Page 1 of 18

BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. IVD-ID5/CT- AJP/AO/DRK-AKS/EAD3-603/147-2014]
__________________________________________________
UNDER SECTION 15 I OF SECURITIES AND EXCHANGE BOARD OF INDIA
ACT, 1992 READ WITH RULE 5(1) OF SECURITIES AND EXCHANGE
BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995
Against:
Ms. Apexa Jagdishbhai Patel
C/44, Greenwood Society
Oppo Sarvoday - 2
Sola Road, Ahmedabad- 380061
PAN No. AFXPP3167P

FACTS IN BRIEF
1. Securities and Exchange Board of India (hereinafter referred to as SEBI)
conducted an investigation into the trading in three scrips viz. Supertex
Industries Ltd. (hereinafter referred to as SIL), Bridge Securities Ltd.
(hereinafter referred to as BSL) and Aarey Drugs and Pharmaceuticals Ltd.
(hereinafter referred to as ADPL) during the period J anuary 1, 2009 to August
31, 2009 (hereinafter referred to as Investigation Period). These scrips are
listed on BSE Ltd. (hereinafter referred to as BSE). It is noted from the
findings of the investigation report (hereinafter referred to as IR) and the table
depicted below that price as well as volume of all the three scrips increased
significantly during the investigation period as compared to pre investigation
period.

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Supertex
Industries
Ltd.
Bridge
Securities
Ltd.
Aarey Drugs and
Pharmaceuticals
Ltd.
Pre Investigation
Period
(1.10.2008
31.12.2008)
Open
(1.10.2008)
0.72 3.1 44.7
High
35
(15.12.2008)
3.1
(6.10.2008)
44.7
(1.10.2008)
Low 0.45
(23,24,27 Oct)
1.91
(21.11.2008)
15.15
(5.12.2008)
Close
(31.12.2008)
25.83 2.1 17.6
Average
Volume
63,035 458 7392
Investigation Period
(1.1.2009 31.8.2009)
Open
(1.1.2009)
26.5 2 18.35
High
64
(5.8.2009)
18.94
(31.8.2009)
52.3
(18.8.2009)
Low 12.5
(5.2.2009)
1.82
(6.1.2009)
15
(22.1.2009)
Close
(31.8.2009)
54.6 18 45.1
Average
Volume
120,633 3974 55174

% change in Average Volume
(Approx)


191%

867%

746%

APPOINTMENT OF ADJUDICATING OFFICER
2. I was appointed as Adjudicating Officer under Section 15 I of the Securities
and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act),
read with Rule 3 of Securities and Exchange Board of India (Procedure for
Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995
(hereinafter referred to as Adjudication Rules) to inquire into and adjudge
under Section 15 HA of the SEBI Act for the violation of Regulations 3 (a), (b),
(c), (d), 4 (1), 4 (2) (a), (b), (e) and (g) of SEBI (Prohibition of Fraudulent and
Unfair Trade Practices Relating to Securities Market) Regulations, 2003
(hereinafter referred to as PFUTP Regulations) alleged to have been
committed by Ms. Apexa J agdishbhai Patel (hereinafter referred to as 'Apexa /
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Page 3 of 18

noticee) and the same was communicated vide proceedings of the Whole
Time Member appointing Adjudicating Officer dated 12.04.2013.

SHOW CAUSE NOTICE, REPLY AND HEARING

3. A Show Cause Notice No. A&E/EAD3/DRK-AKS/20926/2013 dated
16.08.2013 (herein after referred to as SCN) was served on the noticee
requiring the noticee to show cause as to why an inquiry should not be held
against the noticee and why penalty, if any, should not be imposed on the
noticee under Section 15 HA of the SEBI Act. In the said SCN, it was alleged
that the noticee in collusion with the group (as defined in para 10) had
executed circular trades, synchronised trades, reversal trades and self trades
in the above mentioned three scrips which had resulted in creation of artificial
volume in the said three scrips leading to false and misleading appearance of
trading in the three scrips. Further, this has also artificially increased the price
in the three scrips and hence is fraudulent in nature.

