order against rikhav securities ltd. in the matter of ipo of vaswani industries limited

8/21/2019 Order against Rikhav Securities Ltd. in the matter of IPO of Vaswani Industries Limited.

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WTM/SR/IVD/ID – 2/ 43 /03/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAICORAM: S. RAMAN, WHOE TIME MEMBER

ORDER

U!"#$ S#%&'(!) 11 *!" 11B (+ &# S#%-$'&'#) *!" E%*!# B(*$" (+ I!"'* A%&, 12 $#*" '& R#-*&'(!111 (+ &# SEBI $('6'&'(! (+ F$*-"-#!& *!" U!+*'$ T$*"# $*%&'%#) $#*&'! &( S#%-$'&'#) M*$7#&R#-*&'(!), 2003 '! $#)8#%& (+ R'7*9 S#%-$'&'#) &". ANAADCR30;


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against "i#hav Securities, ho as a su!)syndicate mem!er in resect of the I*O of +I$% .he said

Order also directed +I$ to give ithdraal otion to all the investors ho ere allotted shares in the 6II

and "II categories for such num!er of shares !y hich the allotment ratio as imacted due to

ithdraals-re:ections in the aforesaid categories%

2.2 .he aforesaid interim Order dated July 11, 2011 as challenged !efore the 9on

.ri!unal (S.' !y "i#hav Securities% .he 9on

o!served that SEBI Order qua "i#hav Securities as an ad-interim Order and directed SEBI to hear

"i#hav Securities ithin the next to ee#s% ccordingly, "i#hav Securities as granted an oortunity

of ersonal hearing !efore SEBI and the aforesaid interim Order assed on July 11, 2011 against "i#hav

Securities as confirmed !y SEBI vide its Order dated January 11, 2012 till further orders in the matter%

"i#hav Securities again filed an aeal !efore the S. against the said confirmatory Order dated January

11, 2012 hich as disosed of !y S. vide its Order dated ugust 18, 2012 ith a direction to

comlete the investigation and issue a Sho =ause 6otice (S=6' to the aellant !y >ecem!er 1, 2012%

2.3 Su!se/uent to the aforesaid Order of the 9on!le S., a S=6 dated >ecem!er 1, 2012 as issued to

"i#hav Securities on the !asis of findings made in the investigation calling uon them to sho cause as

to hy aroriate action including directions restraining them from !uying, selling or dealing in

securities for a secified eriod should not !e issued against them for the violation of the rovisions of

Section 12(a', (!', and (c' of the SEBI ct, 12 and "egulation (!' and (d' , 8(1' and 8(2' (a' and

(!' of the SEBI (*rohi!ition of ?raudulent and @nfair .rade *ractices "elating to Securities 3ar#et'

"egulations, 200 (hereinafter referred to as &*?@.* "egulations&' and =lause 5(a' of Schedule AI of

SEBI (Issue of =aital and >isclosure "e/uirements' "egulations, 200 (hereinafter referred to as&ICDR R#-*&'(!)?.

3. .he main allegations levelled against "i#hav Securities in the S=6 are stated !elo

i% "i#hav Securities as one of the largest !ro#ers-su!)syndicate mem!ers ith resect to !idding in

!oth 6II and "II categories, and contri!uted to a!out 72C of the issue siDe% ;ithdraals-re:ections

from its terminal ere as high as 1C of the total issue siDe% .he entire !idding (i%e% 100C' under the

6II category and C of the !idding under the "II category, from the terminal of "i#hav Securities

ere ithdran-re:ected%

ii% "i#hav Securities had acted in concert ith its grou comanies namely 9$ Investment

=onsultants *vt% $td% and "i#hav Bro#ers *vt% $td% (resently #non as 8F Solutions *% $td%' and

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laced large !ids on !ehalf of them through its terminal under the 6II category in order to inflate

the !id !oo#G to give a misleading aearance of !idding in the issue and to contri!ute toards

discovering the rice at the highest rice !and of `8-) er share% It is further alleged that the entire

!ids laced on !ehalf of the grou comanies ere su!se/uently ithdran%

iii%

;ith resect to 22 !ids i%e% 20 !ids in the "II category for 050 shares (%0C of total issue siDe'and 2 !ids in 6II category for 7,15,280 shares (7%15C of total issue siDe' laced through "i#hav

Securities, the che/ues su!mitted along ith the !ids ere not !an#ed% ?urther, it as o!served that

the maximum num!er of such alications ere laced on the last day of the !idding rocess during

the final hours% It as therefore alleged that these !ids ere laced !y "i#hav Securities only ith a

design to inflate the !id !oo# to tra innocent investors in a manner that they ould not !e in a

osition to ithdra their !ids and thus minimum su!scrition to the issue as ensured%

iv% "i#hav Securities, through its 6B?= arm namely .otal 9oldings and ?invest *vt% $td% had financed

17 clients of the "II category, ithout any formal agreement ith the said clients% Of these 17clients, H clients ithdre their alications su!se/uently% Similarly, "i#hav Securities client under

6II category, namely 3an!a Investments and Securities *vt% $td% had also financed 0 clients, and

the !ids on !ehalf of the said clients ere laced through the terminal of "i#hav Securities,

contri!uting to 2,7H,500 shares% It is alleged that sto ayment instructions ere issued !y all the said

clients ithout giving any lausi!le exlanation for the ithdraal of their alications%

v% "i#hav Securities had laced large !ids on !ehalf of its clients and then ithdre most of them% In

vie of this, "i#hav Securities is alleged to have artificially inflated the !id !oo# and created a

misleading aearance of aarently healthy su!scrition of the issue% It is also alleged that thismodus oerandi as adoted in order to generate retail investors interest in the scri%

4. In resonse to the S=6, "i#hav Securities filed its rely vide letters dated January 1H, 201 and ?e!ruary

08, 201% Su!se/uently, an oortunity of ersonal hearing as granted to "i#hav Securities on June 1,

201% >uring the course of the hearing, "i#hav Securities as directed to su!mit the details of alications

!id !y it during final four hours along ith the details of ithdraals% Only a art of the information as

su!mitted !y the entity vide his letter dated June 1, 201% .he remaining art of the information as

su!mitted !y "i#hav Securities at the su!se/uent ersonal hearing, as detailed in the folloing aragrahs%

4.1 Su!se/uent to this, it came to my notice, that en/uiry roceedings ere also ending against "i#hav

Securities in the I*O of +I$ for similar violations% In vie of this, the instant matter as #et in

a!eyance till the filing of "eort !y the >esignated uthority (>'as !oth the roceedings arise out of



