Interim Order-cum-Show Cause Notice in the matter ...

Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Sl. No. Name of the Entity PAN

173. Shrenik Jitendrabhai Gohil BRCPG1140D

174. Amit Bechu Yadav AJYPY3967H

175. Hardik Parmar DJFPP1628L

176. Akshay Jitendrakumar Brahambhatt CDXPB7730C

177. Dakshaben Maheshkumar Purabiya DGQPP3613D

178. Neeta Ganpatbhai Dabhi BTLPD3342P

179. Binal Naginbhai Patel CTQPP5758M

180. Prabhavatiben Natvarbhai Patliya DBRPP5531G

181. Maunesh Hargovinddas Devara AVSPD3674L

182. Ramu Jomdar Jsoneya AWJPJ7193E

183. Patiram Ramkishan CCEPK8853M

184. Rahul Rameshbhai Mehta ARCPM5961D

185. Harishkumar Sakariya AXFPS3805D

186. Preyash Sathvara BWPPS8357E

187. Mukeshkumar Mavjibhai DMKPP1977E

188. Praveen Kumar DRRPK7321D

189. Ankit Jagdishbhai Pithava BXVPP0489B

190. Dipak Ganpatbhai Sakariya DYXPS5815K

191. Rekhaben Harishbhai DZEPS8946B

192. Naresh Mavjibhai Parmar DMKPP1979L

193. Sushila Ashokbhai Chiripal AHWPC2333D

194. Anil Dhanuka AAPPD9931Q

195. Chirpal Suryansh Hari BHWPC6616A

196. Vedprakash Devkinandan Chiripal AAHPC2102Q

197. Yash R Bajaj AJCPB9461D

198. Raaj Ravindrakumar Bajaj AVYPB4290Q

199. Yogeshkumar Anandpal Goyal ABKPG1172A

200. Savitridevi V Chiripal AAQPA0515Q

201. Bhavin Shah AAKPS2177G

202. Kevin Kapadia AGIPK9817H Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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In the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling Ropeway Company Ltd., GBL Industries Ltd. and Vishal Fabrics Ltd.

Background

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") investigated into the trading in respect of five (5) scrips viz: Mauria Udyog Ltd., 7NR Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Retail Ltd., Darjeeling Ropeway Company Ltd. and GBL Industries Ltd. listed on the Bombay Stock Exchange Limited (hereinafter referred to as "BSE") and also in the trading in the scrip of Vishal Fabrics Ltd. listed on both the Stock Exchanges i.e., BSE and National Stock Exchange of India Ltd. (hereinafter referred to as "NSE") based on the abnormally sharp rise witnessed in the prices and volumes in the aforesaid five scrips. It was observed during the investigation that there were certain strong commonalities in the trading pattern followed by various entities in these scrips. One such common feature was that 'buy recommendations' for all the above mentioned five scrips were widely circulated through circulation of SMSs and additionally, certain websites were also used for recommending buying in four out of the above noted five aforesaid scrips (except Vishal Fabrics Limited). It was further noted that the period of such SMS circulation with respect to the aforenamed five scrips, coincided with an astronomical rise in the prices and volumes in all the above mentioned five scrips except for the fact, that in case of Darjeeling Ropeway Company Ltd. only volume had increased and price rise remained under control apparently because of specific surveillance actions that were imposed on this scrip by the Stock Exchange during the period of SMS circulation of such 'buy recommendations' with respect to this scrip.

2. In this backdrop, SEBI conducted an investigation into the trading activities witnessed in the aforenamed five scrips to ascertain the reasons behind such historic and abnormal rise registered in the prices and volumes, in the aforesaid scrips and further to identify as to whether the said unusual rise in the price and/or volume had happened in the normal course of dealing in these securities on the Stock Exchange platforms or there were any entities / persons who have masterminded and caused large scale circulation of the 'buy recommendations' in these scrips through SMS and websites so as to artificially cause rapid price and volume increase in these scrips. The investigation also aimed further to find out as to whether such entities who were behind the said SMS circulation, were having connection with the Promoters of the companies and / or with any the other entities who were dealing in the said five scrips during the period under investigation. The investigation also had set out its objective Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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to ascertain the identities of the Ultimate Beneficiaries of wrongful gains, if any, that have been derived by way of dealing in the aforesaid five scrips, in a fraudulent manner or otherwise. Further, the focus of the investigation was also to determine as to whether the acts of such entities involved in dealing in the said five scrips were in consonance with the provisions of Securities and Exchange Board of India Act, 1992 (hereinafter referred to as "SEBI Act") and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as "PFUTP Regulations") during the period under investigation.

SEBI's Investigation

3. The investigation conducted by SEBI has successfully identified certain suspected entities who were prima facie found to be involved in various fraudulent acts that had led to the abnormal rise in the volumes and prices of the above named five scrips during the investigation period. These suspected entities who have been prima facie found to be indulged in fraudulent trade practices in the above named five scrips have been listed out in the first page of this interim order-cum-show cause notice, based on the following fact findings:

3.1. A very discernible unusual pattern of dealing was noted at the time of investigation from the way the entities have dealt in the said five scrips which hinged upon the circulation of bulk SMS with buy recommendations and use of certain websites for recommending to public to buy the said five scrips. It was found that there were two distinct but connected phases of dealing in the said scrips; one was pre-SMS circulation phase during which the scrips which did not have backing of any significant corporate announcements or did not have very sound fundamentals, have witnessed substantial movement in their prices. It has further been noticed that these scrips did not have any noteworthy liquidity and yet witnessed a sustained and substantial increase in prices and volumes compared to their past performances. The second phase kicked in with post circulation of bulk SMS with buy recommendations (SMS circulation phase) during which the trade volumes and prices of the scrips further rose Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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prima facie as a consequence to the SMS circulations and certain other entities who were either enjoying connection with each other and / or with the company through its Promoters/Directors taking advantage of the price rise have exited from these scrips after pocketing a substantial profit.

3.2. It was noted during the investigation that, broadly there were three set of entities involved in the entire matter: the first set of entities were those who are seen to be instrumental in artificially influencing price and volume in the scrips during the pre-SMS period. These entities are nomenclated as "PV Influencers".

These PV influencers were the entities who are found to be connected with each other and / or with the company and who had, in concert by trading as a coherent group in the respective scrips during the pre-SMS period in an unusual manner, had increased the price and volume in the said five scrips. The second set of entities were the "Off loaders" who were also the entities connected with each other and / or with the Company and who had made substantial profits by their dealing in the scrip by way of dumping the shares of these companies on the Stock Exchange platforms (previously acquired by them), by taking advantage of the rapid abnormal price rise in these scrips particularly, during post-SMS circulation. Lastly the 'kingpin', who was the mastermind behind the successful implementation/execution of the entire fraudulent operation, was the "SMS Sender", who has been identified as Mr. Hanif Shekh who, apart from being instrumental in orchestrating the entire scheme along with his connected entities, had also sent the bulk SMS with the buy recommendations in the said five scrips and additionally had also made use of certain websites for making buying recommendation in four out of five aforesaid scrips (except Vishal Fabrics Limited) which triggered influencing and luring other investors / general public to trade in the said five scrips.

3.3. The price and volume manipulation in the afore-stated five scrips as noted during the time of the investigation is summarised in the table below:

Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Table No. 1

by connected total Quantity total Buy_LTP Sell_LTP LTP bution

entities Market by Market by by to net

Buy connecte Sell connected connected price

Volume d entities Volume entities entities rise

3.4. It was also observed that the entire operation which was being prima facie run by the kingpin (Mr. Hanif Shekh) with best of care to deceitfully hoodwink Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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and delude the normal eyes, as a consequence of which Mr. Hanif Shekh along with his connected entities and promoters of some of these companies (scrips) had generated wrongful gains to the tune of approximately INR 143.79 crore by way of dealing in the aforesaid five scrips.

3.5. The investigation also prima facie reveals that a large number of entities connected to Mr. Hanif Shekh and / or Promoter of some of the Companies who were constituents of either PV Influencers or Collaborators or Off Loaders that took part in the prima facie scheme apparently master minded by Mr. Hanif Shekh alongwith Promoters of some of the Companies, were front entities / mule entities / name lenders. These front entities / mule entities / name lenders were prima facie observed to be operated as conduits of Mr. Hanif Shekh and / or of Promoters of some of the Companies. During the investigation, summons was issued to approximately 150 entities, out of which approximately 90 summons did not elicit any response from the respective entities. The same also strengthens the aforesaid prima facie observation that front entities / mule entities / name lenders were employed to successfully execute the prima facie scheme.

3.6. Before delving into the dealing in detail about the prima facie scheme that is observed to be employed for fraudulently dealing in the above noted five scrips so as to generate huge sums of wrongful gains that were transferred by the entities participating in the scheme to the ultimate beneficiaries through various layers of conduits, a diagrammatic indicative representation of the scheme that was prima facie unearthed during the investigation is presented below:

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Figure No. 1 Consideration and Prima Facie Findings

4. I have carefully perused and considered the above narrated findings of SEBI's investigation and have also considered various materials and evidence available on record. On a perusal of the same, I find that essentially, the issue that prima facie requires to be addressed in the present matter is whether one Mr. Hanif Shekh, pursuant to a scheme designed by him, with the assistance of other connected entities Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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in the matter, has first manipulated the price and volume in the aforesaid five scrips which till then had not seen any sustained trading activities. Further, it needs to be ascertained as to whether, once the desired level was reached in the said scrips in terms of price and volumes, it was Mr. Hanif Shekh who ensured that bulk SMSs are sent out to public with buy recommendations in respect of the afore noted five scrips including using certain websites to recommend buying in four out of five aforesaid scrips (except Vishal Fabrics Limited), which became instrumental in further inducing the investors to deal in the aforesaid five scrips causing further rise in volumes and prices of those scrips, thereby giving an opportunity to certain entities who were either connected with Mr. Hanif Shekh and / or the company concerned, to offload the shares in the market they had previously acquired, and in the said process they were successful in making a substantial profit.

5. It will be relevant here to note that although there are five scrips which were taken up under investigation for examining the role of various connected entities and individuals who were suspected to be engaged in fraudulent trade practices in those scrips, most of these connected entities were however not commonly spread across all the said five scrips, as each scrip had also its separate set of inter-linked entities involved in its trading, apart from sharing some common entities who were seen to be involved in dealing with all or many of those in the five scrips. However, there is one common thread that strongly runs through the dealings in all of the said five scrips, which is that of wide circulation of bulk SMSs with buy recommendations with respect to the said five scrips and use of certain websites to recommend buying in favour of four out of five aforesaid scrips (except Vishal Fabrics Limited). Therefore, at the outset, it becomes essential to identify the identity of the 'SMS Sender' that apparently accentuated inducement to buy these scrips, before proceeding further in the matter.

SMS Sender- Mr. Hanif Shekh

6. It is noted that buy recommendations in the scrip of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling Ropeway Company Ltd., GBL Industries Ltd. and Vishal Fabrics Ltd. Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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were circulated through SMSs and certain websites were also used to recommend buying four out of five aforesaid scrips (except Vishal Fabrics Limited), as detailed below:

Table No. 2

* It is clarified that SMS were sent not only from the aforesaid SMS IDs but also from other SMS IDs and

aforenamed websites may not be the only one used for recommending buying the scrips.

Identity of SMS Sender -IDs- BT-ZROHDA, BT-MGAINS, BH-MGAINS, BT-ICISEC, MB- STOCK, MD-MULTIB, QP-BGAINS

7. Bharat Sanchar Nigam Limited (hereinafter referred to as "BSNL") was Telecom Service Provider (hereinafter referred to as "TSP") of sender IDs BT-ZROHDA, BT- MGAINS, BH-MGAINS and BT-ICISEC and MTNL was TSP of MB- STOCK and MD- MULTIB. As per the submissions made by BSNL, the aggregators and resellers during the investigation, it is observed that Awadh Info Pvt. Ltd. (hereinafter referred to as

"Awadh Info"), Spark TG Pvt. Ltd. (hereinafter referred to as "Spark TG") and Newrise Technosys Pvt. Ltd. (hereinafter referred to as "Newrise") were the resellers who dealt with the clients on behalf of TSP for sending SMS from these IDs. HFCL Infotel was TSP for QP-BGAINS. As per submissions of HFCL Infotel and telemarketers, it was seen that Popular Softtech was the reseller who had dealt with the client.

8. For convenience and better appreciation, details of information submitted by BSNL, aggregators and resellers are summarized in the table below:

Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Table No. 3

In order to ascertain the person who was running the operations of the Certificate User

viz: Multibagger Securities, focus was laid upon the mobile numbers which were found to

have been given to all the Resellers by the said Certificate Users. The table below

identifies the commonality amongst the contact mobile numbers of the Certified Users as

shared by the resellers with SEBI and the person owning the said mobile numbers:

Table No. 4

Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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9. The details as provided in the above table unequivocally highlight the strong commonalities that exist amongst the mobile numbers 9067584982, 9537570268, 8511591152 and 9157787756 in terms of location of the mobile numbers, common IMEI number, common email ids, and similar digital footprints (Indigo, Swiggy, Zomato, Makemytrip) etc. All the aforesaid factual details that are irrefutable, prima facie show that the owner of the aforesaid four mobile numbers, is none other than Mr. Hanif Shekh. To sum up the aforesaid factual evidences, the following figure succinctly captures the various parameters/factors based on which the identity of Mr. Hanif Shekh can be prima facie ascertained without any doubt:

Figure No. 2

Digital footprints- Flight bookings (Indigo), Food delivery (Swiggy/Zomato), Hotel Stay(MMT), Gmail (Recovery- E- mail), Yahoo (Forgot password) UCC and KYC details -Number CDR - Location, Common IMEI provided while opening Brokerage Hanif

Number, Call record with resellers account and Bank account. Shekh

and other accomplice. Signature in KYC

10. With respect to the websites i.e. www.midcapgains.in and www.mbstocks.in, the following is noted:

www.midcapgains.in (Active: - October 2019 to September 2020)

10.1. The aforesaid website was registered in the name of First Economy Pvt. Ltd. (hereinafter referred to as the "FEPL"). FEPL in its replies has submitted that it is a digital marketing agency specializing in media planning and buying, Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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website and mobile app development. One person, named Mr. Rohit Jain approached them for the aforesaid website development and for advertisement of the said website on Moneycontrol website. No KYC or agreement was entered into by FEPL with the person named Mr. Rohit Jain.

10.2. It is noted from the submissions of FEPL that the website was advertised on the Money control website and through which customers would land on the customer registration page of the website, www.midcapgains.in. Once the customer registers himself on the website, he would start getting recommendations to buy the aforesaid scrips, except GBL Industries Ltd.

10.3. The records reflect that the website owner was using the mobile number 9537570268 and the email id, midcapgains@gmail.com for communication with

FEPL.

www.mbstocks.in

10.4. As per information submitted by GoDaddy, the website (www.mbstocks.in) was created on December 29, 2018. The contact details of the registrant (Shopper-ID:193051104) for the website, www.mbstocks.in was, dgfinindia@gmail.com and the same email id was used for communication purpose by the website owner.

10.5. It is also noted that the email id dgfinindia@gmail.com is linked with mobile number 8511591152.

10.6. The records reflect that the website was used for sending buy recommendations in the scrip of GBL Industries Ltd.

11. It has already been prima facie observed in the preceding paragraphs that mobile numbers 9537570268 and 8511591152 are owned by Mr. Hanif Shekh. Further, the email id, dgfinindia@gmail.com as noted above has been used by Mr. Hanif Shekh for his transaction with Indigo Airlines and also was provided to the reseller i.e., Newrise while the other email id, i.e. midcapgains@gmail.com was provided by him to the resellers, viz: Spark TG and Popular SoftTech while transacting with them. Therefore, Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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it can be prima facie observed that Mr. Hanif Shekh is the owner and was closely connected with the management of two websites viz: www.midcapgains.in and www.mbstocks.in. Further, it is observed from the findings of the investigation that payment with respect to the website creation and development of www.midcapgains.in was received by FEPL from one proprietary firm, Sambhavanath Traders having HDFC Bank Account No. 50200027909681. As in any kind of commercial transaction, the consideration for owning any kind of property comes from the owner and / or his connected entity. Thus, as noted above prima facie Mr. Hanif Shekh is the owner of the aforesaid two websites and since the payment for the creation and operation of the said websites has come from Sambhavanath Traders, it can be prima facie inferred that both Mr. Hanif Shekh and Sambhavanath Traders (Proprietor - Mr. Chandraprakash Valchand Parekh) are connected with each other. In other words, by making the payment to operationalise the website, www.midcapgains.in, which was used to send buy recommendations in the scrips except GBL Industries Ltd., Sambhavanath Traders has played a decisive role in the prima facie scheme employed in the said scrips (as discussed in subsequent paragraphs) by Mr. Hanif Shekh and / or Promoters of the Companies, wherever applicable.

12. Once the identity of the person who was dealing with the resellers and who was the owner of the aforesaid two websites has been prima facie determined to be Mr. Hanif Shekh, the following circumstances / documentary evidence prima facie lead me to the finding that it was Mr. Hanif Shekh who was actively involved in sending the bulk SMSs and operating the aforesaid two websites:

12.1. Call Data Records (hereinafter referred to as "CDRs") in respect of mobile number 9537570268 confirms calls exchanged between Mr. Hanif Shekh and Awadh Info (9838585569 and 7311111641) and Spark TG (97179397366) during the relevant period.

12.2. Screenshot of WhatsApp Chat between person having mobile number 9537570268 (Mr. Hanif Shekh) and Awadh Info, regarding Sender-IDs, content Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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of message related to Mauria Udyog Ltd., were found to be similar to those messages received by the complainants who have produced those messages in their complaints.

12.3. From the screenshot of WhatsApp chats/calls between the representative of Popular Softtech (9930447726) and mobile number- 9537570268, it is observed that Mr. Hanif Shekh is asking for credit of 3 lakh SMSs in his account and there are multiple WhatsApp calls between these above two mobile numbers on September 22, 2020 and October 07, 2020.

12.4. Documents provided by Spark TG regarding chats with mobile number 9537570268 (Mr. Hanif Shekh) asking for missed call service and SMS content was also similar to those received by complainants.

12.5. Screenshot of WhatsApp Chats between person having mobile number 8511591152 (Mr. Hanif Shekh) and Awadh Info regarding advertisement of midcapgains.in on Moneycontrol website, stating that their advertisements were directly running on Moneycontrol as well. The same has also been submitted by FEPL, who created the website of www.midcapgains.in and ran advertisement of www.midcapgains.in on Moneycontrol.

12.6. Link of the website, www.midcapgains.in was sent both through SMS and through advertisement on Moneycontrol website, prima facie showing that both the SMS sender and website owner are connected with each other.