4. Noticee vide her letter dated 14.09.2013 submitted a reply to the SCN as
follows:
Noticee is a retail investor and has traded in other scrips also.
She is not connected with the group members except Shri J agdishbhai
Ramanlal Patel who is her husband.
5. As requested by the noticee, noticee was granted an opportunity of hearing
vide hearing notice dated 23.09.2013 to appear on 18.10.2013 at 11:00 am at
SEBI Bhavan, Mumbai. The said hearing notice was served on the noticee and
proof of service is also on record. However, the noticee failed to attend the
hearing without furnishing any reasons. Therefore, noticee was again provided
an opportunity of hearing vide hearing notice dated 05.11.2013 to appear for
hearing on 25.11.2013 at 04:30 pm at SEBI Bhavan, Mumbai. Noticee vide her
letter dated 22.11.2013 authorised Ms. Rinku Valanju, Advocate (herein after
referred to as 'AR') to appear on her behalf for the scheduled hearing. The AR
vide her letter dated 22.11.2013 and noticee vide her letter dated 25.11.2013
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sought 3 weeks adjournment as they needed time to prepare a detailed reply
to the SCN. Vide hearing notice dated 23.12.2013 the noticee was advised to
attend the hearing on 07.01.2014 at 12:00 noon at SEBI Bhavan, Mumbai. The
AR vide her letter dated 03.01.2014 requested to adjourn the matter as she
was pre occupied with Hon'ble Securities Appellate Tribunal matter and BSE
arbitration matter. Vide email dated 03.01.2014 noticee was asked to attend
the hearing on 10.01.2014 at 02:30 pm at SEBI Bhavan, Mumbai. However,
the said hearing was adjourned and vide hearing notice dated 17.01.2014
noticee was granted an opportunity to appear for hearing on 04.02.2014 at
11:00 am SEBI Bhavan, Mumbai.
6. At the time of hearing the AR submitted a detailed reply dated 30.01.2014
which was taken on record and further submitted as follows:
Noticee has no connection with the Promoters / Directors of the
companies and with the alleged group of entities.

Noticee has done trading only for few days during the entire investigation
period and that too in miniscule quantity which will have no effect on the
market equilibrium. Further the noticee has traded towards the fag end of
the investigation period when the prices of the scrips were already high.

The AR pointed out that total market volume in the scrips of Riba Textiles
Ltd., Supertex Industries Ltd. and Aarey Drugs and Pharmaceuticals Ltd.
is less than the Group's volume.

The reversal trades are over a period of time and that too more than 2
people are involved.

The AR had sought a number of voluminous documents at the time of hearing
for which the AR was suggested to go for inspection and obtain the relevant
documents from the operations department. The AR undertook to submit a
brief profile of the client, a copy of her KYC and any further submissions on or
before 28.02.2014.
7. Noticee in her reply dated 30.01.2014 submitted as follows:
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Noticee is an independent and distinct person and met her obligations in
terms of shares and money at all times. Noticee is not part of any group as
alleged or otherwise.

The below mentioned table shows noticee's trading in the alleged scrips in
terms of number of days during the investigation period.

Name of the Company Investigation
period (no of
days)

Group traded during
Investigation Period
(no of days)
Noticee traded
during Investigation
Period (no of days)
Supertex Industries Ltd

161 100 2
Bridge Securities Ltd.

122 8 5
Aarey Drugs And
Pharmaceuticals Ltd.

161 145 37

On observing the trade data, noticee's trades are stray, random, and not
continuous on every day. If noticee is a part of the alleged group, then her
trades would have been throughout the investigation period.

Noticee submits that her purchase/ sell transactions in the scrip of SIL were
delivery based and only on 6 days out of 161 days of Investigation period.

Noticee's total volume in the scrip of SIL was only 10,000 shares (0.05% of
market volume) hence her trading in the scrip could not have led to false and
misleading appearance of trading in the scrip and resulted into creation of
artificial volume as alleged.

