SECURITIES AND EXCHANGE BOARD OF INDIA 

DIRECTIONS UNDER SECTIONS 11B AND 11(4) OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 AGAINST

1) SHRI PRAFUL K ROKADIA, 2) SHRI DIPAL P ROKADIA,  3) SMT KAUSHIKA P ROKADIA, 4) SHRI PRADEEP R SHROFF, 5) SMT UMA A SHAH, 6) SHRI ARVIND M SHAH, 7) M/S. NEW DIMENSION FINANCE & INVESTMENT PVT. LTD., 8) M/S. ROSA CONSTRUCTION PVT. LTD.,  9) M/S. SUN FLOWER ESTATE PVT. LTD., 10) M/S. KRUNAL INDUSTRIAL ESTATE DEVELOPMENT PVT. LTD., 11) M/S. VARSHA INDUSTRIAL TOWNSHIP ORGANISERS PVT. LTD., 12) M/S. JIGNESH INDUSTRIAL LAND DEVELOPER PVT. LTD., 13) M/S. FOURS WALLS MARKETING INDIA PVT. LTD., 14) SHRI DIMPALE CHIRAG SHAH, 15) SHRI PATEL BANKIM JAGDISHCHANDRA, 16) SHRI CHIRAG VADILAL SHAH, 17) SHRI JAY SHAH, 18) SHRI DIPAK KUMAR CHANDRAKANT, 19) M/S. J.N. JHAVERI., 20) M/S. INDIA INFOLINE SECURITIES PVT. LTD., 21) M/S. GALAXY BROKING LTD., AND 22) M/S. FORTIS SECURITIES LTD.

IN THE MATTER OF M/s. IND TRA DECO LTD. 

1.0 Background

1.1 During the period March 2005 to September 2005 the Securities and Exchange Board of India (hereinafter referred to as “the SEBI”) observed a sharp rise in the price from a below par level of Rs. 5.81 on 1^st March 2005 to Rs. 22.65 (adjusted price for split shares) on 1^st September 2005 in the scrip of M/s. Ind tra deco Ltd., (hereinafter referred to as “the Company”) listed at the Bombay Stock Exchange (hereinafter referred to as “BSE”) representing a rise of 4 times or 390% in 129 trading days. The shares of the company are listed in the ‘Z-category’ and the settlement of the trades is on trade for trade basis. The steep increase in price of the share listed in ‘Z’ category  which was trading below par value for more than three years warranted further examination into the matter.

1.2 On further examination, it was revealed that starting from the month of June 2005 to September 2005 the Company had regularly made announcements with regards to Board Meeting and the Annual General Meetings. Some of the major announcements made by the company are given below:

It was observed that the Special resolution relating to ‘alteration of the Object Clause of the Memorandum of Association’ was approved by the Postal Ballot process.  It seems as noticed from the BSE’s website that the company did not furnish the details of the changes made in the objects clause of the company.

1.3.  Rise in Share Price: The price volume data of the share of the company from July 1, 2005 till September 13, 2005 is tabulated below.

  Table: Trading history of the share

1.4  It was observed from the trading data that during the period 1^st March 2005 to 13^th September 2005, the price of the scrip remained range bound between Rs. 3 to Rs. 7 during the period from March 1, 2005 (close price Rs. 5.81) to August 9, 2005 (close price Rs. 5.85). During the period from August 10, 2005 to September 1, 2005 the price as well as the volumes of the scrip registered a sharp rise with price moving from Rs. 5.85 (close on 8/8/05) to Rs. 22.65 (close price on 01/09/05) a rise of 287.18%. On September 02, 2005, the face value of the equity shares were subdivided from Rs. 10/- to Re. 1/-. After the subdivision on September 02, 2005, the price of the shares was in the range of Rs. 2.37 to Rs. 2.60. The price of the shares rose steeply in the month of August just before the shares were split.

