Citation Codes

Equivalent Citations

citation codes

Case Number

WTM/GA/40.ISD/11/07

Judges

G. Anantharaman, Whole Time Member

Acts

provisions of section 11B, 11 (4) of the Securities and Exchange Board of India Act, 1992 (for short the Act)
section 19 read with sections 11, 11B and 11(4) of the Securities and Exchange Board of India Act, 1992,
sections 11 and 11 B of the Page 8 of 23 Act
EXCHANGE BOARD OF INDIA ACT, 1992

See more information ...

Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

Securities and Exchange Board of India (SEBI) conducted a preliminary analysis of dealings in Initial Public Offerings (IPOs) during 2003–2005 which prima facie indicated that certain entities opened many demat accounts in fictitious/benami names and obtained IPO allotments in the retail category by making multiple small applications. Subsequent to allotment, shares were transferred from those afferent accounts to identified principals / key operators (master account holders), suggesting cornering of IPO shares to the detriment of retail investors.

On April 27, 2006 SEBI passed an ad interim ex parte order prohibiting various key operators, including Shri Dhaval A. Mehta, from buying, selling or dealing in the securities market (including IPOs) until further directions, on the ground of prima facie violations of Regulation 3 of the FUTP Regulations and the SEBI (Disclosure and Investor Protection) Guidelines, 2000. The interim order was treated as a show cause notice and SEBI ordered an investigation.

Shri Dhaval A. Mehta requested inspection of documents (letter dated May 19, 2006); inspection was allowed on June 19, 2006. By letter dated June 22, 2006 Shri Mehta contested SEBI's power to pass the ad interim order and denied the allegations, describing his business as finance (borrowing and lending) and asserting loan arrangements with Ashmi Financial Consultancy Ltd. He sought an opportunity to be heard.

A hearing was granted (initially November 3, 2006, adjourned to February 7, 2007). Shri Mehta supplied documents on February 22, 2007 including lists of investors he financed, demat and bank statements. The authority considered the materials and framed the sole issue whether SEBI's ad interim directions dated April 27, 2006 should be continued, revoked or modified with respect to Shri Mehta.

After analysis, by an order dated November 27, 2007 (signed by G. Anantharaman, Whole Time Member, SEBI) the ad interim order of April 27, 2006 was confirmed against Shri Daval A. Mehta (Permanent Account Number ALKPM 2611G).

Legal Issues Presented

Whether, on the materials available and considering Shri Mehta's submissions, SEBI's ad interim ex parte directions dated April 27, 2006 should be continued, revoked, or modified in respect of Shri Mehta.
Whether SEBI had the statutory power under sections 11, 11B and 11(4) of the SEBI Act, 1992 to pass the ad interim ex parte directions without conducting a prior enquiry and/or whether initiation of investigation/enquiry under section 11C was a condition precedent to invoke section 11(4).
Whether Shri Mehta's conduct—receipt of large quantities of IPO shares via off-market transfers from numerous afferent accounts and payments debited from his bank accounts—prima facie amounted to cornering of IPO shares and violations of the FUTP Regulations and DIP Guidelines.

Arguments of the Parties

Shri Dhaval A. Mehta's Arguments

SEBI lacked power under sections 11B and 11(4) of the SEBI Act to pass the ad interim order in the absence of an enquiry; directions under section 11B could be passed only after making or causing an enquiry.
Under section 11(4) SEBI can take measures only pending or on completion of an investigation or enquiry; it was not clear SEBI had initiated such investigation in his case.
No directions could be issued against him because he was not a registered intermediary nor a person associated with the securities market.
He was only engaged in finance business (borrowing and lending). He had raised funds from Ashmi Financial Consultancy Ltd. and disbursed loans to individuals who applied in IPOs. As security, borrowers transferred certain shares to his demat account and he transferred shares to Ashmi; ultimately Ashmi sold shares and consideration was returned to borrowers after deducting loan amounts and interest.
He asserted the afferent demat accounts were valid and that he was merely a financier; he denied operating fictitious/benami applications and requested an opportunity of hearing.

SEBI / Authority's Observations and Responses

SEBI's primary duty under sections 11 and 11B is to protect investors and regulate the securities market; the powers under those sections are broad and intended to permit preventive and immediate regulatory action when exigent circumstances require.
The contention that only registered intermediaries or persons formally associated with the market can be restrained is rejected: a person who cornered large numbers of IPO shares by off-market transfers immediately after allotment is, by any reasonable view, a person associated with the securities market for regulatory purposes.
Section 11(4) powers are in addition to and not in derogation of other powers; initiation of investigation/enquiry under section 11C is not a condition precedent to issuing directions under section 11(4) where exigency exists. The SAT authority and judicial decisions were relied upon to support that view.
Although pre-decisional hearing is ideal, in urgent circumstances SEBI may act ex parte and follow up with post-decisional opportunity; SEBI had in fact ordered an investigation dated January 20, 2006.
Documentary and transactional materials (including bank debits for application monies, demat transfers from numerous afferent accounts into Shri Mehta's demat account just before/around listing dates, absence of proof of tripartite loan arrangements, and sales on listing dates at large gains) prima facie support the view that Shri Mehta cornered IPO shares and unjustly enriched himself, rather than merely financing genuine applicants.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Anand Rathi Vs. SEBI (High Court of Bombay)	Recognition that Section 11B is an enabling provision to empower SEBI to regulate speculative markets and take measures as it thinks fit to protect investors; enabling provision must be construed to subserve legislative purpose.	The court cited the decision to support the view that SEBI's powers under section 11B are wide and intended to permit preventive regulatory action in the interests of investors.
Karvy Stock Broking Ltd. Vs. SEBI (Securities Appellate Tribunal, order dated January 08, 2007)	Where prima facie facts disclose a case for proceeding, depending on nature and gravity, SEBI can take measures under section 11 to protect the market and interests of investors; immediate preventive action (including restraining persons) may be necessary.	Used to justify that SEBI may pass interim restrictive orders when prima facie facts indicate manipulation and that "inquiry" in section 11(4) can refer to various types of inquiries pending under the Act, permitting interim orders during such pendency.
Bhoruka Financial Services Ltd. Vs. SEBI	Referenced in connection with differing views on SEBI's powers; noted that a contrary view was stayed by the Hon'ble Supreme Court of India by order dated August 25, 2006.	Mentioned to indicate that a contrary SAT view had been stayed by the Supreme Court, thereby reinforcing the authority's approach to interim powers (as per the opinion's narrative).
Ketan Parekh Vs. SEBI (Securities Appellate Tribunal)	Principle that intention to manipulate or defeat market mechanisms often must be inferred from attendant circumstances because direct evidence may not be available.	Applied to support the proposition that proof of manipulation can rely on inferences drawn from patterns and circumstantial facts (transaction patterns, control over accounts, timing of transfers) and that such inferences can justify restrictive action.