Noticee submits that the investigation period of this scrip is from J anuary
2009 to August 2009 and noticee had traded in the scrip in the month of J uly
and August. Noticee had carried out very few trades and that too at the fag
end of the investigation period. Hence it cannot be said that noticee has
contributed to price rise/ manipulation in the scrip.

Noticee submits that her purchase/ sell transactions in the scrip of BSL were
delivery based and only on 5 days out of investigation period of 122 days.
Further alleged group itself has traded only for 8 days during investigation
period.

Noticee's total volume in the scrip of BSL was only 28,400 shares hence her
trading in the scrip could not have led to false and misleading appearance of
trading in the scrip and resulted into creation of artificial volume as alleged.
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Noticee submits that the investigation period is from J anuary 2009 to August
2009 and she had traded in the scrip in the month of J uly and August. Noticee
has carried out very few trades and that too at the fag end of the investigation
period. Hence it cannot be said that she has contributed to price rise/
manipulation in the scrip.

Noticee submits that her buy volume of 4,490 shares (0.93%) with alleged
group entities is considered synchronized / objectionable and remaining
(99.07%) volume is considered normal by SEBI. Noticee submits that her
entire buy volume of 16,783 shares is considered normal. She is not
connected with any of them in any manner and there is no connection even
established between her and said entities in the SCN.
Noticee submits that her purchase/ sale transactions in the scrip of ADPL
were delivery based and she has met with all her obligations qua broker in
time. Her trades in the scrip have resulted into net delivery of about 74,347
shares hence her trading in the scrip could not have led to false and
misleading appearance and resulted into creation of artificial volume as
alleged.

Noticee has carried out trades at ruling market prices and hence it cannot be
said that she has contributed to alleged price rise in the scrip.

Noticee's total volume in the scrip is 3.8% of the market volume. Noticee
submits that her buy volume of 16,303 shares and sell volume of 32,357
shares is considered synchronized/ objectionable. She is not connected with
anyone in any manner and there is no connection even established between
her and alleged group entities in the SCN. Hence it cannot be said that she
has carried out synchronized / reversal or circular trades in the scrip.

Noticee's alleged synchronized volume is only 0.55% of total market volume
which is negligible and remaining 99.45% is considered normal by SEBI.

With regard to alleged reversal trades in this scrip noticee submits that there
is an error on part of AO in analysing trade data / order data as her purchase
trades (6,705 shares, 4 trades) of 7 days (19.05.2009 to 23.06.2009) with 4
different counter parties are treated as reversal. This is denied as quantity,
date and price of reversal trades are different. The noticee is unable to even
comprehend the charge in this regard.

Noticee has not indulged in any price manipulation activity by way of trading
at LTP variation. She clarifies that her orders were keyed in within permissible
price limits and impact to the price rise of scrip was normal and not
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Page 7 of 18

manipulative as alleged or otherwise. Her trades have not caused any
material or significant impact on price if there are few trades at above LTP
and few trades below LTP but the trades were within permissible circuit limits.

Noticee's trades were as per her strategy, position, financial capacity and
circumstances. There was no common strategy, prior meeting of minds and
none is reflected even in the SCN. Her trades were in the ordinary course of
trading / investment business.

8. The AR vide her letter dated 14.03.2014 submitted a brief profile of the noticee
but failed to submit a copy of her KYC as noticee's request to her stock broker,
Arcadia Share & Stock Broker Pvt. Ltd. for a copy of her KYC was denied as
the account was old.

CONSIDERATION OF EVIDENCE AND FINDINGS
9. I have taken into consideration the facts and circumstances of the case and
the material made available on record.

10. It is observed from the IR that a group of 25 entities including the noticee were
connected to each other by common address, common introducer or
introduced by other group members, transferred shares in off market to each
other etc. The name and linkages among various entities is given below:
S.No PAN NO Name Linkages
1 ABCPP211M Shailesh
Somabhai Patel
Shailesh Patel, Nitaben Patel & Kapilaben Patel have common
address viz. A 14 Snehadri Apts, Ambawadi Shreyas Tekra,
Ahmedabad, Gujarat, 380051.

Ronak Choksi introduced Nitaben Patel and Shailesh Patel (KYC by
Guiness Sec Ltd.)