1.5 S/Shri Dipal P. Rokadia, Praful Rokadia and Jignesh Rokadia, persons acting in concert are directors of M/s. Jignesh Industrial Land Developers Pvt. Ltd. Shri Praful Rokadia is the Chairman of the company and  Shri Dipal P. Rokadia was appointed as Managing Director of the Company in the Extra Ordinary General meeting held on August 25, 2005. It was observed that on 1^st July 2005 from the beneficiary account of the M/s. Jignesh Industrial land Developers Pvt. Ltd. 7, 50, 000 shares of the Company were transferred to the account of Shri Dimpale Chirag Shah, Shri Chirag Vadilal Shah and Shri Patel Bankim Jagdishchandra and it was further observed that Shri Dimpale Chirag Shah and Shri Chirag Vadilal Shah had same address i.e., 2871, Patni's Street, Zaveriwad, Relief Road, Ahmedabad 380001. These shares were further transferred to Shri Jay Shah and Shri Dipak Chandrakantbhai Shah by Shri Chirag Vadilal Shah, Shri Dimpale Chirag Shah and Shri Patel Bankim Jagdishchandra.

1.6  Analysis of Trades: The analysis of the bulk deals disclosed to BSE revealed that Shri Jay Shah, Shri Chirag Shah, Shri Dipak Kumar Chandrakant Shah who are related to promoter / person acting in concert have executed several bulk deals during the period July and August 2005. The details of the said bulk deals are as follows:

1.7 An analysis of bulk deal details disclosed to BSE revealed that  Shri Jay Shah, Shri Chirag Shah, Shri Dipak Kumar Chandrakant Shah who were related to promoter / person acting in concert had executed several bulk deals during the period July 2005 and August 2005. Some of these bulk deals accounted  for 30% - 82% of the total traded shares on BSE on a single day.

1.8 It was also observed that there were several cross deals (wherein the buying and selling brokers are same) of more than or equal to 10, 000 shares of the company during the period March – September 2005 and the brokers who have executed such cross deals were M/s. Angel Broking Ltd., M/s. Anurag stock brokers, M/s. Galaxy Broking Ltd., M/s. India Bulls (Orbis), M/s. Marvadi shares and M/s. S.P. Jain Securities Pvt. Ltd.

2.0 Ad – interim order dated 5^th October 2005

2.1 In view of the above, vide an ad-interim order dated 5^th October 2005 it was concluded that the promoters / the person acting in concert have transferred shares to certain entities through off market route. The said shares were finally off-loaded in the market. Also, the promoters/the person acting in concert sold their shares during the period of examination. There were several cross deals and bulk deals where buyers and sellers were same thereby creating artificial volume in the market and in exercise of the powers by virtue of Section 19 read with Section 11 (4) (b) and Section 11 (1) and 11B of SEBI Act, it was thereby directed, pending investigation, that -

(a)     The following promoters and directors of the Company viz.  Shri Praful K Rokadia, Shri Dipal P Rokadia, Shri Kaushika P Rokadia, Shri Pradeep R Shroff, Shri Uma A Shah and Shri Arvind M Shah shall not buy, sell or deal in securities of M/s. Ind Tra Deco Ltd., directly or indirectly, till further directions in this regard;

(b)    The following promoters of the company M/s. New Dimension Finance & Investment Pvt. Ltd, M/s. Rosa Construction Pvt. Ltd M/s. Sun Flower Estate Pvt. Ltd., and M/s. Krunal Industrial Estate Development Pvt. Ltd shall not buy, sell or deal in securities of the Company directly or indirectly, till further directions in this regard;

(c)     The following Persons Acting in Concert viz. M/s. Varsha Industrial Township Organisers Pvt. Ltd., M/s. Jignesh Industrial Land Developer Pvt. Ltd. and M/s. Fours Walls Marketing India Pvt. Ltd. shall not buy, sell or deal in securities of the Company directly or indirectly, till further directions in this regard;

(d)    The following clients viz. Shri Dimpale Chirag Shah, Shri Bankim Jagdishchandra Patel, Shri Chirag Vadilal Shah, Shri Jay Shah and Shri Dipak Kumar Chandrakant Shah are directed not to buy, sell or deal in securities of the Company directly or indirectly, till further directions in this regard.