Court's Reasoning and Analysis

The authority's analysis proceeded in a sequence of legal and fact-based steps:

Statutory power and purpose: The opinion begins with a legal analysis of SEBI's mandate under sections 11, 11B and related provisions of the SEBI Act, describing those powers as broad, purposive and intended to permit preventive as well as punitive measures to protect investors and regulate a dynamic securities market. The court emphasized harmonious construction of enabling provisions to effectuate legislative intent.
Addressing Shri Mehta's challenge on jurisdiction and procedure: The opinion rejects Shri Mehta's contention that SEBI lacked power to pass the ad interim order or that an enquiry/investigation was a jurisdictional precondition to issue directions under section 11(4). It holds that section 11(4) powers are additional and not in derogation of other powers; SEBI may exercise preventive measures where exigency demands and may act ex parte with post-decisional hearing in appropriate cases. The opinion referred to judicial authorities (Anand Rathi, Karvy Stock Broking Ltd.) to support this approach and noted that SEBI had in fact ordered an investigation on January 20, 2006.
Review of factual materials: The authority examined the transactional record supplied by SEBI and by Shri Mehta, including demat account transactions, lists of afferent account holders, bank statements showing debits for application monies, and timings of off-market transfers relative to listing dates.
Identification of pattern and modus operandi: The opinion highlights a recurring pattern — many demat accounts opened with common addresses and similar names (large clusters tied to particular addresses), payments for IPO applications debited from Shri Mehta's bank accounts (sometimes thousands of applications), off-market transfers from afferent accounts into Shri Mehta's demat account immediately after allotment and around listing dates, and subsequent transfers or sales (including transfers to Ashmi or Ms. Sheelu Lalwani). These patterns matched the modus operandi observed in other key operator cases.
Evaluation of Shri Mehta's defence: The opinion notes Shri Mehta's claim of a tripartite loan arrangement, lack of documentary proof of such tripartite arrangements, lack of corroborating bank statements from Ashmi, and failure to demonstrate that purported applicants were paid back. The authority found the asserted loan explanation unsubstantiated by the record.
Inference and circumstantial reasoning: Citing the principle that manipulation is often proved by inferences from attendant circumstances, the opinion concluded that the combination of documentary facts and patterns raised a prima facie inference of cornering and manipulation. The opinion emphasized that control over funds and timing of transfers indicated that afferent accounts functioned as conduits or name-lenders rather than genuine independent applicants.
Conclusion on prima facie violations: On the totality of the materials, the authority found prima facie that Shri Mehta played a major role in cornering IPO shares and thereby prima facie violated the FUTP Regulations and DIP Guidelines. The authority therefore found reasonable grounds to confirm the ad interim order.

Holding and Implications

Holding: In exercise of the delegated powers under section 19 read with sections 11, 11B and 11(4) of the SEBI Act, 1992, the authority confirmed the ad interim order dated April 27, 2006 against Shri Daval A. Mehta (Permanent Account Number ALKPM 2611G) by order dated November 27, 2007 (signed by G. Anantharaman, Whole Time Member, SEBI).

Implications:

Direct effect: The confirmation upholds the prior ex parte prohibitory directions issued by SEBI (the April 27, 2006 order) as against Shri Mehta. The initial interim order had prohibited the named persons from buying, selling or dealing in the securities market (including in IPOs) until further directions; the confirmation maintains that regulatory restraint as to Shri Mehta on the basis of the prima facie findings set out in the opinion.
On precedent and broader law: The opinion relies on and cites prior judicial and appellate decisions to interpret SEBI's powers. The document does not announce a new legal precedent; it applies existing authorities and principles to the facts at hand to justify confirmation of the interim order.
Scope of findings: The decision is framed as a confirmation on prima facie findings based on the materials available; the opinion repeatedly characterizes conclusions as prima facie and grounds for confirming interim relief pending further proceedings (consistent with SEBI's investigatory and adjudicatory process described in the opinion).

Note: This summary is limited to, and derived exclusively from, the content of the provided opinion. No additional facts, outcomes or legal developments beyond the text have been included.

Show full summary ...

To access the original judgment, please Sign In or Subscribe.

Order against Shri Dhaval A Mehta in respect of his dealings in the initial public offerings

