were only on paper (as only agreements were signed a few days
prior to such announcement) cannot be considered to have granted IFSL a significant
presence in India and Asia. The same also shows that the announcement was premature
and misleading.
iv. I note from the SCN that IFSL had shown a meagre profit in the financial years ending
March 2003 and March 2004. For the financial year ending March 31, 2005, the net
profit of IFSL increased to 6.66 crores, stated to be on account of profits realized as a
result of the disposal of 'unquoted shares' which according to the balance sheet of
IFSL had been valued on the basis of 'negotiated price between the buyer and IFSL, at
an arms length transaction'. On the basis of such profit figures for the year 2004-2005,
IFSL declared a dividend of 10% on the equity shares and also made an announcement
in this regard on June 29, 2005. I note that IFSL had never declared dividend before
June 29, 2005. The announcement of the payment of dividend had coincided with
IFSL's other announcements as discussed above.
During the course of investigation, the bank account statement of IFSL with IDBI
Bank, Nariman Point (bearing A/c no. 0041020000022552) was examined on sample
basis which showed the credit entry from another bank account of IFSL also held with
IDBI Bank, Indore Branch (bearing A/c no. 001102000005593) on December 31, 2004.
A further examination revealed that the funds to the tune of 50,00,000 in the bank
account maintained with Indore branch were received from the bank account
maintained by IFSL with the Nariman Point branch.
v. IFSL in its notice to BSE regarding 19th Annual General Meeting fixed for September
30, 2005, had mentioned the promoter's holding at 16.88%. The investigation in the
matter revealed that the promoter of IFSL had transferred their almost entire holding
through the off-market transactions between July 11, 2005 to August 31, 2005. Such
facts are further confirmed from the analysis of the demat statement of the promoters.
In view of the same, the notice of IFSL to BSE is clearly a misleading statement about
the promoter's holding.
I note that IFSL pursuant to the passing of the interim order, vide its letter dated October
11, 2005 had replied and stated that it had no knowledge of the trading by promoters in off
market and it had no control over the trades executed on the floor of the exchange/ offPage 13 of 32
market deals done by its shareholders including the promoters. It also said that the
corporate announcements were made in the normal and usual course of business and that
the same had hardly any impact on the price/ volume of trading in the scrip of IFSL. It
was also said that the price of IFSL's share was consistently rising since August 2004.
I note that SEBI during the course of investigation had asked IFSL to submit the relevant
documents in support of the above discussed announcements. However, IFSL had failed
to produce such documents, till date. It is observed that none of the Company and its
promoter/ directors have submitted their replies to counter the allegations leveled in the
SCN.
Based on the above facts and circumstances of the case, it can safely be concluded that the
above discussed announcements were made purely to attract the interest of lay investors in
the scrip of IFSL and thereby creating liquidity in the scrip. I also note that directors
namely Mr. Premkumar Singh, Mr. Jagdish Uttam Parab, Mr. Ramdas Kshirsagar, Mr. Dilip
Kulkarni, Mr. Mukesh Vora, Mr. S.S. Dua were on the Board of Directors of IFSL when
the abovesaid announcements were made during the period of May 2005 to September
2005. Further, it is also noted that Mr. Jayant M. Muley was appointed as director of IFSL
on August 16, 2005 and he had attended the board meetings on two days i.e. September 02,
2005 and September 25, 2005.
In view of the above, the act of making such pre-mature announcement constitutes
violation of Regulation 3 (a), (b), (c), (d) and Regulation 4(2)(k) and 4(2)(r) of the PFUTP
Regulations by IFSL and its directors who were on the Board of the Company during the
period when the discussed corporate announcements were made i.e. from May 09, 2005 to
September 27, 2005.
b. Whether Mr. Ramdas Kshirsagar while acting as 'Chairman' and other directors
had taken control of IFSL, without making the requisite disclosures?
The SCN has alleged that Board of IFSL had witnessed significant change during the
period of March 11, 2005 to May 05, 2005. During this period, all the original members of
the Board of Directors had resigned and a new set of members took control over the
functions of IFSL. Such new members as per the SCNs were Mr. Jagdish U. Parab, Mr.
Prem Kumar Singh, Mr. Ramdas Kshirsagar and Mr. Rakesh Singhvi. The details regarding
date of appointment and date of ceasing of the directors of IFSL has been tabled as under:
Page 14 of 32
TABLE B
S.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Name
Date of appointment
Date of ceasing
Mr. Premkumar Singh

Mr. Rishi Vashist
Mr. Dilip Kulkarni
Mr. Mukesh Vora
Mr. Rakesh Singhvi
Dr. Jayant M. Muley
Mr. S.S. Dua
Mr. Rajesh Kaushik
Mr. Mukesh Kaushik
Mr. Bijaya Kumar Sahoo
Mr. Ashish Mohapatra
Mr. Amar Walmiki
March 11, 2005

March 11, 2005
May 25, 2005
March 01, 2005
June 10, 2005
June 10, 2005
April 15, 2005
August 16, 2005
August 03, 2005
October 29, 2005
October 29, 2005
March 25, 2006
June 30, 2006
June 30, 2006
August 22, 2005

