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WTM/SR/ ID- 3/EFD-DRA-III/ 117 /06/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI


CORAM: S. RAMAN, WHOLE TIME MEMBER
ORDER
Under Sections 11 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 respect of Spectrum Chemicals Pvt. Ltd.
(now known as Vidhya Jewellers Pvt. Ltd.) (PAN: AAICS2382L), Mr. Hardik Maheshbhai
Pandya (PAN:ARJPP6330Q), Ms Falguni Chirag Thakkar (PAN: ABMPT4202C) and Mr.
Shalin Kiritkumar Parikh (PAN: AJAPP5421B) in the matter of dealings in the scrip of Crazy
Infotech Ltd.
______________________________________________________________________________

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") and Bombay
Stock Exchange (BSE) conducted investigation into buying, selling and dealing in the scrip of
Crazy Infotech Ltd. (hereinafter referred to as "Crazy Infotech"), for various periods
between August 2005 to August 2007, on observing spurt in the price of the scrip.
2. On the basis of the Report submitted by BSE, SEBI conducted a detailed investigation into
the buying, selling and dealings in the scrip of Crazy Infotech Ltd. during the period from
April 1, 2005 to December 31, 2007 (hereinafter referred to as " Period-I") and during the
period January 1, 2008 to June 30, 2008 (hereinafter referred to as "Period-II") in order to
ascertain any instances of contravention of provisions of SEBI Act, 1992 or any
Rules/Regulations made thereunder.
2.1 During the Investigation Period I, it was observed that,
i. During the period January 21, 2004 to March 31, 2005, the price of the scrip was in the
range from, ` 0.57 to `2.76/- with daily average volume of 16,270 shares and three
months prior to the investigation period i.e from January 1, 2005 to March 31, 2005, the
price of the scrip was in the range from `1.64 to `2.74/-. However, it was observed that
during the investigation period (i.e. from April 1, 2005 to December 31, 2007), price of
the scrip increased from `1.99 to reach a high of `268/- on September 28, 2007 and later
closed at `255.80 on December 31, 2007. After the investigation period, price of the

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scrip fell sharply to close at `21.5/- on March 27, 2008. It was also noted that there were
no major corporate announcements during the said periods.
ii. Investigation found that a group of 823 connected entities (connected through common
telephone number, address, off market transaction, bank transactions and hereinafter
collectively referred to as "connected entities" and individually by their names) were
trading in the scrip during the investigation period in the manner of circular/reversed
and synchronized trades among themselves. Some of the connected entities were also found
to have indulged in self trades during the investigation period. Details of these 823
connected entities along with their trading details during the investigation period and details
of connections amongst a few of these entities were already given in the respective Show
Cause Notices (SCN) issued to them.
iii. The total traded volume in the scrip of Crazy Infotech during the investigation period
was 2,92,46,282 shares. The aforesaid connected entities traded on 566 days out of 653 days
on which the scrip was traded on the exchange (BSE) during the investigation period.
They traded among themselves for 66,57,790 shares i.e. 22.73% of traded volume in the
market. They were involved in trades for 2,14,07947 shares on either buy side or sell side
or both sides of same trades accounting for around 73.07% of the total traded volume of
2,92,46,282 shares. The aforesaid group of connected entities were also observed to be
transferring shares through off-market transactions/trades among themselves during the
investigation period. On analyzing the pattern of transactions executed by the connected
entities, it was found that these connected entities had indulged in self trades and also traded
in circular/ reversal/ synchronized/ structured pattern, creating artificial volume and
price rise in the scrip of Crazy Infotech.
iv. Out of the entire 823 connected entities identified by the investigation (Paragraph No. 2.1 (ii)
above), 780 entities were found to have either traded individually on 10 or less number of
instances during the 653 days on which the scrip was traded on the exchange (BSE)
during the investigation period, or traded on more than 10 instances but bought/sold less
than 75,000 shares in market and/or off-market. On the basis of the said criteria, SEBI
issued administrative warning to the aforesaid 780 entities in May 2011, advising the
entities to be careful in future and to be more vigilant, in the manner they execute trades,