13. In the light of the aforesaid factual revelations, it can be prima facie inferred that Mr. Hanif Shekh was not only involved from the very beginning of creation of multiple SMS sender IDs as well creation of websites but was also involved in actively managing the operation of sending bulk SMSs and also managing those websites. In other words, Mr. Hanif Shekh is prima facie the person found to be responsible for the creation, development and management of websites, www.midcapgains.in and www.mbstocks.in and is also responsible for circulation of SMSs from the sender-IDs such as - BT-ZROHDA, BZ-MGAINS, BH- MGAINS, BT-ICISEC, MB-STOCK, MD-MULTIB and QP-BGAINS etc. from which Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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SMSs with buy recommendations were sent out in favour of the scrips of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling Ropeway Company Ltd., GBL Industries Ltd. and Vishal Fabrics Ltd. Therefore, in the present matter, it is prima facie observed that Mr. Hanif Shekh is the "SMS Sender" and the websites owner. Further, it is observed from the aforementioned multiple SMSs sender IDs that were prima facie owned and used by Mr. Hanif Shekh, that some of these ID names mimic the names of certain reputed stock brokers such as Zerodha Broking Ltd., ICICI Securities, etc. The aforesaid act of imitating and surreptitiously misusing the names of reputed brokerage houses to create similar sounding sender IDs cannot be a coincidence and prima facie has to be by design as Mr. Hanif Shekh apparently has no connection with the afore-stated brokerage houses. Therefore, the sole purpose of using the said nomenclatures to create such sender IDs was prima facie to bring more credibility to the buy recommendations that were prima facie circulated by him considering the stature and huge number of retail investors associated with these brokerage houses. At the outset, such a cunning move by the SMS Sender reveals how well thought of the scheme was that was prima facie employed by Mr. Hanif Shekh wherein, he alongwith his connected entities have not only tried to prima facie manipulate the volumes and prices in the scrips (discussed in subsequent paragraphs of this Order) but have also by impersonating the reputed brokerage houses, deliberately attempted to trick the investors to believe in the growth potential and investment opportunities in the scrips, by sending such bulk SMSs from such mimicked sender IDs, therein giving 'buy recommendations' in favour of such scrips.

PV Influencers, Collaborators and Off Loaders

14. Moving on to the next crucial step to unravel the prima facie scheme, the roles enacted by entities who have, played the role of the PV Influencers, certain entities who also have acted as Collaborators and the Off Loaders of shares, in the prima facie fraudulent trades that were witnessed in the aforementioned five scrips need to be discussed and prima facie determined. For the sake of clarity, the roles played by these Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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separate categories of players who have discharged their respective parts as assigned to them under the prima facie scheme, have been examined scrip wise, in the following sections of this Order.

Mauria Udyog Ltd.

15. Mauria Udyog Ltd. (hereinafter referred to as "MUL / Company") is the company which is involved in the manufacturing and export of LPG cylinders, valves, regulators and related accessories. MUL got listed on BSE on July 14, 2015. It is noted from the Price volume data available on the BSE website, the first trade that was executed in the scrip was on January 27, 2017. Thereafter, there was a sustained increase in the price and volume of the scrip till September 20, 2019. During the period of January 27, 2017 to September 20, 2019, the scrip opened at INR 10.20 reached a high of INR 300 and closed at INR 255.45 with an average volume of 9,423 shares. The relevant Price - Volume chart in the scrip is depicted below:

Figure No. 3

16. As can be seen from the above that price of the scrip increased by 25 times by September 20, 2019 from the price level noticed in January 27, 2017. Further, as can be seen from the aforesaid Price - Volume chart that during the period September 2019 to December 2019, there was a marked increase in the price and volume of the scrip with a high of INR 412.10/- and an average volume of 1,63,738 shares. During the entire period i.e., January 27, 2017 to December 27, 2019 (hereinafter referred to as "Investigation Period - MUL"), it is also noted that there were hardly any major Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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corporate announcements made by the Company or any major change in Company's earnings (rather net loss of INR 12.65 crore was shown in the quarter ended September 2019) or revenue increase (rather revenue decreased by 35% in September 2019 quarter compared to previous quarter). Therefore, in the absence of any fundamental change in the operations or financials of the Company, the sustained rise in the price and volume of the scrip as noted above, certainly raised bonafide suspicion for conducting an investigation.

17. The aforesaid suspicion was further strengthened from the fact that bulk SMSs with buy recommendations were sent in the scrip and the website, www.midcapgains.in was used to send buy recommendations in the scrip which, as discussed in subsequent paragraphs, prima facie had a substantial impact on the price and volume of the scrip. The SMSs had started circulating in the scrip from September 21, 2019 onwards. Considering that the circulation of bulk SMSs and the use of the aforesaid website was the central focal point to the prima facie scheme employed in influencing the trading in the scrip, the trades in the scrip was examined for both, during the pre-SMS period (January 27, 2017 to September 20, 2019) as well as during the SMS period (September 21, 2019 to December 27, 2019).

PV Influencers

Group 1

18. It was noted that the following group (collectively referred to as "Group 1") of connected entities was frequently trading in the scrip of MUL during the period January 27, 2017 to September 20, 2019 i.e., during the pre- SMS period:

Table No. 5

1. Piyush 1. Piyush Agarwal and Sapan Kumar Agarwal are partners of a CA firm Agarwal MKSKA & CO.

2. Juscorp 2. Juscorp Enterprises Pvt Ltd ("Juscorp") and Vepar Solutions Pvt Ltd Enterprises ("Vepar") have same address as that of MKSKA & CO - "207, D.R. Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Private Chambers, D.B. Gupta Road, Karol Bagh, New Delhi - 110005". Vepar is a

Limited company of Piyush Agarwal and Juscorp is a company of Sapan Kumar

Agarwal.

3. A1 Solutions- Prop-Ajju 3. E-mail id of Sapan Kumar Agarwal (agarwal.sapan@ymail.com) is given Kumar for Juscorp on MCA and wife of Sapan Kumar Agarwal- Supriya Agarwal is one of the directors of Juscorp.

4. Corredor Services 4. Shyam Kumar Singh has multiple bank transactions with Sapan Kumar Private Agarwal and MKSKA & Co. He has an account in the same branch of PNB Limited as Sapan Kumar Agarwal. Shyam Kumar Singh is the authorised signatory of Corporate First (proprietorship) which has the same address as that of

5. Sapan Kumar MKSKA & CO and Juscorp. Agarwal

5. Common Mobile Number (9540649579) is provided in the UCC of

6. Vepar Shyam Kumar Singh and Orion Ventures Pvt Ltd where Supriya Agarwal, Solutions wife of Sapan Agarwal has 50% shareholding. Private

Limited 6. Corredor Services Pvt Ltd has Shyam Kumar Singh (DIN 07752726) as one of the Directors. Corredor Services Pvt Ltd has multiple bank

7. Shyam Kumar transactions with Juscorp and MKSKA & CO. Singh

7. Multiple fund transfer between A1 solutions and Piyush Agarwal, Corredor Services Pvt Ltd, Juscorp Enterprises Ltd, Shyam Kumar Singh, MKSKA&CO.

8. MKSKA & CO, Corredor, Juscorp and Vepar have transactions with entity K.M. Enterprise. Proprietor of KM Enterprise is also a friend of one of these entities (Piyush Agarwal- Partners of MKSKA & Co). KM Enterprises has financial transaction with Forex companies (Sub-group 6) Hanif entity- Samukh Trade (Sub-group 2.A). (discussed in subsequent paragraphs).

9. There is an e-mail communication between DK Gupta and Deepak Kumar Garg - staff of Mauria Udyog Ltd to which an excel file is attached (Contractor Shares-1.xlsx) regarding shares sold by the Mauria employees and payment to be made to the two entities, namely Piyush and Malay during the same period when SMS were being circulated.

8. Kamal Gupta 11. Sl Nos. 8,9,10 and 11 have bank transactions with each other and Huf MKSKA & Co and entities at Sl No. 3 and Sl No.7.

9. Chinnu 12. Kamal Gupta and Piyush Agarwal are friend as per their submissions. Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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19. It is noted from the above table that the aforesaid 11 entities are inter alia connected with each other either by way of common directorship or having common address or having multiple fund transactions amongst themselves. For instance, Juscorp and Vepar share common address i.e. "207, D.R. Chambers, D.B. Gupta Road, Karol Bagh, New Delhi - 110005". Further, multiple fund transfers have been observed between A1 solutions (IndusInd Bank Account No. and ICICI Bank Account No.), Mr. Piyush Agarwal (SBI Bank Account No. 55151455822), Corredor Services Pvt. Ltd. (ICICI Bank Account No. 678205600410), Juscorp (ICICI Bank Account No. 629105046965), Mr. Shyam Kumar Singh (PNB Bank Account No. 0619000100190252). The afore- noted factual findings prima facie show the strength of their inter se connections and when the above noted close connections are seen and examined in the backdrop of the peculiar pattern of trading followed by these entities in the scrip of MUL where, these entities have been observed to be trading in a concerted manner and have further been seen to be posing as counterparties to each other's trades in the scrip of MUL during the period from January 27, 2017 to September 20, 2019, they would prima facie demonstrate that the very fact of these connected entities coming together in the securities market to deal in the scrip of MUL in unison and in a concerted manner was not a mere happenstance.

20. As per the findings of the investigation, contribution of aforesaid 11 group members to the price and volume rise in the scrip of MUL during the period January 27, 2017 to September 20, 2019 was, as shown in the table below:

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Table No. 6

21. As can be seen from the above table, these 11 connected entities while acting as a group have prima facie contributed 39.92% to the market buy volume and 35.22% to the market sell volume and also have contributed 17.38% of the total market traded volume, by trading with each other as a group in the scrip of MUL. The trades of the aforesaid connected entities were also further analysed to determine as to how the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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said connected entities were trying to influence the volume and price in the scrip so as to create artificial exuberance in the market thereby projecting the scrip of MUL a potentially attractive proposition for the investors in the securities market. Some illustrations to that effect are as follows:

21.1. On June 3, 2019, Mr. Sapan Kumar Agarwal had placed 25 different buy orders (order numbers from 1559532600002658026 to

1559532600002658050) for 10 shares each in the scrip of MUL at the price of INR 205/- per share (when LTP was INR 255.8/-). All such orders were placed on the stock exchange system at 9:15:00 hours. Subsequently, Mr. Aayush Tanwar who is part of the connected group, had placed a sell order (order number 1559532600002658051) for 250 shares in the scrip of MUL for INR 254.8/- per share at 9:17:36 hours (when LTP was INR 255.8/-). In order to match the aforesaid sell order, the 25 buy orders earlier placed, were modified by Mr. Sapan Kumar Agarwal after 1 second of the aforesaid sell order was placed i.e. at 9:17:37 hours, so as to match the price of the sell order i.e. INR 254.8/-. The aforesaid actions on the part of Mr. Sapan Kumar Agarwal led to matching of 1 sell order of 250 shares with 25 different buy orders for 10 shares each at similar price of INR 254.8/- per share. Thus, by trading in such a manner the entities effected change of hands of 250 shares from Mr. Aayush Tanwar to Mr. Sapan Kumar Agarwal, which could have been otherwise done in a single trade as well had Mr. Sapan Kumar Agarwal initially placed a single buy order for 250 shares at one go instead of placing 25 separate buy orders for 10 shares each. However, by executing a trade for 250 shares of MUL through 25 trades the said two entities have consciously and artificially created a volume through first 25 trades in the scrip on that particular day.

It is noted that during the period when the above trades were being executed the average daily trading volume in the scrip was around 9,400 shares which shows that the liquidity in the scrip was relatively less. In this scenario, placing a buy order of 250 shares which is around 2.5% of the average daily trading volume, at a price (INR 254.8/-) which was far away from the LTP (INR 255.8/-) by at least Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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24%, not only prima facie shows a non-genuine trading behaviour but also prima facie shows that the entities were trying to artificially influence the liquidity / volume in the scrip. The aforesaid acts of the two connected entities when seen along with the fact that the buying entity immediately changed (within few seconds of placement of sale order) his buying price upwards by approximately INR 50/-, only to match the sell order placed by his connected entity and further, the act of the seller entity who is supposed to act prudently on the principle of trying to get the highest price possible for his shares offering his shares to sell even below the LTP prima facie shows that these connected entities were basically trying to artificially create a positive momentum in the scrip. It is further noted that Mr. Aayush Tanwar who was thus seen to be a seller in the first 25 trades of the day, again accessed the securities market on the same day i.e. on June 3, 2019 by placing one buy order (order number 1559532600002658107) for 250 shares in the scrip of MUL at the price of INR 250.8/- per share at 10:29:25 hours (when LTP was INR 252.4/-), which were again, matched by 25 different sell orders (order numbers from 1559532600002658073 to 1559532600002658097) for 10 shares each placed by another connected group entity viz. Mr. Shyam Kumar Singh at the price of INR 250.8/- per share ignoring the fact that the LTP in the scrip was INR 252.4. It is important to note here that initially 25 sell orders were placed by Mr. Shyam Kumar Singh at a price of INR 300/- per share between 10:09:36 hours to 10:10:54 hours (when LTP was INR 252.4/-). However, as soon as a buy order for 250 shares was placed by Mr. Aayush Tanwar at 10:29:25 hours, the 25 sell orders were modified by Mr. Shyam Kumar Singh at the same time at 10:29:25 hours by modifying earlier sell price of INR 300/- per share downwards to INR 250.08/-, in order to match the buy order of Mr. Aayush Tanwar. This resulted in execution of another 25 trades on that particular day.

From the above illustration it can be seen that, similar to the first illustration, buy / sell orders were first placed by the connected entities at prices away from the LTP and such orders were modified when a counter order was placed by the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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connected entity, only in order to match the price of the counter party order, and to execute the said order into a trade.

22. I note from the order log and trade log that the aforesaid instances are not the only instances when the PV Influencers have traded in such unusual pattern as illustrated above. There are multiple such instances of trades during the period from January 27, 2017 to September 20, 2019 through which the said connected entities have prima facie influenced the volume in the scrip. It is however observed that the aforesaid method is not the only modus operandi employed by the connected entities to prima facie create artificial trading volume in the scrip though this was the most frequently used method. A pre-determined plan of the PV Influencers to create artificial volume in the scrip of MUL becomes prima facie evident when the trades executed by these connected entities are juxtaposed with the total trades executed in the scrip during the pre-SMS period. As per the available records, it is noted that the PV Influencers have prima facie created artificial volume of 35.22% out of which 17.38% has been created by directly trading by the group members amongst each other and the remaining 17.84% volume has been created when at least one of the aforesaid connected entities was on either side of a trade. Upon further examination of the trading activities of the said connected entities, it was further observed that although the connected entities had created substantial volume in the scrip during the aforesaid period, in effect only 4.7% (39.92% - 35.22%) of their traded volume during the said period had actually resulted in change of beneficial ownership while the remaining 35.22% of traded volume was created deliberately, just to create a prima facie artificial volume with no change in effective beneficial ownership i.e., the ownership of the shares stayed within the group.

23. It is further noted from the available records that the PV Influencers have not only prima facie created artificial volume in the scrip of MUL but were also prima facie instrumental in creating artificial price in the said scrip. During the pre-SMS period i.e., from January 27, 2017 to September 20, 2019 the said connected entities while acting as a group have contributed INR 906.45/- to the net positive LTP in the scrip of MUL by trading amongst each other in 11,511 trades with a total volume of 8,72,944 Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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shares (17.38% of total market volume). Further, out of the above mentioned 11,511 trades, in 8,643 trades (75.08% of total group trades) it is observed that the time difference between placing of buy orders and sell orders was equal to or less than 60 seconds and such trades have resulted in contribution of INR 842.70/- to the net positive LTP involving 6,34,096 shares (12.62% of total market volume) that were traded by these 11 entities. Upon further scrutiny of the trading activities of the PV Influencers, it was noted that in 7,543 trades (65.52% of total group trades), the time difference between buy orders and sell orders was equal to or less than 10 seconds and such trades have resulted in contribution of net LTP of INR 721.85/- involving 4,91,717 shares (9.78% of total market volume) that were traded by these 11 entities. A few illustrations showing prima facie synchronised trades in the scrip by the said connected entities are also shown herein below:

23.1. On July 2, 2019, Mr. Shyam Kumar Singh had placed a buy order (order number 1562038200002072025) for 400 shares of MUL at 09:31:56 hours at a price of INR 150/- (previous day's LTP was INR 180/-) and Mr. Aayush Tanwar had placed a sell order (order number 1562038200002072027) for 50 shares at 09:35:04 hours at INR 194/-. Within next 3 seconds of the afore-stated sell order placed by Mr. Aayush Tanwar, i.e. at 09:35:07 hours, the buy order placed by Mr. Shyam Kumar Singh was modified and the modified price was INR 194/- and the modified quantity was 50 shares. Consequently, the buy and the sell orders matched resulting in creation of positive LTP of INR 14/- (7.78% higher than the previous LTP). Interestingly, this was the 1^sttrade of the day.

23.2. On July 04, 2019, Mr. Sapan Kumar Agarwal had placed a buy order (order number 1562211000002044029) for 20 shares of MUL at 09:15:24 hours at a price of INR 163/- (previous day's LTP was INR 190/-) and Mr. Aayush Tanwar had placed a sell order (order number 1562211000002044031) for 100 shares at 09:16:22 at INR 209/-. Within next 5 seconds of the afore-stated sell order placed by Mr. Aayush Tanwar, i.e. at 09:16:27 hours, the buy order placed by Mr. Sapan Kumar Agarwal was modified and the modified price was INR 209/-. Consequently, the buy and the sell orders matched resulting in creation of Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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positive LTP of INR 19 (10% higher than the previous LTP). Interestingly also, this was the 1st trade of the day.

The aforesaid illustration when seen in the light of the fact that approximately 65% of the trades (7,543 trades) executed within the said group, were executed within 10 seconds, which not only resulted in net LTP of INR 721.85/- but also represented approximately 10% of the market volume, which demonstrates not only the repeated nature of the transaction that was prima facie synchronised in nature but also strongly points to prior meeting of minds amongst the said entities to conduct their trades in such unusual manner. It is also observed from the details of the trades executed by the said group that despite there being an anonymous trading system on the exchange platforms, matching of such large number of trades between the same connected parties on the said trading system could not have fructified, unless the trading system was being shrewdly abused. It is further pertinent to note that prima facie such types of abnormal trading pattern lead to unwarranted price fluctuation and creates a false appearance of trading in the securities market and thereby tending to mislead the investors. In other words, the execution of buy and sell orders within the group, the volume created therefrom and the proximity of time between the buy orders and sell orders as noted above prima facie show the deceptive behaviour of the PV Influencers to play the market in a pre-ordained unscrupulous manner only for the purpose of increasing the price and the volume and thereby to create an artificial picture of large scale dealings in the scrip of MUL.