September 02, 2005
August 21, 2005
August 22, 2005
June 30, 2006
June 30, 2006
May 05, 2005
January 31, 2006
March 25, 2006
December 30, 2005
September 30, 2006
I note from the SCN that Mr. Ramdas Kshirsagar who joined the board of IFSL on March
01, 2005, had taken major policy decisions in the affairs of the Company and also
appointed other directors in the board as noted from the annexure of minutes of board
meetings. He had acted as a Chairman for all the subsequent meetings till he ceased to be a
director of IFSL on August 22, 2005. During the Chairmanship of Mr. Ramdas Kshirsagar
from April 25, 2005, IFSL had started taking major decisions like changing the name of the
Company, splitting of shares, proposed acquisition of San-Infra, recommendation of
dividend, etc. During this period, the board of IFSL also took decisions on the
appointment of other directors into the board suo moto or on the resignation of other
members from the board. I note that Mr. Ramdas Kshirsagar had joined the board of IFSL
as an additional director and had chaired the board for all subsequent board meetings till
his resignation. In view of the same, it can be concluded that Mr. Ramdas Kshirsagar, along
with the other board members (who during their respective tenure had acted in concert
with Mr. Ramdas Kshirsagar while he was Chairman), were in control of IFSL and that
requisite disclosures were not made in that regard.
c. Whether Sonal Fincap (a promoter of IFSL) had transferred the shares of IFSL in
off-market to a group of interconnected entities and failed to make necessary
disclosures?
i. The investigation conducted by SEBI had observed large scale off-market transfer of
shares of IFSL during the period of investigation to the group of inter-connected
clients/ entities. I note from the SCN that the entities/ persons who had received the
shares from the promoter of IFSL along with other connected entities, while trading in
Page 15 of 32
the scrip of IFSL, bought 71,04,547 shares (79% of the entire market purchase) and sold
51,46,085 shares (accounting for 57% of the entire market sales) during the period of
March 08, 2005 to June 30, 2005 (i.e. the period prior to stock split). In the period after
the stock split i.e. July 01, 2005 to September 16, 2005, such entities/ persons have
bought 19,26,86,117 shares (38% of the entire market purchases) and sold 24,55,96,436
shares (49% of the entire market sales).
ii. I note from the demat account statement of IFSL that by the end of August 31, 2005,
Sonal Fincap, one of the promoters of IFSL had transferred 99.01 lakh shares of IFSL
accounting for 12.37% of the total number of shares to various entities in off market as
detailed hereunder:
TABLE C
Date
Source Client name
Target Client Name
11-Jul-05
Sonal Fincap
Jagdish Uttam Parab
11-Jul-05
Sonal Fincap
Shah Jay
11-Jul-05
Sonal Fincap
Ganesh S. Raut
12-Jul-05
Sonal Fincap
Dattu Aba Shitole
15-Jul-05
Sonal Fincap
Ranjan Mandal
21-Jul-05
Sonal Fincap
Jayesh Waghela
26-Jul-05
Sonal Fincap
Jayesh Waghela
08-Aug-05
Sonal Fincap
Sharpline Trading Co. Pvt. Ltd.
09-Aug-05
Sonal Fincap
11-Aug-05
Sonal Fincap
Surekha H. Sanghvi
11-Aug-05
Sonal Fincap
17-Aug-05
Sonal Fincap
Ritedeal Trading Co. Pvt. Ltd.
17-Aug-05
Sonal Fincap
22-Aug-05
Sonal Fincap
Newleader Trading Co. Pvt. Ltd.
22-Aug-05
Sonal Fincap
Deepak A. Narvekar
23-Aug-05
Sonal Fincap
Stockholm Mercantile Co. Pvt. Ltd.
23-Aug-05
Sonal Fincap
23-Aug-05
Sonal Fincap
Shah Jay
24-Aug-05
Sonal Fincap
26-Aug-05
Sonal Fincap
27-Aug-05
Sonal Fincap
27-Aug-05
Sonal Fincap
Jayesh Waghela
31-Aug-05
Sonal Fincap
Vishal Kumar Textiles Pvt. Ltd.
Total
No. of shares
1,40,000
3,00,000
4,65,315
1,54,000
1,55,059
2,44,813
3,33,926
2,00,000
10,00,000
1,00,000
2,00,000
1,00,000
2,00,000
30,00,000
1,00,000
3,00,000
6,00,000
10,00,000
5,00,000
2,17,387
2,12,442
1,25,719
2,53,000
99,01,661
As discussed in the earlier paragraphs, I note that IFSL on one hand had made various
positive announcements including the proposal to enter into the power business by
tying up with a company and on the other hand the promoter of the Company (Sonal
Fincap) had offloaded its stake through off market transactions. Such offloading of
shares had clearly reduced the shareholding of the promoters in IFSL, however, no
disclosures in this regard under the Regulation 13(3) of the Insider Trading Regulations
were made. After the issuance of the SEBI directions vide the interim order, Sonal
Fincap vide its letter dated October 11, 2005 had denied the allegations, however,
Page 16 of 32
subsequently it never responded/ cooperated in the investigation of SEBI. The

summons issued to Sonal Fincap also returned undelivered on all the occasions. IFSL
has also failed to make any disclosure regarding the change in the shareholding pattern
of the promoters. In view of the same, I find Sonal Fincap guilty of not making relevant
disclosures under Regulation 13(3) of the Insider Trading Regulations.
12.
Whether the inter-connected clients forming part of the two groups had executed
synchronized/ structured trades and influenced the volume and price in the scrip of
IFSL?
i. I note from the SCN that large scale off loading of the shares of IFSL had happened
during the investigation period as also detailed in Table C above. The entities who
received these shares in off-market have been found to be actively trading in the scrip of
IFSL during the period of investigation. As discussed in the earlier part of the order, the
SCN has alleged that the inter-connected clients belonging to 'Group I' and 'Group II'
had traded in the scrip of IFSL. The SCNs have also alleged that these inter-connected
clients had indulged in substantial trading in the shares of IFSL during the investigation
period and thereby were instrumental in the creation of artificial volume in the shares of
IFSL and its artificial price rise. I note that in response to the SCN, only three clients
namely Mr. Vinod Khetan, Ms. Anita Khetan and Mr. Lokesh Kapoor have attended
the personal hearing and made oral submissions. No written submissions have been
filed by the said clients.
ii. While proceeding further, let me consider the trading activities of the 'Group I' clients
during the period of investigation i.e. March08, 2005 to September 16, 2005:
TABLE D
S.
No.
Client
Traded
through
Broker
Connection
1 Ramdas
UTI Securities a. He was a common link between
Kshirsagar Ltd.
Newleader Trading Co. P. Ltd., Sharpline
and
Trading Co. P. Ltd. and IFSL. In all these
Networth
companies he was a director and had also
Broking Ltd.
acted as chairman of IFSL
b. Phone no. given in the KYC documents
are '56546670' and '56546666'.
2. Jagdish
Insight Share a. Had received 1,40,000 shares of IFSL in
Parab*
Brokers P.
off market from Sonal Fincap,
Ltd.,
b. Phone no. given in the KYC documents is
IndiaBulls
'56546670' and '56546666'.
Securities Ltd.
Page 17 of 32
Trading
before stock split
after stock split
Purchase
Sold qty. /
Purchase
Sold qty./
qty. / avg.
avg. rate
qty. / avg. avg. rate ()
rate ()
()
rate ()
2,69,346
252.75
3,000
225.50
1,18,560
249.69
0
1,69,520
226.63
54,317
257.72
0
1,20,000
25.41
1,20,550
26.05
1,50,000
26.18
1,69,050
226.93
56,92,864
23.8
48,09,423
23.65
20
28
and
NNM
Securities P.
Ltd.
3 Premkuma Networth
r Singh
Broking Ltd
10
11
12
a. He was one of the Director of IFSL