(e)     The following brokers viz., M/s. J.N. Jhaveri, M/s. India Infoline Securities Pvt. Ltd, M/s. Galaxy Broking Ltd, M/s. Fortis Securities Ltd. are directed not to buy, sell or deal in securities of the Company directly or indirectly; till further directions in this regard.

(f)      the Depositories shall not give effect to any transfer of shares of the Company lying in the beneficial owner accounts of said promoters, directors, persons acting in concert and clients mentioned above at 2.1 (a), 2.2 (b), 2.3 (c) and 2.4 (d), till further directions in this regard;

2.2 Further the promoters, directors, persons acting in concert and persons mentioned at 1 (d) and 1 (e) or the Company were required to file their objections, if any to the said order within 15 days from the date of the order and, if they so desire, avail themselves of an opportunity of personal hearing at the Securities and Exchange Board of India, Head Office.

3.0 Written submissions pursuant to ad – interim order

3.1 Pursuant to the said ad – interim, M/s. Fortis Securities Limited, vide letters dated 23^rd November 2005 and 13^th January 2006 requested that they may be permitted to deal for persons other than entities / persons etc., mentioned at para 4.1 (a) – 4.1 (d) of ad-interim order.

3.2 Like wise M/s. Galaxy Broking Ltd., vide letter dated 20^th October 2005 filed written submissions submitting that it had traded on behalf of  Shri Chirag Vadilal Shah. However, M/s. Galaxy Broking Ltd., is not related to the company nor has done any proprietary trades in the scrip of the company.

3.3 M/s. Rosa Constructions Private Limited vide its letter dated 29^th October 2005, Shri Dipal Rokadia vide his letter dated 30^th October 2005, Smt Uma Ashwin Shah vide her letter dated 30^th October 2005, Shri Kaushika Praful Rokadia vide his letter dated 31^st October 2005, Shri Arvind Shah vide his letter dated 31^st October 2005, M/s. New Dimention Finance and Investments Co Pvt. Ltd., vide its letter dated 31^st October 2005, M/s. Four walls Marketing (I) Private Limited vide its letter dated 31^st October 2005, Shri Praful Kantilal Rokadia vide his letter dated 31^st October 2005, M/s. Krunal Industrial Estate Developers Pvt. Ltd., vide its letter dated 31^st October 2005, M/s. Sunflower Estates Pvt. Ltd., vide its letter dated 31^st October 2005, M/s. Jignesh Industrial Land Developers Pvt. Ltd vide its letter dated 5^th November 2005 and M/s. Varsha Industrial Township Organisers Pvt. Ltd., vide its letter dated 7^th November 2005 interalia submitted that they were not instrumental in market manipulation and in carrying out unfair trade practice that has been alleged in the ad – interim order dated 5^th October 2005.

4.0 Personal hearing

4.1 As provided in the above mentioned ad-interim order, on 25^th April 2006, a personal hearing was given to 1). Shri Praful Rokadia, 2). Shri Kaushik P Rokadia, 3). Shri. Dipal P Rokadia, 4). Shri. Arvind M Shah, 5). Ms. Uma M Shah, 6). Shri. Pradeep R Shroff, 7). M/s. Krunal Industrial Estate Development Pvt. Ltd., 8). M/s. Rosa Construction Pvt. Ltd., 9). M/s. Fours Walls Marketing Pvt. Ltd., 10). M/s. New Dimention Finance & Investments Co. Pvt. Ltd., 11). M/s. Sun Flower Estate Pvt. Ltd.,  12). M/s. Jignesh Industrial Land Developers Pvt. Ltd., 13). M/s. Varsha Industrial Township Organizers Pvt. Ltd. and 14). M/s. TM Fortis Securities Ltd.

4.2 During the hearing Shri. Pradeep Shroff submitted that he resigned as director of the Company in 1991 itself. From the Annual Report of the Company for the year 2003 – 04, it is seen that Shri Shroff was not in its list of Board of Directors of the Company. Further clarification was sought from the Company about the composition of the Board of Directors from 2003. Details submitted by the Company vide letter dated 8^th June 2006 did not mention Shri Shroff as one of its directors.