SMS Period

24. Once a momentum was generated in the scrip by dealing in the scrip of MUL in the aforesaid unusual manner as illustrated above, so as to maintain the price and volume in the scrip at a sustainable level, the next leg of the prima facie scheme that is discernible from the investigation comes into play by way of sending out bulk SMSs in favour of the scrip with buy recommendations to the public at large including using the website to give buy recommendation in the scrip. In the SMS headers related to scrip of MUL, it was observed that the SMS from the header BH-MGAINS were sent to Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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61,960 unique mobile numbers and from the header BT-MGAINS SMS were sent to 752 unique mobile numbers during the period of September 21, 2019 to December 27, 2019 i.e., SMS Period. A few sample SMS texts that were circulated in respect of the said scrip and its prima facie impact on volume and price in the scrip of MUL, are indicated in the table below:

Table No. 7

Thus, from the aforesaid table it can be seen that there has been a marked increase in

the volume of the scrip noticed immediately on the next day of sending of the SMS

including an upward movement in the price of the scrip. It is further observed from

the records that there has been 1638% increase in the volume of the scrip during the

SMS period vis-à-vis pre-SMS period. The price in the scrip also touched a high of INR

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412.10/- during the SMS period as compared to the closing price of the pre-SMS period which was INR 255.45/- i.e., there was a 61.32% spike in the price of the scrip. The aforesaid figures prima facie accentuates the role played by the bulk SMSs in luring the investors to deal in the scrip. The records reflect that the circulation of bulk SMSs and the use of the website to give buy recommendations was not a solitary instance and was frequently used during the SMS period by using different sender IDs. The same had a noticeable impact on the price and volume movement in the scrip. Apart from sending scrip specific recommendation in scrip of MUL, automatic messages were also received from calling on missed call service number. Sample of SMS text received from calling missed call service number (926667330) is shown below:

"Thank You For Joining Us For MULTI-BAGGER Stock 2019. Our Executive Will Call You Soon. Please Check Our 100% Successful PAST PERFORMANCE on www.MidcapGains.in"

Collaborators

Group -2

25. It is noted from the records that around the time when the bulk SMSs in the scrip had started circulating (September 21, 2019 to December 27, 2019), another group of connected entities (hereinafter referred to as "Collaborators"), as shown below were observed to be frequently trading in the scrip of MUL:

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Table No. 8

1. G oenka Business 1. There are fund transfers between Kalpesh Dantani, Shivam Kumar, Finance Limited Sanjaybhai Solanki, Amrutji Gokaji Thakor, Goenka Business and Finance Ltd and Director of Goenka Business and Finance Ltd, Yasin

2. K alpesh Dantani Abdul Sattar Ghori. There are multiple fund transfers between Sanjaybhai Solanki, Suresh Vaghela and Goenka Business and Finance

3. S hivam Kumar Ltd. There are multiple fund transfers between Suresh Vaghela and

4. S anjaybhai Babubhai Amrutji Thakor, Sanjaybhai Solanki. Solanki

2. Goenka Business and Finance Ltd and Kalpesh Dantani shared

5. C hetanbhai same mobile number - 7622002502 in their UCC details. Mahendrabhai Dantani

3. Kalpesh Dantani and Chetanbhai Dantani shared same mobile

6. S uresh Deshaljibhai number -8487887844 in their UCC details. Vaghela

4. Goenka Business and Finance Ltd and Sanjaybhai Babubhai Solanki

7. A mrutji Gokaji Thakor traded with Sunflower broking as member.

5. Malay Bhow of Sunflower broking and his wife Viral Bhow have had frequent bank transactions with Goenka Business and Finance Ltd.

6. Malay Bhow (Mob No. 9924920206) has frequent communications (call) with Hanif Shekh (Mob No. 9537570268).

7. There is fund transfer from Kailash Chouhan Contractor and Susheel Kumar Contractor of INR 7.41 lakh and INR 7.27 lakh, respectively to Kalpesh Dantani on 8/8/2019. Kailash Chouhan and Susheel Kumar are named in the list of employees (both permanent and contractual) as provided by MUL

8. There is e-mail communication between DK Gupta and Deepak Kumar Garg - employees of MUL where an excel file is attached (Contractor Shares-1.xlsx) regarding shares sold by the employees of MUL and payment to be made to two entities namely Piyush and Malay during the same period when SMS were being circulated. The above referred excel list also has details of payment made to Kalpesh Dantani.

26. For ease of reference, the connections that are found amongst the Collaborators are depicted diagrammatically as below:

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Figure No. 4

27. It is noted from the above table and the figure that the aforesaid 7 entities are inter alia connected with each other either by way of having multiple fund transactions amongst themselves or through common phone numbers or through common stock broker. For instance, Mr. Suresh Deshaljibhai Vaghela had received INR 5,00,000/- on February 18, 2019 and INR 1,00,000/- on July 26, 2019 from Mr. Amrutji Gokaji Thakor. Mr. Suresh Deshaljibhai Vaghela had also received INR 5,00,000/- on October 4, 2019 and INR 2,22,000/- on December 30, 2019 from Mr. Sanjaybhai Babubhai Solanki. Similarly, as per UCC details, Goenka Business and Finance Ltd. and Mr. Kalpesh Dantani have same mobile number viz. '7622002502'. It is further noted that in addition to the connection that existed amongst each other, some of these 7 entities are also connected to one more entity namely Mr. Malay Bhow, who is directly connected with Mr. Hanif Shekh (through phone calls as well as through his own admission during statement recording). Mr. Malay Bhow is closely connected with Goenka Business and Finance Ltd. For instance, Goenka Business and Finance Ltd. has frequent fund transfers with Mr. Malay Bhow and his wife, Ms. Viral Bhow. Further, Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Goenka Business and Finance Ltd. and Mr. Sanjaybhai Babubhai Solanki executed their trades in the scrip of MUL through Sunflower Broking wherein Mr. Malay Bhow is one of the Directors. It is further noticed that one of the aforementioned group of 7 entities, namely Mr. Kalpesh Dantani has fund transactions with employees of MUL and his name also appears in the excel sheet unearthed at the time of investigation from email id of Mr. Davinder Kumar Gupta (employee of MUL), which shows his connection with the employees of MUL. The aforesaid facts prima facie suggest the strength of their inter se connections and when these connections are seen along with the timing of their dealings in the scrip of MUL and the way the Collaborators (7 entities) have traded in a concerted manner inter alia by being counterparties to each other's trades in the scrip of MUL during the SMS period (discussed in subsequent paragraphs), would prima facie demonstrate that the act coming in unison to trade together in the securities market in the scrip of MUL by these connected entities, was not a mere coincidence.

28. The trades executed by the Collaborators were examined during the SMS circulation period (September 21, 2019 to December 27, 2019). The summary of the trades executed by the aforesaid Collaborators group is shown below:

Table No. 9

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29. As can be seen from the above table, the Collaborators while acting as a group have prima facie contributed 23.08% to the market buy volume and 22.71% to the market sell volume and 1.45% to the total market traded volume by trading amongst each other as group members in the scrip of MUL. The trades of the Collaborators were analysed and the prima facie pattern that had emerged therefrom showed that the said group of entities, by trading in the scrip were trying to artificially influence the volume in the scrip so as to maintain and carry forward the momentum of trading in the scrip that was already previously created by the PV Influencers as explained in earlier paragraphs, thereby presenting the scrip as an attractive proposition for the investors in the securities market. Few illustrations to support the aforesaid observation are as follows:

29.1. I note from the trade logs that the aforesaid 7 connected entities were trading in a peculiar manner where, at any given point of time during the first 1.5 months of the SMS period i.e., during September 24, 2019 to November 11, 2019, at least 2 entities from the group were accessing the market. Thus, it is observed that the Collaborators were forming small units of two entities at a given point of time and were taking turns one after another on different trading days during first 1.5 months of the SMS circulation period to deal in the scrip of MUL so as to ensure that there is a sustained trading activity in the scrip when the SMS had initially started circulating in the scrip, so as to prima facie ensure that the momentum that was previously created by the PV Influencers during pre-SMS Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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period continued unabatedly in the scrip. The aforesaid peculiar trading pattern followed by the collaborators is further highlighted below:

Table No. 10

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In the light of the trading pattern as depicted in the above table and upon further

analysis of the trade logs of the Collaborators, it is also noted that out of 64

trading days that the group has traded in the scrip of MUL during the SMS period,

on 11 trading days, only 1 of the 7 entities has continuously traded in the scrip

of MUL. Similarly, on 21 trading days, only 2 of the 7 entities have traded in the

scrip of MUL. There was not a single trading day out of the aforementioned 64

trading days, when at least one of the members of the Collaborators has not

traded in the scrip. The aforesaid trading behaviour adopted by the

Collaborators prima facie exposes a premediated scheme employed by the

Collaborators to deal in the scrip of MUL to serve an ulterior motive.

29.2. It is further noticed that the Collaborators mostly executed intra day trades in the scrip of MUL. It is further observed that on a majority of the occasions, similar amount of shares was sold and bought on the said trading day by such entities. It is noted from the records that the Company had weak fundamentals coupled with poor financials and there was absence of any major corporate announcement from the end of the Company during the relevant period. In the aforesaid scenario, executing intra day trades of considerable volumes on a Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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regular basis in spite of continuously suffering losses, does not appear to be either a prudent or a genuine dealing in the scrip. In the instant matter, given the nature of the prima facie scheme appears to have been employed by these entities in the scrip, the act of the Collaborators / Group 2 entities to execute frequent intra day trades in the scrip irrespective of the outcome of such trades, was prima facie found to be intended to increase the number of trades in the scrip of MUL with an ulterior motive to demonstrate liquidity and high trading volumes in the scrip so as to induce the innocent investors to deal in the said scrip. Few of the instances where the aforesaid 7 entities have repeatedly executed intra day trades and have suffered losses during the SMS period are cited below:

29.2.1. For instance, on November 26, 2019, Mr. Kalpesh Dantani purchased 12,290 shares of MUL and sold a similar number of shares of MUL on the same trading day and incurred a loss of INR 10,751.9/-. Further, he had purchased and sold similar quantity of shares on various trading days such as on November 21-22, December 2-3, 5, 9-13, 16-20 and 23, 2019 and in each of the aforementioned trading days, he had incurred losses in the range of INR 3,687/- to INR 59,497/-.

29.2.2. Similarly, Mr. Shivam Kumar had purchased 11,066 shares of MUL on December 2, 2019 and had sold similar number of shares of MUL on the same trading day. In the said process he had incurred a loss of INR 15,002.4/-. Further, he had purchased and sold similar quantities of shares on various trading days such as on November 14, 18, 19, 21, 25-29, December 2, 4-6, 10-13, 19-20 and 23-24, 2019 and in all the aforementioned trading days, he had incurred losses in the range of INR 973/- to INR 24,148/-.

I note that the same trading pattern of buying and selling of similar number of shares on a particular trading day and incurring losses has been exhibited by other entities of the group as well and cumulatively, the Collaborators have Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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incurred losses to the tune of INR 52.17 lakh by trading in the scrip of MUL during the SMS period.

29.3. From a closer examination from the order / trade logs in the scrip of MUL during the SMS period, it is noted that these 7 entities, while dealing in the scrip of MUL, either as a buyer or a seller, have quite apparently and deliberately, placed orders for few shares. The said trading behaviour was followed prima facie to artificially create and show to the public continuous trading activities in the scrip as well as to demonstrate artificial liquidity in the scrip to induce the innocent investors to deal in the scrip. It is noted that out of 19,559 trades executed by 7 entities on buy side, in 3,809 trades (19.47% of total number of trades executed by 7 entities on buy side) the traded quantity was 10 shares or less than 10 shares. Similarly, out of 19,559 trades executed by 7 entities on buy side, in 5,232 trades (26.74% of total number of trades executed by 7 entities on buy side) the traded quantity was 20 shares or less than 20 shares. Similarly, while acting as sellers in the scrip of MUL during the SMS period, it is noted that these 7 entities have cumulatively executed 20,933 sell trades and out of these 20,933 sell trades, in 6,758 trades (32.28%) the traded quantity was 10 shares or less than 10 shares. Similarly, out of 20,933 trades executed by 7 entities on sell side, in 8,753 trades (41.81%) the traded quantity was 20 shares or less than 20 shares.

30. In view of the aforesaid discussion and factual findings on the peculiar trading pattern adopted by the Collaborators, it is prima facie observed that such an abnormal trading pattern as noted in the trades executed by the Collaborators wherein they have frequently executed intra day trades in spite of incurring losses on a regular basis, coupled with the fact that the said entities during the first half of the SMS period, were dealing in the scrip of MUL by forming small sub groups on a rotational basis, when seen in conjunction with the timing of their dealing in the scrip along with their connections with Mr. Hanif Shekh, one comes to a prima facie conclusion that the afore described manipulative trading behaviour displayed by the Collaborators was mischievously intended to artificially inflate the trading volumes in the scrip of MUL Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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hence, such trading transactions of these entities do not inspire any confidence to suggest that their trades were ever executed in the normal and ordinary course of dealing in the scrip.

31. It is also observed that the aforesaid methods are not the only methods employed to prima facie create artificial volume in the scrip though this was the most frequently used strategy followed by the Collaborators. The pre-determined plan of the Collaborators to create artificial volume in the scrip becomes prima facie more evident when the trades executed by them are juxtaposed with the total number trades executed in the scrip during the SMS period. As per the available records, it is noted that the aforesaid connected entities have prima facie created an artificial volume of 23.08% on the buy side and 22.71% of trading volumes on the sell side. Upon further examination of the trading activities of the said connected entities, the extent of their dishonest intent behind executing those trades becomes more apparent. For example, though the connected entities had created substantial volumes in the scrip during the aforesaid period, however, in effect only 0.37% (23.08% - 22.71%) of their traded volumes during the said period resulted in actual change of beneficial ownership while the remaining 22.71% of trade volumes created by them was used just to create prima facie artificial volume without any intent to change/transfer the effective beneficial ownership i.e., the ownership of the shares always stayed within the group. It is further pertinent to note that prima facie such type of unusual trading pattern leads to creation of false appearance of trading in the securities market thereby tending to mislead the investors. In other words, the net effect of the overall buy and sell orders executed by the group as noted above and the trade volumes artificially created therefrom prima facie expose the true intention of the group to influence / play the market for the purpose of creating an artificial picture of large scale dealings in the scrip of MUL to entice other genuine investors to deal in the said scrip.

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Off Loaders

32. Once the bulk SMSs were sent out with buy recommendations in favour of the scrip and the website, www.midcapgains.in was also used to give buy recommendations in the scrip, by the SMS Sender who has been prima facie identified as Mr. Hanif Shekh in the earlier part of this Order, thereby prima facie luring the other gullible investors who by witnessing the meteoritic rise in the price and volume of the scrip during the SMS period (September 21, 2019 to December 27, 2019) a large part of which was also contributed and sustained by the dealings of the Collaborators in the scrip, apparently got attracted to invest/deal in the said scrip triggering a bullish run of the scrip. Taking advantage of this opportunity, it is observed that the entities who were connected either with the Company or with the SMS Sender, successfully exited the scrip by offloading their shares prima facie on those innocent investors who were induced to deal in the said scrip due to the sustained artificial trades carried out by the PV influencers and Collaborators during pre-SMS as well as during SMS period as have been discussed in detail earlier in this order. As noted in the preceding paragraphs, the average daily volume in the scrip during the SMS period vis-a-vis pre- SMS period increased by 1638%, while the price in the scrip opened at INR 256/- and reached a high of INR 412.10/-, an approximate increase of 61% during the SMS period. Such entities who exited the scrip taking advantage of the afore noted price & volume rise in the scrip are herein after referred to as Off Loaders.

33. The connection amongst the Off Loaders who exited the scrip of MUL during the SMS period as discovered during the investigation, are indicated in the table below:

Table No. 11 Sl. Entity Name PAN Connection with sub-group members No.

Mauria Connected entities (hereinafter referred to as "Sub-group 1")

1. Jagdish Chahar ANNPC0228J Connection as an Employee of Mauria Udyog Ltd.

2. Amit Kumar AJCPK6114G

3. Jagdish Singh ARGPS3874H 1. Many of the Entities at Sl. No. 1 to 62 are employees (either

4. Mithun Singh BVZPS9152G permanent or contractual) of Mauria Udyog Ltd. as per data

5. Santosh Raut AZBPR5416K submitted by the Company.

6. Raja Ram CCIPR2093C Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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42. Kailash ADCPC4008R 13. For entities at Sl. No. 2,4,6,14,24 recovery e-mail is the same i.e. Chouhan lmgupta@mauria.com.

43. Kesh Ram ABBPY2796D 14. lmgupta@mauria.com is email id used on behalf of Mr. Deepak

44. Kuldeep Singh BRPPS6874R Kumar Garg who is a secretarial staff. Mobile number of Mr. Deepak

45. Laxman Yadav ADVPN2232P Kumar Garg- 9911546552 is also provided as UCC details for opening

46. Mahender AWJPS8491E of broker accounts of many employees of Mauria Udyog Ltd. Singh 15. E-mail id - lmgupta@mauria.com is also associated with Ms.

47. Mangal Singh ALBPP6249E Deepa Sureka- Promoter of Mauria Udyog Ltd. and Mr. Akhil Kumar

48. Mukesh CXPPP6254H Sureka - family members of Mr. Navneet Kumar Sureka as per the Pandey UCC details available with broker/exchanges.

49. Narender BFVPS5988C 16. Promoter related companies like Linkwise Marketing Private

50. Parmanand ALBPP6249E Limited and Vee-Em Infocentre Pvt Ltd, while opening their Gmail

51. Pramod Ram AYUPR9406M accounts have provided the same recovery e-mail viz:

52. Prem Chand AGSPC0271B lmgupta@mauria.com.

53. Rajendra BWHPK5104R 17. Mr. Deepak Kumar Garg signed as a witness on the rent agreement Kumar of Linkwise Marketing Pvt Ltd that was signed on March 02, 2016.

54. Rajesh Giri AXGPG5852K 18. Mr. Raja Ram (Sl No. 6) and Linkwise Marketing Pvt. Ltd. have a

55. Rajesh Kumar BPUPK5369G common mobile number -- 9911546552 linked with their Gmail

56. Raju Devi CAQPD3563B account.

57. Ratindra Nath AMCPN9622R 19. Ms. Leelu Singh (Sl No. 29) and Mr. Sukhilal Meena (Sl No. 18) have

58. Saroj Yadav AFPPY4880A common recovery mobile number - 9990928213 as per the data

59. Seeta Ram AGMPR7725F provided by Google.

60. Shiv Shanker COKPS1441D

61. Sunil Nagar AMCPN9604P Connection w.r.t IP address

62. Susheel Kumar AISPA5466E 20. Mr. Amit Kumar (Sl no.2), Mr. Govind Singh (Sl. No. 14), Mr. Jeet Arora Bahadur (Sl No. 24), Mr. Mithun Singh (Sl. No.4), Mr. Raja Ram (Sl No. 6) had similar/common IP address

(103.79.114.72/103.79.114.74/ 103.79.114.75) while opening

their Gmail account.

21. Ms. Leelu Singh (Sl No. 29) and Mr. Sukhilal Meena (Sl No. 18) had common IP address (2402:3a80:93b:66ff:3477:d7f:65ce:a6fc) while opening their Gmail account.