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similar set of facts and the rovisions violated are also similar% .he > filed his reort on July 11,

2018 and the ost en/uiry S=6 as issued on ugust H, 2018% .he entity filed its ritten su!missions

dated >ecem!er , 2018 to the "eort filed !y >, vide its letter dated >ecem!er 10, 2018% "i#hav

Securities also su!mitted the aforesaid coies of ithdraal letters of all the alicants (mentioned in

*aragrah 6o% 8 a!ove' along ith the ritten su!missions%

4.2 In vie of the additional su!missions and the documents su!mitted !y "i#hav Securities, an

oortunity for hearing as once again granted to the entity in the resent roceeding on >ecem!er

10, 2018, hich as ostoned to >ecem!er 2, 2018 on the re/uest made !y the entity% .he entity

reiterated the su!missions already made in their earlier rely dated June 1, 201 and re/uested time to

file additional rely and suorting documents%

4.3 "i#hav Securities vide letter dated January 1, 201H and January 12, 201H filed additional su!missions

and also furnished some documents suorting its contentions%

5. In its aforementioned letters and during the ersonal hearing held on June 1, 201 as ell as >ecem!er

2, 2018, "i#hav Securities inter alia made the folloing su!missions

5.1 Su!missions made !y the entity on June 1, 201)

i% .he role of "i#hav Securities, as a su!)syndicate mem!er is limited and falls !eteen the role of

Syndicate mem!er and su!)!ro#er in the hole chain of I*O rocess% It as !inding on "i#hav

Securities under I=>" "egulations to !id the alication as early as ossi!le and is re/uired to carry

out the instructions of the alicant(s' scruulously%

ii% Other than the !ids of to grou comanies of "i#hav Securities namely, 9$ Investment

=onsultants *rivate $td% and "i#hav Bro#ers *rivate $td%, the remaining six !ids under the 6II

category ere received through the su! )!ro#ers namely 6i#ita 3anisha Shah and "ahul, ho ere in

no ay connected to "i#hav Securities% .he contri!ution of the aforesaid grou comanies of "i#hav

Securities amounted to 1%HC of the total alications !id in the I*O i%e% 8%17 crores, hich is a very

negligi!le ercentage to induce other investors to aly in the I*O% .he grou comanies ithdre

their !ids as there as no 4IB su!scrition on first to days of the issue and that it remained

undersu!scri!ed even after the closure of the I*O% >uring the I*O of +I$, there as another good

investment oortunity in the issue of *oer ?inance $td% In addition to this, negative nes in the

mar#et and in various e!sites regarding the large ithdraals !y investors etc% also contri!uted to the

ithdraal of alications !y the grou comanies%



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iii% In resect of the allegation regarding the failure to !an# the che/ues, su!mitted along ith the !ids,

"i#hav Securities contended that under "II category, 20 alications ith che/ues ere received

during 10 a%m% to 2 %m% on the last day of !idding% s a routine ractice, su! !ro#ers ho collect

alications from the day issue oens, lodge the alications on the last day of the closing of the I*O

and alicants ut the closing date of the issue on the che/ue% .hus, !idding as done during the last

hours% Incidentally, since investors anted to ithdra the alications, hich ere !id !ut not

!an#ed, they ere instructed to give ithdraal letter for the same% .his is a revalent rocedure and

standard ractice adoted !y every su!)syndicate mem!er for ithdraal of alications and "i#hav

Securities also folloed the same ractice% =he/ues ere not !an#ed since all the 20 alicants ("II'

had re/uested in riting to "i#hav Securities for ithdraal of !ids% ?urther, ith regard to the non)

su!mission of coies of ithdraal letters along ith coies of che/ues and alication forms of the

remaining 5 clients, it is su!mitted that those records ere availa!le ith the su! !ro#ers ho deal

ith the alicants and it as never insisted !y SEBI during investigation that they should lodge all the

ithdraal letters%

iv%

6o connection as esta!lished !eteen the issuer comany)+I$, B"$3)shi#a =aital $td%, 6II

alicants (3an!a Frou and other 8 individual alicants' and "i#hav Securities% Investigation !y

SEBI has given clean chit to the comany in its Order dated July 11, 2011% If there ere maniulation,

the comany should !e the sole !eneficiary%

v% t *ara 18 of the S=6, it as stated that only 25 !ids ere su!mitted !y "i#hav Securities during last

to hours and that under no circumstances, !ids in last to hours influence others% .he !ids ut in

the last 2 hours of !idding could not inflate the !id !oo# or lure others to aly% ?urther, according to

the details of timing of lacement of !ids, only 25 !ids ere su!mitted !y "i#hav Securities during last

to hours hich indicated contradiction in the investigation !y SEBI%

vi% In the instant case, as soon as 6II and "II alicants discovered that 4IB ortion as heavily under

su!scri!ed, they rushed to ithdra% .hus, they ere not misled to aly !ut ere rather correctly led

to ithdra%

vii%

In the 6II category, five su! )syndicate mem!ers, other than "i#hav Securities, namely arvy Stoc#

Bro#ing $td%, shi#a Stoc# Bro#ing $td%, Enam Securities *vt% $td%, mit Jasani and 3atalia Stoc#Bro#ing $td% had 100C !ids resulting into invalid alications% Similarly, comaring the ratio of

invalid alications !y "i#hav Securities in the "II category, 3otilal Osal Securities $td% had large



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num!er of invalid alications in a!solute num!ers and I?S Securities *vt% $td% had higher

ercentage of invalid alications%

viii% ;ithdraal of the H alications (out of total 17 alications', financed !y "i#hav Securities

through its 6B?= arm namely .otal 9oldings and ?invest *vt% $td% ere to the extent of a!out 80C

only and ithdraals ere at the otion and decision of the resective alicants% .he comany had

received a!out H00 !ids% .herefore, 17 !ids could not inflate the order !oo# in any meaningful ay%

ix% It is a ell settled la that hen there is a charge of fraud, mens rea -intention is material% @nder the

facts and circumstances of the given case, no intention is evident%

x% lleged contravention of =lause 5 (a' of Schedule AI of SEBI (I=>"' "egulations, 200 is the

o!ligation of B"$3-Syndicate mem!er% It is a statutory o!ligation and not transfera!le and hence