during the period of 11/03/200522/08/2005
b.
Phone no. given in the KYC
documents is '56546666'.
Newleader India Bulls
a. Common address as that of Sonal Fincap
Trading
Securities Ltd. (promoter, IFSL) i.e. D-708, Crystal Plaza,
Co. Pvt.
New Link Road, Andheri (West), Mumbai,
Ltd.*
b.
It had received 30,00,000 shares
from Sonal Fincap in off market,
c. Director and authorised person is Ramdas
Kshirsagar (also a director of IFSL),
d.
Sharpline
Insight Share a. Director is Ramdas Kshirsagar, who is
Trading
Brokers Pvt.
also a director of IFSL,
Co. Pvt.
Ltd.
b.
It had received 27,00,000 shares
Ltd. *
from Sonal Fincap in off market,
c. Phone no. given in the KYC documents is
'56546666'.
White
IndiaBulls
a. Director is Santosh Jagtap,
Moon
Securities Ltd. b.
Mercantile
Co. P. Ltd.
Santosh
IndiaBulls
a. Director of White Moon Mercantile Co.
Jagtap
Securities
P. Ltd.
Ltd.,
b.
Ruchiraj
documents is '56546666' and '56546669'.
Shares &
Stock Brokers
Pvt. Ltd.
and
K&A
Securities Ltd.
Dattu
IndiaBulls
a. He had received 1,54,000 shares of IFSL
Shitloe*
Securities
in off market from Sonal Fincap,
Ltd.,
b. He was director of Righstar Trading
Joindre
Company P. Limited,
Capital
Services
'56546666'.
Limited
and
K&A
Securities Ltd.
Rightstar
IndiaBulls
a. Director is Dattu Shitole, who had
Trading
Securities Ltd.
received 1,54,000 shares of IFSL in off
Company
market from Sonal Fincap,
Pvt. Ltd.
i.e. '56546666'.
Deepak
IndiaBulls
a. Had received 1,00,000 shares of IFSL in
Narvekar* Securities Ltd.
and
UTI
'56546666' and '56546669'.
Securities Ltd.
Ganesh
IndiaBulls
Raut*
Securities Ltd.
and
b. He was the director of Fineline
Galaxy
Merchantile Co. P. Limited.
Broking Ltd. c. Phone no. given in the KYC documents is
'56546666'.
Fineline
IndiaBulls
a. Director is Ganesh Raut, who had
Merchantil Securities Ltd.
received 4,65,315 shares of IFSL in off
e Co. P.
market from Sonal Fincap,
Ltd.
Page 18 of 32
24,460
237.24
15,670
239.22
50,661
23.41
50,661
23.74
3,000
225.50
25,250
24.58
1,41,01,801
29.59
1,68,91,615
27.48
5,18,61,488
27.66
5,41,18,075
27.25
10,00,000
26
1,14,400
263.56
22,500
258.68
1,76,500
267.34
0
3,00,000
25.87
0
2,25,000
24.35
3,15,764
235.48
45,500
257.97
3,60,396
237.01
11,480
225.50
1,70,405
24.9
28,85,642
24.07
20,00,000
28.01
3,26,777
25.2
30,39,849
24.77
23,50,000
26.58
49,089
27.85
36,64,094
26.60
1,01,625
239.99
3,58,675
233.4
93,645
237.73
2,61,360
256.75
39,60,187
25.77
0
44,43,314
25.29
0
1,88,660
244.38
0
1,22,995
227.62
56,500
256.42
33,22,413
27.56
9,59,687
22.58
34,74,970
26.68
16,25,000
25.14
5,10,392
34.7
60,10,392
34.72
13 Stockholm Joindre
Mercantile Capital
Co. P.
Services Ltd.
Ltd.*
'56546666'.
b. Director is RajKishore Singh
'56546666'.
14 RajKishore Fortis
Singh
Securities
Ltd
a. Director of Stockholm Mercantile Co.

Pvt. Ltd.,
is. ' 56546668'
15 Jayesh
Peninsular
Waghela* Capital
Market Ltd. b. Phone no. given in the KYC documents
and
are '56546669' and '56546670'.
India Infoline c. He was introduced to Peninsular Capital
Securities Pvt.
Market Limited by Vinod Khetan
Ltd.
16 Vishal
Ruchiraj
Kumar
Shares &
Textiles P. Stock Brokers b. Director is Ajit Suryavanshi
Ltd.*
Pvt. Ltd.
'56546670'
17 Ajit
Fortis
a. Director of Vishal Kumar Textiles P.
Suryavansh Securities Ltd.
Limited,
i
and
b. Phone no. given in the KYC document is
Galaxy
'56546666'
Broking Ltd.
18 Ranjan
Ruchiraj
Mandal*
Shares &
off market from Sonal Fincap
Stock Brokers
P. Ltd.
19 Jay Shah* India Infoline a. Had received 13,00,000 shares of IFSL
Securities Pvt.
in off market from Sonal Fincap
Ltd.
20 Lokesh
Ruchiraj
a. Received shares in off market from
Kapoor
Shares &
Rajkishore Singh, director of Stockholm
Stock Brokers
Merchantile Co. P. Limited, who received
P. Ltd.
7,29,829 shares of IFSL from Sonal
Fincap.
21 Cardiod
Galaxy
a. Had received shares in off-market from
Marketing Broking Ltd.
Ganesh Raut (Director of Fineline
Pvt. Ltd.
Merchantile Co. P. Limited who received
4,65,315 shares from Sonal Fincap) and
Rightstar Trading Co. Pvt. Ltd. (whose
director is Mr. Dattu Shitole who received
1,54,000 shares from Sonal Fincap)
b. The director is Paras Chaplot, who was
the authorised signatory for the bank
accounts of IFSL.
22 Vivekanan IndiaBulls
Phone no. given in the KYC document is
d Patankar Securities Ltd. '56546666'
23 Santosh
Pawar
IndiaBulls
Securities Ltd.
and
Fortis
Securities Ltd.
24 Kiran
IndiaBulls
Dhanavade Securities Ltd.
25 Jaydeep
IndiaBulls
Mane
Securities Ltd.
26 Amar
IndiaBulls
Adhav
Securities
Ltd.,
UTI
Securities Ltd.
and

'56546666'
63,27,213
26.82
77,19,988
.27.79
5,87,548
234.35
3,91,199
236.55
17,23,852
26.17
34,11,542
26.08
2,51,965
237.38
0
3,30,700
245.2
0
2,37,49,757
25.86
6,83,000
26.45
2,47,70,958
25.44
4,10,000
33.44
1,20,01,776
26.66
1,30,77,215
26.13
1,01,135
230.01
0
4,750
222.5
0
0
7,63,155
26.56
1,15,000
26.98
10,79,455
26.47
1,44,671
244.66
3,82,321
239.7
33,14,531
24.09
30,62,185
23.61
51,82,633
28.24
67,32,633
28.27
3,40,472
250.24
3,81,498
244.2
4,190
253.69
2,190
253.36
1,13,745
264.73
53,000
263.29
3,52,142
25.7
51,500
263.25
45,800
242.54
1,10,100
25.47
1,11,73,079
25.77
4,07,078
251.15
'56546670'
'56546668'
a. Phone no. given in the KYC document
are '56546666' and '56546670'.
b. Had received shares in off-market from
Mr. Tejas Thakkar (serial no. 39)
Page 19 of 32
75,50,299
26.01
0
3,500
258.66
4,86,324
246.75
3,05,937
231.9
17,270
0
2,78,890
253.41
2,04,132
242.4
18,270
5,50,000
23.20
75,86,690
26.19
1,00,000
22.4
52,685
3,60,000
27.12
5,22,527
23.67
1,08,59,371
25.97
1,00,000
4.73
60,274
Action
Financial Ser.
(India) Ltd.
27 Umesh
IndiaBulls
Choukekar Securities Ltd. '56546666'
242.42
242.43
23.96
23.78
4,50,607
245.52
3,87,993
249.93
93,69,702
27.43
1,01,53,178
26.15
28 Deepak
Todkar
76,672
245.99
15,300
261.23
1,86,16,888
26.46
2,19,67,770
26.43
1,52,511
241.07
0
1,24,500
249.01
0
1,56,110
25.26
0
38,000
262.14

'56546666'
'56546669'
92,775
224.45
60,000
233.50
25,000
252.58
0
28,335
26.77
12,82,000
24.93
5,14,905
27.36
18,57,466
28.95

'56546666'
38,64,106
31.86
38,82,896
32.41

'56546666'
34,840
226.90
9,66,000
27.88
11,23,900
29.60
He had introduced Jayesh Waghela and

Haresh Posnak to broker Peninsular
Capital Market Ltd.
Wife of Vinod Khetan
10,000
251.61
10,000
251.75
12,95,828
31.3
13,12,406
29.15
80,000
28.75
80,000
25.94
He was introduced to the broker