Ronak Chokasi signed as witness to Shailesh Patel & Nitaben Patel
(KYC by Networth Stock Broking Ltd.)

Shailesh Somabhai Patel and Nitaben Shaileshbhai Patel received
shares in preferential allotment in Winsome in the year 2008.

Common Introducer - The following set of entities had a common
introducer:

Shailesh Patel, Nitaben Patel, Nikhilbhai Shah and Shaishil J haveri by
one Premal Shah (KYC by Brics Securities Ltd.)
2 AGXPP3551G Nitaben
Shaileshbhai
Patel
3 AYQPP7574A Kapilaben
Somabhai Patel
4 ADDPC2938D Ronak Ashwin
Choksi
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S.No PAN NO Name Linkages

Kapilaben Patel and Nitaben Patel by one Samir Shah (KYC by
Comfort Securities Pvt. Ltd.)

Shailesh Patel and Shaishil J haveri by one Macwan J oel J (KYC by
Mangal Keshav Securities Ltd.)

Shailesh Patel and Kapilaben Patel by one Prakash Kadiya (KYC by
MTL Share and Stock Brokers Ltd.)

Nitaben Patel and Shailesh Patel by one Narayan Equity Broking and
Advisory Ser Ltd. (KYC by SMC Global Sec Ltd.)

Nitaben Patel and Shailesh Patel by one Nitin Patil (KYC by SSJ
Finance and Sec Pvt. Ltd.)

Manish Shah, Nikhilbhai Shah and Shailesh Patel by one Ashish
Dapki (KYC by Nirmal Bang Sec Ltd.)

Kumkum Stock Brokers Pvt. Ltd. and Nitaben Patel by one Ripple K
Shah (KYC by Nirmal Bang Sec Ltd.)

Nitaben Patel and Shailesh Patel by one A.R. Patel (KYC by Anand
Rathi Share & Stock Brokers Ltd.)

5 ACIPS6166P Nikhilbhai Shah Nikhilbhai Shah, Shaishil T. J haveri and Bela T J haveri are Directors
of Kumkum Stock Brokers Pvt. Ltd. (KYC by Nirmal Bang Sec Pvt.
Ltd.)

Manish Ratilal Shah & Nikhilbhai Shah have common Address - B-81,
Pariseema Complex, C.G. Road, Ellisbridge Ahmedabad.

Bela J haveri introduced to Nikhil Shah (KYC by SSJ Finance &
Securities Pvt. Ltd.)

Shaishil J haveri introduced Manish Shah and Nikhil Shah (KYC by
SPFL Sec Ltd.; Siddhi Shares Pvt. Ltd.)

Common introducer:

Shailesh Patel, Nitaben Patel, Nikhilbhai Shah and Shaishil J haveri by
one Premal Shah (KYC by Brics Securities Ltd.)

Bela J haveri and Nikhil Shah by one Hardik Shah (KYC by Religare
Securities Ltd)

6 AGQPJ 8664F Shaishil T. J haveri
7 AABPZ2800L Bela T J haveri
8 AACCK6784E Kumkum Stock
Broker Pvt. Ltd.
9 AZMPS2291J Manish Ratilal
Shah
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S.No PAN NO Name Linkages
Shailesh Patel and Shaishil J haveri by one Macwan J oel J (KYC by
Mangal Keshav Securities Ltd.)

Manish Shah, Nikhilbhai Shah and Shailesh Patel by one Ashish
Dapki (KYC by Nirmal Bang Sec Ltd.)

Kumkum Stock Brokers Pvt. Ltd. and Nitaben Patel by one Ripple K
Shah (KYC by Nirmal Bang Sec Ltd.)

10 AKQP8635P Daxaben
Vasantkumar
Shah
Nita B Bhavsar, J ipal Shah, Dhavalkumar Soni , C Shah Champaklal
and Shailesh Somabhai Patel, have common contact number i.e.
9825011486 and email ID (KYCs by Emkay Share and Stock Brokers
Ltd.)