"i#hav Securities, as a su!) syndicate mem!er, ought not to have !een alleged to have contravened the

same%

5.2 Su!missions made !y "i#hav Securities during the hearing held on >ecem!er 2, 2018)

i% ?urnished the coies of ithdraal letters of all the 20 alicants (the che/ues of hom ere

allegedly not !an#ed !y "i#hav Securities', ho had laced !ids under the retail category,

ii% SEBI has not alloed insection of certain documents,

iii%

SEBI denied oortunity to cross examine various alicants ho !id through "i#hav Securities

and their statements ere recorded during investigation,

iv%

.he to grou comanies of "i#hav Securities ere having sufficient sources of funds at the

relevant time and the same as communicated along ith documentary evidence in the course of

investigation%

v% 6oticee has no rerogative to either accet or re:ect the alication, if it is duly filled%

vi% 6o connection esta!lished !eteen the 6oticee and,

•••• the issuer comany,

•••• 3erchant Ban#ers,



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•••• Syndicate mem!ers,

•••• Other su!)syndicate mem!ers,

•••• =lient grous%

vii%

s soon as the 6II and "IIs learnt that the 4IB ortion in the I*O of +asani Industries $td%

as undersu!scri!ed (only 7,00,080 shares ere su!scri!ed under 4IB category against H0,00,000

shares reserved for them in I*O', they rushed to ithdra their alications% .his is a common

trend in rimary mar#et, hence no fault can !e attri!uted to "i#hav Securities%

5.3 In its ritten su!missions dated >ecem!er , 2018 and rely, vide letters dated January 1, 201H and

January 12, 201H, "i#hav Securities inter alia made the folloing additional su!missions

i. "We were being appointed as sub syndicate members ( SSM and used to enter into agreement with Syndicate

Member ( SM

ii.

The applications were even withdrawn from the oo! unning #ead Manager BRM $% vi&. 'shi!a apital%

even though they were also Syndicate Member in the said )*+.

iii. The applications filed through us were genuine and bonafide. Withdrawal of applications were made in the interest

of )nvestors ,lients.

iv. ' copy of the ban! statements of '# *# have been provided.

v. 's regards application made by the group companies vi&. i!hav ro!ers *vt. #td and '# investment

onsultants *vt. #td. it is submitted that the si&e of application amounted to only /.012 of the total application

received in the )*+ of 3)# and it is very miniscule percentage of applications to induce other investors to apply for

the shares in the )*+ of 3)#. )n these companies only directors were common and not shareholders. The said

group companies whose applications were bid through us had enough funds at the time of bidding.

vi. They were only collecting agents for the SM and their role is merely to enter the bid details on the terminals wherein

the connectivity is provided by the stoc! e4change.



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vii.

egulation 56(7$ /85 read with Schedule 9) of S:) ();$ egulations% 5880 (hereinafter referred to as

udicating proceedings carried out for other entities in the scrip% the learned '+ has held that

bids of ?oticees which were made only on the last day of )*+ that too after /.78 *M cannot influence other

investors to bid in the said )*+. @urther% para 5A% 51 and 5B the #earned 'd>udicating +fficer has narrated the

grounds and >ustification to arrive at a conclusion that the withdrawal of the bids by the ?oticee therein cannot be

considered to have placed in order to create misleading appearance of bids in the )*+ by any

act,practices,device,artifice and therefore% no contravention of provisions of S:) 'ct and *@CT* egulations

is proved against them.

4ii.

Submitted that in most of the )*+=s the allotment is always done at the highest price.

4iii. )n the )*+ of 3)# withdrawals too! place at large through all SSM. The details of such withdrawal through

other SSM is given.

4iv. )n ?)) category other than ?oticeee% other 1 Sub Synidicate members vi&. Darvy Stoc! ro!ing #td.% 'shi!a

Stoc! ro!ing #td.% :nam Securities *vt. #td% 'mit Easani and Matalia Stoc! bro!ing #td had /882 bids

resulting into invalid applications. @urther on an overall basis in ?)) category% 072 of the bids were invalid

applications. So there was a pattern of invalid applications in ?)) category in the )*+ of 3)#.

4v. Similarly in )) category% in comparision to ?oticee=s 0A7 invalid application for 7F% 68%F58 shares out of /55/

bids for A6%FB%B68 share (FF.172$% /7B/ application for A1%60%FB8 shares were invalid. Similarly% 56/ bids



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for 0%0F%1B8 shares (61.182$ were invalid out of 75B bids for //%BB%668 shares bided by D)@S Securities *vt.

#td (D)@S$ and /0/ bids for F%1B%6A8 shares (F6.//$ were invalid out of 5A7 bids for 0%B0%888 shares bided

by Shri *arasram oldings *vt. #td. So comparing ratio of ?oticee=s invalid applications in )) category%

D)@S and Shri *arasram oldings *vt. #td. had higher percentage of invalid applications.

4vi.

The Sub GSyndicate member or their sub-agents are not required to obtain any certificate of registration with

S:) or any other authorities. )n fact Sub-syndicate member is appointed by way of a *rivate arrangement

,agreement between the Syndicate and the Sub-syndicate member.

4vii.

's and when the withdrawals were ta!en place same was in the !nowledge of SM,'shi!a apital and it is

quite surprising to !now despite being overall in charge of the issue process% they did not ta!e any corrective steps.

4viii. S:) has ta!en action against the entity for each of the activity that they have been carrying and not debarred all

the operations of the entity for violations. )n this regard% we would li!e to bring to your !ind notice that 'lmond&

was found guilty in two )*+s simultaneously% then also it was debarred from ta!ing new assignments in the area

of merchant ban!ing only and not across their other area of operations.

4i4. 's per inspection report in respect of i!hav Securities% there were no ma>or discrepancies e4cept few minor

observations in Dnow your lient (DH$ forms. We submitted our reply to said inspection and pursuant we have

not received any observation letter from S:).

44.

@urther% it is S:) own case that each activity of the intermediary should be separated by a hinese wall and thisaspect is usually verified by S:) in its inspection of the intermediaries."

C(!)'"#$*&'(! (+ I))-#) *!" F'!"'!)

;. I have considered the S=6 issued !y SEBIG the relies filed !y "i#hav Securities along ith the

su!missions made !y its authoriDed reresentative during the course of the ersonal hearing !efore meG

and other relevant materials availa!le on record%

;.1.