Peninsular Capital Market Ltd. by Vinod
Khetan
Received shares from Sonal Fincap via
off market deal
Received shares in off market from
Sharpline Trading Co. Pvt. Ltd. Who had
received 27,00,000 shares of IFSL from
Sonal Fincap
IndiaBulls
Had transferred 2,31,000 shares in offSecurities Ltd. market to Amar Adhav (serial no. 26)
6,90,000
26.2
6,90,000
25.89
2,29,663
26.97
4,500
33.25
27,85,000
28.12
8,50,000
25.85
1,23,472
256.97
8,97,920
26.98
191737242/
27.02
38.05%
244052381/
25.65
48.43%
IndiaBulls
Securities Ltd.
and
UTI
Securities Ltd.
29 Mahesh
IndiaBulls
Kokate
Securities Ltd.
and
K&A
Securities Ltd.
30 Santosh
Fortis
Narvekar
Securities Ltd
31 Sandeep
India Infoline
Kadam
Securities Pvt.
Ltd.
32 Prakash
Archi Shares
Yadav
& Stock
Brokers Pvt.
Ltd.
33 Vijay
CSL Stock
Suryavansh Broking Pvt.
i
Ltd.
34 Vinod
Joindre
Khetan
Capital
Services Ltd.
Anita
Joindre
35 Khetan
Capital
Services Ltd.
36 Haresh
Peninsular
Posnak
Capital
Market Ltd.
37 Dadasaheb IndiaBulls
Gavhane* Securities Ltd.
38 Amit
Galaxy
Mehta
Broking Ltd.
39 Tejas
Thakkar
Phone no. given in the KYC document are

'56546666' and '56546668'

'56546666'
Total Qty. / Avg. Rate ()

% to total market volume on gross basis during relevant period
5473479/
242.61
60.83%
4093199/
244.99
45.49%
40,000
24.87
0
3,80,000
26.93
* Clients had received the shares from Sonal Fincap. Client namely Mr. Dadasaheb Gavhane had received 22,61,247 shares in
off-market from Sonal Fincap on September 01, 2005.
a. The investigation in the scrip of IFSL has revealed that the phone number '56546666',
'56546668', '56546669' and '56546670' as used by the clients (more specifically dealt and
explained below) were in the name of one Mr. Mahesh Mistry, Ground Floor, Kalpataru
Chambers, Nanik Motwani Mahal, Near HDFC Bank, Fort, Mumbai - 400001. I also
note as under:
-
the phone number '56546666' has been used by clients namely Sharpline Trading,
White Moon, Vivekanand Patankar, Santosh Pawar, Dattu Shitole, Rightstar
Page 20 of 32
Trading, Amar Adhav, Deepak Narvekar, Umesh Choukekar, Fineline

Merchantile, Deepak Todkar, Mahesh Kokate, Sanotosh Jagtap, Jagdish Parab,
Ajit Suryavanshi, Stockholm Merchantile, Santosh Narvekar, Prakash Yadav, Vijay
Suryavanshi and Premkumar Singh.
-
The phone number '56546668' has been used by clients namely Newleader
Trading, Jaydeep Mane, Deepak Todkar, Rajkishore Singh.
The phone number '56546669' has been used by clients namely Santosh Jagtap,
Jayesh Waghela, Sandeep Kadam.
The phone number '56546670' has been used by clients namely Ramdas
Kshirsagar, Kiran Dhanavade, Amar Adhav, Jagdish Parab and Jayesh Waghela.
b. From the table D above, I note that Mr. Ramdas Kshirsagar (through the companies
namely Newleader Trading Co. Pvt. Limited and Sharpline Trading Co. Pvt. Limited)
and Mr. Jagdish Parab (both directors of IFSL) had received the shares of IFSL from
Sonal Fincap in off-market and these had traded heavily in the scrip during the relevant
period of investigation i.e. March 08, 2005 to September 16, 2005, along with the other
connected clients. As noted, the phone number of these had also matched with other
clients in the group who also had actively traded in the scrip.
iii. Now I will consider the trading of the 'Group II' clients, wherein the common link as per
SCNs is one Kodiyar Industries Limited:
TABLE E
before stock split
S.
Client
Member
No.
1 Amul Sheth Pilot Credit Capital
Ltd.
Khodiyar
Industries
Limited
Gogia International
Securities Ltd.
Vikas
Narnawar
Adolf Pinto
Jayesh Shah Pawan J. Choudhri
Connection
The relation of Amul Sheth and
Ramniklal Patel of Khodiyar
Industries Limited was found in
another SEBI investigation in the
matter of one 'e-star Infotech
Limited'.
a.
Its director is Ramniklal
Patel and introduced Jayesh Shah
to broker Pawan J. Chudhri
b.
It was introduced to
broker
Gogia
International
Securities Limited by Vikas
Narnawar
c.
It had common address
as that of Jayesh Shah.
a. He had introduced Ramniklal
Patel to Gogia International
Securities Limited
a. He was introduced to the broker
Pawan J. Choudhri by Ramniklal
Patel
b.
He had common address
Page 21 of 32
Purchase qty./
avg. rate ()
after stock split
Sold qty./ Purchase qty./

avg. rate ()
avg. rate()
Sold qty./
avg. rate()
9,340
166.05
2,08,033
204.22
1,32,018
251.40
10,200
158.74
8,650
174.15
5
6
7
8
Bachubahai
Koyani
Dilipkumar
Mehta
Kamlesh
Rasiklal
Patel
Sureshbhai
Baldha
Rajendra
Kumar
Gajanand
Adukia
10 Mukesh
Soni
IndiaBulls Securities
Ltd.
Galaxy Broking
Ltd.
Trusted Shares &
Investments Ltd.
as that of Ramniklal Patel

The address of these clients was 8/16
M K Amin Mg Patel Bldg, 3rd Flr
Room No. 30, Fort, Mumbai which is
the same as that of Khodiyar
Industries Ltd.
2,12,097
233.73
4,44,773
223.73
4,70,454
221.66
1,10,917
249.15
3,37,709
.248.78
3,12,706
255.39
SSKI Investor
Services Pvt. Ltd.
IndiaBulls Securities
Ltd.
Adolf Pinto
He had received shares in off market
from Khodiyar Industries Limited
whose director is Ramniklal Patel
1,16,981
250.69
1,29,040
222.97
15,500
160.44
Trusted Shares &

Investments Ltd.
4,000
259.25
He had transferred the shares to

Kishorbhai Bhavsar whose contact
no. '22615666' is the same as that of
Khodiyar Industries Ltd.
Total Qty. / Avg. Rate ()