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so that their trades do not compromise market integrity in any manner. Adjudicating
proceedings were initiated against one of the entities, viz. Arcadia Share & Stock Brokers
Pvt. Ltd.
v. Out of the remaining 42 entities, 37 entities were alleged to have traded in both market
and off-market segments and bought/sold at least 75,000 or more shares in market
and/or in off-market during the investigation period in circular/reversal,/synchronized/
structured trades in connivance with other connected entities, which resulted in artificial
volumes and rise in price of the scrip of Crazy Infotech. The remaining 5 entities were
found to have indulged only in off-market transactions and were an important off-market
link between the other connected entities trading in market, thereby completing the circular
pattern of trading among themselves and creating artificial volume in the market.
vi. SEBI issued separate SCNs dated November 7, 2012 against the aforesaid 42 entities for
their alleged indulgence in manipulative and fraudulent trades in the nature of
circular/reversal trades, in connivance with other connected entities, creating artificial
volumes and impacting the price in the scrip of Crazy Infotech during the Period-I,
thereby violating Regulation 3 (a), 4(1), 4(2)(a), (b), (e) & (g) of SEBI (Prohibition of
Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
(hereinafter referred to as "PFUTP Regulations, 2003").
vii. Subsequently, SEBI, passed a common Order on February 10, 2015 against the 41
entities, under Section 11 and 11B of the SEBI Act. The proceedings against the
remaining one entity was abated on account of his death. Vide the aforesaid Order, SEBI
warned the 41 entities to be cautious in the conduct of their dealings as participants in
the securities market and restrained 8 of them from accessing the securities market,
directly or indirectly, for a period of two years for indulging in self-trades in the scrip of
Crazy Infotech during Period-I.
Period-II2.2 On completing investigation into the trading in the scrip of Crazy Infotech for the period
from April 1, 2005 to December 31, 2007 (Period-I), SEBI conducted further

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investigation in the scrip of Crazy Infotech during the Investigation Period II (i.e
January 1, 2008 to June 30, 2008). It was observed that,
i. During the period, January 1, 2008 to March 31, 2008, the price of the scrip opened at
`262.5 on January 1, 2008, reached a high of `268.95 on the same day and later fell
sharply to close at `21.5 on March 27, 2008. The prices were near lower circuit filter
prices on certain days during the investigation period. The volumes in the scrip varied
with a few days of high volumes followed by days of low volumes. Average daily volume
was 71,241 shares during this period of 3 months. During this period, totally 42,74,454
shares were traded.
ii. On March 28, 2008, the price of the scrip was adjusted on account of subdivision /split
up of equity share of `10/- to `1/- per share. During the period from March 28, 2008 to
June 30, 2008, the price of the scrip opened at `2.25 (on March 28, 2008), reached a high
of `8.45 on May 21, 2008 and later fell to close at `3.77 on June 30, 2008. The prices
were near higher/lower circuit filter prices on certain days during the investigation
period. The volumes in the scrip varied with a few days of high volumes followed by days
of low volumes. Average daily volume was 4,39,919 shares during this period of 3
months. During this period, totally 27,71,4889 shares were traded. It was also noted that
there were no major corporate announcements during the said periods.
iii. The

investigation

conducted

by

SEBI,

during

the

Period-II,

observed

circular/reversal/synchronized patterns of trades and also off market transactions in the


scrip of Crazy Infotech (similar to those which were observed during the investigation
Period-I (by 823 connected entities)), by a group of 95 entities. It was further found that
these 95 entities included, 38 entities of the 823 connected entities (of Period-I) and a newly
identified group of 57 more inter-connected entities. Out of the said newly identified 57
connected entities, 56 entities were found to be connected with 823 connected entities and
with each other through off-market transactions observed during Period-II. The
remaining one entity, viz. Spectrum Chemicals Pvt. Ltd. had the same address as that of
Khodiyar Industries Ltd. and Cardioid Marketing Pvt. Ltd. who were part of the interconnected group of 823 entities.