Connection w.r.t UCC data

22. Mr. Santosh Raut (Sl No. 5), Mr. Govind Ojha (Sl No. 7), Mr. Ramajor (Sl No. 10), Mr. Prem Chand (Sl No. 52), Mr. Devi Singh (Sl No. 36), Mr. Rajendra Kumar (Sl No. 53) and Mr. Rathindra Nath (Sl No. 57) and Mr. Madan Prasad (Sl No. 25) share a common mobile no-

9268823695.

23. Mr. Raja Ram (Sl No. 6) shares same address viz. 8 Bougan Villa Avenue, Westend Green Fram Rajokari, South West New Delhi- 110038' with the Director of the Company viz. Navneet Kumar Sureka.

24. Mr. Mithun Singh (Sl No. 4), Mr. Sukhilal Meena (Sl No. 18), Mr. Leelu Singh (Sl No. 29), Mr. Arvind Kumar (Sl No. 20), Mr. Krishan Murari Sharma (Sl No. 26), Mr. Binod Kumar Jha (Sl No. 34), Mr. Hoshiyar Saini (Sl No. 39), Mr. Mahender Singh (Sl No. 46), Mr. Narender (Sl No. 49), Mr. Jeet Bahadur (S. No 24), Mr. Hare Ram (Sl Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Sl. Entity Name PAN Connection with sub-group members No.

No 19) and Mr. Roshan Kumar Jaiswal (Sl No. 22) shared common mobile no- 9268823641.

Mobile number - 9268823641 and 9911546552 belonged to Mr. Deepak Kumar Garg. Mr. Deepak Kumar Garg is a secretarial staff of Mauria Udyog Ltd. In UCC details of Mr. Charu Garg (DMLPG7693K), the e-mail id of Mr. Deepak Kumar Garg i.e.-

garg.deepak55@gmail.com is mentioned against mobile number -

9268823641.

25. As per UCC data received from NSDL, 22 entities have common address at 'C/O Mauria Udyog Ltd, Sector 25, Sohna Road, Faridabad,121004' which is the same as that of the Company's postal address.

Ahmedabad Based entities (hereinafter referred to as "Sub-Group 2")

63. Ravi AVSPA1063A Connection w.r.t bank statements Kannadasan

Adidravid 26. All these entities have frequent transactions with either each other

64. Pritiben AXGPP6927Q or with another set of companies related to Mr. Hanif Shekh (Sub- Popatbhai Group 2.A. which has been discussed later in this Order). Parmar

65. Manishkumar CGPPR9641K 27. Majority of the entities have bank accounts in Canara Bank at Rajput Sabarmati Branch.

66. Shahrukhkhan DOJPP7089N Pathan Connection w.r.t Income Tax Return filing

67. Sahilkumar ATLPV1359B Amrutbhai 28. Entities at Sl No. 63-72 have common/similar e-mail id in ITR viz:-

Vaghela birju2it@gmail.com/ birju1it@gmail.com.

68. Lilaben DBYPP5174G Popatbhai 29. Sl Nos. 66, 73, 74 and 75 have common mobile numbers in their ITR Parmar form i.e.- 9428735408.

69. Popatbhai DGFPP6706L Ramjibhai Connection w.r.t UCC details Parmar

70. Dipika DKMPP5973A 30. Mr. Karan Sanghvi (Sl No. 76) has the same address and e-mail id Popatbhai with Ms. Krusha Sanghvi (Sl No. 75)- K6SANGHVI@GMAIL.COM Parmar

71. Fuldeep GIOPS7160B 31. E-mail address of Ms. Hina Barot (Sl No. 77) is Popatbhai vishal.ideabdo@gmail.com which is same as that of the Proprietor Sehgal of Samukh Trade- Mr. Vishal Jitendrakumar Barot, who has funded

72. Keval Savant HYAPS6005L these entities.

73. Chiragkumar CTXPM2544K Makwana

74. Makwana CUHPM8134L Connection w.r.t trading pattern Madhuben 32. Trading by these entities in other companies was done where either

75. Krusha FXCPS0434J SMS has been circulated. Birjukumar

Sanghvi

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Sl. Entity Name PAN Connection with sub-group members No.

76. Karan ESJPS8192E Birjubhai

Sanghvi

77. Hina Barot DGUPB9477B

78. Prakash AGEPV6889L Kantilal

Vaghela

Kolkata Based entities (hereinafter referred to as "Sub-Group 3")

79. Highgrowth AACCH1789A Connection w.r.t UCC details Vincom Private 33. All entities except for Highgrowth Vincom (Sl No. 79), Glorious Limited Vincom (Sl No. 82), Linkup Financial (Sl No. 85), Ms. Minu Mallick (Sl No. 90) have a common address i.e.- Vill- Ramchandra Nagar, Madhya Shibpur, South 24 Parganas, West Bengal India 743372.

80. Sumit Laha AXJPL4908J

81. Dibakar Laha AJVPL4026B 34. Glorious Vincom Pvt. Ltd. shared a common address and common

82. Glorious AADCG3846Q Director (Mr. Umesh Rajak, Mr. Sumon Mondal, Mr. Somnath Vincom Pvt. Halder) with Highgrowth Vincom Pvt. Ltd.

Ltd.

83. Arpan Das CEZPD7390K Connections w.r.t Bank:

84. Sanjay Dey BWHPD4063L

85. Linkup AACCL0347G Financial 35. All the entities have entered into frequent bank transactions with Consultants Hanif connected entities namely Amuly Suppliers, DK Jain Private Limited Properties, MR Merchants Pvt Ltd, Midpoint Commodeal Pvt. Ltd

86. Suprabhat Laha APXPL1814M

87. Ujjal Laha ATSPL2483R

88. Buddhadeb AQBPL5563C 36. DK Jain Properties Ltd. has shown its address as 9/12, Lal Bazar Laha Street 3rd Floor Block-B Room No 17 Kolkata 700001 which is

89. Sourav Das CEJPD9809M similar to the address of Econo Trade India Ltd. is located viz: - 9/12

90. Minu Mallick DGTPM2047B Lal Bazaar Street, 3rd Floor, Block - B, Room No. 3103 Kolkata

91. Arun Dutta AIYPD5217E 700001. Parents of Hanif Shekh are major shareholders in Econo

92. Debashish CVMPD9641P Trade India Ltd. Dutta

37. Linkup Financial Consultants Ltd. Has shown its address as 9/12,

93. Uma Dutta COXPD8400E Lal Bazar Street, 1st Floor, Block - B, Kolkata 700001 which is

94. Subrata Laha APWPL5386H similar to the address of Econo Trade India Ltd. is located viz: - 9/12

95. Priyankar Laha AKLPL2832L Lal Bazaar Street, 3rd Floor, Block - B, Room No. 3103 Kolkata

96. Tapas Laha ANCPL7138F 700001.

97. Arun Laha APWPL5441F

38. Highgrowth Vincom Private Limited and Linkup Financial Consultants have multiple fund transfers with Lagan Barter Pvt Ltd. The Directors of Lagan Barter Pvt Ltd. viz. Mr. Ramesh Laha and Mr. Kamal Das have shown their address as - "Madhya Shibpur, Ramchandranagar South 24 Parganas, Magrahat II, Howrah 743372".

39. Mr. Sumit Laha, Mr. Buddhadeb Laha, Mr. Arpan Das, Mr. Dibakar Laha, Mr. Priyankar Laha and Mr. Suprabhat Laha had common IP address, viz: - [2401:4900:1c00:385c:3944:f716:fbae:38b9] while Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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34. It is noted from the above table that the Mauria Connected entities / Sub Group 1 listed out therein are inter alia connected with MUL through employer - employee relationship, common addresses, common email ids., UCC data, common IP addresses, etc. For instance, it is noted from the data provided by MUL at the time of investigation that many of the aforestated 62 entities are employees (either permanent or contractual) of MUL. It is also noted that 37 entities in their bank accounts have disclosed their correspondence address as "C/O Mauria Udyog Ltd, Sector 25, Sohna Road, Faridabad,121004" which is the same address as that of MUL. Further, as per UCC data, it is noted that 22 entities have shown their address as "C/O Mauria Udyog Ltd, Sector 25, Sohna Road, Faridabad,121004" which is the same address as that of MUL. Further, from the ITRs of 21 entities, it is noted that they have shared a common email id and mobile number viz., dkgupta1087@gmail.com/sensons2@gmail.com and 8800772803 respectively, which belongs to Mr. D. K. Gupta (CFO of MUL). Now coming to their inter se connections, it is noted that these entities are connected with each other through common mobile numbers, common IP addresses used while opening their gmail accounts, etc. For instance, as per UCC data, entities namely Mr. Santosh Raut, Mr. Govind Ojha, Mr. Ramajor, Mr. Madan Prasad, Mr. Prem Chand, Mr. Devi Singh, Mr. Rajendra Kumar and Mr. Rathindra Nath, share common mobile no.

"9268823695". It is also noted that Mr. Amit Kumar, Mr. Govind Singh, Mr. Jeet Bahadur, Mr. Mithun Singh, Mr. Raja Ram have similar/common IP address (103.79.114.72/103.79.114.74/ 103.79.114.75) while opening their gmail accounts. Keeping in view the afore noted undisputed factual findings and my observations thereon, it can be seen that not only there is a common identity thread which runs Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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through all the aforesaid entities i.e. almost all of them were employees of MUL but also these entities shared many other things in common amongst them, such as mobile number, email id, IP address etc. When the various commonalities shared by the aforesaid 62 entities are juxtaposed or examined in combination with their unusual trading pattern (heavy selling) in the scrip of MUL during the SMS period, coupled with their timing of accessing the market and also the fact that the said entities did not even have the financial capacity to deal in such huge volumes in the said scrip (discussed in subsequent paragraph) , it can be prima facie firmly inferred that their act of coming together to offload their shares of MUL in the market as a group during SMS period, was pursuant to a prima facie pre-conceived scheme and was by design.

35. It is also noted from the above table that the Ahmedabad Based entities / Sub Group 2 entities are inter alia connected with each other by way of common email ids, common phone numbers, having multiple fund transactions amongst themselves, etc. For instance, it is noted from the ITR forms of Mr. Shahrukhkhan Pathan, Mr. Chiragkumar Makwana, Mr. Makwana Madhuben and Ms. Krusha Birjukumar Sanghvi that they have disclosed in their Income Tax Returns, a common mobile number i.e. 9428735408. Similarly, entities namely Mr. Ravi Kannadasan Adidravid, Ms. Pritiben Popatbhai Parmar, Mr. Manishkumar Rajput, Mr. Shahrukhkhan Pathan, Mr. Sahilkumar Amrutbhai Vaghela, Ms. Lilaben Popatbhai Parmar, Mr. Popatbhai Ramjibhai Parmar, Ms. Dipika Popatbhai Parmar, Mr. Fuldeep Popatbhai Sehgal and Mr. Keval Savant have disclosed common/similar e-mail ids viz. birju2it@gmail.com/ birju1it@gmail.com in their ITRs. It is also noted that as per UCC details, Mr. Karan Sanghvi and Ms. Krusha Sanghvi shared a common e-mail id

(K6SANGHVI@GMAIL.COM) and common address viz. "227, Varsodas Chawl, Opp Jayesh Hard Ware, Sabarmati, Ahmedabad, Gujarat, India 380005". Various funds transfers have also been observed amongst the Sub Group 2 entities. For instance, Mr. Sahilkumar Amrutbhai Vaghela had received INR 5 lakh in his account number 1414101054772 in Canara Bank from Ms. Madhuben Jayantibhai Makwana from bank account number 1414101055111 held with Canara Bank on May 12, 2020. Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Similarly, on July 3, 2020, Ms. Krusha Birjukumar Sanghvi had transferred an amount of INR 5 lakh from her Canara Bank Account bearing number 1414101053100 to Mr. Prakash Kantilal Vaghela into his account bearing no. 1414201012372 held with Canara Bank.

In the light of the aforesaid facts and prima facie evidence which demonstrate that the said 16 entities are connected with each other on multiple parameters. These findings about their inter se close connections not only prima facie show the strength of the connection enjoyed by them with each other as a group, but also when the said inter se connection is seen along with the way the said entities have traded in an unusual but concerted manner in the scrip including the unusual timing of their dealing in the scrip, and moreover, keeping the fact in view that these entities were funded by some other set of entities (discussed in subsequent paragraphs), it leads to a prima facie compelling inference that their act of coming together in the securities market to deal in the scrip of MUL was part of a premediated scheme and was pursuant to a prima facie scheme employed in the scrip.

36. It is observed from the above table that the Kolkata based entities / Sub Group 3 are also inter alia connected with each other by way of common addresses, common IP addresses, common email ids, having common phone numbers, having multiple fund transactions amongst themselves, etc. For instance, all the entities (except Highgrowth Vincom, Glorious Vincom, Linkup Financial and Ms. Minu Mallick) have shown a common address at "Vill- Ramchandra Nagar, Madhya Shibpur, South 24 Parganas, West Bengal India 743372". Further, entities namely Mr. Arun Laha, Mr. Subrata Laha, Mr. Tapas Laha, Mr. Arun Dutta, Mr. Debashish Dutta, Mr. Buddhadeb Laha, Mr. Priyankar Laha, Mr. Dibakar Laha, Mr. Arpan Das and Ms. Uma Dutta have shared a common IP addresses (116.206.200.17/48/*) while trading from their respective online accounts through multiple stock brokers. It is also noted that these entities are connected with Mr. Hanif Sheikh. For instance, Mr. Arpan Das, Mr. Priyankar Laha, Mr. Arun Dutta, Highgrowth Vincom Pvt Ltd and Linkup Financial Consultants Pvt Ltd appear as >1% shareholders in Kanungo Financiers Ltd. which is part of Hanif group of companies. Similarly, Mr. Arpan Das, Mr. Arun Laha, Ms. Minu Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Mallick, Mr. Sanjay Dey, Mr. Sumit Laha, Mr. Ujjal Laha, Ms. Uma Dutta and Highgrowth Vincom Pvt Ltd appear as >1% shareholder in Econo Trade India Ltd where the parents of Mr. Hanif Shekh are Promoters. Further, DK Jain properties Ltd has shown its address as "9/12, Lal Bazar Street 3^rdFloor Block-B Room No 17 Kolkata 700001"

which is located in the same premises/address where Econo Trade India Ltd is located of which the parents of Mr. Hanif Shekh are the Promoters. From the aforesaid factual revelations, it is noted that not only the aforesaid 18 entities are connected with each other on various parameters but are also connected with Mr. Hanif Shekh who, as noted in preceding paragraphs, is not only the prima facie the kingpin of the scheme but is also the SMS Sender in the scrip. The aforesaid facts when seen along with their unusual trading pattern (heavy selling) in the scrip of the MUL including the timing of their dealing in the said scrip and also keeping in view the fact that they were also funded by the entities who are connected with Mr. Hanif Shekh, it can be prima facie inferred that the very act of coming together of the aforesaid entities/off loaders to the market to offload their shares of MUL at a profit was in accordance with the prima facie pre-designed scheme employed to indulge in fraudulent trades in the scrip.

37. The profits made by the Off Loaders by dumping their shares of MUL during the SMS period are indicated in the table below. Interestingly, the investigation reveals that the PV Influencers who had prima facie artificially inflated the price and volume in the scrip prior to the circulation of SMSs on this scrip, had also prima facie made unlawful gains while perpetrating their prima facie fraudulent trade practices in the scrip.

Table No. 12

Profit made by Mauria connected entities-Off loaders (Sub-group 1)

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#Note: For the shares bought before Investigation Period (IP), opening day price - INR 10.2 has been taken to calculate the acquisition price

of these extra shares. For entities at Sl Nos. 61 and 62, shares sold during IP is less than shares sold. To calculate the profit, for the shares sold,

profit made per share is calculated and is multiplies by no of shares sold. Profit/shares is calculated by (Total Sale Value/Total Sell Qty - Total

Buy Value/Total Buy Qty).

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Table No. 13

Profit made by Ahmedabad based connected entities-Off loaders (Sub-group 2)

Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Sl Entity Buy Buy Sell Sell Value Shares #Acquisitio Total Buy Net Profit No. Name Qty Value Qty during IP already n price of Value (INR) duri during during held shares

ng IP IP IP (D) before IP already (G) = B+F C-G

(A) (E) = C-A held

(B) (C) (F)

16. Sh ahrukhkh 0 0 1000 299500 1000 195000 195000 104500

an Pathan Total 0 0 53350 16118119 53350 11052766 11052766 5065353

#Note: For calculation in column 'F' (buy value for shares bought before SMS circulation period), if shares are bought during IP period, average buy price of shares during Pre-SMS period (within IP) is considered for calculating buy value of shares, otherwise if shares are bought before IP period, opening price on the first day of IP is considered as acquisition price for calculating value of those shares.

Table No. 14

Profit made by Kolkata based connected entities-Off loaders (Sub-group 3)

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#Note: For calculation in column 'F' (buy value for shares bought before SMS circulation period), if shares are bought during IP period, average

buy price of shares during Pre-SMS period (within IP) is considered for calculating buy value of shares, otherwise if shares are bought before

IP period, opening price on the first day of IP is considered as acquisition price for calculating value of those shares.