EXCHANGE BOARD OF INDIA ACT, 1992 AGAINST SHRI DHAVAL A MEHTA IN RESPECT OF HIS DEALINGS IN THE INITIAL PUBLIC OFFERINGS. 1.1 A preliminary analysis into the buying, selling or dealing in the shares issued through Initial Public Offerings (IPOs) of various companies during the period 2003-2005, by Securities and Exchange Board of India (hereinafter referred to as SEBI) prima facie showed that, certain entities opened many demat accounts (for short afferent accounts) in fictitious/ benami names and the said entities had cornered/ acquired the shares of the such companies allotted in the IPOs, by making applications in fictitious/ benami names with each of the applications being of small value so as to make it eligible for allotment under the retail category. It was further revealed that, subsequent to the allotment of IPO shares, the fictitious/benami allottees had transferred the said shares to their principals who were prima facie identified by SEBI as key operators / master account holders. The modus operandi as detailed above led to the prima facie view that the thousands of entities in whose names demat accounts and bank accounts had been opened and IPO applications made, were either benami, name lenders or non existent. 1.2 In the above facts and circumstances, SEBI vide an ad interim ex parte order dated April 27, 2006 inter alia prohibited various key operators including Shri Dhaval A Mehta not to buy, sell or deal in the securities market including in IPOs, directly or indirectly till further directions as it was inter alia found that they had prima facie violated the provisions of Regulation 3 of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (for short the FUTP Regulations) and the provisions of Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000. It was further directed to treat the said interim order as show cause notice against the entities named therein and an opportunity was also provided to the said entities to file their objections, if aggrieved. SEBI also ordered for an investigation to look into the alleged violations. 2.1 Shri Dhaval A. Mehta (hereinafter referred to as Shri Mehta for the sake of brevity) vide letter dated May 19, 2006 inter alia requested for the inspection of all the documents relied upon by SEBI in the aforesaid ex- parte interim order and further requested for the extension of time for filing the objections. As requested by Shri Mehta, SEBI granted an opportunity to him to inspect the documents, on June 19, 2006. Subsequently, vide letter dated June 22, 2006, Shri Mehta inter alia stated that the provisions of section 11B, 11 (4) of the Securities and EXCHANGE BOARD OF INDIA ACT, 1992 (for short the Act) did not empower SEBI to pass the ad interim order. He contended that the directions under section 11B of the Act could be passed only after making or causing to be made an enquiry and that there was nothing on record to show that the said requirement was followed in his case. According to him, under section 11 (4) of the Act, SEBI can take any of the measures specified therein either pending investigation or enquiry or on completion of such investigation or enquiry. He further contended that, no directions could be issued against him as he was not an intermediary registered with SEBI and also not associated with the securities market. He urged that no prima facie case was made out which warranted the issuance of the ad interim order which was passed in gross violation of principles of natural justice. He stated that he was doing finance business involving borrowing and lending money. He added that, he had raised funds inter alia from one Ashmi Financial Consultancy Ltd. (for short Ashmi) and the loan amount taken from the said Ashmi was disbursed among various individuals (who had applied for the allotment of shares in IPOs) at a higher rate of interest. According to him, as per the terms of understanding of the loan, the borrower had transferred certain shares to his demat account and thereafter, he had transferred the said shares to Ashmi as a security against the money borrowed from it. He added that, the said shares were ultimately sold by Ashmi as per the instructions of the individual borrowers. 2.2 According to Shri Mehta, all the individual borrowers had valid demat accounts with their respective depository participants and therefore, he could not be treated as the key operator. He stated that his role was limited in providing finance to entities / persons in the normal course of business and that he had no role in making fictitious/benami applications. In respect of IPO of IDFC, Shri Mehta stated that as per the arrangement entered into between himself, Ashmi and the various individuals (borrowers), he had received shares from the said individuals and thereafter, the said shares were transferred to Ashmi. The said Ashmi had subsequently sold the said shares and the consideration was given back to Shri Mehta after deducting the loan amount along with the interest. He claimed that the money thus received by him was returned back to the individual borrowers. In respect of the IPO of Suzlon Energy Ltd. he stated that the shares received by him as per the loan arrangement were transferred to the account of one Ms.Sheelu Lalwani as per the instructions of Ashmi. He added that, as per the advice of the borrowers, he instructed Ashmi to sell the said shares and to adjust the consideration against the money borrowed by him from the said Ashmi. He stated that he had not used any afferent accounts to obtain the IPO shares of Suzlon Energy Ltd. He claimed that the income earned by him was limited to the differential interest rates. He urged that he had not violated inter alia the provisions of the FUTP Regulations. He further requested for an opportunity of hearing. 2.3 Pursuant to the receipt of the aforesaid reply, an opportunity of hearing was granted to Shri Mehta on November 3, 2006 and the same was adjourned to February 7, 2007, as per his request. On February 7, 2007, Shri Joby Mathew, advocate appeared before me and made submission on behalf of Shri Mehta. Shri Sandeep Mehta, the brother of Shri Mehta was also present at the time of the hearing. The learned advocate made submissions on the lines of the reply of Shri Mehta dated June 22, 2006. As it was inter alia submitted that the afferent accounts from which the shares were transferred to the demat account of Shri Mehta were not fictitious, Shri Mehta was advised to produce the details of various information / documents including the share transfers and the details of IPO applications, Bank Accounts, etc. Shri Mehta vide letter dated February 22, 2007 inter alia furnished the details of the investors financed by him along with their address and demat account details. He also enclosed the copy of his demat account statements and the bank account statements for the relevant period, in addition to the extract of the ledger account copy of Ashmis account as reflected in his books. 2.4 I have perused the reply of Shri Mehta, the oral submissions made on his behalf and other materials available on record. In the facts and circumstances, sole issue for consideration at this juncture is, whether based on the available materials on record and considering the submissions made by Shri Mehta, the directions issued by SEBI vide ad interim ex parte order dated April 27, 2006 need to be continued, revoked or modified in any manner in so far as it relates to Shri Mehta. 