4.3 During the hearing M/s. TM Fortis Securities Ltd pleaded that the ban imposed on them vide the ad-interim order may be restricted to non-trading on behalf of the promoters of the Company only in shares of the Company and that they should be allowed to trade on behalf of other clients as is being done in other cases.

4.4 During the personal hearing on 25^th April 2006, 1) Shri Praful Rokadia,  2) Shri Kaushik P Rokadia, 3) Shri. Dipal P Rokadia, 4) Shri. Arvind M Shah, 5) Ms. Uma M Shah, 6) M/s. Krunal Industrial Estate Development Pvt. Ltd., 7) M/s. Rosa Construction Pvt. Ltd., 8) M/s. Fours Walls Marketing Pvt. Ltd., 9) M/s. New Dimention Finance & Investments Co. Pvt. Ltd., 10) M/.s Sun Flower Estate Pvt. Ltd., 11) M/s. Jignesh Industrial Land Developers Pvt. Ltd., and 12) M/s. Varsha Industrial Township Organizers Pvt. Ltd., have all sought time to submit written response and to provide documents in support of their submissions.

5.0 Written submissions pursuant to personal hearing

5.1 As sought during the personal hearing on 25^th April 2006, 1). Shri Praful Rokadia, 2). Shri Kaushik P Rokadia, 3). Shri. Dipal P Rokadia, 4). Shri. Arvind M Shah, 5). Ms. Uma M Shah, 6). M/s. Krunal Industrial Estate Development Pvt. Ltd., 7). M/s. Rosa Construction Pvt. Ltd., 8). M/s. Fours Walls Marketing Pvt. Ltd., 9). M/s. New Dimention Finance & Investments Co. Pvt. Ltd., 10). M/s. Sun Flower Estate Pvt. Ltd., 11). M/s. Jignesh Industrial Land Developers Pvt. Ltd., 12). M/s. Varsha Industrial Township Organizers Pvt. Ltd. and 13). M/s. TM Fortis Securities Ltd. vide letter dated 18^th May 2006 submitted that all the appropriate disclosures were made to BSE. As regards, the number of shares traded by Shri Dipal P Rokadia, M/s. Jignesh Industrial Land Developers Pvt. Ltd. and M/s. Varsha Industrial Township Organizers Pvt. Ltd., it was submitted that these three entities have only sold their shareholding as they were  in need of funds and that  Shri Dipal P Rokadia even sold for loss.

5.2 I note from the written submission dated 18^th May 2006 that the Company did not provide any document to show that details of changes made in the object clause were informed to BSE. From letter dated 16^th July 2005 written by the Company to BSE, I note that the Company only stated that the Board of Directors of the Company have decided to meet at 1 pm on 16^th July 2005 to include and transact in the forthcoming EGM for the business of alteration of the objective clause of the Company and to appoint Managing Director. However, it was not clear as to what exactly the proposed alteration was. Further no record is provided to show if the proposed alteration of the object clause had taken place or not. Hence there was no full disclosure on part of the Company. Like wise no documents in support of trading done by Shri Dipal P Rokadia,  M/s. Jignesh Industrial Land Developers Pvt. Ltd. and M/s. Varsha Industrial Township Organizers Pvt. Ltd. have been provided. No substantial information or data had been placed before me to substantiate the claims of the entities that ad-interim order dated 5^th October 2005 was not justified and as such I do not see any reason as to why the order should not be continued.