Table No. 15

Profit made by the PV Influencers

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The Ultimate Beneficiaries

38. It is prima facie noted from the records that though the Off Loaders were the entities who had exited the scrip by making a substantial profit, however, they were just a façade to hide the Ultimate Beneficiaries. The rationale behind the aforesaid prima facie finding is as follows:

38.1. The trading activities of the above listed three groups of Off Loaders were not commensurate with their respective declared annual income. It has already been brought on records in the preceding paragraphs that the Mauria Group of entities are connected with each other as well as with the Company inter alia in terms of their employment, operation of bank accounts and their trading accounts (which were active only during the SMS period and had nil/negligible transactions, a year before and after the SMS period), common recovery email addresses, common email ids for filing of ITR etc. Similarly, Ahmedabad based entities and Kolkata based entities are connected with each other inter alia in terms of frequent funds transactions with Mr. Hanif Shekh connected entities, common email ids for filing of ITR, common MAC address and IP address, common shareholding etc. In the table below, the total exposures taken by some of the Mauria Group of entities, Ahmedabad based entities and Kolkata based entities to the scrip of MUL - the Off Loaders in the scrip of MUL vis-à-vis their respective total annual income are depicted:

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Table No. 16 Sl No. Entity Name Total exposure in the market which is prima facie not commensurate with declared income

Mauria connected entities

Annual Income as Buy Value during Sell value during the SMS period per ITR SMS period

1. Jagdish Chahar 306991 3,26,99,321 Shares already

2. Amit Kumar 563275 held before start 2,97,53,195

3. Jagdish Singh 512884 of SMS circulation 2,87,01,130

4. Rakesh Goel 239768 1,63,75,751

5. Shiv Pal 250950 1,62,18,262

6. Ramajor 364494 1,34,54,600

7. Mahavir Prasad 384475 1,27,66,410

8. Haribansh Gupta #NA 1,11,02,009

9. Sunil Kumar Verma 463065 1,08,45,234

10. Govind Singh 419893 1,08,41,142

11. Sukanta Kumar Pala 553023 1,04,38,450

12. Madhu 282164 1,02,99,492

13. Ravita Devi 464253 1,02,64,165

14. Sukhilal Meena #N/A 1,00,89,380

15. Hare Ram 191028 1,00,76,616

16. Arvind Kumar 209789.5 1,00,69,760

17. Meera Devi 449402.5 99,18,314

18. Roshan Kumar Jaiswal 248160.5 98,43,481

19. Kavita Devi 430095.5 98,25,461

20. Jeet Bahadur 432144 98,19,044

21. Madan Prasad 374883 97,23,400

22. Krishan Murari Sharma 503173 93,14,034

23. Pappu Kumar Ram 290660.5 88,97,818

24. Nand Lal Sharma 484699 86,78,760

25. Leelu Singh 426329 86,60,499

Ahmedabad based entities

Total exposure in the market is incommensurate with declared income Annual Income as Avg buy value Avg sell value during the period per ITR during the period June 01, 2019 to December 31, June 01, 2019 to 2019

December 31,

2019

26. Ravi Kannadasan

4,27,129 1,32,55,601 9,76,163

Adidravid

27. Pritiben Popatbhai

4,27,327 62,82,533 13,42,864

Parmar

28. Manishkumar Rajput 4,95,000 22,42,825 8,27,797

29. Shahrukhkhan Pathan 4,02,520 28,38,125 17,46,031 Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Sl No. Entity Name Total exposure in the market which is prima facie not commensurate with declared income

30. Sahilkumar Amrutbhai

4,32,962 3,48,58,921 38,13,077

Vaghela

31. Lilaben Popatbhai

4,34,468 70,66,579 27,51,460

Parmar

32. Popatbhai Ramjibhai

4,60,784 59,62,698 25,22,185

Parmar

33. Dipika Popatbhai

4,29,112 73,65,499 16,63,850

Parmar

34. Fuldeep Popatbhai

4,02,804 30,68,170 11,30,044

Sehgal

35. Keval Savant 4,45,423 1,26,05,819 11,92,354

36. Chiragkumar Makwana 3,81,882 1,20,74,068 13,48,828

37. Makwana Madhuben 3,73,587 1,11,17,241 14,38,597

38. Krusha Birjukumar

4,28,781 22,22,405 5,46,452

Sanghvi

39. Karan Birjubhai Sanghvi 4,00,652 13,19,156 10,81,905

40. Hina Barot 4,96,500 64,03,156 17,86,626

41. Prakash Kantilal 3,80,900 1,53,37,411 7,80,034 Vaghela

Kolkata based entities

Total exposure in the market is incommensurate with declared income Annual Income as Avg buy value Avg sell value during the period per ITR during the period June 01, 2019 to December 31, June 01, 2019 to 2019

December 31,

2019

42. Arpan Das 7,54,537 8,33,15,677 9,52,52,557

43. Suprabhat Laha 6,27,933 7,10,90,813 7,84,60,781

44. Debashish Dutta 3,78,562 1,27,98,646 1,38,12,156

45. Sumit Laha 20,33,907 6,52,21,180 9,11,39,146

46. Sanjay Dey 18,59,997 3,13,93,056 4,99,69,756

47. Dibakar Laha 18,85,021 14,75,02,020 16,11,32,996

48. Uma Dutta 4,24,750 72,59,120 87,99,756

49. Buddhadeb Laha 16,46,845 46,65,859 64,39,214

50. Subrata Laha 2,09,797 1,71,41,540 1,84,16,062

51. Ujjal Laha 8,22,076 1,53,16,402 2,72,83,081

52. Arun Laha 5,02,099 1,01,65,418 1,23,47,255

53. Tapas Laha 3,14,854 48,91,005 66,29,232

54. Priyankar Laha 3,88,977 35,75,388 46,00,427

55. Minu Mallick 8,48,976 2,60,21,480 3,35,12,638

56. Arun Dutta 9,42,422 81,49,237 95,18,674

57. Highgrowth Vincom 5,63,154 1,71,86,299 4,35,33,171 Private Limited

58. Linkup Financial 1,30,108 5,18,33,591 5,21,85,903 Consultants Private

Limited

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From the above table, it is observed that on a comparison of the declared income with either the average buy value or average sell value of the trades executed by each of the aforesaid entities in the scrip of MUL, one can easily ascertain the glaring disproportionate trading activities undertaken in the trading accounts of the said entities as compared to their declared annual income. For instance, the declared annual income of Mr. Sahilkumar Amrutbhai Vaghela (Sl. No. 30) is approximately INR 4.32 lakh while his average buy value in the scrip is approximately INR 3.48 crore which is at an astronomical variance of approximately 7950% from his declared income. Similarly, the declared income of Mr. Subrata Laha (Sl. No. 50) is approximately INR 2.09 lakh while his average buy value in the scrip is approximately INR 1.71 crore which is at an astronomical variance of approximately 8070% from his declared income. The aforesaid instances prima facie demonstrate how, by taking such huge buying exposures in the scrip the said entities were displaying their unfettered confidence about their capability, albeit without any credible substance, to take delivery of those shares bought by them that were worth much more than their annual income. In other words, their risk appetite in the scrip was very high which necessarily was not the outcome of their own net worth/income level or even the fundamentals of the Company but was due to certain inexplicable extraneous circumstances.

38.2. Ownership of shares - It is noted from the records that except a few entities, the above discussed Off Loaders connected to the Company, did not buy any shares on-market from the very start of the trading in the scrip of MUL i.e. January 27, 2017 till the start of circulation of SMS i.e. September 21, 2019 onwards (a few entities had bought some shares after starting of SMS circulation). Before listing of the scrip, most of these entities had received their shares of the Company, majorly through off-market transactions. Since, before listing of the Company the shares of the Company are mainly held by the Promoters of the Company, the probability of the aforesaid entities of receiving the shares of the Company through off-market mode from the Promoters of the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Company, is high. Further, there are no records which could be unearthed at the time of investigation, which would show that any consideration was ever paid by the Off Loaders to the persons from whom they had received the shares in off market mode. The said fact coupled with the fact that the Off Loaders had transferred funds (out of the sale proceeds) post their off-loading of the shares of MUL inter alia to the Promoter related companies (discussed in subsequent paragraphs) and the fact that most of these Off Loaders were also the employees of the Company, lead me to a compelling inference, on a preponderance of probability basis, that the Off Loaders/ beneficial owners of the shares who off- loaded the shares on the Exchange platform by booking substantial profits, were not the genuine owners of those shares which they had acquired from off-market sources during pre-listing days of the Company, but in all likelihood were prima facie the front entities for the Promoters of the Company. Similarly, the other two sets of Off Loaders i.e., Ahmedabad based entities (Sub Group 2) and Kolkata based entities (Sub Group 3) who on paper were the owners of the shares of the Company which they sold at a high profit, but the records with SEBI reflect that they were funded by certain other entities who are collectively referred to as Sub Group 2.A and Sub Group 3.A, respectively, who in turn were connected with Mr. Hanif Shekh and apparently by using such funds these entities, i.e. Sub Groups 2 and 3, had acquired those shares of the Company. A few instances where the buy trades of the Sub Groups 2 and 3 were prima facie found to have been funded by the Sub Groups 2.A and 3.A, respectively, are presented below. However, prior to that it will be appropriate to identify the entities who belonged to the Sub Groups 2.A and 3.A which provided funds to Sub Groups 2 and 3 for acquiring shares of MUL. The said entities are as follows:

Table No. 17 Sl No. Entity Name Connection with each other Sub-group 2.A - Entities involved in funding of trade of Sub-group 2 and transferring funds to Sub-Group 3.A

1. Aneel A & Co Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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2. Samukh Trade a. Sub-group 2.A has frequent two-ways

3. Shakti Enterprise transactions with each other and with Sub- group 2.

4. Sharad Enterprise b. Sub-group 2.A has frequent transactions with

5. Ambika Traders Sub-group 3.A.

Sub-Group 3.A - Entities inc.v olAvlel dha ivne f oupnedniendg tohfe tirra adceco oufn Stus bin- Gsaromuep b 3ra nch of Canara Bank.

6. Midpoint Commodeal a. Sub-group 3.A has had frequent two-ways transactions with each other and Sub-group 3.

7. Dk Jain Properties b. Midpoint Commodeal, D K Jain Properties, MR

8. Mr Merchants Pvt Ltd Merchants, Amuly Supplier had shareholdings

9. Armeva Dealers Pvt Ltd in Escort Agencies- an unlisted entity. c. Amuly suppliers and Midpoint Commodeal

10. Amuly Suppliers have same android id (device id-

11. Frexon Supppliers Pvt Ltd 3dec7ed5640fa5fe) while accessing their

12. Rightview Dealers Pvt Ltd respective e-mail ids.

13. Mackny Trexim Pvt Ltd d. DK Jain Properties Private Ltd., Amuly

14. Urki Sales Pvt Ltd Suppliers Private Ltd., MR Merchants Private Ltd. and Midpoint Commodeal Private Ltd. all

15. Nxstar Dealcom Pvt Ltd had a common director, Mr. Nandu Shaw (DIN

16. Impalio Distributors Pvt Ltd 06403637).

17. Cradon traders Pvt Ltd It is noted from the aforesaid table and material available on record that the said 17 entities (5 entities from Sub Gro up 2.A and 12 entities from Sub Group 3.A) are not only inter se connected with each other but were also connected with Mr. Hanif Shekh, and / or Hanif Entities (Sub Group 5 - identified subsequently in the Order). Few of such connections are indicated below:

 Sub Group 2.A had frequent transaction with Sub Group 3.A. For instance, an entity from Sub Group 2.A namely, Aneel A & Co had transferred INR 12 lakh to an entity from Sub Group 3.A namely, Armeva Dealers Pvt. Ltd. on December 7, 2018. Again on December 12, 2018, Aneel A & Co had transferred INR 19 lakh to Armeva Dealers Pvt. Ltd.

 An entity from Sub Group 3.A namely, DK Jain properties Ltd has its address as "9/12, Lal Bazar Street 3^rdFloor Block-B Room No 17 Kolkata 700001" which is located in the same premises and address where Econo Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Trade India Ltd (Sub Group 5) is located. Further, parents of Mr. Hanif Shekh are Promoters of Econo Trade India Ltd as well. A few instances where the buy trades of the Sub Groups 2 and 3 were seen to be funded by Sub Groups 2.A and 3.A, respectively, are shown below:

Table No. 18 Sub-group 2.A Sub-group 2 Entity

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Similar to the conduct of Mauria Group of connected entities (Sub Group 1) post their exit from the scrip of MUL with substantial profits, the Off Loaders of Sub Groups 2 and 3 also, post their exit from the scrip, had transferred funds (prima facie out of the sales proceeds of the shares) inter alia to Sub Groups 2.A and 3.A (discussed in subsequent paragraphs). Additionally, considering the undeniable fact that all the sub groups i.e., 2, 2.A, 3 and 3.A are connected with each other as well as with Mr. Hanif Shekh, I am now persuaded, on a preponderance of probability basis that, the aforesaid beneficial owners of the shares, viz: the entities of Sub groups 2 and 3 were not the genuine owners but were prima facie the front entities holding the shares of MUL on behalf of the entities pertaining to Sub Groups 2.A and 3.A (who had provided funds) and who in turn, were prima facie the front entities for some other entities (discussed in subsequent paragraphs) who were the Ultimate Beneficiaries of the entire scheme deployed in the trading of the scrip.

Thus, prima facie form the aforesaid factual exposition and my prima facie observations pertaining to the apparent role played by the various groups of connected entities, a discernible pattern emerges wherein it can be seen that as per the master plan of the purported scheme, it was pre-determined that there would be one set of entities who would be shown as the owners of the shares on the books of the Company while there would be another set of entities who would fund the transactions of the so called owners of shares to procure the shares and then post the dealing in the scrip by the Off Loaders i.e., the first set of entities who were the on-paper owners of the shares, would transfer the sales proceeds with the profits so earned to the ultimate and the real beneficiaries by using the financiers (the second set of entities referred to above who had funded the first set of entities) as conduits, wherever applicable and in other cases via layered transactions using other connected entities as conduits. In short, prima facie the scheme was perpetrated in such a way so as to hide the real identities of the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Ultimate Beneficiaries by putting enough distance / layers between them and the initial dealings in the scrip by their connected front entities.

38.3. Transfer of trade proceeds - In a genuine sell transaction on the securities market, post selling of shares, the proceeds of the shares sold in the securities market, goes to the bank account of the seller on T+2 day (where T is the trading day). However, in the instant case the sellers in the scrip of MUL i.e., the Off Loaders, be it the Mauria Connected entities, or the Sub Group 2 or Sub Group 3 entities, all of them have without fail, transferred the proceeds either to the Promoter related companies of MUL or to Mr. Hanif Shekh (the SMS sender) related companies or to certain Forex companies which was later on converted into cash. These post sales suspicious behaviour of the selling entities viz: the entities of sub-groups no.1, 2 and 3 who, after off-loading the shares never held the proceeds with themselves and instead transferred them to the aforesaid destinations, belies and betrays the genuineness of the dealings in the scrip by the Off Loaders. Further, once the funds trail is traced out and the ultimate recipients of the sales proceeds are identified, it becomes crystal clear that the Ultimate Beneficiaries of the prima facie scheme that was deployed in the trading in the scrip of MUL included none other than the kingpin and the mastermind behind the bulk SMSs that were sent to public by him/at his behest namely, Mr. Hanif Shekh and also the Promoters of the Company. Before proceeding to illustrate a few instances of transfer of money by the Off Loaders to the Ultimate Beneficiaries, it will be appropriate to first identify a certain set of entities which can be named as Hanif entities, Hanif connected entities, and also the entities which were used to transfer money to Forex companies and to the entities connected to the Promoters of the Company.

Table No. 20

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Table No. 21 Sl. No Entity Name Connection with each other Sub-group 5.A - Hanif Connected Entities

1. Nilratan Suppliers Pvt. a. Briya Enterprise, Kanungo Financiers and Purple Ltd. Entertainment had same android id (device id-

37cf22489924fd2f) while accessing their respective e-mail ids.

b. Nilratan Suppliers Pvt Ltd and Kanungo Financiers had same

2. Briya Enterprise Ltd. android id (device id- 3d266d7692779548) while accessing

3. Kanungo Financiers their respective e-mail ids. Ltd. c. Lagan Barter Pvt Ltd had frequent transactions with Kolkata

4. Purple Entertainment entities and Econo Broking Pvt Ltd, Econo Trade India Ltd, Ltd. Nilratan Suppliers Pvt Ltd and Briya Enterprise.

d. Lagan Barter Pvt Ltd and Nilratan Suppliers Pvt Ltd trade

5. Lagan Barter Pvt. Ltd. frequently with broking firm of Hanif Shekh- Econo Broking Pvt Ltd.

6. Jignesh Sudhirbhai e. Frequent bank transaction between Jignesh Sudhirbhai Shah Shah and abovementioned entities. Hanif Shekh has frequent call record with Jignesh Sudhirbhai Shah.

Table No. 22 Sub-group 6 - Companies involved in routing fund to Forex conversion in Cash S No Name Relation/Connection

1. Amba Enterprise a. Entities at S No 1 to 21 are companies acting as

2. Sai Enterprise conduits to transfer money to Forex dealers -

3. Yash Enterprise Entities at S No 22 to 25 ("FFMC - Full Fledged

4. Njp Ntrade International Money Converters") who in turn converted the money received from entities at S No 1 to 21 into

Forex cash and have not maintained bills for the

5. Garvi Trading said transactions/conversions as per their

6. C Square Trading submission.

7. Vikas Sales

8. Shree Mahakal Enterprises b. Net Sellers in the scrip of Mauria Udyog Ltd, 7NR Retail Ltd, GBL industries Ltd and Price-volume

9. Jagannath International manipulators in Mauria Udyog Ltd -Group-01 (through K M Enterprise) and Sub-group 2.A and

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Table No. 23 Sl. No Entity Name Connection with each other Entities connected to the Promoters of Mauria Udyog Ltd.

1. Linkwise Marketing Pvt. Ltd.

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2. Vee-Em Infocentre Pvt a. Both while opening Gmail account, had same recovery e-mail Ltd as lmgupta@mauria.com which is also mentioned in the UCC details of broker/exchanges of Deepa Sureka- Promoter of

Mauria Udyog Ltd. and Akhil Kumar Sureka - family member

of Navneet Kumar Sureka.

b. Both had same service IP address i.e. 27.251.171.132 on

09/07/2014 and 23/06/2014 while opening Gmail account.

c. Deepak Kumar Garg (employee of MUL) signed as witness on

the rent agreement of Linkwise Marketing Pvt Ltd signed on

March 02, 2016

d. Sureka group has significant holding in Vee-Em Infocenter Pvt. Ltd.

e. In a corporate filing with BSE, Mauria Udyog Ltd has

mentioned Vee-Em Infocenter Pvt. Ltd. in its related party

transactions (Group Company).

Now that the relevant recipient entities (of sales proceeds of shares of MUL) have been identified, a few instances are shown below to demonstrate as to how the sale proceeds were transferred by the Off Loaders to the Ultimate Beneficiaries. A few instances where the sales proceeds were transferred by Mauria Connected entities to the Company/Promoter connected entities, are shown below:

Table No. 24 Broker Entity Company/sister concern of MUL Mauria connected entities sales proceeds

Choice Jagdish Chahar Linkwise Marketing Vee EM Infocentre Mauria Udyog Ltd.

Equity (Group company of Mauria Udyog Ltd) Date Amount Date Amount Date Amount Date Amount 29/11/19 17,08,000 29/11/19 17,08,000 29/11/19 15,00,000 30/11/19 15,00,000 Edelweiss Jagdish Singh Mauria Udyog Ltd.

Date Amount Date Amount 30/10/19 14,70,000 31/10/19 14,70,000 Edelweiss Jagdish Singh Sai Enterprise Date Amount Date Amount

27/12/19 60,68,100 27/12/19 19,50,000 Linkwise Marketing

Date Amount

27/12/19 22,22,500

Choice Ramajor Linkwise Marketing Vee EM Infocentre Mauria Udyog Ltd.