3.1 Shri Mehta in his reply inter alia contended that the provisions of sections 11B, 11 (4) of the Act did not empower SEBI to pass the ad interim order. He also urged that the directions under section 11B thereof could be passed only after making or causing to be made an enquiry and that there was nothing on record to show that the said requirement was followed in his case. He further added that it was not clear from the interim order as to whether SEBI had initiated an investigation in terms of section 11C of the Act in order to exercise its powers under section 11(4) thereof. According to him, no directions could be issued against him under section 11 (4) (b) of the Act as he was not an intermediary registered with SEBI and also not a person associated with the securities market. In this context, I note that the primary function and duty of SEBI is to protect the interests of the investors in securities and to regulate the securities market. The said duty is inter alia performed under sections 11, 11B of the Act which is the very soul and heart of it. On a careful perusal of section 11, it could be seen that SEBI has been mandated to protect the interests of investors in securities by such measures as it thinks fit which provide a large sweep to SEBI. The provisions of SEBI such as 11B, 11(4) etc are meant to arm SEBI with authority so as to enable it effectively to exercise power and achieve the declared objectives of the Act. It is clear that a common thread runs through the various provisions of the Act to empower SEBI to take preventive as well as punitive measures so as to protect the investors and to promote the securities market. One cannot lose sight of the fact that SEBI has to regulate in a dynamic market situation which is likely to throw up several exigencies calling for the immediate intervention by Regulator, all of which cannot be captured in detail in the text of the law and that the same has to be read into the scheme of the enactment in a harmonious construction. The power of SEBI has to be aligned with what is sought to be achieved in the legislative intent and any attempt to deny the same would stultify the very purpose for which the law was enacted. If one has regard to the aforesaid principles, it would follow that the power which has been conferred under section 11B of the Act to issue direction are of a widest possible amplitude and are exercisable in the interests of investors. The powers of SEBI to pass orders under these sections have been judicially recognized by various judgments. The Honble High Court of Bombay in the matter of Anand Rathi Vs. SEBI had inter alia observed as follows: ..It cannot be gainsaid that SEBI has to regulate speculative market and in case of speculative market varied situations may arise and looking into the exigencies and requirements, it has been entrusted with the duty and functions to take such measures as it thinks fit. Section 11B is an enabling provision enacted to empower the SEBI Board to regulate securities market in order to protect the interest of the investors. Such an enabling provision must be so construed as to subserve the purpose for which it has been enacted . Further the Honble Court had observed Section 11B is an enabling provision enacted to empower SEBI to protect interest of investors and to promote the development of and to regulate the securities market and to prevent malpractices and manipulations inter alia by brokers . 3.2 Further the contention that as he was not an intermediary registered with SEBI and not a person associated with the securities market, no order could be passed against him, takes a restricted and blinkered view of SEBIs powers. He may not be an intermediary registered with SEBI in its strict sense, but by any stretch of imagination, it cannot be said that a person, who had cornered large number of IPO shares (by off market transfers immediately after the allotment and around the time of listing) to the detriment of retail genuine investors, is not a person associated with the securities market. I note that SEBI has plenary powers to take measures to prohibit, unearth and deal with fraudulent and manipulative transactions to effectively protect the interest of investors and such powers travel beyond the straight-jacket of registered intermediaries to the vast expanse of people associated with the securities market. This is also needed in order to promote an orderly development of healthy and vibrant securities market. In view of the above, the contention that SEBI did not have power to pass directions under sections 11 and 11 B of the Act against Shri Mehta is devoid of any merits and accordingly is rejected. As far as his contention that initiation of investigation/ enquiry is a condition precedent for passing a direction under section 11 (4) of the Act, I note that the powers under section 11 (4) of the Act are in addition to and not in derogation of powers under sections 11 (1), (2), (2A) and (3) and 11B of the Act. SEBI being the regulator carries with it all the necessary powers expressed or implied which are essential to meet any exigencies in its widest amplitude in order to protect the interest of investors. In such circumstances, the contention that the initiation of investigation/inquiry is a condition precedent for the issuance of direction under section 11 (4) of the Act is difficult to accept. Further, the Honble Securities Appellate Tribunal (SAT), in its order dated January 08, 2007 inter alia observed in the matter of Karvy Stock Broking Ltd. Vs SEBI If the prima facie facts disclose a case for proceeding further in the matter and depending upon the nature and gravity of the wrong doing, it would decide what measures it needs to take under section 11 to protect the securities market and also the interests of the investors. If it feels that immediate preventive action is essential, it can restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities with immediate effect. . The SAT further observed in the case cited supra The provisions of the Act are basically intended to protect the interests of the investors and to promote the market. However, the Act as initially enacted provided primarily for taking promotional or protective measures. The power to take preventive or punitive measures was implicit. Now it has been expressly extended to taking even the preventive or punitive measures .. In view of the above, we hold that the word inquiry used in section 11(4) refers to the inquiries held under sections 11, 11B, also to the enquiry under the inquiry regulations framed under section 12(3) and also to the inquiry held under Chapter VIA and it is during the pendency of any of these inquiries that an interim order could be passed with a view to protect the interests of investors or in the interest of the market (Emphasis supplied). A contrary view of SAT in the matter of Bhoruka Financial Services Ltd. Vs. SEBI has been stayed by the Honble Supreme Court of India, vide order dated August 25, 2006. 3.3 In the scheme of regulatory directions by way of ad interim orders, pre decisional hearing is not a must when the facts and circumstances of the particular case demand an urgent action, in order to protect the interest of investors and the securities market in general. However, the same would be followed by an opportunity to the party, if aggrieved, to explain his case. When the imperative of the situation demands emergent action, the rules of natural justice can be deferred and the post decisional hearing would serve the purpose. Having said so, the argument that no investigation has been carried out by SEBI in respect of the alleged manipulations in the Initial Public Offerings is not correct and misleading. In fact, SEBI, vide order dated January 20, 2006 ordered for an investigation to look into the alleged manipulation in respect of the dealings in the Initial Public Offerings. In the facts and circumstances, the contention that SEBI could not pass the ad interim directions is devoid of any merits and accordingly is rejected. 3.4 The fact that the demat account of Shri Mehta received large number of IPO shares from various afferent accounts as mentioned below, is not disputed. Name of the Depository Participant Client ID Names of IPOs Number of afferent accounts from which shares received through off market transfers No of shares transferred through off market transfers Karvy Stock Broking Ltd. 10139886 IDFC Ltd. 660 175560 Khandwala Intergrated Financial Services Pvt. Ltd. 10139886 Suzlon Energy Ltd. 3863 61808 3.5 I note that Shri Mehta vide letter dated February 22, 2007 enclosed the list of investors financed by him in the IPOs of Suzlon Energy Ltd and IDFC Ltd. alongwith their address, demat account details etc. A perusal of the said details (as furnished by Shri Mehta) indicate that a number of demat accounts had been opened by the purported investors having a common address. Some of such details, as provided by Shri Mehta are given below :