6.0 Order

6.1 Thus, based on an examination of the facts and the material attendant circumstances, I, in exercise of powers conferred upon me under section 19 of Securities and Exchange Board of India Act, 1992, hereby direct under sections 11, 11 (4) and 11B of Securities and Exchange Board of India Act, that the ex-parte interim order dated 5^th October 2005 against 1). Shri Praful Rokadia, 2). Shri Kaushik P Rokadia, 3). Shri. Dipal P Rokadia, 4). Shri. Arvind M Shah, 5). Ms. Uma M Shah, 6). M/s. Krunal Industrial Estate Development Pvt. Ltd., 7). M/s. Rosa Construction Pvt. Ltd., 8). M/s. Fours Walls Marketing Pvt. Ltd., 9). M/s. New Dimention Finance & Investments Co. Pvt. Ltd., 10). M/.s Sun Flower Estate Pvt. Ltd., 11). M/s. Jignesh Industrial Land Developers Pvt. Ltd., 12). M/s. Varsha Industrial Township Organizers Pvt. Ltd. 13) M/s. Galaxy Broking Ltd, and 14) M/s. Fortis Securities Ltd. shall remain in force till further orders which SEBI will pass on conclusion of the investigation proceedings referred to hereinabove.

6.2 The ad-interim order dated 5^th October 2005 passed by SEBI has also been served on 1) Shri Dimpale Chirag Shah, 2) Patel Bankim Jagdishchandra, 3) Chirag Vadilal Shah, 4) Shri Dipak Kumar Chandrakant Shah, 5) M/s. J. N. Jhaveri and 6) M/s. India Infoline Securities Pvt. Ltd. but the said entities have not responded to the ad-interim order. Therefore, the ad-interim order dated 5^th October 2005 shall remain in force against the six entities also till further orders which SEBI will pass on conclusion of the investigation proceedings referred to hereinabove.

6.3 Shri Pradip Shroff has submitted a copy of the Form 32 submitted to the Registrar of Companies at the time of his resignation from M/s. Ind Tra Deco Ltd. M/s. Ind Tra Deco Ltd. has also confirmed this fact vide a letter dated 8^th June 2006 whereby the details of Directors as on 1^st January 2003 was specified as Dr. Pramila Dekhtawala, Shri Dipal Rokadia and Smt Jyotiben Dalal. However, the details submitted by Shri Pradip Shroff and the company could not be verified since the details are not available either with the Registrar of Companies or with BSE. Therefore, I am not inclined to consider the contentions raised by Shri Pradip Shroff at this stage and direct that the ad-interim order dated 5^th October 2005 shall remain in force against him till further orders which SEBI will pass on conclusion of the investigation proceedings referred to hereinabove.

6.4 Shri Jay Shah has not been served with a copy of the ad-interim order of SEBI dated 5^th October 2005. Since Shri Shah has not been given an opportunity to represent his case, I do not pass any further directions against him herein. But the ad-interim order dated 5^th October 2005 shall continue to remain in force against Shri Jay Shah till the order is being served upon him and he is provided an opportunity to represent his case before me.

6.5 I also direct M/s. National Securities Depository Limited and M/s. Central Depository Services Limited not to give effect to the transfer of shares of M/s. Ind Tra Deco Ltd. lying in the beneficial accounts of 1). Shri Praful Rokadia, 2). Shri Kaushik P Rokadia, 3). Shri Dipal P Rokadia, 4). Shri Arvind M Shah, 5). Ms. Uma M Shah, 6). M/s. Krunal Industrial Estate Development Pvt. Ltd., 7). M/s. Rosa Construction Pvt. Ltd., 8). M/s. Fours Walls Marketing Pvt. Ltd., 9). M/s. New Dimention Finance & Investments Co. Pvt. Ltd., 10). M/.s Sun Flower Estate Pvt. Ltd., 11). M/s. Jignesh Industrial Land Developers Pvt. Ltd., 12). M/s. Varsha Industrial Township Organizers Pvt. Ltd. 13) Shri Dimpale Chirag Shah, 14) Patel Bankim Jagdishchandra, 15) Chirag Vadilal Shah, 16) Shri Dipak Kumar Chandrakant Shah, 17) Shri Jay Shah and 18) Shri Pradip Shroff.

6.6 With regard to the submission made on behalf of M/s. Fortis Securities Ltd., and M/s. Galaxy Broking Ltd., that the ban should be restricted to non-trading on behalf of only promoters of the Company and it should be allowed to trade on behalf of other clients, I find no reason to accede to the request at this stage.