Equity (Includes amount received from other sellers)

Date Amount Date Amount Date Amount Date Amount 26/12/19 27,60,000 26/12/19 27,60,000 30/12/19 2,76,00,000 30/12/19 90,00,000 31/12/19 1,90,00,000

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A few instances where the sales proceeds were transferred by Mauria Connected entities to Hanif connected entities are shown below:

Table No. 25

Broker Choice Equity Jagdish Chahar Frexon Suppliers Ltd (Sub-group Further 3.A transfer to

Date Amount Date Amount Hanif Shekh

30/08/19 9,41,500 30/08/19 9,41,500 Entities (Sub- Edelweiss Jagdish Singh Samukh Trade (Sub-group 2.A) group 5.A) Date Amount Date Amount

30/10/19 14,70,000 31/10/19 14,70,000

Pantomath Ramajor Armeva Dealers (Sub-group 3.A Date Amount Date Amount

20/08/19 9,16,000 20/08/19 9,16,000

Comfort Mahavir Parshad Rightview Dealers Pvt Ltd (Sub- group 3.A

Date Amount Date Amount

19/08/19 9,18,816 20/08/19 9,19,047

Mahavir Parshad Armeva Dealers Pvt Ltd (Sub- group 3.A

Date Amount Date Amount

22/08/19 9,70,454 26/08/19 9,71,047 A few instances where sales proceeds were transferred by Mauria Connected entities to the companies acting as conduits for conversion of sales proceeds into foreign exchange are shown below:

Table No. 26

Broker to

Choice Jagdish Chahar NJP Ntrade C Square Trading After Equity International multiple

routing,

Date Amount Date Amount Date Amount funds 16/12/19 21,67,000 16/12/19 21,67,000 17/12/19 24,50,000 were Choice Jagdish Chahar Amba Enterprise Infinity Trading Co converted Equity to Forex

Date Amount Date Amount Date Amount cash

06/01/20 20,00,000 06/01/20 20,00,000 07/01/20 15,00,000 Choice Ramajor Amba Enterprise MH Corporation

Equity

Date Amount Date Amount Date Amount

20/12/19 52,25,000 20/12/19 52,25,000 20/12/19 1,18,00,000 Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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A few instances where the sales proceeds were transferred by Ahmedabad based entities (Sub Group 2) to Sub Group 2.A entities are shown below:

Table No. 27

Broker MNM Stock Manish Kumar Rajput Aneel A &CO Aneel A & CO, Broking Ambika

Traders and

Date Amount Date Amount Samukh Trade

30/10/19 25,00,000 01/11/19 25,00,000 are part of Sub Competent Finman Sahilkumar Vaghela Ambika Traders Group 2.A Pvt Ltd entities who

Date Amount Date Amount are connected

17/10/19 18,00,000 23/10/19 18,00,000 to Hanif Shekh Arihant Capital Fuldeep Popatbhai Samukh Trade (discussed later Markets* Sehgal in the Order).

Date Amount Date Amount

09/09/20 22,59,330 09/09/20 22,59,330

*Outside IP - To illustrate repetitive pattern and relation/connection between the Entities. A few instances where the sales proceeds were transferred by Kolkata based entities (Sub Group 3) to Sub Group 3.A entities are shown below:

Table No. 28

Ashika Stock Broking Sanjay Dey Midpoint Commodeal Midpoint Date Amount Date Amount Commodeal Pvt

23/12/19 37,48,796 23/12/19 30,00,000 Ltd, D K Jain Amuly Suppliers Properties Pvt

Date Amount Ltd and Amuly

23/12/19 575,675 Suppliers are

SMC Global Suprabhat Laha D K Jain Properties Pvt Ltd part of Sub Securities* Group 3.A

Entities who

Date Amount Date Amount

are connected

19/10/20 25,43,573 19/10/20 19,02,169

to Hanif Shekh

Prabhudas Liladhar Arpan Das Midpoint Commodeal Pvt Ltd (discussed later

Pvt Ltd Date Amount Date Amount in the Order). 20/12/19 80,00,000 23/12/19 7,50,000

27/12/19 25,95,000 15/01/20 70,00,000

D K Jain Properties Pvt Ltd

Date Amount

15/01/20 21,65,765

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38.4. Attempt to conceal the identity - As noted in the preceding paragraphs, each and every leg of the prima facie scheme is designed in such a way so as to hide the identity of the real perpetrators of the said scheme. Right from the first leg were the PV Influencers were trying to prima facie artificially inflate the price and volume in the scrip to the Collaborators who continued to manipulate the trading volumes and prices of the scrip during the SMS period till the transfer of the sales proceeds by the Off Loaders post their exit from the scrip, to the Ultimate Beneficiaries, every attempt was made to conceal the identity of the real and ultimate beneficiaries of the prima facie fraudulent scheme, including the attempt that was made to hide the identity of the SMS Sender by giving incorrect name, multiple mobile numbers, by making cash payment etc. At every step, effort was made to mask the connection of the entities who were on paper dealing in the scrip during pre and post SMS period, with the Promoters of the Company or with Mr. Hanif Shekh, the SMS Sender. However, as one scrutinizes and looks through the maze of multiple layers of the prima facie scheme, the concerted effort which was put in the said scheme by the kingpin, Mr Hanif Shekh to maintain his anonymity and to avoid the regulatory detection, falls apart.

39. The cumulative effects of the afore-discussed deceitful acts that have been committed by different sets of entities through layers of transactions, coupled with the relationship / connections as brought out succinctly in the preceding paragraphs that existed amongst the connected entities based on a preponderance of probabilities, prima facie lead to an imposing inference that the prima facie scheme which was employed to deal in the scrip of MUL was prima facie conceived and implemented to benefit Mr. Hanif Shekh and his connected entities namely, Mr. Kasambhai Shekh, Ms. Hasina Kasambhai Shekh, Robert Resources Ltd, Econo Trade India Ltd, Econo Broking Pvt Ltd and Sai Metal tech LLP and also the Promoters of Mauria Udyog Ltd. namely Mr. Navneet Sureka and Ms. Deepa Sureka and their connected companies viz., Mauria Udyog Ltd. and Vee-Em Infocenter Pvt. Ltd.

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Profits

40. As may be observed from the foregoing factual analyses, the prima facie scheme that was hatched by the kingpin, Mr. Hanif Shekh along with the Promoters of the Company for their fraudulent dealings in the scrip of MUL has prima facie resulted in earnings of profits at various levels. The first and the foremost entities who made profits by their fraudulent dealings in the scrip are the PV influencers as noted at Table No. 15 above in this Order, who had entered the scrip at the initial stages of implementation of the prima facie scheme. As already discussed in the early part of this Order, these entities had collectively by their manipulative trades in the scrip during pre and post SMS period (majorly during pre-SMS period), have prima facie made a profit of INR 7,38,34,535/-. The next set of entities who made profit by their dealings in the scrip, pursuant to the prima facie scheme are the Off Loaders. The first group of Off Loaders i.e., Mauria Connected entities (Sub Group 1) post their exit from the scrip had transferred the profits to Mr. Hanif Shekh and his connected entities and also to the entities connected to the Promoters of the Company. A summary of such profit earned by the Mauria Connected entities that were transferred through layers of conduits to Mr. Hanif Shekh and his connected entities and also to the entities connected to the Promoters of the Company is tabulated below:

Table No. 29

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41. It has been noted in the preceding paragraphs that the forex companies viz., Gemmy Forex Pvt. Ltd., Donum Forex Pvt. Ltd., Malacca Forex Pvt. Ltd. and Velocity Forex Pvt. Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Ltd., etc. were receiving funds from certain companies as mentioned at Sl. Nos. 1-21 at Table No. 22 which were acting as conduits and in turn, the Forex companies were converting the funds so received by them into forex cash. The aforesaid conduit companies which were transferring funds to the Forex companies were receiving funds from the Sub Group 1 (Mauria Connected entities) and from the entities of Sub Group 2.A as well as Sub Group 3.A. It may be noted that entities of Sub Group 2.A were having banking transactions with Ahmedabad based entities [Sub Group 2] and the entities of Sub Group 3.A were having banking transactions with Kolkata based entities [Sub Group 3]. It is noted from the records that similar to the action of Off Loaders like Sub Group 1 in the case of MUL, in case of certain other scrips covered in this matter as well viz., 7NR Retail Ltd. and GBL Industries Ltd., the Off Loaders were seen to be transferring the funds (sales proceeds) to the conduit companies and the only common denominator involved across all these scrips where prima facie, similar fraudulent schemes were deployed, is Mr. Hanif Shekh (discussed in subsequent paragraphs). Thus, a pattern can be seen across all such scrips wherein post the exit of the respective Off Loaders from the scrip especially during the SMS period, certain portion of the profits were also transferred to the conduit companies only to be onward transferred to the forex companies. Thus, on a preponderance of probability basis it can be inferred that Mr. Hanif Shekh who is the only constant key element across different scrips where similar scheme was found to be deployed as in the case of the scrip of MUL, and considering the fact that the same set of conduit companies and Forex companies have been used across all these scrips covered in the present proceedings, one is prima facie led to a factual conclusion that the conversion of sales proceeds of the shares by the Off Loaders to forex cash was done only on behalf of and for the benefit of Mr. Hanif Shekh. The said inference further gets reinforced from the fact that the Sub Groups 2.A and 3.A which have transferred funds to the conduit companies are in turn connected with Mr. Hanif Shekh, thereby showing proximity of Mr. Hanif Shekh with respect to the said conduit companies, rather than with multiple Off Loaders across the scrips. In other words, there can be no other contrary inference made other than the aforesaid prima facie conclusion, which can plausibly explain as Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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to why not one or two but a majority of the Off Loaders across the scrips, whether or not Promoters of the companies are involved, decided to transfer the sales proceeds of their dealing in that scrip, to the conduit companies for onward transfer of those funds to Mr. Hanif Shekh and his related entities or to the entities related to the Promoters of the company and in most such instances like in the scrip of MUL, the Off Loaders (not necessarily all the Off Loaders) did not have even the requisite financial capacity to deal in the scrip and also were seen to be funded by some other entities.

42. In view of the aforesaid discussion, it can be prima facie inferred that the profits made by Mr. Hanif Shekh and his connected entities including Sub Groups 2 and 3 by their dealing in the scrip of MUL aggregate to INR 33,48,04,829/- while the Promoters of MUL along with their connected companies have prima facie made a profit of INR 26,19,68,781/-.

43. Before proceeding further to determine the prima facie violations of the entities who were involved in the dealings in the scrip of MUL in a fraudulent manner, based on the detailed discussions in preceding paragraphs, I would like to briefly reiterate the broad modus operandi of the prima facie scheme employed in the scrip of MUL. The same is as follows:

43.1. A certain group of entities (PV Influencers) who are connected to the Company started dealing in the scrip of MUL inter alia either by trading amongst themselves or by executing synchronised trades or by accessing the market at regular interval and placing multiple orders on the same day with the primary goal of gradually increasing the price and volume in the scrip.

43.2. In the meantime, Mr. Hanif Shekh obtained multiple sender IDs from the resellers of TSPs which can be used to send bulk SMSs and also created website (www.midcapgains.in) which can be used to give buy recommendation in favour of the scrip once a desired level of price and volume is reached largely with the support of the fraudulent trades of the PV influencers.

43.3. Post the wide circulation of SMSs in which recommendations for buying the scrip was given, a few entities (Collaborators) connected with the SMS Sender, Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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collectively as a group tried to maintain the momentum so far created by the PV Influencers in the scrip inter alia either by taking turns to deal in the scrip on separate occasions or by executing intra day trades even at the cost of making losses in the process, just to ensure that the liquidity can be continuously maintained in the scrip, consequently, increasing the probability of the Off Loaders to exit the scrip with a profit.

43.4. Multiple groups of connected entities (Off Loaders), majority of whom did not have even the financial capacity or were funded by other set of entities, were set up as front entities by the Ultimate Beneficiaries, and such front entities dealt in the scrip by executing both buy and sell trades during the SMS period.

43.5. Due to the concerted effort of the SMS Sender and the Collaborators, the Off Loaders were able to exit the scrip by pocketing a substantial profit after dumping around 30 lakh shares of MUL-, a scrip which, post its listing did not witness any trades for two years and subsequently in spite of the sustained efforts of the PV Influencers, the average volume during pre SMS period remained at 9,423 shares.

43.6. Once the Off Loaders had exited the scrip, the profits were transferred from their accounts to the accounts of the Ultimate Beneficiaries who were none other than the SMS Sender and his connected entities and also the Promoters of the Company and their connected entities and such funds transfers were undertaken via several conduits and layers so as to maintain the anonymity of the Ultimate Beneficiaries and also to avoid regulatory detection.

44. Here, it will be relevant to reproduce the text of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d), 4(1) and 4(2)(a), (b), (e), (g), (k), (n) and

(r) of PFUTP Regulations for ready reference. The same reads as follows:

SEBI Act Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control.

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12A. No person shall directly or indirectly—

(a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder;

(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 stock exchange;

(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder;

PFUTP Regulations

3. Prohibition of certain dealings in securities

No person shall directly or indirectly—

(a) buy, sell or otherwise deal in securities in a fraudulent manner;

(b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under;

(c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange;

(d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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in contravention of the provisions of the Act or the rules and the regulations made there under.

4. Prohibition of manipulative, fraudulent and unfair trade practices

(1) Without prejudice to the provisions of regulation 3, no person shall indulge in a manipulative, fraudulent or an unfair trade practice in securities markets. 4 (2) Dealing in securities shall be deemed to be manipulative, fraudulent or an unfair trade practice if it involves any of the following: —

(a) knowingly indulging in an act which creates false or misleading appearance of trading in the securities market;

(b) dealing in a security not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such security for wrongful gain or avoidance of loss; ….

(e) any act or omission amounting to manipulation of the price of a security including, influencing or manipulating the reference price or bench mark price of any securities; …

(g) Entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security; …

(k) disseminating information or advice through any media, whether physical or digital, which the disseminator knows to be false or misleading in a reckless or careless manner and which is designed to, or likely to influence the decision of investors dealing in securities;

…

(n) circular transactions in respect of a security entered into between persons including intermediaries to artificially provide a false appearance of trading in such security or to inflate, depress or cause fluctuations in the price of such security; Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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…

(r) knowingly planting false or misleading news which may induce sale or purchase of securities;

45. From the aforesaid provisions of law, it may be appreciated that the determination of the prima facie violations by the entities has two linked but separate parts to it:

45.1. The first is determination of prima facie violation of provisions of SEBI Act and PFUTP Regulations and who all are liable for the same.

45.2. The second is to determine the persons who are prima facie liable for the proceeds generated by executing the trades that were executed in the scrip prima facie in violation of provisions of SEBI Act and PFUTP Regulations.

46. I now proceed to address the first issue. In the instant matter, pursuant to the employment of the prima facie scheme, the entities belonging to the category of PV Influencers by way of their manipulative trades have prima facie interfered with the market forces of supply and demand in the scrip of MUL by artificially influencing the price and volume of the scrip and have thus, prima facie distorted the price discovery mechanism of the Stock Exchange. The said entities have, by frequently trading amongst themselves above the LTP during the pre-SMS period have contributed significantly to the LTP of the scrip and also have executed numerous synchronised trades above LTP amongst themselves wherein, in majority of the trades the time difference between buy orders and sell orders was equal to or less than 10 seconds. Further, the said entities, by trading amongst themselves have created substantial trading volumes in the scrip so as to enhance the liquidity in the scrip which was illicitly achieved by executing multiple trades for a particular order (for example, matching of 1 big buy or sell order with multiple small buy / sell orders) to artificially show market depth in the scrip. It is also noted from the records that the aforesaid entities, by engaging in such manipulative trades in the scrip of the company during the SMS period had also made substantial profits. As noted in preceding paragraphs, matching of a large number of trades between a selected set of persons over a considerable period of time in an illiquid scrip cannot be a matter of market Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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coincidence especially when the fundamentals and financials of the Company are weak. Furthermore, there were several red flags already available in public domain which could have alerted a genuine investor in the scrip viz., at the peak (December 26, 2019), the Company showed a PE ratio of 121.56 in contrast to PE ratio of its peers, Ador Fontech Ltd- 6.90, W.H. Brandy & CO- 4.71. Further, during similar periods the broader market Nifty 50 moved by 30.07 % while the scrip price of MUL moved by 2204%. Therefore, it has to be prima facie inferred that the PV Influencers have acted in collusion with the Promoters of the Company and have created artificial volumes in the market inter alia by trading amongst themselves and have also influenced price of the scrip by placing and executing a large number of orders at a price higher than the last traded price including executing synchronised trades, thereby indulging in unfair trade practices so as to induce/attract the gullible investors to deal in the scrip. Thus, the aforesaid actions of the PV Influencers i.e., Mr. Piyush Agarwal, Juscorp Enterprises Private Limited, A1 Solutions- Prop- Mr. Ajju Kumar, Corredor Services Private Limited, Mr. Sapan Kumar Agarwal, Vepar Solutions Private Limited, Mr. Shyam Kumar Singh, Kamal Gupta HUF, Ms. Chinnu, Mr. Gyanendra Gharti Chhetri and Mr. Aayush Tanwar along with the Promoters of the Company, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka with whom the PV Influencers are connected (and prima facie for whom they have undertaken those manipulative trades as PV Influencers), have prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d), 4(1) and 4(2)(a), (b), (e) and (g) of PFUTP Regulations.

47. Next comes the examination of the role played by Mr. Hanif Shekh as SMS Sender and owner of the website, www.midcapgains.in. I note that the examination of the definition of fraud under the PFUTP Regulations envisages, among other things, fraud by way of an "act" so as to have an "effect of inducement" on another person for dealing in securities. The Regulation prohibits employing any device, scheme or artifice in connection with dealing with or issuance of securities. It also prohibits engaging in any acts or course of business which operates as fraud or deceit upon any one in connection with dealing in or issuance of the securities. It is noted from the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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records that Mr. Hanif Shekh was prima facie instrumental in the creation of sender IDs which were used to send bulk SMSs and website which was used to give buy recommendation to the public at large to buy the scrip. Further, the impact of the said bulk SMSs was also noted on the scrip as pursuant to the circulation of those SMSs, there were significant increase in the volume of shares and marked increase in the price of the scrip that were traded the next day of circulation of such SMSs. Not only the SMS was disseminating misleading information by giving random target price in the scrip but was also spreading false news such as "N.S.E. LISTING IN 12 DAYS- BUY".