% to total market volume on gross basis during relevant period
16,31,068/
222.26
18.12%
12,48,875
27.54
0
15,44,055
25.98
0
1,08,331
255.54
47,205
251.85
0
4,000
260.0
10,52,886/
251.98
11.70%
12,48,875/
27.54
0.24%
15,44,055/
25.98
0.30%
From the table E above, I note that Khodiyar Industries Limited and its director Mr.
Ramniklal Patel are the common links for most of the 'Group II' entities.
c. I note from the SCNs that the discussed two groups (Table D and E) together, had
bought 71,04,547 shares @ average rate of 237.90, accounting for around 79% of
entire market purchases and sold 51,46,085 shares @ average rate of 246.40,
accounting for 57% of entire market sales during the period prior to stock split i.e.
March 08, 2005 to June 30, 2005 and have totally bought 19,29,86,117 shares @ average
rate of 27, accounting for around 38% of entire market purchases and sold
24,55,96,436 shares @ average rate of 25.65, accounting for 49% of entire market sales
during the period after stock split i.e. July 01, 2005 to September 16, 2005.
d. From the findings of the investigations, it is noted that the address of the client namely
Cardiod Marketing Pvt. Limited (a 'Group I' entity whose director was Mr. Paras
Chaplot, the authorised signatory of IFSL) and Khodiyar Industries Limited (a
'Group II' entity whose director was Mr. Ramniklal Patel) was same i.e. 28, Lal Building,
36, Goa Street, Fort, Mumbai - 400 001. I have seen the pattern of trading of the interconnected clients who had received the shares of IFSL in off-market from Sonal Fincap
had either dealt in the market directly or transferred to other clients of the group, who
then traded in the scrip of IFSL. It is also noted from the SCN that Khodiyar Industries
Limited (a 'Group II' client) had transferred 2,25,000 shares and 3,01,210 shares of IFSL
on July 20, 2005 and July 25, 2005, respectively, to Mr. Ganesh Raut (a 'Group I'
Page 22 of 32
client). The above suggests that the clients of the groups i.e. 'Group I ' and 'Group II'
were related/ connected to the each other.
e. I have considered the trading pattern of two groups (Table D and E). From the same,
I note that the clients of the said groups had entered into trades with each other for
8,16,16,211 shares, which had accounted for around 16% of the total traded volumes
during the entire period of investigation (i.e. 43% for the period before the stock split
and 15% for the period after stock split). I have also seen the day wise table showing the
total quantity traded between the clients of 'Group I' and 'Group II' vis-a-vis the daily
traded volumes traded. Out of the total quantities traded by the clients forming part of
'Group I' and 'Group II' in the market, average of around 46% and 9% of trades were
executed during the two patches viz. first patch (i.e. March 08, 2005 to May 06, 2005)
and the second patch (i.e. August 29, 2005 to September 06, 2005) of price rise
respectively. The trading amongst the clients forming part of 'Group I' and 'Group II'
had contributed to more than 50% of that days volume, on various days during first
patch of price rise. I note that out of the total trading amongst the said groups about
65% of the trades (i.e. for 5,29,64,145 shares) were through large trades of above 25,000
shares.
I also note from the samples selected in the SCNs that on four days i.e. April 12, 2005,
May 03, 2005, June 29, 2005 and August 11, 2005, on an average around 68% of total
traded volumes were through synchronized orders, out of these about 28% orders were
such wherein the order rate and quantity were identical. Further, during the period prior
to the stock split of IFSL, the brokers dealing on behalf of the inter-connected clients
forming part of the two groups had together contributed to about 85% of the buy
orders and 63% of the sell orders. After stock split, the brokers dealing on behalf of the
two groups had contributed to about 69% of the buy orders and 50% of the sell orders.
A sample showing the trading pattern of the clients has been brought out for reference:
TABLE F
Date
12/4/2005
12/4/2005
12/4/2005
12/4/2005
12/4/2005
Order time
Buy
Client name
Qty.
Rate
Order time
242.90
242.75
242.70
242.70
242.70
10:22:36
14:55:01
14:59:27
14:59:50
15:10:01
10:22:33
14:55:08
14:59:29
15:02:28
15:10:04
Amar Adav
Rajkishore Singh
Rajkishore Singh
Rajkishore Singh
Rajkishore Singh
25000
13000
4300
2000
4000
12/4/2005 14:59:29
12/4/2005 14:59:29
Rajkishore Singh
Rajkishore Singh
4300
4300
242.70 14:58:47
242.70 14:59:13
Sell
Client name
Rate
Trade
Qty.
Price
Time
difference
Rajkishore Singh
Amar Adav
Amar Yuvraj Adav
Amar Yuvraj Adav
Amar Adav
25000
13000
4300
4300
4000
242.90
242.75
242.70
242.70
242.70
25000
13000
2300
2000
4000
242.90
242.75
242.70
242.70
242.70
00:00:03
00:00:07
00:00:02
00:02:38
00:00:03
Shri Khodiyar Industries Ltd.

Shri Khodiyar Industries Ltd.
1000
1000
241.75
241.50
1000
1000
241.75
241.50
00:00:42
00:00:16
Page 23 of 32
Qty.
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
29/6/2005
09:57:50
09:57:52
10:55:42
12:53:38
12:53:55
12:53:55
14:22:57
14:33:47
14:33:47
14:49:55
15:09:44
15:50:16
15:50:46
15:58:09
15:58:09
3/5/2005 13:51:11
3/5/2005 14:51:25
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
09:58:56
09:58:31
10:06:07
10:10:40
10:11:50
10:11:50
10:11:50
10:11:50
10:11:50
10:11:50
Jayesh Naresh Waghela

Ranjan Mandal
Deepak Shankar Todkar
Jagdish Uttam Parab
Jagdish Uttam Parab
Jagdish Uttam Parab
Jagdish Uttam Parab
Vijay Sambhaji Suryavanshi
Jagdish Uttam Parab
Jagdish Uttam Parab
Rajkishore Singh
Santosh Romidas Jagtap
Ritedeal Trading Co. P. Ltd
Sharpline Trading Co.
Vishalkumar Textiles P. Ltd.
8/11/2005 12:06:41
8/11/2005 12:06:41
Sandeep B. Kadam
Sandeep B. Kadam
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
8/11/2005
Dattu aba Shitole

Dattu aba Shitole
Jay Shah
Vinod Premsukh Khetan
Vishalkumar Textiles P.
14:22:54
14:22:54
14:25:18
14:22:54
14:27:26
15:41:00
15:43:04
14:22:54
24000
1000
25000
10000
25000
25000
10000
8000
8000
3000
3000
16000
340
5000
5000
500
7500
50000
899150
100
200000
1080450
5000
899150
100
100
1000000
100000
100000
500000
500000
75000
500000
1000000
1500000
1000000
500000
233
233
223.95
223.75
223.75
223.75
223.65
223.70
223.70
223.95
223.90
223.90
223.90
223.90
223.90
09:57:37
09:57:37
10:55:26
12:53:26
12:53:48
12:54:06
14:22:30
14:33:22
14:33:45
14:44:49
15:09:36
15:47:35
15:47:35
15:58:05
15:58:21
Jagdish Uttam Parab

Jagdish Uttam Parab
Jagdish Uttam Parab
Dattu aba Shitole
Dilipkumar Shantilal Mehta
Dattu aba Shitole
Ranjan Mandal
Jagdish Uttam Parab
Jagdish Uttam Parab
Dattu aba Shitole
Dattu aba Shitole
25000
25000
25000
10000
15000
10000
10000
4000
4000
3000
3000
16000
16000
5000
100
236
236
223.95
223.75
223.75
223.75
223.65
223.70
223.70
223.95
223.90
223.90
223.90
223.90
223.90
24000
1000
25000
10000
15000
10000
10000
4000
4000
3000
3000
15660
340
4900
100
233.00
233.00
223.95
223.75
223.75
223.75
223.65
223.70
223.70
223.95
223.90
223.90
223.90
223.90
223.90
00:00:13
00:00:15
00:00:16
00:00:12
00:00:07
00:00:11
00:00:27
00:00:25
00:00:02
00:05:06
00:00:08
00:02:41
00:03:11
00:00:04
00:00:12
260.90 13:50:22
261.55 14:51:26
Ranjan Mandal
Umesh Balkrishna Choukekar
9000
25000
260.90
261.55
500
7500
260.90
261.55
00:00:49
00:00:01
09:55:22
10:01:09
10:06:15
10:09:15
10:10:06
10:09:15
10:11:29
10:11:46
10:08:47
10:13:42