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iv. The said 57 newly identified connected entities totally bought 2,25,144 shares and sold
27,17,218 shares in the market and received 7,68,288 shares and transferred 4,53,799
shares in off-market during the investigation period-II. Out of the 57 newly identified
entities, who were found to have traded during Period-II, SEBI issued administrative
warning in May 2012 to 53 entities as they had indulged in buying/selling of less than
75,000 shares in market and/or off-market.
v. The remaining 4 entities viz. Spectrum Chemicals Pvt. Ltd. (Spectrum Chemicals), Mr.
Hardik Maheshbhai Pandya (Hardik Pandya), Ms Falguni Chirag Thakkar (Falguni
Thakkar) and Mr. Shalin Kiritkumar Parikh (Shalin Parikh) (hereinafter collectively
referred to as Noticees and individually by their respective names) were found to have
traded, in the scrip of Crazy Infotech significantly, during the entire period of
investigation, i.e Period-I and/or Period II, in circular/reversal and synchronized pattern,
in market and off-market, in concert with other inter-connected entities, creating artificial
volume and price rise in the scrip of Crazy Infotech and later alleged to have dumped the
shares in the market at the artificially inflated prices to earn huge profit.
2.3 SEBI issued a common SCN dated November 7, 2012, against the 4 Noticees to show
cause as to why suitable directions under Section 11& 11B of the SEBI Act, 1992 read
with Regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices
relating to Securities Market) Regulations, 2003 (hereinafter referred to as "PFUTP
Regulations, 2003"), including a direction to restrain them from accessing the securities
market and prohibit from buying, selling or dealing in securities for a particular duration
should not be passed against them for the violation of the provisions of SEBI (Prohibition
of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.
2.4 The aforesaid Noticees are alleged to have indulged in manipulative and fraudulent trades
in the nature of circular/reversal trades, in connivance with other connected entities,
creating artificial volumes and impacting the price in the scrip of Crazy Infotech during
both the investigation periods (Period-I and Period-II), thereby violating Regulation 3 (a),
4(1), 4(2)(a), (b), (e) & (g) of PFUTP Regulations, 2003. The relevant provisions alleged to
have been violated by the Noticees are reproduced below for reference purpose,
PFUTP Regulations, 2003

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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;

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;
(e) any act or omission amounting to manipulation of the price of a security;
(g) entering into a transaction in securities without intention of performing it or without intention of
change of ownership of such security;
2.5 The four Noticees, viz. Spectrum Chemicals, Hardik Pandya, Falguni Thakkar and Shalin
Parikh submitted their reply, vide letters dated January 30, 2014, December 6, 2012 and
December 5, 2012.
2.6 Pursuant to this, Noticees were given an opportunity for personal hearing before me on
February 5, 2014. The Noticees availed the opportunity of hearing granted to them on
February 5, 2014 and made their respective submissions before me. Subsequent to this,
another opportunity of hearing was granted to them on May 8, 2015. On May 8, 2015,
three of the Noticees availed the opportunity granted to them. Spectrum Chemicals did
not appear for hearing.
2.6.1 Following inter alia were the submissions (written and oral) made by the Noticees,
i. Spectrum Chemicals in its reply to the SCN, vide letter dated January 30, 2014 and email dated February 06, 2014 and the written submissions dated February 17, 2014
submitted that,

They did not execute any trades in the scrip of Crazy Infotech through any broker.
They enclosed their DP account statements and bank account statements in order to
substantiate its contention that it has not made any payments to the Brokers (through
whom they were alleged to have been transacted in the shares of Crazy Infotech).

SEBI has not provided copy of investigation Report.