Moreover, as noted earlier, after exiting the scrip with profits, the Off Loaders, transferred the proceeds to the Promoter related companies and also to certain conduits so that the said funds can be eventually transferred to Mr. Hanif Shekh. The said acts and conduct involving transfer of funds out of sales proceeds earned by the Off Loaders prima facie shows the complicity of the Promoters of the Company with Mr. Hanif Shekh. The said involvement of the Promoters of the Company when seen along with the fact that when such bulk SMSs were circulating in the market for a considerable period of time, disseminating misleading and false information, no action or clarification was forthcoming from them who were also in charge of the affairs of the Company, thereby further strengthening the prima facie inference of their collusion with Mr. Hanif Shekh in sending the bulk SMSs. The aforesaid actions of Mr. Hanif Shekh and the Promoters of the Company, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka have prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d), 4(1) and 4(2)(k) and (r) of PFUTP Regulations. Further, as noted in preceding paragraphs, Sambhavanath Traders (Proprietor - Mr. Chandraprakash Valchand Parekh) has prima facie played a decisive role in operationalising the website, www.midcapgains.in without which the prima facie scheme would not have been able to be implemented at its full vigour. Therefore, the actions of Sambhavanath Traders (Proprietor - Mr. Chandraprakash Valchand Parekh) has prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d), 4(1) and 4(2)(k) and (r) of PFUTP Regulations. Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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48. Moving on to the Collaborators who as a group were taking turns to deal in the scrip and were executing intra day trades even at the expense of continuous losses just to maintain the positive momentum in the scrip which was created by the PV Influencers, so that the same momentum can be sustained post sending of the SMS, have prima facie indulged in a deceitful behavior and unfair trade practices. Their premediated way of accessing the securities market in small units to execute trades in the scrip and also intentionally incurring losses, prima facie do not show a genuine trading behavior. Trading is always done with the aim to make profits. But if one party consistently and prima facie deliberately, makes losses and the same behavior is repeated across the group members, the same prima facie constitutes an unfair trade practice as nobody intentionally trades only for incurring loss. Any intentional trading for incurring losses per se, is not a genuine dealing in securities. Moreover, as noted earlier, the trading activities of the Collaborators were undertaken by following a peculiar and unusual pattern that was prima facie suggestive of the fact that such trades executed by the Collaborators were undertaken as part of a scheme wherein they had to maintain the liquidity in the scrip over a period so that the next leg of the scheme could be implement wherein the Off Loaders could dump their shares and exit the scrip by making considerable profit. Therefore, when the actions of the Collaborators are seen conjointly in the context of giving effect to the prima facie scheme, it is unequivocal that the Collaborators were not trading in the normal and ordinary course. Consequently, it can be prima facie inferred that their dealing in the scrip has clearly restricted the free and fair operation of market forces in the scrip and has upset the market equilibrium. Any transaction executed to defeat the market mechanism is illegal and amounts to compromising the integrity of the market. Therefore, the actions of the Collaborators namely, Goenka Business Finance Limited, Mr. Kalpesh Dantani, Mr. Shivam Kumar, Mr. Sanjaybhai Babubhai Solanki, Mr. Chetanbhai Mahendrabhai Dantani, Mr. Suresh Deshaljibhai Vaghela and Mr. Amrutji Gokaji Thakor along with the kingpin of the prima facie scheme Mr. Hanif Shekh and the Promoters of the Company, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka, have prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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regulations 3 (a), 3 (b), 3 (c), 3(d), 4(1) and 4(2)(a), (b) and (e) of PFUTP Regulations. Additionally, as observed in the preceding paragraphs that the Collaborators have prima facie played their role as part of the prima facie scheme hatched by Mr. Hanif Shekh along with the Promoters of the Company. Considering the timing of their dealing in the scrip, it would be too much of a coincidence to believe that they dealt in the scrip right at the opportune time when the liquidity in the scrip had to be maintained. Therefore, the coming together of the Collaborators and Mr. Hanif Shekh without the aid of Mr. Malay Bhow prima facie cannot be ruled out. Thus, Mr. Malay Bhow is also prima facie instrumental in facilitating the execution of the prima facie scheme. The said action of Mr. Malay Bhow has led to the prima facie violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d) and 4(1) of PFUTP Regulations.

49. Similarly, the Off Loaders were also not prima facie genuine traders in the scrip as not only the majority of them did not have the financial capacity to deal in huge volumes in the scrip and some of them were also funded by other entities, their only prima facie purpose to trade in the scrip was to take undue benefit of the liquidity and the high price created in the scrip by the previous players of the prima facie scheme as part of a pre-meditated plan employed in the scrip. Thus, the trades executed by the Off Loaders were prima facie not in the normal and ordinary course and were non- genuine trades as they were executed pursuant to the prima facie scheme. Therefore, the actions of the Off Loaders were prima facie a deliberate unwarranted interference in the operation of ordinary market forces of supply and demand in the scrip and consequently it has not only undermined the integrity and efficiency of the market but has also prima facie portrayed a misleading appearance of trading in the scrip thereby inducing the other investors to deal in the scrip. The aforesaid actions of the Off Loaders as highlighted in the Table No. 11 along with the actions of the kingpin of the prima facie scheme Mr. Hanif Shekh and the Promoters of the Company, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka, have prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d), 4(1) and 4(2)(a) of PFUTP Regulations. Additionally, as noted in the preceding paragraphs, Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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the Off Loaders post their exit from the scrip had transferred funds via multiple layers to the Promoters of the Company and its connected entities namely, Mauria Udyog Ltd. and Vee Em Infocenter Ltd. The same had enabled Promoters of the Company to become the Ultimate Beneficiary of the prima facie scheme employed in the scrip. Thus, the actions of Mauria Udyog Ltd. and Vee Em Infocenter Ltd. have prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d) and 4(1) of PFUTP Regulations.

50. It is noted from records that entities connected to Mr. Hanif Shekh namely Mr. Kasambhai Shekh, Ms. Hasina Kasambhai Shekh, Robert Resources Ltd., Econo Trade India Ltd., Econo Broking (Erstwhile Bansal Finstock) and Sai Metaltech LLP, entities mentioned at Table 21 and entities mentioned at Table No. 17 have prima facie enabled him to encash the benefit of the scheme employed by him along with the Promoters of the Company in the scrip as they had facilitated in transferring of funds which were received by them from the other connected entities of Mr. Hanif Shekh namely Sub-groups 2.A, 3 and 3.A who had dealt in the scrip pursuant to the prima facie scheme employed in the matter. Thus, the aforesaid actions of the connected entities of Mr. Hanif Shekh have prima facie led to the violation of Sections 12A (a),

(b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d) and 4(1) of PFUTP Regulations.

51. With respect to Mr. Deepak Kumar Garg and Mr. Davinder Kumar Gupta, it is observed that Mr. Deepak Kumar Garg had maintained an Excel Sheet wherein all the details of the activities of Off Loaders who were employees of the Company viz., details of trades done by them such as number of shares bought/sold, date of trade, pay out date etc. was mentioned along with details of beneficiaries to whom the said entities had transferred their sale proceeds with bank account no., UTR no, date of transfer, amount transferred etc. The said Excel Sheet was sent by him to Mr. Davinder Kumar Gupta. Not only that, the entrenchment of both the aforesaid two entities in the prima facie scheme is further borne out from the fact that in the ITR filing of 21 entities (Off Loaders who were employees of the Company) as mentioned at Table No. 11, Mr. Davinder Kumar Gupta's email id (dkgupta1087@gmail.com) and mobile number Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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(8800772803) has been provided. Moreover, the mobile number of Mr. Deepak Kumar Garg, 9268823641 was common with various Off Loaders (Mithun Singh, Jeet Bahadur, Hare Ram, Roshan Kumar Jaiswal, Sukhilal Meena, Leelu Singh, Arvind Kumar, Krishan Murari Sharma, Binod Kumar Jha, Hoshiyar Saini, Mahender Singh and Narender) and 5 of the Off Loaders recovery email id was same as that of him, lmgupta@mauria.com, as noted from the UCC details. It has already been noted in preceding paragraphs that the Off Loaders who were connected with the Company were as per the prima facie scheme were the front entities who were dealing in the scrip on behalf of the Promoters of the Company. Consequently, it can also be prima facie inferred that Mr. Deepak Kumar Garg and Mr. Davinder Kumar Gupta were instrumental in managing the dealing of the Off Loaders who were connected with the Company in the scrip and maintaining the records thereof. Thus, the actions of Mr. Deepak Kumar Garg and Mr. Davinder Kumar Gupta which prima facie enabled the Promoters of the Company to execute the scheme has led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d) and 4(1) of PFUTP Regulations.

52. Furthermore, as observed in the preceding paragraphs with respect to flow of funds by entities who have dealt in the scrip pursuant to the prima facie scheme that post dealing in the scrip they have transferred funds to entities connected to the Promoters of the Company through multiple layers and one such entity was Linkwise Marketing Pvt. Ltd. Thus, Linkwise Marketing Pvt. Ltd. has prima facie enabled Promoters of the Company to encash the benefit of the scheme employed by them along with Mr. Hanif Shekh in the scrip, as it had facilitated in transferring of funds which were received by it from the other connected entities of Promoters of the Company who had dealt in the scrip pursuant to the prima facie scheme. The said action of Linkwise Marketing Pvt. Ltd. has prima facie led to the violation of Sections 12A (a), (b) and (c) of SEBI Act and regulations 3 (a), 3 (b), 3 (c), 3(d) and 4(1) of PFUTP Regulations.

53. The issue which now merits discussion is who amongst the aforesaid entities, would be prima facie liable for the proceeds generated by the employment of the prima facie scheme in the scrip. From the above discussion, I note that the kingpin, Mr. Hanif Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Shekh and the Promoters of the Company, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka have prima facie masterminded and implemented the scheme at its various stages. Not only were they the Ultimate Beneficiaries of the prima facie scheme even though they have tried their best to obfuscate the funds trail by executing the funds transactions through multiple layers. Therefore, based on the available records, it is prima facie inferred that Mr. Hanif Shekh and his connected entities namely Mr. Kasambhai Shekh, Ms. Hasina Kasambhai Shekh, Robert Resources Ltd., Econo Trade India Ltd., Econo Broking (Erstwhile Bansal Finstock) and Sai Metaltech LLP including Sub Groups 2 and 3 and Promoters of MUL, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka are jointly and severally liable for the wrongful gains generated in the scrip by the employment of the prima facie scheme as discussed in preceding paragraphs, to the tune of INR 33,48,04,829/- while the Promoters of MUL, Mr. Navneet Kumar Sureka and Ms. Deepa Sureka along with their connected companies namely, Mauria Udyog Ltd., Vee Em Infocenter Ltd. and Mr. Hanif Shekh and his connected entities namely Mr. Kasambhai Shekh, Ms. Hasina Kasambhai Shekh, Robert Resources Ltd., Econo Trade India Ltd., Econo Broking (Erstwhile Bansal Finstock) and Sai Metaltech LLP are jointly and severally liable for the wrongful gains generated in the scrip by the employment of the prima facie scheme as discussed in preceding paragraphs, to the tune of INR 26,19,68,781/-. Furthermore, the PV Influencers (entities at Table No.

6) who have also exited the scrip by making wrongful gains to the tune of INR 7,38,34,535/- are jointly and severally liable for the said wrongful gains generated in the scrip by them.

Vishal Fabrics Ltd.

54. Vishal Fabrics Ltd. (hereinafter referred to as "VFL / Company") was incorporated in 1985 and is involved in dyeing, printing and processing of denim, and other wide range of fabrics. VFL got listed on BSE on August 20, 2014. Based on the price and volume movement in the scrip, the trading in the scrip was examined for the period of March 25, 2020 to October 20, 2010 (hereinafter referred to as "Investigation Period - VFL"). It is noted that during the period of March 25, 2020 to September 4, 2020 (pre-SMS period), the scrip had opened on BSE at INR 134/- and closed at INR Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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272/- with a high of INR 291.80/-, with an average daily volume of 10,382 shares, while during the period of September 7, 2020 to October 20, 2020 (during SMS period), the scrip had opened on BSE at INR 274.10/- and closed at INR 369.25/- with a high of INR 369.35/-, with an average daily volume of 91,217 shares. At NSE, during the period of March 25, 2020 to September 4, 2020 (pre- SMS period), the scrip had opened at INR 144.10/- and closed at INR 272/- with a high of INR 299/-, with an average daily volume of 11,701 shares, while during the period of September 7, 2020 to October 20, 2020 (during SMS period), the scrip had opened on NSE at INR 274.10/- and closed at INR 369.20/- with a high of INR 369.40/-, with an average daily volume of 6,63,124 shares. The aforesaid figures show that not only the price in the scrip increased by more than 2.5 times within a brief span of 7 months but there was a massive spurt in the volume of the scrip as well. The Price - Volume chart in the scrip during the aforesaid period is depicted below:

Figure No. 5

BSE PV Chart - VFL

400 160000

350 140000

300 120000

250 100000

200 80000

150 60000

100 40000

50 20000

0 0

25-Mar-20 25-Apr-20 25-May-20 25-Jun-20 25-Jul-20 25-Aug-20 25-Sep-20 No.of Shares Close Price

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Figure No. 6

NSE PV Chart - VFL

400 1400000

350 1200000

300

1000000

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800000

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600000

150

400000

100

50 200000

0

27-Mar-20 27-Apr-20 27-May-20 27-Jun-20 27-Jul-20 27-Aug-20 27-Sep-20 Total Traded Quantity Close Price

55. The aforesaid Price - Volume charts show that from March 2020 onwards till August 2020, there has been a gradual increase in the price and volume of the scrip but in the next two months i.e., during September - October 2020, there has been a noteworthy increase in both price and volume of the scrip. During the investigation period it is noted that there were hardly any major corporate announcements made by VFL. The absence of major corporate announcements by the Company has to be seen in conjunction with the bulk SMSs which had started circulating in the scrip with buy recommendations from September 7, 2020 onwards. As noted in the preceding paragraphs, circulation of bulk SMSs is prima facie the epicentre of the scheme that was employed in the scrip. The aforesaid factors were compelling enough to examine the dealings in the scrip during the investigation period. Accordingly, the trading in the scrip of VFL has been examined in two phases, one during pre-SMS period (March 25, 2020 to September 4, 2020) and the other during SMS period (September 7, 2020 to October 20, 2020).

PV Influencers

56. It is noted from the records that during pre-SMS period (March 25, 2020 to September 4, 2020), the price in the scrip on both the Stock Exchanges has increased gradually Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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but steadily month on month onwards. The month wise break-up of the increase in the price during this period is indicated below:

Table No. 30 Price Volume

BSE

Month Closing % change from Month Average Volume Price (INR) closing price on

March 24, 2020

Mar-20 158.50 17.8 4% Apr-20 218.05 62.12% May-20 251.45 86.95% Jun-20 258.00 91.82% Pre-SMS period 10,382 Jul-20 273.10 103.05%

Aug-20 274.50 104.09%

NSE

Mar-20 158.75 10.24% Apr-20 218.50 51.74% Pre-SMS period May-20 251.40 74.58% 11,701 Jun-20 258.00 79.17%

Jul-20 273.10 89.65%

Aug-20 274.50 90.63%

Chiripal Group

57. It will be relevant here to note that the following entities are part of the Promoter / Promoter Group of VFL: Mr. Brijmohan Chiripal Devkinandan, Chiripal Industries Limited, Mr. Deepak J Chiripal, Mr. Jaiprakash D Chiripal, Mr. Jyotiprasad D Chiripal, Ms. Nitika Deepak Chiripal, Ms. Priyanka Brijmohan Chiripal, Mr. Ravindrakumar Bajranglal Bajaj, Mr. Ronak B Agarwal, Ms. Savitridevi V Chiripal, Shanti Exports Pvt Ltd, Tripoli Management Private Limited and Mr. Vedprakash Devkinandan Chiripal. It is noted from the material available on record that the following group (collectively referred to as "Chiripal Group") of connected entities who were prima facie directly and / or indirectly connected with the Promoter / Promoter Group of VFL, were frequently trading in the scrip of VFL during the pre-SMS period:

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Table No. 31

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58. It is noted from the factual points presented in the above table that the aforesaid 15 entities are not only connected with the Company but are also inter alia connected with each other either by way of common mobile no. or having common email id or are relatives of each other or having multiple fund transactions or business transactions amongst themselves. For instance, as per UCC details, Mr. Anil Dhanuka and Mr. Manuj Ashokkumar Chiripal shared a common mobile number viz.

"1528518708". Similarly, Rushp Trading LLP, Satrama Trading LLP and Shivhari Trading LLP shared a common mobile number viz. "9727768088" and common email id i.e. "purvee@chiripalgroup.com:. Further, Mr. Yash Ravi Bajaj, Ms. Trisha Vikas Bajaj, Ms. Sonali Ateet Bajaj and Raaj Ravindrakumar Bajaj are relatives. Various fund transfers have been observed amongst Rushp Trading LLP and Ms. Durgeshwari Pradipbhai Chiripal, Mr. Raaj Ravindrakumar Bajaj, Shivhari Trading LLP, Ms. Sushila Ashokbhai Chiripal and Mr. Yash Ravi Bajaj. The aforesaid factual findings prima facie show that these entities enjoyed a strong inter se connection amongst themselves and when such connection is seen along with the way the said entities have traded in a Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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concerted manner and also seen to have traded posing as counterparties to each other's trades in the scrip of VFL during the pre-SMS period (March 25, 2020 to September 7, 2020), it would prima facie demonstrate that their dealings in the scrip of VFL was not genuine trades executed in normal course of trading in securities market but instead were undertaken as part of a premediated plan or scheme to perpetrate fraudulent trades in the scrip of VFL. The aforesaid inference is further buttressed from the fact that during the pre-SMS period, it was observed that the Chiripal Group, Ahmedabad based entities (Sub-group 2) and Kolkata based entities (Sub-group 3) were found to be frequently trading amongst themselves in the scrip of VFL. As noted in preceding paragraphs, the Ahmedabad based entities and Kolkata based entities are prima facie connected with Mr. Hanif Shekh who is also the prima facie the SMS Sender in the scrip of VFL. Thus, the very act of the aforesaid three motley group of entities coming together to deal in the scrip of VFL during the pre- SMS period has to be by design and not by mere coincidence and in all probability, given the preponderance of facts and circumstances, these entities have dealt with the scrip of VFL only pursuant to a prima facie fraudulent scheme employed by them for trading in the scrip.