Amar Yuvraj Adav
Santosh Kumar Pawar
Santosh Kumar Pawar
Jay Shah
Amar Yuvraj Adav
51000
9000
13000
2,00,000
5000
200000
50000
9000
11000
400
26.25
26.45
26.20
26.25
26.15
26.25
26.25
26.30
26.35
26.35
43010
9000
100
195000
3000
5000
50000
100
100
400
26.25
26.45
26.20
26.25
26.15
26.25
26.25
26.29
26.35
26.35
00:03:34
00:02:38
00:00:08
00:01:25
00:01:44
00:02:35
00:00:21
00:00:04
00:03:03
00:01:52
26.95 12:06:36
26.95 12:06:59
Vishalkumar Textiles Pvt.L

Sandeep B. Kadam
100000
50000
26.95
26.95
90750
8250
26.95
26.95
00:00:05
00:00:18
28.20
28.20
28.40
28.20
28.45
28.45
28.45
28.20

Stockholm Mercantile
Stockholm Mercantile
Amit Shantilal Mehta
5000
1600
5000
10000
1560
6000
20000
10000
28.3
28.35
28.40
28.40
28.45
28.45
28.45
28.40
5000
1600
5000
10000
1560
400
1302
10000
28.29
28.35
28.4
28.4
28.45
28.45
28.45
28.40
00:00:46
00:00:58
00:01:26
00:02:59
00:00:11
00:07:52
00:08:17
00:02:59
27
25.95
26.20
26.25
25.90
26.25
26.20
26.30
26.35
26.25
14:23:40
14:23:52
14:23:52
14:25:53
14:27:15
15:48:52
15:51:21
14:25:53
From the above sample, it can be seen that the trades were executed in a synchronised
manner by various clients. Such synchronised trades had surely contributed to the
volume in the scrip which in turn represented the active trading. As discussed earlier the
clients of the said 'Group 1' and 'Group II' were connected among the respective groups
with the common link of telephone numbers, common address, off market receipt of
shares etc.
f. The SCN has also alleged that the trades amongst the clients forming part of 'Group I'
and 'Group II' had significantly influenced the price of the scrip. It is noted that the
price rise mainly happened in two patches i.e. March 08, 2005 to May 06, 2005 and
August 29, 2005 to September 06, 2005. During the period of March 08, 2005 to May
06, 2005, the price of the scrip of IFSL had increased from 148.10 to 275, a rise of
about 85% in 42 trading days. It has been said that the price of the scrip had mainly
increased in intra-day movement. I have seen the details provided along with the SCN
to show that in 75 instances, the price difference was more than 2 than the previous
Page 24 of 32
trade price. Further, 135 trades had resulted into new high price in the scrip of IFSL. A
sample of such trades has been reproduced below:
TABLE G
Date
31/03/2005
31/03/2005
31/03/2005
01/04/2005
06/04/2005
11/04/2005
15/04/2005
20/04/2005
20/04/2005
20/04/2005
27/04/2005
Time Qty. Previous Price Increase

Buy client
price () ()
()
12:20:50 175 218.90 221.25 2.35
Bachubhai Koyani
14:59:56 140 219.50 222.00 2.50
Dilip Kumar Mehta
15:18:06 500 222.40 228.50 6.10
Bachubhai Koyani
10:04:56 100 217.55 222.50 4.95
Umesh Choukekar
11:59:47 320 232.50 235.00 2.50
Rajkishore Singh
13:44:50 250 239.50 242.65 3.15
Khodiyar Industries
14:59:55 10 243.70 246.50 2.80
Deepak Narvekar
10:31:25 250 250.20 252.25 2.05
Bachubhai Koyani
11:04:47 300 250.20 252.25 2.05
Sureshbhai Baldha
11:23:51 450 250.15 252.40 2.25
Sureshbhai Baldha
10:25:29 1000 254.00 256.00 2.00
Kamlesh Patel
Sell client
Dilip Kumar Mehta
Ranjan Mandal
Dilip Kumar Mehta
Ajit Suryavanshi
Lokesh Kapoor
Bachubhai Koyani
Dilip Kumar Mehta
Khodiyar Industries
Kamlesh Patel
Kamlesh Patel
Khodiyar Industries
It was observed that from March 21, 2005, onwards there were about 96 priceinfluencing trades in which the counter-parties were the clients mainly forming part of
above discussed two groups. As analysis of such trades are as under:
TABLE H
Period
March
2005
March
2005
Price movement
08,
to
20,
March
21,
2005 to May
06, 2005
The price increased from 148.10 to