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ii. Hardik Pandya vide letter dated December 5, 2012, made the following submissions:

"I have opened Demat Accounts and allowed their use by third parties against monetary
consideration which gave me other income for some period,
I came to know that my accounts were given for third party use on the instructions of Mr. Paras
Chaplot, a market operator having his base at Mumbai.
I was advised by my well wisher broker Mr. Samir S Shah to provide my demat accounts for such
use.
I got a sum of Rs.4000/- ( Rupees Four Thousand Only) per month for this use during the
aforesaid period"

iii. Falguni Thakkar and Shalin Parikh vide separate letters dated December 5, 2012
submitted that:

" On the advice of some well wishers I opened demat account and allowed its use by third parties
against monetary consideration which gave me other income for some period,
I have opened Demat Accounts and allowed their use by third parties against monetary
consideration which gave me other income for some period,
I came to know that my accounts were given for third party use on the instructions of Mr. Paras
Chaplot, a market operator having his base at Mumbai.
I was advised by my well wisher broker Mr. Rakesh Patel to provide my demat accounts for such
use.
I got a sum of Rs.4000/- ( Rupees Four Thousand Only) per month for this use during the
aforesaid period".

iv. During the personal hearing granted to the Noticees on February 5, 2014 Mr.
Gokulbhai Rakesh Patel appeared on behalf of Falguni Thakkar and admitted that the
alleged trades were not executed by Falguni Thakkar and those trades were executed by
him using her demat account. Similarly, during the hearing held on February 5, 2014
Shalin Parikh appeared and submitted that it was Mr. Gokulbhai Rakesh Patel, who
had executed the alleged transactions in his account. During the subsequent hearing
held on May 8, 2015, Mr. Gokulbhai Rakesh Patel appeared on behalf of Falguni
Thakkar and Shalin Parikh and admitted that the alleged trades were executed by him
on behalf of them.
3. I have carefully examined the SCN issued against each Noticees, their replies, oral and
written submissions made before me during the hearing along with the documents submitted

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therewith. In the next few paragraphs, the charges vis--vis each Noticee will be examined in
the light of the findings of the investigation, the replies filed by the Noticees and the
submissions made before me during the personal hearing.
3.1 The Noticees herein are part of the 57 newly identified inter-connected group of entities
who were found to have traded (both in market and off market) in the scrip of Crazy
Infotech during the Period-II in circular/ reversed and synchronized pattern, along with
the 38 entities (entities mentioned in Paragraph No.2.2 (iii) above). The Noticees were also
found to have traded significantly in circular/reversed and synchronized pattern during the
Period-I.
3.2 On analyzing the data given in the SCNs issued to the Noticees along with the Annexures
therein, the following are observed,

Spectrum Chemicals (Noticee No.1) and Hardik Pandya (Noticee No. 2) were amongst
the seven entities who were found to have indulged in both buying and selling of shares
in the market in synchronized and circular pattern during Period-II along with other
connected entities. Spectrum Chemicals was also alleged to have indulged in self trades
during the period I and II.

Falguni Thakkar (Noticee No.3) and Shalin Parikh (Noticee No.4) were amongst the
group of entities, who were found to have involved in off-market transactions with
other connected group entities during Period-II.

All the aforesaid four Noticees were also alleged to have traded significantly during
Period-I along with other connected entities in synchronized and circular/reversed pattern
resulting in artificial volume and price in the scrip of Crazy Infotech.
Connection/relation amongst the Connected Entities:

3.3 The SCN alleges that 56 out of 57 newly identified entities including the Noticees, viz.
Hardik Pandya, Falguni Thakkar and Shalin Parikh were connected with 823 connected
entities and with each other through off-market transactions observed during Period-I. The
Noticee, viz. Spectrum Chemicals had same address as that of the entities, Khodiyar
Industries Ltd. and Cardioid Marketing Pvt. Ltd. who were part of the 823 connected entities.

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Market and Off-market Transactions by Noticees3.4 As has been observed earlier, during Period II, the aforesaid 57 newly identified entities
including the Noticees herein totally bought 2,25,144 shares and sold 27,17,218 shares in
the market and these entities received 7,68,288 shares and transferred 4,53,799 shares in
off-market. They were also found to have traded significantly in the previous investigation
period (Period-I) and counter-parties to most of the trades were connected group entities.
It was alleged that during both the investigation periods, their trades were mainly in the
nature of circular, synchronized and reversal in nature, contributing to artificial volume and
price rise generated in the scrip of Crazy Infotech.
3.5 As per the SCN, the market and off market transactions entered into by the Noticees
during Period-I and Period II are as follows:

Mkt

Buy
Mkt
within
group

12,51,890

6,97,057

II

1,79,039

3,14,919

II

7,500
1,69,499

0
1,47,454

Investi
gation
Period
Spectrum
Chemicals

Hardik
Pandya
Falguni
Thakkar

Offmkt

Synchronised*

Mkt

2,93,540

Offmkt

Synchronised*

1,29,824

9,21,501

1,36,866

87,807

56,840

15,99,018

3,09,580

3,08,575

3,14,849

7,977

5,022

3,13,756

3,09,717

0
1,39,300

5,070
0

2,500
1,69,499

0
1,65,450

0
1,65,425

5070

I
II

Shalin
Parikh

Sell
Mkt
within
group

0
0
2,09,544

0
1,93,201

1,78,177

17,621
0

12,669
2,01,864

7,669
1,91,318

1,84,963

4,952
0

7,680

7,680

I
II

* The time difference between placement of buy order and sell order was less than 60 seconds in synchronized
trades

3.6 In view of the connection alleged against the entities, the SCN alleges that the trades
executed by the connected entities including the Noticees, were mainly in the manner and
pattern of reversal, circular and synchronized in nature, in collusion with each other. All of
these transactions alleged to have resulted in the artificial volume and price rise in the scrip
of Crazy Infotech.
3.7 The allegations are dealt under the following paragraphs.

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Circular/ Reversal and Synchronized Trades by the Noticees


a. It is observed from the SCN, that the Spectrum Chemicals has traded significantly in
Period -I and II in circular/reversed and synchronized pattern with no intention to
transfer beneficial ownership of shares and counterparties to most of their trades were
connected group entities. As regards, the trades executed by Hardik Pandya, it was stated
in the SCN that the trading of Hardik Pandya was not significant during Period-II.
However, during Period-I, Hardik Pandya had traded significantly, along with the
connected entities.
b. From the various instances of trading pattern executed by Spectrum Chemicals and
Hardik Pandya reproduced in the SCN, which were alleged to be circular/reversed and
synchronized trades and from the details in respect of the connection amongst the
entities including the Noticees, as alleged in the SCN, it is observed that the SCN does
not specifically explain the connection/relation amongst the Noticees and the
counterparties of their trades, which are alleged to be in the manner of reversed/ circular
and synchronized transactions. Moreover, the connection amongst certain entities in the
group alone cannot be a decisive factor to determine the collusion amongst all the connected
entities including the Noticees herein as the SCNs do not contain specific data indicating
the specific role/contribution of the Noticees to the volume and price generated through
the alleged reversals/circular trades in the scrip. It is also relevant to note that
administrative warning has been issued to 780 entities (out of the 823 connected entities) of
Period-I and 53 entities (out of 57 newly identified connected entities) of Period-II.
c. For instance, from the details of circular/reversal and synchronized trades alleged to
have been executed by Spectrum Chemicals during Period-I and Period-II (as given in
the SCN), it is seen that the counterparties to the trades of Spectrum Chemicals were Mr.
Hemant M Shah, Mr. Kapil Kumar M Jain, Mr. Basant Kumar Bangur, Mr. Bhikhalal
Prahladrai Agarwal, Mr. Gokulbhai Patel Rakesh and Mr. Vipin Maneklal Kudar.
Similarly, the counterparties to the trades executed by Hardik Pandya were Mr.
Gokulbhai Patel Rakesh, Mr. Mayank Navnitbhai Gandhi and Ms. M. Gandhi Aditi. It is