It is o!served that the su!scrition level in the I*O of +I$ declined from 8%15 times at the closure of theissue to 1%27 times after accounting for the ithdraals-re:ections% 3aximum ithdraals-re:ections had

ta#en lace in the 6II category for hich the su!scrition levels fell from 11%2 times to 0%78 times and

for "IIs from 5%72 times to 1%H times% .his indicates that there as a sudden ithdraal-re:ection of the



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alications from certain terminals through hich !ids ere laced% It is also noted that there as no

secific nes in the mar#et to romt such a large num!er of sudden ithdraals-re:ections%

;.2. In this articular factual situation of the case, the issue under consideration is that hether the !idding of

alications !y "i#hav Securities on !ehalf of its alicants-investors including its on grou

comanies and su!se/uent ithdraal thereof, ere misleading in nature and ere intended to

artificially inflate the !id !oo# or-and to create an interest for other investors-u!lic to su!scri!e in

the I*O of +I$% .he !asis for the aforesaid allegation against "i#hav Securities is mainly the folloing

factors such as,

• $arge scale !idding and ithdraals from the terminal of "i#hav Securities,

• *lacing of !ids under 6II =ategory on !ehalf of grou comanies and su!se/uent ithdraals,

• & ?ot an!ing" of che/ues received along ith the !ids,

•

?inancing and controlling of !ids%

;.3. Before dealing ith the aforesaid factors in seriatim, the relevant legal rovisions, the contravention

of hich have !een alleged in this case may !e reroduced hereunder for reference urose)

SEBI A%&, 12

5$('6'&'(! (+ >*!'8-*&'9# *!" "#%#8&'9# "#9'%#), '!)'"#$ &$*"'!/ *!" )-6)&*!&'* *%-')'&'(!

(+ )#%-$'&'#) ($ %(!&$(.

12A. ?o person shall directly or indirectlyI

(a$ use or employ% in connection with the issue% purchase or sale of any securities listed or proposed to be listed on arecogni&ed stoc! e4change% any manipulative or deceptive device or contrivance in contravention of the provisions of this 'ct or the rules or the regulations made thereunderJ

(b$ employ any device% scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc! e4changeJ

(c$ engage in any act% practice% course of business which operates or would operate as fraud or deceit upon any person% inconnection with the issue% dealing in securities which are listed or proposed to be listed on a recognised stoc! e4change% incontravention of the provisions of this 'ct or the rules or the regulations made thereunderJ

FUT R#-*&'(!), 2003

7. *rohibition of certain dealings in securities

?o person shall directly or indirectlyI



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(b$ use or employ% in connection with issue% purchase or sale of any security listed or proposed to be listed in arecogni&ed stoc! e4change% any manipulative or deceptive device or contrivance in contravention of the provisions of the 'ct or the rules or the regulations made there underJ

(d$ engage in any act% practice% course of business which operates or would operate as fraud or deceit upon any personin connection with any dealing in or issue of securities which are listed or proposed to be listed on a recogni&ed stoc!e4change in contravention of the provisions of the 'ct or the rules and the regulations made there under.

A. *rohibition of manipulative% fraudulent and unfair trade practices

(/$ Without pre>udice to the provisions of regulation 7% no person shall indulge in a fraudulent or an unfair trade practice in securities.

(5$ ;ealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and mayinclude all or any of the following% namelyKI

(a$ indulging in an act which creates false or misleading appearance of trading in the securities mar!etJ

(b$ dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a deviceto inflate% depress or cause fluctuations in the price of such security for wrongful gain or avoidance of lossJ

SEBI ICDR R#-*&'(!), 200

Schedule AI

(B$ 'ppointment of stoc! bro!ers as bidding,collection centres.

(a$ The boo! runner(s$,syndicate members shall appoint stoc! bro!ers who are members of the recognised stoc!e4change and registered with the oard% for the purpose of accepting bids% applications and placing orders with theissuer and ensure that the stoc! bro!ers so appointed are financially capable of honouring their commitments arisingout of defaults of their clients,investors% if anyJ

*$# S%*# B'""'! *!" W'&"$**) +$(> &# T#$>'!* (+ R'7*9 S#%-$'&'#)

;.4. It is alleged in the S=6 that "i#hav Securities as one of the largest !ro#ers ith resect to total !idding

in !oth 6II and "II categories in the I*O of +I$ and the ercentage of ithdraals-re:ections from its

terminal as significantly higher than that of the other ma:or !ro#ers-su!)syndicate mem!ers to the issue%

;.4.1 ?rom the S=6, it is o!served that the day)ise attern of !idding, (from the oening of the I*O on ril

2, 2011 till closing on 3ay , 2011', ercentage of valid !ids and ercentage of invalid !ids from the

terminal of "i#hav Securities ere as under



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T*6#

BID DATE CATEGOR

T(&* (+ &(&*6'""'! (+R'7*9 &( &#&(&* 6'") (+&# "*

S*$#)'! 9*'"6'")

(+ 9*'"6'") *) &( &(&*6'") 6 &#6$(7#$ (!&# "*

)*$#) '! 9*'" 6'")*) &(&(&* 6'")(+ &# "*

S*$#)$##%"/'&"$*!

(+'!9*'")*$#) &(&(&* 6'")*$#) 6&#6$(7#$

(+I!9*'"6'") &(&#&(&*6'") (+&# "*'! &#

IO

2/04/2011

NII 232;320 24.5 0 0.00 0.00 232;320 100 24.5

"II ) ) ) ) ) ))

)

.otal 232;320 24.5 0 0.00 0.00 232;320 100 24.5

2/5/2011

6II 1020280 2%C ) ) ) 1020280 100 2%

"II 25H20 7%82C 15800 5%0C H%1C 20 5%1 %11

.otal 1255;0 40.


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hen the ithdraals-re:ections of 6II and "II categories are ta#en together, "i#hav Securities is the

largest contri!utor to the ithdraals in the I*O i%e% 1,2,270 shares amounting to 28%8C of the total

shares ithdran-re:ected in the I*O% Out of total 72,2,280 shares !id through the terminal of "i#hav

Securities, 1,2,270 shares ere ithdran-re:ected from its terminal and this constituted 75%5C of

shares ithdran-re:ected from its terminal% It is noted that on all three days of the issue, the

contri!ution of "i#hav Securities to the !ids ere significantly high%

;.4.4 @nder these facts and circumstances, it is o!served that the ercentage of ithdraals-re:ections from the

terminal of "i#hav Securities is significantly higher than that of the other ma:or !ro#ers- su!)syndicate

mem!ers in the I*O, as discussed a!ove%

*%'! (+ B'") -!"#$ NII %*($ (! 6#*+ (+ $(-8 %(>8*!'#) *!" )-6)#-#!& '&"$**)