a) In the case of IPO of Suzlon Energy Ltd. It has been noted that about 300 demat accounts were opened by the purported applicants in such a manner that most of the said accounts were either in the same name or with different combinations of a particular name, with a common address at 57, Jajkeshavni Chali, Ahmedabad 380018 as given below:

1. Parmar Kirti Shankar

2. Naresh Manilal Parmar

3. Rajput Bharat Bhagvanbhai

4. Babiben Chawda

5. Parmar Bindhu Arvind

6. Jagdish Kumar Solanki

7. Chouhan Govind Mohan

8. Tulsi C. Chamar

9. Tusharbhai S. Parmar

10. Jashi Parmar

11. Rathod Baldevbhai Sheeva

12. Panjal Mani Ratikumar

13. Parmar Vijay Dudhabhai

14. Chawda Padmadevi Suresh

15. Parvati H. Rathod

16. Chamar Jayanti M

17. Pasiben Chawda

18. Parmar Nainadevi Vijayakumar

19. Raiben Chouhan

20. Khemi Parmar

21. Jayanti Madhabhai Chamar

22. Parvati Hirabhai Rathod

23. Raiben Govindbhai Chouhan

24. Khemi B Parmar

25. Chawda Pasi Motibhai

26. Prajapati Chhagabhai Keshabhai

27. Solanki Jagdishkumar Natwarlal

28. Bharat Rajput

29. Panjal Rekhaben

30. Bindhuben A Parmar

31. Shivabhai Parmar

32. Hirabhai K Rathod

33. Vijay Parmar

34. Tulsi Chhanbhai Chamar

35. Hansaben Baldevbhai Pardhi

36. Naina Parmar

37. Padmadevi Chawda

38. Rajeshkumar K Parmar

39. Eshwarlal Khandas Shah

40. Solanki Jagdish Natwar

41. Rekhaben M Panchal

42. Solanki Ranjan Jagdish

43. Baldev Sheevabhai Rathod

44. Nikhil Manilal Panchal

45. Pasi Chawda

46. Chhagaji Keshaji Prajapati

47. Babiben Chhanalal Chawda

48. Mani Panchal

49. Shah Prakashbhai Ishvarbhai

50. Vitthalbhai C. Rathod

51. Chhagabhai Prajapati

52. Rathod Vittalbhai

53. Chawda Babi Chhanalal

54. Solanki Natwar Govind

55. Nikhil Kumar Panchal

56. Chauhan Raidevi Govind

57. Rekhaben Panchal

58. Rathod Vitthalbhai Cheharabhai

59. Rekhaben Manilal Panchal

60. Sureshkumar Panchal

61. Vitthalbhai Chherabhai Rathod

62. Vitthalbhai Rathod

63. Hansa Panchal

64. Rekha Panchal

65. Padma Chawda

66. Rajput Bharat B

67. Dinabhen Vithalbhai Rathod

68. Padma S Chawda

69. Parmar Manjulaben Kirtikumar

70. Raiben G Chauhan

71. Padma Suresh Chawda

72. Babi Chawda

73. Vijaykumar Parmar

74. Jagdishkumar Natwarlal Solanki

75. Prakash I Shah

76. Hemlata Mahesh Rathod

77. Nainaben V Parmar

78. Natwarlal Govindlal Solanki

79. Baldev Pitambarbhai Parmar

80. Babiben C Chowda

81. Baldev P Parmar

82. Baldev Rathod

83. Baldev S Rathod

84. Bhagwatiben Govindbhai Parmar

85. Bhagwatiben Parmar

86. Bhagwatiben G. Parmar

87. Bharat B Rajput

88. Bharat Bhagwanbhai Rajput

89. Bindhuben Arvindbhai Parmar

90. Panchal Rekhaben Manilal

91. Binduben Parmar

92. Chamar Shanta

93. Pardhi Hansaben

94. Parmar Manjulaben

95. Rathod Hirabhai Kanjibhai

96. Hansaben B Pardhi

97. Parmar Manjula Kirtibhai

98. Nikhil Panchal

99. Mani Parmar

100. Chauhan Raiben Govindbhai

101. Parmar Shivabhai S

102. Parmar Hemlataben Vasantbhai

103. Naresh M Parmar

104. Parmar Tusharbhai S

105. Parmar Kirtibhai

106. Parmar Manjuben Jayantibhai

107. Parmar Bindhuben

108. Laxmiben Hirabhai Rathod

109. Hansaben Pardi

110. Nikhil M Panchal

111. Hemlala M Rathod

112. Prajapati Chhagaji

113. Laxmiben H Rathod

114. Parmar Tusharbhai Shankarbhai

115. Chawda Pasiben

116. Khemi Baldevbhai Parmar

117. Solanki Natwarlal Govindlal

118. Shailesh Parmar

119. Parmar Laxmi Kantilal

120. Parmar Mani

121. Tulsi Chamar

122. Rathod Dinaben

123. Jayantibhai H Rathod

124. Jayanti Chamar

125. Laxmiben Parmar

126. Rathod Hemlata Mahesh

127. Pasiben Motibhai Chawda

128. Shivabhai S Parmar

129. Suresh Motibhai Chawda

130. Hemlataben B Parmar

131. Jitendra Manilal Parmar

132. Manilal Panchal

133. Parmar Jashi Manilal

134. Hirabhai Kanjibhai Rathod

135. Parmar Jitendra Manilal

136. Parmar Nainaben

137. Chamar Tulsi Chhanbhai

138. Jayantibhai Hirabhai Rathod

139. Shailesh Baldevbhai Parmar

140. Parmar Rajeshkumar Kalidas

141. Parmar Shailesh Baldevbhai

142. Rathod Jyantibhai Hirabhai

143. Rathod Laxmiben Hirabhai

144. Rathod Gunvant Hirabhai

145. Chamar Shanta Madhabhai

146. Gunvant H Rathod

147. Motiben H Rathod

148. Chowda Suresh

149. Rathod Parvati Hirabhai

150. Chawda Mulji Mohan

151. Pasiben M Chawda