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however, observed that SCN does not provide sufficient material to prove that these
entities are connected/related to Spectrum chemicals and Hardik Pandya and that they
have colluded amongst themselves to manipulate the price and volume in the scrip of
Crazy Infotech.
d. As regards, the trades executed by Falguni Thakkar and Shalin Parikh, it is observed that
the SCN alleges that the said Noticees traded significantly during Period -I and the
counter parties to most of the trades were group entities only. It is however, observed
from the SCN that their trading during the Period II was not significant compared to
their trading during the Period I.
e. SCN cites a few instances of trades alleged to be in the nature of circular/reversal
executed by Falguni Thakkar and Shalin Parikh in both market and off market. It is
however, observed that SCN does not provide sufficient material evidence to prove that
these entities are connected/related to by Falguni Thakkar and Shalin Parikh and that
they have colluded amongst themselves to manipulate the price and volume in the scrip
of Crazy Infotech.
Price Manipulation by Noticeesf. The SCN issued to the Noticees alleges that as per the analysis of Last Traded Price
(LTP), the trades of Noticees had impacted/led to rise in price in the scrip of Crazy
Infotech. In this regard, it is pertinent to note that rise in price of the scrip is alleged as a
result of the transactions alleged in the SCN as reversed/ circular and synchronized trades.
However, as mentioned earlier, in the absence of sufficient material in the investigation
report suggesting connection amongst the entities, the nature of trades executed by the
Noticees cannot be conclusively determined as reversed/circular and synchronized with
pre-meditated intention to artificially inflate the price and volume in the scrip. Further, the
counter parties to many transactions, belong to the group of entities against whom SEBI
has already issued an administrative warning.
3.8 To sum up, the trades of the Noticees, as per the SCNs, largely, fall under the category of
self trades, reversal/circular/synchronized trades and off market transactions. It is observed
that even though the SCN cites a few instances of reversed/circular trades executed by the

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Noticees with the entities alleged to have been connected with each other, it does not
provide for sufficient material to prove the connection/relation between the Noticees and
the said connected entities. Further, the trades are spread across the entire investigation
period and the counterparties to the trades executed by the Noticees include the 823 connected
entities of Period I and 57 newly identified entities of Period II and also some non-connected
entities. In this regard, it is relevant to note that out of the 823 entities alleged to have been
connected to each other and have traded concertedly in the scrip during the Period-I (in both
market and off market, creating artificial volume and price rise), 780 entities were given an
administrative warning by SEBI and out of the 57 newly identified entities (including the
Noticees), alleged to have been connected with each other and have traded concertedly
during the Period-II, 53 entities were given an administrative warning by SEBI. In this
regard, it is observed that eventhough such a course of action was adopted by SEBI in order
to filter data and identify the main entities involved in the alleged manipulation, the fact that
the counter parties to many of the trades (alleged to be synchronized and reversed trades)
executed by the Noticees include entities against whom administrative warning had been
issued by SEBI, cannot be ignored.
3.9 The SCN narrates instances of unusual trading pattern amongst the connected entities
including the Noticees casting doubt on the intent of the Noticees, in respect of the
impugned transactions. It is also noted that the Noticees, viz. Hardik Pandya, Falguni
Thakkar and Shalin Parikh admitted that they allowed third parties to use their demat
accounts. Hardik Panday and Shalin Parikh submitted that they allowed third parties to use
them against monetary consideration of Rs. 4000/- per month. It is thus, clear that the
aforesaid Noticees permitted their accounts to be used by third parties in return of
monetary benefit. In view this, they cannot avoid the responsibility for misuse of their
accounts by third parties. The Hon'ble Securities Appellate Tribunal in Rahul H. Shah Vs.
SEBI (Appeal No. 83 of 2012 decided on May 11, 2012) observed that name lending "is a
fraudulent activity and requires to be curbed for maintaining the sanctity of the securities market".
However, considering the large number of transactions involving many entities, spread
over many days during the investigation period, coupled with the fact that 780 of the 823
connected entities and 53 out of 57 entities who had allegedly indulged in
reversal/circular/synchronized trades during both the investigation period, have been
issued administrative warning by SEBI, I am of the view that, for the sake of uniformity,