;.5. nother allegation in the S=6 is that "i#hav Securities had laced large !ids through its terminal under the

6II category on !ehalf of its grou comanies vi&. 9$ Investment =onsultants *vt% $td% and "i#hav

Bro#ers *vt% $td% in order to inflate the !id !oo#G to give a misleading aearance of !idding in the issue

and also to contri!ute toards discovering the rice at the highest rice !and of `8-) er share%

;.5.1 .he day)ise !idding details through "i#hav Securities indicate that on first day of !idding i.e. on ril

2, 2011 under 6II category, 28%HC of the total !ids for the day ere laced through "i#hav Securities

hich ere fully ithdran-invalid% ?urther, on second day of !idding i.e. on 3ay 2, 2011, the total !ids

through "i#hav Securities contri!uted to 80%C of total !ids for the day, out of hich 75%7C ere

ithdran-invalid and on 3ay , 2011, total !ids laced through "i#hav Securities ere 87%HC of the

total !ids for the day out of hich %75C ere ithdran-invalid%

;.5.2 It is further o!served that under the 6II category, the total !ids laced through the terminal of "i#hav

Securities ere for ,85,H50 shares on 2 days of !idding i%e% on 2%8%2011 and on 2%H%2011 !y eight

6II-96I clients% .he said eight 6II-96I clients included to associate-grou comanies of "i#hav

Securities vi&., "i#hav Bro#ers *vt% $td% R'7*9 B$(7#$), resently #non as 8F I. Solutions India

(*' $td% and 9$ Investment =onsultants *vt% $td% AH I!9#)&>#!&% Other 6II-96I clients of

"i#hav Securities ere, 3s% "eeta Jain, 3s% Indira Jain, 3an!a Investments K Securities *vt% $td%,

3an!a Bro#ing Services% *vt% $td%, 3r% Shahru#h#han SharfaraD#han and 3r% +ive# garal% .he details

of the !ids laced !y the said entities has already !een rovided in the S=6%

;.5.3 It is o!served from the S=6 that the grou comanies of "i#hav Securities, vi&. "i#hav Bro#ers and

9$ Investments had common directors as that of "i#hav Securities% On the first day of issue, "i#hav



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Bro#ers *vt% $td% had laced a !id at 1028 a%m% at a rice of `8-) er share for 5,12,280 shares

under 6II-96I category% .his as the first !id laced on that day i%e the oening day of the issue%

Su!se/uent to this, another grou comany of "i#hav Securities vi&. 9$ Investments laced !id for

2,08,000 shares at `8-)er share at 1HHH2 on the same day% .he total contri!ution of the !ids laced

!y the grou comanies of "i#hav Securities, vi&. "i#hav Bro#ers *vt% $td% and 9$ Investments to the

issue siDe as 7,15,280 shares i%e 7%15C of the issue siDe on the first day of !idding% ll the che/ues in

resect of all the said entities ere returned su!se/uently%

;.5.4 ?rom the S=6, it is further o!served that on the first day of issue, su!se/uent !ids in the 6II category

ere laced on !ehalf of 3an!a Investments and Securities *vt% $td% and 3an!a Bro#ing Services *vt%

$td% (hereinafter referred together as &3an!a Frou&' through the terminal of "i#hav Securities% .he

com!ined !ids of 3an!a grou for 7,15,280 shares through the terminal of "i#hav Securities,

contri!uted to 7%15C of the total issue siDe and alleged to have inflated the !id !oo# to that extent% It is

noted that the 3an!a Frou, rior to their che/ues !eing forarded to the escro !an#er, laced their

ithdraal re/uest ith "i#hav Securities vide its letters dated 3ay 8, 2011 stating that "due to some reason

we do not want to apply for the same application and hence we request you not to do ban!ing of the said application..&%

.herefore, the che/ues issued !y the 3an!a grou ere not !an#ed% I find this exlanation not

convincing% .he total !ids of all the entities ho had laced !ids through the terminal of "i#hav

Securities under the 6II category on the first day of !idding formed 2%25C of the total issue siDe%

?urther, it is o!served that every single !id laced in the 6II category through the terminal of "i#hav

Securities as ithdran-re:ected either due to the reason "heque returned" or due to the reason &not

ban!ed"% i.e. there as 100C ithdraals of !ids through the terminal of "i#hav Securities under 6II

category%

;.5.5 "i#hav Securities, in its rely dated January 1H, 201 su!mitted that no connection as esta!lished

!eteen "i#hav Securities and 3an!a grou-other four individual alicants in the 6II category% In this

regard, it is noted from the S=6 that in addition to the I*O financing of clients done !y "i#hav

Securities 6B?= arm, ( vi&. .otal 9oldings', 3an!a Investment and Securities *vt% $td% also financed 0

clients, ho had laced the !ids through the terminal of "i#hav Securities, hich together contri!uted to

2,7H,500 shares% It is noteorthy that each and everyone of these alications, "stop payment" instructions

ere issued !y the alicants%

;.5.; I further note that "i#hav Securities in its rely dated January 1H, 201 has su!mitted that its >irector, 3r%

9itesh $a#hani, in his statement recorded !efore SEBI on June 1H, 2011 had rovided reasons for the

100C ithdraal of the alications in the 6II category% It as stated,



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• LSecondary mar!et falls about A2%

• @rom mar!et information,gossip etc. we came to !now that this will be listed on heavy discount%

• Muthoot finance which was listed on May B was given good rating also goes below issue price during the mar!et

time%

• 'nnouncement of the *ower @inance #td. )*+ came price had been declared so it was attractive than

3aswani )*+?

;.5.