206.45, a rise of 40% in 9 trading
days, with scrip touching its
applicable near circuit limit on 6
days
The price increased gradually from
200.25 to 275, a rise of 37% in 33
trading days
Total
Total no.
Buyers
Sellers
of
Group Group Others Group Group Others
instances
I
II
I
II
39
35
1
3
39
96
38
46
12
36
33
27
135
73
47
15
36
33
66
g. During the period of August 29, 2005 to September 06, 2005, the price of the scrip had
increased from 25.45 to 38 i.e. a rise of about 49% in 7 trading days. I note that SCN
has given an analysis of all the buy orders, which had resulted in multiple trades and
influenced the price of the scrip by 1 or more within one minute, during the period of
August 29, 2005 to September 06, 2005 (annexure 40 to the SCN). The annexure has
details of about 10 such orders placed by the clients namely Newleader Trading Co. Pvt.
Limited and Sharpline Trading Co. Pvt. Limited whose director was Mr. Ramdas
Kshirsagar. A few samples of such orders is given hereunder:
Page 25 of 32
TABLE I
Client
Date
Quantity
Price
Time
Newleader Trading
(88430)
31/08/2005
01/09/2005
06/09/2005
7,50,000
10,00,000
25,00,000
10,00,000
28.40
28.75
30.55
38.00
10:35:41
10:38:27
09:55:27
10:14:58
Price
rise
1.35
1.35
1.85
2.3
29/08/2005
31/08/2005
31/08/2005
5,00,000
544,415
5,00,000
26.40
29.25
28.90
09:55:21
9:55:38
9:55:39
0.95
2.5
1.45
Sharpline Trading
(B314S35)
h. It is observed that there was buying pressure in the scrip with valid buy orders for
23,54,48,485 shares compared to 18,76,45,354 valid sell orders. I note from the details
annexed with the SCN that the clients belonging to 'Group I' namely Newleader
Trading Co. Pvt. Limited and Sharpline Trading Co. Pvt. Limited had placed the buy
orders at higher price as compared to the other buyers. The brokers entering trades on
behalf of the said two clients had accounted for about 38% concentration in placing of
the buy orders and 30% concentration in placing sell orders. The brokers entering trades
on behalf of the entire 'Group I' had together accounted for about 45% concentration
in placing of the buy orders and 40% concentration in placing sell orders. I note the
allegation made in the SCN that the clients forming part of the 'Group I' and 'Group II'
had supported the price of the scrip till the stock split.
i. I note that the clients forming part of the 'Group I' and 'Group II' had not filed their
submissions during the course of investigation. It is also noted that the SCNs issued to
the clients forming part of the 'Group I' and 'Group II' had returned undelivered except
those issued to clients namely Mr. Vinod Khetan, Ms. Anitha Khetan, Mr. Lokesh
Kapoor and Mr. Paras Chaplot. I note that none of the said clients have replied to the
respective SCNs and has also not given any written submissions. As noted in the earlier
part of the order Mr. Vinod Khetan, Ms. Anitha Khetan and Mr. Lokesh Kapoor had
attended the personal hearing and made oral submissions.
I have considered the oral submissions made by these clients and note that Mr.
Vinod Khetan had traded for huge quantities in the scrip of IFSL during the relevant
period. He had also introduced Mr. Jayesh Waghela and Mr. Haresh Posnak to the
Page 26 of 32
broker, Peninsular Capital Market Limited. I note that Jayesh Waghela had received
7,04,458 shares from Sonal, the promoter of IFSL.
I have seen the trading pattern of Vinod and note that his trades were synchronised
and structured in nature and had matched with the other 'Group I' clients. From the
same, an inference can be drawn that Mr. Vinod Khetan was part of the interconnected clients forming part of the 'Group I' and had role in creating volume and
price rise in the scrip of IFSL.
As regards Ms. Anita Khetan, it is noted that the only connection is that she is the
wife of Mr. Vinod Khetan. As discussed above, Vinod Khetan had traded in the scrip
and had introduced two other clients (of 'Group I') to a broker. I note that the
allegation in the SCN are of volume creation and price manipulation. It is noted that
Ms. Anita Khetan has not explained her trading objective in the scrip of IFSL. In
absence of the same, it can be presumed that she was acting along with her husband
(also part of 'Group I') who had traded in the manner as explained above, in the scrip
of IFSL and had role in creation of volume and price rise in the scrip.
Another client who had made his submission is Mr. Lokesh Kapoor. It is noted from
the SCN that he had received shares from another inter-connected client namely Mr.
Rajkishore Singh who was a director of Stockholm Mercantile Co. P. Limited (the
entity who received 7,29,829 shares of IFSL from Sonal Fincap). Mr. Lokesh Kapoor
has submitted that he had certain dues from one Mr. Vishal Malviya and in return he
had received the shares of IFSL from him. He has also submitted that he does not
know Mr. Rajkishore Singh. I note that Mr. Lokesh Kapoor has not submitted any
documentary proof for such claim of dues from the said Mr. Vishal Malviya.
It has been submitted by him that he had traded the shares of IFSL in the narrow
price range of 244 to 250 and had dealt only before the stock split. It has also been
said that he had entered 6 trades during March 08, 2005 to May 06, 2005 and there
was time difference i.e. of one minute to more than two hours. Further, his trades
under scrutiny are 17,540 shares as compared to his total trading of 7,21,970 shares.
Further, he stated that rest of his trades i.e. for 7,04,430 shares were clean.
In this regard, it is necessary to refer to the trading of Mr. Lokesh Kapoor in the
scrip of IFSL, the same is being reproduced herein below for reference:
Page 27 of 32
TABLE J
Date
24/3/2005
30/3/2005
1/4/2005
6/4/2005
11/4/2005
13/4/2005
19/4/2005
5/5/2005
13/5/2005
16/5/2005
17/5/2005
18/5/2005
19/5/2005
20/5/2005
23/5/2005
24/5/2005
Total
Purchase
Qty.
Rate ()
0
0
0
0
33000
117927
54200
0
46650
3025
10480
18985
0
19755
22150
14300
3,40,472
0
0
242.92
243.83
250.20
0
266.54
263.46
256.22
256.87
0
250.89
248.39
262.50
Qty.
Sale
Rate ()
69480
11700
60281
41957
0
0
30350
50000
0
3025
26605
29000
15000
0
26100
18000
3,81,498
214.13
217.95
223.95
234.81
0
0
250.97
262.95
0
257.50
254.01
253.63
250.15
0
257.12
255.18
Net
Qty.
-69480
-11700
-60281
-41957
33000
117927
23850
-50000
46650
0
-16125
-10015
-15000
19755
-3950
-3700
-41,026
Cumulative
net Qty.
-69480
-81118
141461
-183418
-150418
-32491
-8641
-58641
-11991
-11991
-28116
-38131
-53131
-33376
-37326
-41026
A reading of the above table shows that Mr. Lokesh Kapoor had traded regularly
in the scrip of IFSL and his trading had surely supported the volume and price of
the scrip. Considering the above trading details, it may not be correct to say that
only a portion of his trading was under scrutiny. I note that the trading pattern of
the clients had been explained with the help of a few samples. Having noticed that
shares have moved from Mr. Rajkishore Singh to Mr. Lokesh Kapoor, I am
inclined to taken an adverse view in the absence of any documentary proof to
show that he had any transactions with Mr. Vishal Malviya and that these were
settled through the aforementioned share transfer.
j. Having considered the above discussion, it can be concluded that most of the interconnected clients forming part of 'Group I' and 'Group II' had extensively traded in the
scrip of IFSL during the period of investigation. It is noted that most of the clients were
connected by common telephone number and address. A few clients who had received
shares in off market from the promoter of IFSL had traded heavily in the scrip of IFSL
and had also transferred the shares to other clients of the group, who in turn had traded
actively in the scrip. The trades of clients forming part of 'Group I' and 'Group II' can
be said to be synchronized/ structured in nature as explained above and such trades had
played a role in influencing the volume and price in the scrip of IFSL.
Page 28 of 32
k. To sum-up, I note that the directors of IFSL namely Mr. Ramdas Kshirsagar (through
the companies wherein he was a director) and Mr. Jagdish U. Parab along with certain
other inter-connected clients forming part of 'Group I' had received the shares of IFSL
in off-market deals from Sonal Fincap and then these had traded actively in the scrip of
IFSL. The period of such trades coincided with the period during which various major
decisions taken by Mr. Ramdas Kshirsagar during his tenure in the capacity as a
Chairman of IFSL (as discussed in the earlier part of the order). During the time when
such decisions and announcements thereof were being made, the inter-connected clients
forming part of 'Group I' and 'Group II' including Mr. Ramdas Kshirsagar (through his
companies namely Newleader Trading Co. Pvt. Limited and Sharpline Trading
Company Pvt. Limited), who were also acting in concert as demonstrated in the
previous paragraphs had offloaded the shares received in off-market in the market.
l. The same indicates a game plan of the promoter and the directors of IFSL to first induce
the investors to deal in the scrip of IFSL by making misleading announcements about
the Company, simultaneously creating an artificial impression of trading in the scrip by
inter-connected clients and thereby offloading of the shareholding in the market. In
view of the same, it can be concluded that the clients namely Mr. Jagdish Parab, Mr.
Premkumar Singh, Newleader Trading Co. Pvt. Limited, Sharpline Trading Co. Pvt.
Limited, White Moon Mercantile Co. Pvt. Limited, Mr. Santosh Jagtap, Mr. Dattu
Shitloe, Right Star Trading Co. Limited, Mr. Deepak Narvekar, Mr. Ganesh Raut,
Fineline Mercantile Co. Pvt. Limited, Stockholm Mercantile Co. Pvt. Limited, Mr.
Rajkishore Singh, Mr. Jayesh Waghela, Vishal Kumar Textiles P. Limited, Mr. Ajit
Suryavanshi, Mr. Ranjan Mandal, Mr. Jay Shah, Mr. Lokesh Kapoor, Cardiod Marketing
Pvt. Limited, Mr. Paras Chaplot, Mr. Vivekanand Daji Patankar, Mr. Santosh Pawar,
Mr. Jaydeep Mane, Mr. Amar Adhav, Mr. Umesh Choukekar, Mr. Deepak Todkar, Mr.
Mahesh Kokate, Mr. Santosh Narvekar, Mr. Sandeep Kadam, Mr. Prakash Yadav, Mr.
Vijay Suryavanshi, Mr. Vinod Khetan, Ms. Anita Khetan, Mr. Haresh Posnak, Mr.
Dadasaheb Gavhane, Mr. Amit Mehta, Mr. Tejas Thakkar, Khodiyar Industries Limited,
Mr. Bachubhai Koyani, Mr. Dilipkumar Shantilal Mehta, Kamlesh Patel, Mr. Sureshbhai
Baldha and Mr. Mukesh Soni had traded in the scrip of IFSL during the period of
investigation. The trades executed by these had influenced the share price of the scrip
and were in the manner of synchronised and structured trades which in turn had created
Page 29 of 32
volumes in the scrip. Such activities are in violation of the Regulation 3 (a), (b), (c), (d)
and Regulation 4 (2)(a), (b), and (e) of the PFUTP Regulations.
m. Considering the above discussion, it can also be concluded that Sonal Fincap was part
of the entire scheme and has offloaded its holding in IFSL in the background of various
positive announcements and thereby benefited with the entire scheme. Such conduct of
Sonal Fincap is in clear violation of the provisions of Regulation 3 (a), (b), (c), (d) and
Regulation 4 (2) (a), (b), (e), (k) and (r) of the PFUTP Regulations.
n. I note that the client namely Mr. Kiran Dhanavade had only sold the shares of IFSL
during the period of investigation. Further, the clients namely Mr. Amul Sheth, Mr.
Vikas Narnawar, Mr. Jayesh Shah and Mr. Rajendra Kumar Gajananad Adukia had only
purchased the shares of IFSL during the period of investigation. No further details of
trading has been discussed in the SCN. In view of the same, I find that the details given
in SCN are insufficient to establish the charges leveled against the clients namely Mr.
Kiran Dhanavade, Mr. Amul Sheth, Mr. Vikas Narnawar, Mr. Jayesh Shah and Mr.
Rajendra Kumar Gajananad Adukia. Considering the facts and circumstances of the
case, I am of the considered view that the said clients are entitled for a benefit of doubt
in respect of the alleged violations of Regulation 3 (a), (b), (c), (d) and Regulation 4
(2)(a), (b), and (e) of the PFUTP Regulations.
13.
In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19
read with Sections 11(4) and 11B of the of the Securities and Exchange Board of India Act,
1992 read with Regulation 11 of the Securities and Exchange Board of India (Prohibition
of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003,
hereby issue the following directions:
a. restrain the following persons and entities, from accessing the securities market and
prohibit these from buying, selling or dealing in securities in any manner either directly
or indirectly for a period of two (2) years.
S. No.
1.
2.
3.
4.
5.
Persons/ Entities
IFSL Limited
Sonal Fincap Pvt. Limited
Dr. Jayant M. Muley
Mr. S.S. Dua
Mr. Mukesh Vora
Page 30 of 32
PAN
AAACI4383H
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6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
Mr. Dilip Kulkarni