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Noticees, viz. Mr. Hardik Maheshbhai Pandya, Mrs. Falguni Chirag Thakkar and Mr. Shalin
Kiritkumar Parikh also be afforded the same treatment.
3.10 In view of the discussions above, I am constrained to observe that a warning would be
reasonable for the Noticees viz. Mr. Hardik Maheshbhai Pandya, Mrs. Falguni Chirag
Thakkar and Mr. Shalin Kiritkumar Parikh in respect of the reversed/circular and
synchronized, and the off market transactions alleged to have executed by the aforesaid
Noticees in the scrip of Crazy Infotech.
Self- trades by Spectrum Chemicals
3.11 In addition to the reversal/circular and synchronized trades, the Noticee, viz. Spectrum
Chemicals was found to have indulged in self trades for several days during the
investigation period. As per the SCN, Spectrum Chemicals has indulged in self trades for
6,571 shares, (where Spectrum Chemicals was on both buy and sell sides).
i. Copy of trade and order log data provided by BSE indicate that Spectrum Chemicals
have traded in the scrip of Crazy Infotech on BSE during the period of investigation
through the stock broker, Ami Stock and Share Brokers Pvt. Ltd.
ii. Spectrum Chemicals in its reply to the SCN, vide e-mail dated February 06, 2014 and
written submissions vide letter dated February 17, 2014 (pursuant to the personal
hearing granted on February 5, 2014), submitted that they have not executed any trades
in the scrip of Crazy Infotech through any broker. They also furnished the copies of
their demat account statement with MPSE Securities Ltd., Indore and bank account
statement with UTI Bank, Indore Branch for the period from March 1, 2005 to
February 28, 2007 and Axis Bank, Indore for the period from February 28, 2007 to
January 30, 2014 in order to substantiate its contention that they have not made any
payments to the Broker through whom they are alleged to have transacted in the shares
of Crazy Infotech and has not made any transactions in the scrip of Crazy Infotech
through the said broker during the period of investigation.
iii. In order to ascertain whether the alleged transactions were indeed carried out by
Spectrum Chemicals, the materials/documents such as the details of demat accounts of

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Spectrum Chemicals, statements of transactions executed by Spectrum Chemicals


during the period of investigation through the demat account, etc. obtained from the
depositories (NSDL and CDSL) have been analyzed. It is observed from the
information provided by NSDL, vide letter dated June 19, 2013 that no demat account
is found to be held in the name of Spectrum Chemicals with any of the depository
participants (DP) of NSDL. CDSL, vide e-mail dated May 19, 2015 stated that
Spectrum Chemicals had only one demat account with its DP, viz. MPSE Securities
Ltd.. On analysing the data/information such as demat account details and statement
of transactions pertaining to aforesaid demat account of Spectrum Chemicals from the
date of account opening (November 23, 2004) to date of closure (September 21, 2013)
forwarded by CDSL, it is observed as under:
a) The spectrum Chemicals has only one demat account with the depository
participant of CDSL, viz. MPSE Securities Ltd.,
b) The statement of transactions pertaining to the aforesaid demat account for the
period November 23, 2004 to September 21, 2013 forwarded by CDSL,
indicates that Spectrum Chemicals had not executed any transactions in the
scrip of Crazy Infotech during the period of investigation.
3.12 Considering the above and also in absence of any other material on record to indicate that
the alleged transactions were executed by Spectrum Chemicals, I am of the view that the
charge against Spectrum Chemicals has not been clearly established. In view of this, I am
inclined to give benefit of doubt to Spectrum Chemicals in respect of the charges alleged
against Spectrum Chemicals.
Order4. In view of the forgoing, I, in exercise of the powers conferred upon me by virtue of Section 19
read with Section 11 and 11B of the SEBI Act, 1992 and Regulation 11 of the PFUTP
Regulations, 2003, hereby-

i.

warn the Noticees, viz. Mr. Hardik Maheshbhai Pandya (PAN:ARJPP6330Q), Ms Falguni
Chirag Thakkar (PAN: ABMPT4202C) and Mr. Shalin Kiritkumar Parikh (PAN:
AJAPP5421B) to be cautious in their future dealings and exercise due care and diligence in the

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conduct of their dealings as participants in the securities market (for the reasons mentioned at
Paragraph No. 3.9 above),
5. This Order shall come into force with immediate effect.
6. The copy of the said Order shall be forwarded to the concerned Stock Exchanges and
Depositories.

Place: Mumbai
Date: June 17, 2015

S. RAMAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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