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honor the !id amount% 9oever, they did not furnish any documents such as !an# account statements to

su!stantiate their claim during the course of investigation and also during the course of hearing held on June

1, 201% Su!se/uently, "i#hav Securities, vide letter dated >ecem!er 10, 2018 and January 1, 201H,

(su!se/uent to the hearing held on >ecem!er 2, 2018' inter alia furnished the folloing documents ith

regard to the availa!ility of funds in the accounts of the said grou comanies at the time of !idding

• =oy of the certificate issued !y Ban# of India certifying that che/ue for an amount of `1,,,H0-)

got de!ited from the account of 9$ Investments on 3ay 12, 2011% .he said che/ue as stated to

have !een issued !y 9$ Investments for the su!scri!ing to the I*O of Sanghvi ?orging and

Engineering $td% S*!9' F($'!, hich had oened on 3ay 8, 2011%

• =oy of demat statement of 9$ Investment shoing credit of shares of Sanghvi ?orging,

• =oy of ledger confirmation of 3-s Shree:i >arshan Enterrises for the eriod from ril, 01, 2011 to

3arch 1, 2011,

•

=oies of the &Statement of available fund position & during the eriod from ril 2, 2011 to 3ay 05, 2011of "i#hav Bro#ers and 9$ Investments%

• =oies of !an# account statements of "i#hav Bro#ers *vt% $td% and 9$ Investments *% $td%,

• =oies of &alance onfirmation ertificate" issued !y the resective !an#s to "i#hav Bro#ers and 9$

Investments,

• =oy of $edger =onfirmation of "i#hav Bro#ers for the eriod from 3arch 2, 2012 to 3arch 1,

2012 shoing the details of the account of "i#hav Bro#ers, as standing in the !oo# of accounts of

.otal 9oldings and ?invest *vt% $imited (.otal 9oldings',

• =oy of &Schedule of Terms" document executed !eteen .otal 9oldings and "i#hav Bro#ers in

ursuance of the rovisions of the master loan agreement dated ?e!ruary 10, 2010 executed !eteen

"i#hav Bro#ers and .otal 9oldings (ursuant to the I=> of "s% H crores from "i#hav Bro#ers to.otal

9oldings'%

;.5.11 On erusal of the said documents and !an# account statements, folloing are o!served

• Even though the aforesaid &statement of available fund position" of "i#hav Bro#ers furnished !y "i#hav

Securities, shos that they had total funds of more than `H,80,87,015-) during ril 2, 2011 to

3ay 05, 2011, the !an# account statements of "i#hav Bro#ers, hoever, indicate that the funds

availa!le in the !an# accounts of "i#hav Bro#ers ere only `1,75,87,015-)% .he remaining amount

included surlus Inter =ororate >eosit (I=>' of `,H8,00,000-) laced ith their grou comany



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and 6B?= arm, .otal 9oldings% In vie of this, it is evident that "i#hav Securities as not having

the re/uired funds during the eriod of ma#ing alication to I*O%

• In resect of the availa!ility of funds in the !an# account of 9$ Investments, it is o!served that

they laced the !id through che/ue dran on Ban# of India (ccount no% 00H021100000018',

amounting to `,5,000-)% s er the !an# statements furnished !y 9$ Investments, on 3ay 0H,2011 it only had a !alance of `2,77,0H5-)% ?urther, as er the 9>?= !an# account statements of

9$ Investments, `1 crore as received on 3ay 05, 2011 through ".FS from Shree:i >arshan

Enterrises% .he same as immediately de!ited and the closing !alance in the said account as

`5,1-)% .his leads to the inescaa!le conclusion that as on 3ay 05, 2011, 9$ Investment did

not have sufficient funds in their accounts during the eriod of ma#ing alication to I*O%

• It is ertinent to note that as er the S:) circular @;,;)#,7,58/8 dated ril 22, 2010, hich

stiulates the indicative timelines for the various activities in the issue rocess, rovides " ollecting ban!s

to commence clearing of payment instruments on TN7 day M.Nissue closure date&% In the instant matter the

entity lacing the !ids did not have sufficient funds in their accounts till 3ay 5, 2011%

• In vie of the aforementioned facts and circumstances, it is clear that the grou comanies of "i#hav

Securities did not have sufficient funds in their account during the time of !idding and also after lacing

the !ids, i.e. till 3ay 05, 2011%

;.5.12 In the facts and circumstances, it is o!served that lacing large !ids !y the grou comanies of "i#hav

Securities through its on terminal under the 6II category at the highest rice of `8-) and su!se/uently

ithdraing the alications-!ids so laced couled ith the fact of non)availa!ility of sufficient funds in

the resective account at the time of !idding lead to the inescaa!le conclusion that the !ids ere laced

ith the re)meditated fashion ith an intention to artificially inflate the !id !oo# and create a misleading

aearance of !idding in the I*O of +I$% .he aforesaid activities of "i#hav Securities ere clearly intended

to generate ade/uate interest of "IIs in the I*O%

;.5.13 .he !ids laced !y 6II and 4IBs aarently indicated good resonse to the I*O and !ecame a !enchmar#

for the ricing of the issue% In this regard, it is noted that the !ids ere laced !y "i#hav Securities at the

highest rice of `8-) and had ithdran the !ids ithin a san of to days after closure of the issue% It

cannot !e a mere coincidence that every single one of the 6II clients including its on grou comanies ho

had laced !ids through "i#hav Securities should ithdra their !ids on closure of the issue% It is o!served

that the extent of su!scrition in any issue can !e seen online on the exchange e!sites as ell as the !idding



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terminals of the syndicate-su!)syndicate mem!ers% In this context, it is imortant to note =lause 12(g' of

Schedule AI of SEBI (I=>"' "egulations, 200, hich says that & the bidding terminals shall contain an on-line

graphical display of demand and bid prices updated at periodic intervals% not e4ceeding thirty minutes &% .his indicates that

"i#hav Securities along ith its grou comanies, had laced these !ids through its terminal in a concerted

manner solely ith a vie to ro:ect an exaggerated resonse to the issue% It is also clear that all along they

deli!erately did this ith a rior intention to ithdra the alication%

?N(& B*!7'!/? (+ C#-#) $#%#'9#" *(! '& &# B'")

;.;.

I note from the S=6 that "i#hav Securities did not !an# che/ues received from 22 clients (20 "II clients

and 2 6II clients of 3an!a grou'% Such alications, in resect of hich che/ues ere not !an#ed amount

to a total of 1,1,500 shares and form 1%2C of the issue siDe% In this context, it is noted that "i#hav

Securities, vide its rely letter dated January 1H, 201, stated that the aforesaid alications of 20 clients ere

received !y "i#hav Securities during 10 a%m% to 2%00 %m on the last day of the !idding and hence !idding in

resect of those alications ere done during the final hours% ?urther, it as also su!mitted !y "i#hav

Securities that on the same day those 20 alicants anted to ithdra the alications% It is seen that the

timing of lacement of the !ids of 20 clients of the "II category is as under

T*6# III

D* B'""'! T'># N(. (+ RII *88'%*&'(!)0)0H)2011 1800 to 1H00 50)0H)2011 1H00 to 1500 H0)0H)2011 1500 to 100 20)0H)2011 100 to 1700 H5

T(&* 230

;.;.1 s seen from the a!ove ta!le, even the !ids laced !y H5 alicants during the closure of the !idding hours,