Mr. Premkumar Singh
Newleader Trading Co. Pvt. Limited
Sharpline Trading Co. Pvt. Limited
White Moon Mercantile Co. Pvt. Limited
Mr. Santosh Jagtap
Mr. Dattu Shitloe
Right Star Trading Co. Limited
Mr. Deepak Narvekar
Mr. Ganesh Raut
Fineline Mercantile Co. Pvt. Limited
Stockholm Mercantile Co. Pvt. Limited.
Mr. Rajkishore Singh
Mr. Jayesh Waghela
Vishal Kumar Textiles Limited
Mr. Ajit Suryavanshi
Mr. Ranjan Mandal
Mr. Jay Shah
Mr. Paras Chaplot
Cardiod Marketing Pvt. Limited
Mr. Vivekanand Daji Patankar
Mr. Santosh Pawar
Mr. Jaydeep Mane
Mr. Amar Adhav
Mr. Umesh Choukekar
Mr. Deepak Todkar
Mr. Mahesh Kokate
Mr. Santosh Narvekar
Mr. Sandeep Kadam
Mr. Prakash Yadav
Mr. Vijay Suryavanshi
Mr. Vinod Khetan
Ms. Anita Khetan
Mr. Haresh Posnak
Mr. Dadasaheb Gavhane
Mr. Lokesh Kapoor
Mr. Amit Mehta
Mr. Tejas Thakkar
Khodiyar Industries Limited
Mr. Bachubhai Koyani
Page 31 of 32
Not Available
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48.
49.
50.
51.
Mr. Dilipkumar Shantilal Mehta

Mr. Kamlesh Rasiklal Patel
Mr. Sureshbhai Baldha
Mr. Mukesh Soni
ASDPS0763J
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b. dispose of the show cause notice issued to Mr. Kiran Dhanavade, Mr. Amul Sheth, Mr.
Vikas Narnawar, Mr. Jayesh Shah and Mr. Rajendra Kumar Gajananad Adukia without
any directions.
14.
This order shall come into force with immediate effect.
15.
A copy of this order shall be served on all the recognised stock exchanges and depositories
for necessary compliance.
DATE: April 28th, 2015

PLACE: Mumbai
PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA
Page 32 of 32

Order in Respect of IFSL Ltd.

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WTM/PS/05/ISD/APR/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

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Mr. Kiran Dhanavade

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June 14, 2005

June 29, 2005

July 19, 2005

Aug 29, 2005

Aug 31, 2005

Sept 27, 2005

June 14, 2005, by way of another

Mr. Premkumar Singh

March 11, 2005

August 22, 2005

subsequently it never responded/ cooperated in the investigation of SEBI. The

a. He was one of the Director of IFSL

a. Director of Stockholm Mercantile Co.

Phone no. given in the KYC document is

Phone no. given in the KYC document is

Phone no. given in the KYC document is

Phone no. given in the KYC document is

He had introduced Jayesh Waghela and

He was introduced to the broker

Phone no. given in the KYC document are

Phone no. given in the KYC document is

Total Qty. / Avg. Rate ()

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Trading, Amar Adhav, Deepak Narvekar, Umesh Choukekar, Fineline

Jayesh Shah Pawan J. Choudhri

after stock split

Sold qty./ Purchase qty./

as that of Ramniklal Patel

Trusted Shares &

He had transferred the shares to

Total Qty. / Avg. Rate ()

Shri Khodiyar Industries Ltd.

Jayesh Naresh Waghela

Dattu aba Shitole

Jagdish Uttam Parab

Deepak Shankar Todkar

Vishalkumar Textiles Pvt.L

Vinod Premsukh Khetan

Time Qty. Previous Price Increase

The price increased from 148.10 to

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Mr. Dilip Kulkarni

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Mr. Dilipkumar Shantilal Mehta

This order shall come into force with immediate effect.

DATE: April 28th, 2015

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