59. Contribution of aforesaid 3 groups i.e., Chiripal Group, Ahmedabad based entities and Kolkata based entities to the price and volume rise in the scrip of VFL during the period March 25, 2020 to September 4, 2020, is shown below:

Table No. 32 %

% Buy to % Sell to contrib

total total Net Net Entity Type of Buy Sell Total ution to Market Market Buy Sell

Name entity Qty Qty LTP net Buy Sell LTP LTP

price

Volume Volume

rise

BSE

Rushp Chiripal 112014 10.58% 0 0.00% -6.95 - -6.95 -5.04% Trading LLP Group

Satrama Chiripal

101138 9.55% 0 0.00% 1.00 - 1.00 0.72% Trading LLP Group

Bajaj Sonali Chiripal

Group 34300 3.24% 0 0.00% 1.10 - 1.10 0.80% Ateet Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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105900 138.0 138.0 138.0 100.00

Market Total 1059004 100.00% 100.00% 4 0 0 0 %

NSE

Shivhari Chiripal Group 24033 1.96% 1095 0.09% 1.35 -3.00 -1.65 -1.29% Trading LLP Sushila Chiripal

Ashokbhai Group 100 0.01% 0 0.00% 0.00 - 0.00 0.00% Chiripal

Bajaj Sonali Chiripal

Group 9820 0.80% 0 0.00% -0.10 - -0.10 -0.08% Ateet Chiripal Chiripal

Suryansh Group 6000 0.49% 0 0.00% -0.90 - -0.90 -0.70% Hari

Rushp Chiripal

Group 50449 4.11% 0 0.00% -4.00 - -4.00 -3.13% Trading LLP Satrama Chiripal

Group 38652 3.15% 1 0.00% -5.45 -0.30 -5.75 -4.49% Trading LLP Trisha Chiripal

Group 31700 2.58% 0 0.00% -19.30 - -19.30 -15.08% Vikash Bajaj Anil Chiripal

0 0.00% 151295 12.31% - -26.15 -26.15 -20.43% Dhanuka Group

Chiripal Chiripal

Manuj Group

0 0.00% 206086 16.77% - -38.15 -38.15 -29.80% Ashokkuma

r

Durgeshwar Chiripal

Group 0 0.00% 1314 0.11% - 0.00 0.00 0.00% i P Chiripal Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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Market Total 1228645 100.00% 1228645 100.00% 128.00 128.00 128.00 100.00%

60. As can be seen from the above table, the Chiripal Group along with Ahmedabad based entities (Sub-group 2) and Kolkata based entities (Sub-group 3) collectively have prima facie contributed 56.12% to the market buy volume and 39.04% to the market sell volume during the pre-SMS period through their trades on BSE. Further, by trading amongst each other as one seamless group in the scrip of VFL, these entities have contributed 29.03% to the total market traded volume during the pre-SMS period. It is also noticed that on BSE, the aforesaid connected entities have contributed to the tune of INR 76.35/- (55.33%) to the net price rise in the scrip during the pre-SMS period. The trades of the said connected entities were analysed to determine as to how the said connected entities were trying to influence the volume and price in the scrip during the pre-SMS period so as to present the scrip as an attractive proposition for the investors in the securities market. Some illustrations to that effect as noticed from their trades on BSE are as follows:

60.1. On March 25, 2020, Mr. Manuj Ashokkumar Chiripal had placed 1 buy order for 18,353 shares of VFL on BSE at 14:32:58 hours at a price of INR 134/- per share. Subsequently, Mr. Yogeshkumar Anandpal Goyal who is also part of the Chiripal Group, had placed 11 different sell orders cumulatively for 18,346 Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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shares in the scrip of VFL for INR 134/- per share between 14:33:30 hours to 14:37:26 hours, i.e. within few minutes of placement of the aforesaid single buy order and to be very precise, the time range within which these 11 sell orders were placed was between 30 seconds to 4 minutes and 28 seconds. The aforesaid efforts on the part of the entities to place orders in such a manner led to the matching of 1 buy order of 18,353 shares with 11 different sell orders for different quantities of shares (cumulatively 18,346 shares) at the same price of INR 134/- per share. The aforestated manner of dealing in the scrip apparently resulted into changing hands of 18,346 shares from Mr. Yogeshkumar Anandpal Goyal to Mr. Manuj Ashokkumar Chiripal. These two persons as noted above, belonged to the Chiripal Group and by their act of splitting a single transaction into multiple sub-transactions executed through multiple trades which could have been done in a single trade as well, these entities have prima facie exposed their spurious intention while dealing in the scrip of VFL. It is also pertinent to note that the aforesaid action on the part of the said two entities has resulted in execution of the first 11 trades in the scrip on that particular day. It is also pertinent to note here that apart from the afore discussed 11 trades, there was no other trade in the scrip of VFL on BSE on that particular trading day.

60.2. On July 3, 2020, Mr. Manuj Ashokkumar Chiripal (part of Chiripal Group) had placed 1 sell order for 20,000 shares of VFL on BSE at 14:49:50 hours at a price of INR 255.5/- per share having order number as 1593747000000018022. Subsequently, one of the connected entities namely, Linkup Financial Consultants Private Limited from the Sub-group 3, had placed 1 buy order for 3,000 shares in the scrip of VFL for INR 255.5/- at 14:52:51 hours (just 3 minutes after the sell order was placed by Mr. Manuj Chiripal). The said sell order got executed and a trade for 3,000 shares at INR 255.5/- was executed in the scrip. No sooner the aforesaid trade was executed, Linkup Financial Consultants Private Limited immediately after 14 seconds i.e. at 14:53:05 hours, placed another buy order for 3,000 shares at INR 255.5 per share which also matched with the pending sell order of Mr. Manuj Ashokkumar Chiripal. Similar pattern Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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was followed two more times by Linkup Financial Consultants Private Limited i.e. it placed two separate buy orders (3^rdand 4^thorders) one after the other for 3,000 shares and 2,500 shares at 14:53:18 hours (13 seconds after his 2^ndorder) and at 14:53:40 hours (22 seconds after his 3^rdorder) respectively, which also got matched with the sell order of Mr. Manuj Ashokkumar Chiripal, already pending in the system, thereby matching more than 57% (11,500 shares out of 20,000 shares) of the sell order placed by Mr. Manuj Ashokkumar Chiripal. Then, in order to execute the remaining sell orders placed by Mr. Manuj Ashokkumar Chiripal, another connected entity from the Sub-group 3, namely Mr. Sourav Das, placed a buy order for 3,000 shares of scrip of VFL at INR 255.5/- per share (similar to price offered by Mr. Manuj Ashokkumar Chiripal for his sell order) at 15:09:14 hours, which immediately got executed. Straightaway, Mr. Sourav Das placed his 2^ndand 3^rdbuy orders for 3,000 shares and 2,500 shares respectively at price of INR 255.5/- per share at 15:09:20 hours (5 seconds after his 1^storder) and 15:09:25 hours (5 seconds after his 2^ndorder) in order to match the remaining quantity of the pending sell order of Mr. Manuj Ashokkumar Chiripal. Interestingly, by looking at the market momentum and activities in the scrip and prima facie getting enticed by these artificially created volumes, another market participant placed an order and purchased 790 shares from Mr. Manuj Ashokkumar Chiripal and therefore, Mr. Sourav Das could get only 1,710 shares out of 2,500 shares that he planned to buy. The aforesaid actions on the part of the entities led to matching of 1 single sell order for 20,000 shares with 7 different buy orders for different quantities of shares at the same price of INR 255.5/- per share as placed by the seller. The aforestated trades apparently have resulted into changing hands of 19,210 shares from Mr. Manuj Ashokkumar Chiripal to Linkup Financial Consultants Private Limited and to Mr. Sourav Das and considering that all the three entities are directly / indirectly connected with each other, it can be said that the said sell order could have been matched by the buyer by placing either one or two buy orders as well. It is also important to note that all the aforesaid 8 orders viz. (1 sell and 7 buy orders) placed by these Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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connected entities, were placed consecutively, in sequence (one after another) ranging from order number 1593747000000018022 to

1593747000000018029 resulting in 7 continuous trades in the scrip from trade numbers 11 to 17, which prima facie demonstrates that the aforesaid connected entities have dealt in the scrip in a pre-planned manner only to generate trading activities around the scrip in a concocted manner.

60.3. I note that the aforesaid instance is not a solitary instance since similar pattern of dealing in the scrip wherein one buy / sell order is matched with multiple buy / sell orders has been executed on numerous occasions by the aforesaid Groups in the scrip during the pre-SMS period. For instance, on July 2, 2020, Shivhari Trading LLP (part of Chiripal Group) had placed one buy order for 4,000 shares of VFL at BSE for INR 255/- per share at 11:19:35 hours bearing order number 1593660600000021010, which remained unexecuted for almost 40 minutes till a sell order was placed by Mr. Anil Dhanuka (part of Chiripal Group) for 6,000 shares at INR 255/- per share at 11:58:13 hours (order number 1593660600000021011), which resulted in a trade of 4,000 shares in the scrip of VFL. Immediately, within 5 minutes, i.e. at 12:03:43 hours, another buy order (order number 1593660600000021012) for 2,000 shares (to match with the pending sell order of Mr. Anil Dhanuka) was placed by Shivhari Trading LLP at a price of INR 255/-, which resulted in another trade for 2,000 shares. It is pertinent to mention here that these 2 trades were the 1^sttwo trades in the scrip of VFL on that day, which started the momentum for the trading in the scrip for the rest of the day.

61. The aforesaid illustrations of the trades executed by the PV Influencers (Chiripal Group, Ahmedabad based entities and Kolkata based entities) in the scrip demonstrates the trading pattern of the PV Influencers wherein the buyers and the sellers across the various groups have traded in close proximity of time inter se amongst them which means, the orders were being placed on the anonymous exchange trading system in a manner that they matched with each other and was confined to the connected entities of the aforesaid group. The buy and sell orders were Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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placed within a short time interval and the trades which could have been executed in one or two transactions were broken down into several smaller transactions. By the said act, the entities have not only prima facie made an attempt to artificially inflate the number of trades executed in the scrip on a particular trading day thereby trying to artificially create more number of trades but have also deliberately try to set a positive momentum for the trading in the scrip. Further, considering the fact that the counter parties to the trades were mostly connected with each other resulting in the beneficial ownership of the shares so traded, staying within the group, it prima facie shows how the PV Influencers were attempting to create artificial volume in the scrip by indulging in such trades. The aforesaid act of the PV Influencers to influence the volume in the scrip becomes further glaring from the fact that the entities were placing orders within few minutes of each other's orders and their orders were almost identical in terms of quantity and price. Thus, the PV Influencers have prima facie tried to influence the volume in the scrip by executing their trades in a structured manner wherein the orders were being placed in tandem with each other's orders so as to ensure that the orders placed by the connected entities matched with each other thereby contributing to the trade volumes and price of the scrip in a pre-designed manner. Needless to observe here that the aforesaid trading pattern repeatedly followed by the PV Influencers could not have occurred by accident or by coincidence and rather such an unusual and artificial manner of trade in the scrip of VFL lead me to a prima facie inference that there was a prior meeting of minds with a pre- determined plan. Therefore, the aforesaid trades executed in the scrip by PV Influencers to create artificial volume in the scrip were prima facie non-genuine trades and were executed in pursuance of a scheme employed in the scrip.

62. It is also observed that the aforesaid method is not the only method employed by the aforesaid connected entities to prima facie create an artificial volume in the scrip but was the most frequently used strategy. The pre-determined plan of the PV Influencers to create an artificial volume in the scrip becomes prima facie evident, when the trades executed by them are juxtaposed with the total trades executed in the scrip during the pre-SMS period. As per the available records, it is noted that during the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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pre-SMS period, a total number of 2,245 trades were executed in the scrip of VFL on BSE which resulted in trading of 10,59,004 shares of VFL. Out of the said 10,59,004 shares of VFL that were traded during the pre-SMS period, the connected entities (PV Influencers) while acting as buyers, have cumulatively traded for 5,94,348 (56.12%) shares of VFL in just 339 trades (14.87% of total trades executed in the scrip during the period). Similarly, for contributing 39.04% of the total volume as sellers, these connected entities have traded in 496 trades (22.09% of the total trades in the scrip). Further, while trading within the group, it is observed that these entities have contributed to trading in 3,07,405 shares (29.02% of total trading volume) in only 176 trades (7.83% of total trades executed in the scrip during the period). Though the connected entities have prima facie created substantial volume in the scrip during the pre-SMS period, however, in effect only 17.08% (56.12% - 39.04%) of their traded volume during the said period has resulted in actual change in beneficial ownership while the remaining 39.04% shares were used just to create a prima facie artificial volume in the scrip with no change in effective beneficial ownership i.e., the ownership of the shares stayed within the group.

63. It is noted from the material available on record that the PV Influencers have cumulatively contributed to a price rise of INR 76.35/- (55.33%) of the net price rise of INR 138/- seen in the scrip of VFL at BSE during the pre-SMS period. Further, these connected entities, by trading amongst each other, have contributed INR 25.80/- (18.70%) to the net price rise of INR 138/- in the scrip of VFL at BSE during the pre- SMS period. Upon examination of the trade log of the PV Influencers, it was noted that various methods were employed by these entities to prima facie influence the price in the scrip viz., structured trades by as pointed out earlier and manipulating the closing price and opening price etc. Few illustrations to that effect are presented below:

63.1. On March 27, 2020, one of the connected entities namely Mr. Sahilkumar Amrutbhai Vaghela (part of Sub - group 2), had placed a buy order at BSE for 200 shares of VFL at INR 144.9/- (at that time the LTP was INR 137) and after 9 minutes, another connected group entity namely Mr. Durgeshwari Pradipbhai Chiripal (part of Chiripal Group) placed a sell order for 200 shares, exactly at the Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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price of INR 144.9/- to match the pending buy order of the connected group entity which resulted in creating a positive LTP of INR 7.9/- (5.77% increase from previous LTP of INR 137). It is important to note that it was the 6^thand the last trade of the particular day which was a structured trade and apart from getting the scrip closed at around 4.34% higher than the previous day closing price, the LTP created by this trade also set the positive momentum for the next trading day due to which the scrip opened on a positive note of INR 145/- on the next day.

63.2. On March 26, 2020, the closing price of the scrip of VFL on BSE was INR 138/-. On March 27, 2020 (next trading day), Ms. Durgeshwari Pradipbhai Chiripal (part of Chiripal Group) placed a sell order (order number 1585279802392020000) for 100 shares of VFL at 12:34:23 hours at a price of INR 144/- and after 38 seconds of the aforesaid sell order i.e. at 12:34:23 hours, Ms. Sushila Ashokbhai Chiripal (part of Chiripal Group) placed a buy order (order number 1585279802392020001) for 100 shares at INR 131.1/-. However, due to difference between the offer and ask price, both of these orders remained unexecuted till the buying price and the selling price were modified to INR 142/- by Ms. Sushila Ashokbhai Chiripal and Ms. Durgeshwari Pradipbhai Chiripal respectively. Interestingly, the difference between the time while the aforesaid buy and sell orders were modified was 1 second i.e. the buy order was modified by Ms. Sushila Ashokbhai Chiripal at 12:35:10 hours and the sell order was modified Ms. Durgeshwari Pradipbhai Chiripal at 12:35:11 hours. It is also pertinent to note that the aforesaid trade was executed at INR 4/- (2.9%) higher than the previous closing price and interestingly this was also the 1^sttrade of the said trading day.

63.3. It is also noted that on the aforesaid trading day (March 27, 2020) only 6 trades were executed and till the execution of 5^thtrade, the LTP was INR 137/- which was executed at 14:49:12 hours. However, in order to set the LTP further high for the next trading day, these entities again accessed the market. Mr. Sahilkumar Amrutbhai Vaghela (part of Ahmedabad Group) placed a buy order Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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(order number 1585279802392020008) for 200 shares of VFL at 15:09:54 hours at price INR 144.9/- (INR 7.9/- higher than the LTP of INR 137/-) and then Ms. Durgeshwari Pradipbhai Chiripal (part of Chiripal Group) placed a sell order (order number 1585279802392020009) for 200 shares at 15:19:15 hours at INR 144.9/-, which led to matching with the pending buy order of Mr. Sahilkumar Amrutbhai Vaghela and resulted in creation of a positive LTP of INR 7.9/-. Since this was the last trade of the trading day and as no other trade happened during the last 30 minutes of the trading, price of INR 144.9/- became the closing price of VFL on BSE on (March 27, 2020).

63.4. It is also noted that apart from the aforesaid trade on March 27, 2020, various occasions have been noticed when these entities have manipulated the opening price in the scrip of VFL by executing the 1^sttrade on respective trading days. For instance, on July 8, 2020, sell order placed by one of the Chiripal Group entity namely Mr. Anil Dhanuka at a price of INR 258/- was matched by a buy order placed by another Chiripal Group entity namely Rushp Trading LLP which resulted in creating LTP at INR 258/- (INR 2/- higher than closing price on previous trading day). Such instances by trading at a price higher than the previous trading day's closing price and creating positive LTP through 1^sttrades by these connected entities were also observed on other trading days including July 8, 2020, July 9, 2020 and July 10, 2020.

64. The trades of the PV Influencers in the scrip were also examined on NSE. As can be seen from the above table, Chiripal Group along with Ahmedabad based entities (Sub- group 2) and Kolkata based entities (Sub-group 3) collectively as a group have prima facie contributed 18.17% of the total market buy volume and 31.93% of the total market sell volume. Further, by trading with each other as group members in the scrip of VFL, these entities have contributed 6.85% of the total market traded volume. It is also noticed that on NSE, the aforesaid connected entities contributed to the tune of INR 30.20/- (23.59%) to the net price rise in the scrip. Similarly, by trading amongst each other, these entities have contributed INR 38.230/- (29.84%) to the net price rise in the scrip of VFL. The trades of the said connected entities were further analysed Interim Order-cum-Show Cause Notice in the matter of Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling

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to determine as to how the said connected entities were trying to influence the volume and price in the scrip on NSE so as to present the scrip as an attractive proposition for the investors in the securities market. Some illustrations to that effect are as follows:

64.1. On April 30, 2020, one of the Sub-group 2 entity, namely Mr. Parmar Popatbhai had placed a sell order (Order number 1300000007525715) for 250 shares of VFL at NSE at 12:11:49 hours at a price of INR 218.5/- (+ve LTP of INR 0.70/-). It is noted that various connected entities from Sub-groups 2 and 3, placed buy orders in miniscule quantities but at the same price one after the other (within a time difference of few seconds to few minutes) so as to enable execution of multiple trades in the scrip. Details of such entities and their respective trades are tabulated below:

Table No. 33 Trade Buyer Seller Buy Sell Trade Trade Buy Sell Trade Date Name Name Order Order Time Price Order Oder Qty Last Last Last Last

Modifie Modifie Mod Mod

d Time d Time Qty Qty

30/04/2020 Sourav Das Parmar 12:14:14 12:11:49 12:14:14 218.5 4 250 4 Popatbhai

30/04/2020 Dibakar Parmar 12:15:04 12:11:49 12:15:04 218.5 5 250 5 Laha Popatbhai

30/04/2020 Sahilkumar Parmar 12:15:32 12:11:49 12:15:32 218.5 1 250 1 Amrutbhai Popatbhai

Vaghela

30/04/2020 Priyankar Parmar 12:15:51 12:11:49 12:15:51 218.5 5 250 5 Laha Popatbhai

30/04/2020 Vaghela Parmar 12:16:46 12:11:49 12:16:46 218.5 1 250 1 Prakash Popatbhai

Kantilal

30/04/2020 Ravi Parmar 12:16:53 12:11:49 12:16:53 218.5 1 250 1 Kannadasan Popatbhai

Adidravid

30/04/2020 Keval Parmar 12:16:55 12:11:49 12:16:55 218.5 5 250 5 Savant Popatbhai

30/04/2020 Chiragkuma Parmar 12:16:58 12:11:49 12:16:58 218.5 1 250 1 r Makwana Popatbhai

30/04/2020 Makwana Parmar 12:17:01 12:11:49 12:17:01 218.5 5 250 5 Madhuben Popatbhai

30/04/2020 Debashish Parmar 12:18:14 12:11:49 12:18:14 218.5 5 250 5 Dutta Popatbhai

30/04/2020 Buddhadeb Parmar 12:22:25 12:11:49 12:22:25 218.5 5 250 5 Laha Popatbhai

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64.2. Another similar instance of continuous trading in the scrip on August 10, 2020 with miniscule quantity and within a short time interval executed by Sub- group 2 entities namely, Mr. Vaghela Prakash Kantilal (VPK), Mr. Chirag Kumar Makwana (CM) and Mr. Makwana Madhuben (MM) acting as buyers and Ms. Parmar Dipika (DP), Ms. Priti Parmar (PP), Ms. Parmar Lilaben Popatbhai (PLP) and Mr. Parmar Popatbhai (PP1) acting as sellers, is shown herein below:

Table No. 34

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