152. Parmar Kirtibhai S

153. Panjal Hansa Baldev

154. Baldev Kumar Rathod

155. Vitthal Kumar Rathod

156. Shah Prakash Ishverlal

157. Solanki Ranjanben Jagdishbhai

158. Parmar Rajesh Kalibhai

159. Shanta Madhabhai Chamar

160. Parmar Hemlata Vasant

161. Parmar Shiva Somalal

162. Parmar Tushar Shankar

163. Parmar Manju Jayanti

164. Rathod Dina Vithaldas

165. Parmar Bhagwati Govindkumar

166. Shah Ishver Khandasbhai

167. Parmar Khemi Baldevbhai

168. Parmar Mani Bhagwandas

169. Parmar Kokila Rameshbhai

170. Parmar Naresh Manilal

171. Rathod Motiben Kanjibhai

172. Gunvant Hirabhai Rathod

173. Motiben Kanjibhai

174. Nainaben Parmar

175. Suresh Chawda

176. Chhgaji Prajapati

177. Suresh M Chawda

178. Vijay D Parmar

179. Chawda Padma

180. Manilal R Panchal

181. Chhgaji K Prajapati

182. Parmar Vijay

183. Chavda Babiben

184. Panchal Nikhil

185. Panchal Manilal

186. Rathod Baldev

187. Chhamar Jayanti

188. Rathod Dinaben V

189. Chavda Muljibhai M

190. Chavda Pasiben Motibhai

191. Chavda Padma Suresh

192. Chavda Suresh Motibhai

193. Parmar Naynaben Vijay

194. Parmar Rajesh Kumar K

195. Parmar Hemlataben B

196. Parmar Manjulaben K

197. Chmar Shanta C

198. Chamar Tulsi C

199. Parmar Jashi M

200. Parmar Mani B

201. Parmar Jitendra M

202. Parmar Laxmiben K

203. Parmar Manjuben J

204. Shah Prakash I

205. Solanki Ranjanben J

206. Solanki Jagdishkumar N

207. Parmar Shivabhai

208. Parmar Tusharbhai

209. Rajput Bharat

210. Parmar Hemlataben

211. Parmar Rajeshkumar

212. Parmar Laxmiben

213. Parmar Bhagwatiben G

214. Chauhan Govindbhai M

215. Shah Ishvarlal K

216. Chauhan Raiben G.

217. Shah Prakash

218. Solanki Ranjanben

219. Solanki Natwarlal

220. Solanki Jagdishkumar

221. Parmar Baldev

222. Chhamar Tulsi

223. Parmar Jashi

224. Parmar Jitender

225. Parmar Kokila

226. Parmar Khemi

227. Parmar Shailesh

228. Parmar Naresh

229. Chauhan Raiben

230. Chauhan Govindbhai

231. Shah Ishvarlal

232. Chavda Muljibhai

233. Parmar Bhagwatiben

234. Parmar Bindhuben

235. Parmar Manjuben

236. Shanta Chamar

237. Jitendra Parmar

238. Kokila Parmar

239. Manjuben Parmar

240. Kirtibhai Parmar

241. Tusharbhai Parmar

242. Manjulaben Parmar

243. Rajeshkumar Parmar

244. Hemlataben Parmar

245. Manjulaben K Parmar

246. Manjuben J Parmar

247. Laxmiben K Parmar

248. Kirtibhai S Parmar

249. Jashi Manilal Parmar

250. Kokila Rameshbhai Parmar

251. Mani Bhagwandas Parmar

252. Muljibhai M Chawda

253. Dinaben V Rathod

254. Govindbhai M Chauhan

255. Ishvarlal K Shah

256. Kokila R Parmar

257. Jashi M Parmar

258. Shanta M Chamar

259. Jayanti M Chamar

260. Shailesh B Parmar

261. Jitendra M Parmar

262. Mani B Parmar

263. Ranjanben J Solanki

264. Natwarlal G Solanki

265. Jagdishkumar N Solanki

266. Laxmiben Kantibhai Parmar

267. Manjuben Jayantiben Parmar

268. Kirtibhai Shankarbhai Parmar

269. Tusharbhai Shankerbhai Parmar

270. Manjuben Kirtikumar Parmar

271. Shivabhai Somabhai Parmar

272. Rajeshkumar Kalidas Parmar

273. Hemlataben Vasantbhai Parmar

274. Pardhi Hansaben Baldevbhai

275. Chavda Babiben Chhanalal

276. Panchal Manilal Tatilal

277. Prajapati Chhagaji Keshaji

278. Rathod Baldev Sheevabhai

279. Panchal Nikhil Manilal

280. Prakash Shah

281. Natvarlal Solanki

282. Ranjenben Solanki

283. Prakash Ishvarlal Shah

284. Ranjenben Jagdishbhai Solanki

285. Dinaben Rathod

286. Govindbhai Chauhan

287. Muljibhai Chawda

288. Ishvarlal Shah

289. Naresh Parmar

290. Govindbhai Mohanbhai Chauhan

291. Muljibhai Mohanbhai Chawda

292. Shah Ishvarlal Kandad

293. Chauhan Govindbhai Mohanbhai

294. Parmar Kirtibhai Shankerbhai

295. Parmar Shivabhai Somabhai

296. Parmar Bhagwatiben Govindbhai

297. Parmar Bindhuben Arvindbhai

298. Parmar Laxmiben Kantibhai

299. Chawda Muljibhai Mohanbhai Besides, there were about 258 demat accounts with a common address i.e. 56 Jajakeshavni Chali, Ahmedabad 380018, in the same method and manner. A perusal of the details provided by Shri Mehta also clearly indicates the adoption of similar modus operandi, with several names being reported from the same address like 23 Jajakeshavni Chali, Ahmedabad 380018, 24 Jajakeshavni Chali, Ahmedabad 380018, 48 Jajakeshavni Chali, Ahmedabad 380018 etc.