!eteen 100 hrs 1700 hours, ere ithdran vide letters on the same day% It is difficult to comrehend

hy the alicants, hose !ids ere laced during the last one hour, had re/uired "i#hav Securities to

ithdra their alications% "i#hav Securities in its rely vide letter dated January 1H, 201 su!mitted that La

sub-syndicate member is duty bound carry out the instruction of the clients immediatelyO % 9oever, the actions of "i#hav

Securities is contrary to their su!missions as it is seen that they had laced of the !ids only during the last

to hours, as shon in the a!ove ta!le%

;.;.2 ;ith regard to the allegation of &not ban!ing" the che/ues of 22 alicants-clients (20 "IIs and 2 6II-96I

clients', "i#hav Securities stated that the che/ues of the aforesaid 22 clients ere not !an#ed as all the 22

alicants-clients re/uested to hold !ac# their che/ues% 9oever, it is o!served that "i#hav Securities could

not furnish the coies of all the ithdraal letters of the aforesaid alicants-clients hen as#ed to do so

during the course of investigation% s regards the non)su!mission of the same, "i#hav Securities, in its rely



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vide letter dated January 1H, 201 contended that those records ere availa!le ith the su!)!ro#ers ho deal

ith the alicants and it as never insisted !y SEBI during investigation that it should lodge all the

ithdraal letters ith SEBI% In this context, it is noted that during the course of investigation, SEBI as#ed

"i#hav Securities to clarify the reasons for not !an#ing the che/ues of the aforesaid 22 alicants-clients%

"i#hav Securities as also advised to rovide the full details such as names, address, !an# account num!ers,

!an# name, !ranch name, address etc% of the said alicants-clients, hose che/ues ere not !an#ed% 3r%

9itesh $a#hani, >irector of "i#hav Securities, on !ehalf of "i#hav Securities stated that all the said

alicants-clients had re/uested for ithdraal of their alications% 3r% 9itesh $a#hani undertoo# that the

coies of the alication forms and ithdraal letters su!mitted !y the aforesaid 20 alicants-clients

ould !e su!mitted !y >ecem!er , 2012% It is o!served that 3r% 9itesh $a#hani, vide letter dated

>ecem!er , 2012 to SEBI, hile stating that &we would li!e to furnish you the below mentioned documents

Mithdraal letters and alication forms su!mitted !y all the 22 alicants as required by you for further

investigation &, su!mitted only the ithdraal letters for 15 clients and no exlanation has !een given for non)

su!mission of the remaining re/uisite documents in resect of other clients% 9oever, later, "i#hav

Securities, vide their letter dated >ecem!er 10, 2018 furnished the coies of the ithdraal letters of all the

22 alicants, after !eing called for a hearing on >ecem!er 10, 2018 (hich as later ostoned to

>ecem!er 2, 2018'%

;.;.3 =onsidering the facts that "i#hav Securities could roduce the ithdraal letters, though after considera!le

delay and in the a!sence of any other material on record to rove that "not ban!ing" of the aforesaid che/ues

in resect of the 22 alications ere ith the sole intention to inflate the !id !oo#, I am inclined to give

!enefit of dou!t in resect of the said charge against "i#hav Securities%

F'!*!%'! (+ B'") 6 &# NBFC A$> (+ R'7*9 S#%-$'&'#) *!" C(!&$('! (+ B'") 6 R'7*9S#%-$'&'#)

;.


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?urther, day)ise !rea#)u of the a!ove, is as under

B'" D* T(&* W'&"$**) V*'"

N(. (+ 6'")N(. (+)*$#) N(. (+ 6'")

N(. (+)*$#) N(. (+ 6'") N(. (+ )*$#)

02)0H)2011 H0 208000 18 H120 5 185770

0)0H)2011 1 HH750 51 287770 5 10070

T(&* 1< etails of the same are reroduced !elo

T*6# V

T'># (! 03/05/2011

T(&* RII *88'%*&'(!)

N(. (+ *88'%*&'(!) 6'" "-$'! &#(-$

I!9*'"/'&"**!/$##%"*88'%*&'(!) (-& (+ &#*88'%*&'(!) 6'" "-$'! &# (-$



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?rom 20 m to 2H8 75 02

?rom %05 m to H H 28

?rom 810 m to 8HH 21 208

?rom H02 m to HH7 1H7 180

T(&* 1152 20

;..1 n analysis of the a!ove ta!le indicates that out of the total 122 !ids laced through the terminal of

"i#hav Securities, 11H2 alications ere !id during the last four hours (i%e !eteen 20m and 0HH7

m'% Interestingly, out of the said 11H2 alications !id during the last four hours, 20 alications (70C'

ere ithdran% Similarly, out of the 1H7 !ids laced during the last one hour of !idding, 180 ere

ithdran%

;..

?urther, in its rely, "i#hav Securities had also contended that it had a very limited role as a su!)syndicate

mem!er and had essentially only a clerical role to lay in the hole rocess of I*O% It had executed the

instructions of alicants-clients !y lacing and ithdraing !ids% ?rom the S=6, it is o!served that in the

aointment letter dated January 1, 2011 of "i#hav Securities as a su!)syndicate mem!er to the Boo#

"unning $ead 3anager, a secific clause states that "i#hav Securities ould ma#e good any defaults of its

clients-investors% In vie of the onerous resonsi!ility cast uon the su!)syndicate mem!ers, the aforesaid

contention ut forth !y "i#hav Securities is not tena!le and I am of the vie that "i#hav Securities role in

the hole rocess of I*O is not mechanical or clerical as contended in its rely%

;.10. ?urther, ith regard to the contention ut forth !y "i#hav Securities in resect of the re/uirement of mens

rea , it is o!served that fraudulent or maniulative trade ractices in securities mar#et can !e roved on the

!asis of &reonderance of ro!a!ility& and not &!eyond reasona!le dou!t& as held !y the 9on!le Securities

ellate .ri!unal (S.' in *!%*! G*-$*9 R*'>**!' 9 A.O., SEBI, M->6*' , decided on January H,

2010 and 5$*)*!& H. 5*, M->6*' 9. SEBI, decided on ugust 1, 2010% .he 9on!le S. further

o!served that, roof of mens rea in maniulation cases need not !e direct, !ut rather may !e inferred from

circumstantial evidence and is generally !ased on a course of conduct shoing an intentional interference

ith the normal functioning of the securities mar#et and not !ased on a solitary action%