b) Similar pattern (as done in the case of Suzlon Energy Ltd) is noticed in the case of IPO of IDFC Ltd. Some of the common addresses noticed here are 48/B, 735 Krishan Nagar, Ahmedabad, B/46, Arya Nagar Society, Ahmedabad, C-27, Malhar Flats, Ahmedabad etc. 3.6 The pattern as above is of a piece with the modus operandi noticed in the cases of other key operators as well which was the very staple of the major irregularities in the allotment process of 21 IPOs leading to cornering of shares by a few to the detriment of retail investors. Further, the payments made by Shri Mehta in respect of the IPO applications (of the purported applicants) out of his bank accounts and the subsequent off market transfers of allotted shares to his demat account, majority of which were credited just before the date of listing [i.e. in the case of Suzlon Energy Ltd., off market transfers took place on October 15, 2005, October 17, 2005 and October 18, 2005 (the date of listing being October 19, 2005) and in the case of IDFC Ltd., the off market transfers took place on August 8, 2005 and August 10, 2005 (the date of listing being August 12, 2005)] would prima facie indicate his complicity in the entire game plan, meant for the purpose of cornering the IPO shares to the detriment of the retail genuine investors. 3.7 Though Shri Mehta contended that such credits were received as security in terms of the loan arrangement entered into between himself, the borrowers and the so called Ashmi (from whom Shri Mehta had borrowed money), he had failed to produce the proof of the putative tripartite loan arrangement entered into between him and the said Ashmi on the one hand and also between him and the said borrowers on the other hand. Thus, the claims/ contention made by Shri Mehta in this regard are not supported by any material evidence. 3.8 Shri Mehta is prima facie found to be one of the key operators (as per the interim order of SEBI) who had received off market credit of shares of 500 or more dematerialsed account holders in the IPOs of Suzlon Energy Ltd. and IDFC Ltd. In such a situation, the role of Shri Mehta has to be seen in the context of the large scale cornering of IPO shares at the time of issue that substantially interfered with the allotment process, tweaking it unfairly in favour of a few. Shri Mehta has not disputed the large credit of IPO shares as mentioned in the table at para 3.4. In the case of IPO of IDFC, 1,46,832 shares were sold on the listing date at the price of Rs.69.50 against the listing price of Rs.34. Similarly, the Suzlon Energy Ltd. shares (61,808) were sold @ Rs.692.85 as against the issue price of Rs.510. It is further noted that the afferent applicants had acquired substantial number of shares allotted in the various IPOs (in the retail category) and particularly, in the case of IDFC Ltd., the percentage of shares allotted to the afferent applicants vis-a vis the retail allotment was 10.18%. 3.9 A perusal of the demat account (no. 10139886) of Shri Mehta maintained with the depository participant, Khandwala Integrated Financial Services Pvt. Ltd., inter alia shows the following transactions on various dates. Date/ Period of off market transfer of shares to the account of Shri Mehta from the afferent accounts Name of the Date of listing Number of shares credited to the account of Shri Mehta Number of shares debited from the account of Shri Mehta Name of the financier to whom the said shares had been transferred with the date of such transfer August 08, 2005 IDFC Ltd./ August 12, 2005 1,46,832 1,46,832 Ashmi - August 11, 2005 September 09, 2005 IDFC Ltd. August 12, 2005 1330 1330 Ashmi -September 09, 2005 October 17-18, 2005 Suzlon Energy October 19, 2005 14,576 14,576 Ms. Sheelu Lalwani -October 18, 2005 October 19, 2005 Suzlon Energy Ltd. October 19, 2005 40,016 40,016 Ms. Sheelu Lalwani -October 19, 2005 October 20, 2005 Suzlon Energy Ltd. October 19, 2005 7,216 7,216 Ms. Sheelu Lalwani -October 20, 2005 3.10 According to Shri Mehta, he had received large number of IPO shares as security from the persons, who had borrowed money from him. However, he failed to produce any material in support of the alleged loan arrangement. The circumstances of the present case prima facie indicate that even if the demat accounts existed in the name of the respective account holders (as contended by Shri Mehta), they acted as mere name lenders, as the money for the IPO applications was debited from the account of Shri Mehta. Further, immediately after the allotment the shares were credited to his demat account through off market transfers. The above, coupled with the fact that Shri Mehta stood to gain by such transfers, prima facie shows that Shri Mehta had made use of number of demat accounts which appear to be under his control, for the purpose of cornering such shares to the detriment of the retail genuine investors. He is prima facie an unjust beneficiary of the entire transactions with or without the others. 3.11 Shri Mehta contended that he had only financed certain people in making IPO applications and that he had not manipulated the securities market. In this context, I note that the issue germane to the present case is that Shri Mehta had prima facie cornered IPO shares to the disadvantage of the retail genuine investors. Through a fair market practice, one could not have obtained such allotments of large number of IPO shares as mentioned in the table at para 3.4. Admittedly, Shri Mehta had received large number of IPO shares through off market transfers from numerous afferent accounts and made benefits out of the said shares. Any market practice which facilitates cornering is an abomination. Prima facie, the cornering of shares as happened in this case can not be treated as a normal market practice. The abuse of allotment process for cornering shares in unjust enrichment smacks of a venality of the worst order and whoever participated in the same either on their own or on behalf of some financiers or jointly is tarred with the same brush and they can not be allowed to seek legitimacy for their unfair shenanigans by making a facile plea that he had only financed to the people who had made applications in the IPOs. The contention that Shri Mehtas role was limited to the extent of lending money to the individual borrowers in making IPO application is unable to believe, in the facts and circumstances of the case. There is no documentary evidence in support of the loan arrangement at various levels. Though, Shri Mehta claimed that he had received the financial assistance from Ashmi (Rs.6.5 crores), the same has not been satisfactorily explained by him through the bank account transcripts (as provided by him). Though, the said bank account (provided by Shri Mehta) statements shows the credit of Rs.6.5 crores on September 27, 2005, it would not clearly indicate as to whether the said amount was received from Ashmi or from a third party. The credit in the Bank Account of Shri Mehta remains unexplained for want of supporting transcript of Bank Account of Ashmi. It can be prima facie presumed that the said money belonged to him and not received from Ashmi or some other third party as contended by him. May be, it is his money or somebody elses money which might have been used, but that is not the core issue. The fact remains that Shri Mehta alone paid for the IPOs out of his Bank Account. Further, it was Shri Mehta only who received large number of IPO allotted shares as mentioned above, immediately after the allotment through off market transfers and just before or after the listing of the said scrips. What more, the entire control over funds and movement into and out of afferent accounts have remained only with Shri Mehta, thereby prima facie indicating that such afferent accounts are just conduits for receiving shares on allotment and retransmitting them back to Shri Mehta upon allotment in a make- believe arrangement to induce the impression that there were beneficiaries behind those accounts which was just a myth. Though the entire edifice has been built on such afferent account holders, they are hardly seen in action excepting that their names and addresses helped create and complete the paper work and documentation. Therefore, all the exercise to reconstruct the case history to invest it with the trappings of a financial transaction is just an after thought to give a veneer of acceptability to unmitigated market abuse festering with all its enormity and gravity. Further, such an attempted rejig does not detract from what really transpired with the IPO allotment to the detriment of retail investors. Any market practice which favours abusing the IPO allotment process (at the cost of genuine retail investors) through cornering and offloading on listing for raking in unfair gains can not be a standard or bench mark to defend such execrable activity hurting the retail investors by depriving them of their legitimate dues. 3.12 The copy of bank account statement of Shri Mehta maintained with the Catholic Syrian Bank Ltd., Fort Branch, Mumbai (Account No. 001522) (as furnished by him vide letter dated February 22, 2007) reveals that the application money in respect of numerous applications (approximately 1216) for Rs.48,960/- (per application) had been debited on October 3, 2005 and October 4, 2005 in his account in respect of the IPO of Suzlon Energy Ltd.. Similarly, on July 29, 2005, application money in respect of approximately 719 applications in respect of the IPO of IDFC Ltd. for Rs.47,600/- ( per application) had been debited in his account. He also enclosed the copy of his bank account statement (without the name of the bank), from which it is seen that on September 29, 2005, application money in respect of approximately 2476 applications in the IPO of Suzlon Energy Ltd. for Rs.24,705/- had been debited in his account. Apparently, no margin money was received from the purported applicants. Each application was for a value less than Rs.50,000/- thereby not requiring to mention the Permanent Account Number of the purported applicants. In view of the above also, it appears that the purported applicants were non existent or merely name lenders. This is further strengthened in the facts and circumstances, by the fact that immediately after the IPO allotment, the allottees made off market transfers to the demat account of Shri Mehta. 3.13 In the facts and circumstances, the available materials on record (including the documents provided by Shri Mehta) prima facie indicate, inter alia, the following : ? Shri Mehta failed to explain satisfactorily his contention that he had received Rs.6.5 crores from Ashmi. ? Number of demat accounts were opened with the same name of the purported applicants (or in different combinations) with common address. ? Admittedly, Shri Mehta made the payments from his own bank account in respect of the IPO applications (Suzlon Energy Ltd. and IDFC Ltd.) of the said demat account holders who appears to be either fictitious or name lenders. ? The IPO shares allotted to the said purported applicants were credited to the demat account of Shri Mehta through off market transfers, immediately after the allotment, on a large scale simultaneous off market transfers on various days just before the listing of the said shares. ? Shri Mehta failed to establish that the investors (afferent account holders) were given back their money after the sale of the IPO shares, as contended by him. 3.14 Prima facie, the fact remains that, a number of demat accounts which on the facts and circumstances of the case appeared to be under the control of Shri Mehta, were pressed into service to corner shares with own money or borrowed funds for wangling a patently unfair advantage which no market practice can either bless or anoint. Any attempt to morph it to make it appear as financing transaction is at once mischievous and beguiling and needs to be frowned upon, while the case history in the broad picture of IPO manipulation reeks of vilest of manipulative intent. It is very difficult to unravel all the threads in the tangled skin of the abuse of the IPO allotment process, since the intentions of the players are shrouded in secrecy and stealth. There can be no direct evidence to fathom the same, but it has to be a matter of inference from the attendant circumstances of the case which prima facie establishes that there was cornering of the shares by certain players either on their own or in concert with others in an abuse of the IPO allotment process. The manner how it was executed through fictitious afferent accounts and exercise of control over them to facilitate off- market transfers on allotment has all the ingredients of a devious design and the same definitely casts a reflection on the conduct of parties including Shri Mehta which can by no stretch of imagination be regarded as a fair market practice. The receipt of such large number of shares through off market transfers from various afferent accounts cannot be considered as a normal market practice. Taking into account the totality of the facts and circumstances, it can be inferred that either the afferent account holders were non - existing or fictitious or name lenders. 3.15 Though Shri Mehta claimed that he had transferred the IPO shares (IDFC Ltd. and Suzlon Energy Ltd.) to the account of the Ashmi and Sheelu Lalwani in terms of the loan arrangement, he failed to produce any specific authorization received from the purported applicants (who received shares pursuant to the IPO allotment) in respect of the said transfer of shares. The only inference which can be drawn in the facts and circumstances is that the said afferent account holders if at all existed, were only name lenders and that Shri Mehta was prima facie having full control over demat/ afferent accounts of the purported IPO applicants and the shares allotted. It is noteworthy that in the case of IPO of Suzlon Energy Ltd., the allotted shares were transferred to the account of one Ms. Sheelu Lalwani and not to the demat account of the Aashmi which had given money to Shri Mehta. It is strange that these shares were transferred to a third party, though, according to Shri Mehta, no financial assistance was availed from the said Ms. Sheelu Lalwani. 3.16 Further, the conduct of a market participant has to be appraised in the overall context of the happenings in the market at the material point of time and the individual involvement can not be viewed in isolation. It would prima facie indicate that it was Shri Mehta who had made the payments in respect of numerous applications for IPO shares and upon receipt of the allotments, it was Shri Mehta who had got the said allotted shares transferred to his demat account through off market transactions in and around the date of listing of the respective scrips. Thus, prima facie, he had cornered IPO shares meant for retail investors. Also any suggestion attributing innocence to the parties involved in such transactions would give rise to an untenable situation where certain other third persons/entities alone would be responsible for the manipulation and none else. Thus, it prima facie appears that Shri Mehta had complete control over the dematerialized accounts held in the names of fictitious / benami entities and those fictitious / benami entities were merely name-lenders. Further, what is material to the case on hand is whether Shri Mehta prima facie cornered the shares or not, by abusing IPO allotment process, while the loan theory as canvassed in a crafty move to reconstruct the events for providing an escape route is totally beside the point in the attendant circumstances of the case essentially turning on cornering of shares by a bunch of key operators employing a common modus operandi in the broad picture of the case. 3.17 Proof of manipulation almost always depends on inferences drawn from a mass of factual details. Findings must be gathered from patterns, nature of the transactions etc. The evidence, direct or circumstantial, should be sufficient to raise a presumption in its favour with regard to the existence of a fact sought to be proved. As pointed out by Best in Law of Evidence, the presumption of innocence is no doubt presumptio juris; but everyday practice shows that it may be successfully encountered by the presumption of guilt arising from circumstances, though it may be a presumption of fact. It is exceedingly difficult to prove facts which are especially within the knowledge of the parties proceeded against and in that view the findings would be inferential from the conduct of the parties. The legal proof in such circumstances partakes the character of a prudent mans estimate as to the probabilities of the case. The Honble Securities Appellate Tribunal has observed in the matter of Ketan Parekh Vs. SEBI: .. Whether a transaction has been executed with the intention to manipulate the market or defeat its mechanism will depend upon the intention of the parties which could be inferred from the attending circumstances because direct evidence in such cases may not be available. 3.18 In view of the above, it is seen that Shri Mehta had prima facie played a major role in cornering the shares, thereby, inter alia, violating the provisions of FUTP Regulations and DIP Guidelines. Shri Mehta could not adduce anything convincing to rebut such a prima facie finding. On the other hand, the available records prima facie establish the role of Shri Mehta in cornering the shares in IPO allotment to the detriment of the genuine retail investors for the purpose of making unjust enrichment. I am, therefore, convinced that there are reasonable grounds to confirm the ad interim order dated April 27, 2006 against Shri Mehta having his address at 5-A, Vaishnav Society, Ramnagar, Sabarmati, Ahmedabad - 380005. 4.1 Therefore, in exercise of the powers delegated to me in terms of section

19 read with sections 11, 11B and 11(4) of the Securities and EXCHANGE BOARD OF INDIA ACT, 1992, I hereby confirm the ad interim order of Securities and Exchange Board of India dated April 27, 2006 against Shri Daval A. Mehta (Permanent Account Number ALKPM 2611G). G. ANANTHARAMAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Place: Mumbai Date: November 27, 2007

Order against Shri Dhaval A Mehta in respect of his dealings in the initial public offerings

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Shri Dhaval A. Mehta's Arguments

SEBI / Authority's Observations and Responses

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Order against Shri Dhaval A Mehta in respect of his dealings in the initial public offerings

Comments