;.10.1 It is noted that in the instant matter, the roof of maniulative intent is evident from the series of

activities of "i#hav Securities, as discussed in the receding aragrahs, and disclose a clear maniulative

conduct, such as lacing !ids on !ehalf of "i#hav Securities on grou comanies at highest rice !and

and then ithdraing-cancelling the entire !ids under the 6II categoryG arranging the finance and

controlling of !ids laced !y "II clients and su!se/uent ithdraal-re:ection of a su!stantial ortion of

the !ids, etc% It is noted that in the I*O of +I$, the oversu!scrition level on closure of !ids as initially



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at a level of 8%15 times, hoever, after ta#ing into account the ithdraals and technical re:ections, the

oversu!scrition level fell to 1%27 times% In these circumstances and alying the aforesaid rinciles, I am

of the vie that all the charges against "i#hav Securities are esta!lished%

;.10.2 In the instant I*O, the inference of there !eing a good demand for the issue, hich as dran !y the

investors as su!stantially negated !y su!se/uent large)scale ithdraals and conse/uent dro in thesu!scrition level from 8%15 times to 1%27 times% 9ad the genuine investors !een aare of the true extent

of the demand for the I*O, imending large)scale ithdraals and the conse/uent change in allotment

ratio, they ould have most certainly reevaluated their investment decision, e/uied ith the correct

information% It is further noted from the availa!le records, that on the listing date i.e. Octo!er 28, 2011,

the rice of the scri at BSE hich as su!scri!ed at a rice of ` 8-) er share, oened at ` %8H and

closed at ` 1%H%

;.10.3 In order to rotect the interests of investors ho could have ossi!ly !een attracted !y the aarent

excess su!scritions in the I*O of +I$, SEBI vide the interim Order dated July 11, 2011, inter alia ,

directed the issuer comany, +I$ to give otion for ithdraal to all investors ho ere allotted shares

in the 6II and "II categories for such num!er of shares !y hich the allotment ratio as imacted due to

ithdraals-re:ections in the aforesaid categories% In vie of this, I have no hesitation to re:ect the

contention ut forth !y "i#hav Securities that SEBI had given a clean chit to the comany in its Order

dated July 11, 2011% It is also noted that the 9on!le S. vide Order dated ugust 2H, 2011 confirmed

the said SEBI Order to the extent of giving ithdraal otion to the investors in the "II category% ?rom

this, it is clear that the "IIs ere lured into alying in the I*O, !y the &good& resonse artificially created

!y the entities including "i#hav Securities%

;.11. "i#hav Securities, during the hearing held on >ecem!er 2, 2018 su!mitted that SEBI has not given

insection of documents and has not alloed cross examination of various alicants ho !id through

"i#hav Securities and their statements ere recorded during investigation% "i#hav Securities also

re/uested for cross examination of the alicants ho !id through "i#hav Securities% In this regard, it

is o!served from the availa!le records, that "i#hav Securities as granted insection of documents on

6ovem!er 0, 2018 and 6ovem!er 10, 2018 and all the materials relied uon !y SEBI have !een

rovided to the entity% ?urther, in resect of the contention that oortunity to cross examine as not

given, it is o!served that SEBI has not relied uon statements of any erson or entity in the

roceedings against "i#hav Securities% In vie of this, I am of the oinion that the issue of cross)

examination does not arise in the instant matter% It is also noted that amle oortunities have !een



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granted to "i#hav Securities to adduce evidence in the matter% 3ost of the relevant documents such as

the ithdraal letters of all the 20 alicants etc% have !een furnished !y "i#hav Securities only after

receit of the S=6 in resect of the en/uiry roceedings initiated against "i#hav Securities%

;.12.

.he authoriDed reresentative of "i#hav Securities, during the ersonal hearing !efore me on June 1, 201,

su!mitted a coy of >elhi 9igh =ourt "uling dated January 18, 201 in SEBI V). A.5.. I!"-)&$'#) &". I

have carefully analysed the :udgment and I find that the facts of the instant matter are different from the

case /uoted !y "i#hav Securities% .he issue under consideration in the referred case as refund of

su!scrition in an issue, hich did not attract minimum su!scrition net of alication ithdraals%

9oever, in the instant matter, the issue under consideration is hether "i#hav Securities as a su!)syndicate

mem!er to the I*O of +I$, !y its various acts and omissions, inflated the !id !oo#G created misleading

aearance of vigorous !iddingG contri!uted toards maniulating the rice at the highest rice !andG

laced large orders on !ehalf of the alicants initially and then ithdre-cancelled the !ids there!y

inducing innocent investors to su!scri!e to the issue% I am, therefore, of the vie that the :udgment /uoted

!y "i#hav Securities is not relevant for deciding the instant issue and the same is of no hel to "i#hav

Securities%


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. It is also relevant to note that "i#hav Securities, failed to furnish the relevant documents crucial in determining

the case on merits such as the ithdraal letters and coies of alication forms of the 22 alicants (as

detailed in *aragrah 6o% 5%5%2', the !an# account statement and other documents shoing funds availa!le in

the !an# account of their grou comanies, etc% during the course of investigation and also during the hearing

held on June 1, 201% It as only during the second hearing granted to "i#hav Securities i.e. on >ecem!er 2,

2018, that they furnished some of the relevant documents-material such as the ithdraal letters of the

aforesaid 22 alicants, the !an# account statement and other documents of their grou comanies, etc%

10.

I note that SEBI, vide the Interim Order dated July 11, 2011 (later confirmed through the =onfirmatory Order

on January 11, 2012', restrained "i#hav Securities from acting as a syndicate mem!er-su!)syndicate mem!er

for all forthcoming issues, till further orders in the matter and it has already undergone the restraint for a

eriod of aroximately three years and seven months%

O$"#$

11.

=onsidering all the facts and circumstances of the case and the aforesaid mitigating factors, I, in exercise of

the oers conferred uon me !y virtue of Section 1 read ith Section 11 and 11B of the SEBI ct and

"egulation 11(1' of the *?@.* "egulations, 200, restrain "i#hav Securities $td% from acting as a

syndicate-su!)syndicate mem!er for a eriod of 4 #*$)% .he eriod of rohi!ition already undergone !y

"i#hav Securities in terms of SEBI Interim Order dated July 11, 2011, shall !e set)off from the eriod of

de!arment as directed a!ove%

12. .his Order shall come into force ith immediate effect%

*lace 3um!ai S. RAMAN>ate 3arch 1 , 201H WHOE TIME MEMBER

order against rikhav securities ltd. in the matter of ipo of vaswani industries limited

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