Dhavalkumar Hastimal Soni & Hastimal Gulabchand Soni have
common address viz. Mota Nagar Wada, At Kapadwanj, Nadiad,
Gujarat 387620.

J ipal Shah introduced Kapilaben Patel and Nita Bhavsar (KYC by
Arcadia Share & Stock Brokers Ltd.)

Daxaben Shah introduced Apexa Patel (KYC by Arcadia Share &
Stock Brokers Pvt. Ltd.)

Common Introducer:
Daxaben Shah, J ipal Shah and Nita Bhavsar by one Pranav Vora
(KYC by ANS Pvt. Ltd.)
11 ANNPB8668D Nita B Bhavsar
12 BMWPS2515R J ipal Pineshkumar
Shah
13 AURPS9165R Dhavalkumar
Hastimal Soni
14 AGMPS1204L Hastimal
Gulabchand Soni
15 AURPS4385B C Shah
Champaklal
16 AFXPP3167P Apexa
Jagdishbhai
Patel
Apexa Jagdishbhai Patel & J agdish Ramanlal Patel have common
address viz. C/44, Greenwood Society, Opp:Sarvoday-2, Sola Road,
Ahmedabad, 380061.

Daxaben Shah introduced Apexa Patel (KYC by Arcadia Share &
Stock Brokers Pvt. Ltd.)

J agdishbhai Patel introduced Sonal Kiritbhai Patel (KYC by Arcadia
Share & Stock Brokers Pvt. Ltd.)

Common Introducer:
Apexa Patel and J agdish Patel by one Tejas Shah (KYC by SSJ
Finance and Securities Pvt. Ltd.)


17 AAWPP0600R J agdish Ramanlal
Patel
18 AOEPP2753D Sonal Kiritbhai
Patel
19 AAACC2255N Chase Marketing
Pvt. Ltd

The email id is given as supertex@vsnl.com. Further, it received
shares in preferential allotment from Supertex Industries Ltd. It
transferred 350,000 shares of Supertex to Manish Ratilal Shah and
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S.No PAN NO Name Linkages
500,000 shares of Supertex to Nikhil V Shah in off market.

20 AAAPA7605D Amrita Agrawala She received shares in preferential allotment from Supertex Industries
Ltd. She transferred 300,000 shares of Supertex to Kapilaben
Somabhai Patel in off market.
As stated in her reply dated 15.1.2013, she had transaction with
Kapilaben Somabhai Patel. It was a friendly loan.
21 AFYPM7292R Danish Merchant He received shares in preferential allotment from Supertex Industries
Ltd. He transferred 150,000 shares of Supertex to Kapilaben
Somabhai Patel in off market.

Letters dated 14.1.2013 from Amrit L Gandhi and Danish Merchant
requesting for one month time are identical letters and signed by
common person, indicates connection between the two entities
22 ADPPB9428F J agdish Bhagat
He received shares in preferential allotment from Supertex Industries
Ltd. Further, he received 10,000 shares of Supertex from Kumkum
Stock Broker Pvt. Ltd in off market.
23 AAUPV2876R J igish Vasa He transferred 55,000 shares of Supertex to Bela Tushar Zaveri in off
market. Further, he received 30,000 shares of Supertex and 59,200
shares of Winsome from Shaishil J haveri in off market.
24 AADCP2649G Parameshwar
Exports Pvt Ltd
It received shares in preferential allotment from Supertex Industries
Ltd. It transferred 300,000 shares to Manish Ratilal Shah in off market.

25 AACPG5265H Amrit L Gandhi He received shares in preferential allotment from Supertex Industries
Ltd.
Letters dated 14.1.2013 from Amrit L Gandhi and Danish Merchant
requesting for one month time are identical letters and signed by
common person, indicates connection between the two entities

11. Out of the above entities, several entities also entered into off market
transactions with each other that indicates their connection. The off market
transactions in the scrip of RTL was for 1,094,439 shares, in SIL for 2,646,181
shares, in ADPL for 79,224 shares and in WTIL for 178,196 shares.

12. The trading activity of the group clients across 3 scrips during the investigation
period is as follows:
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Scrip A
Traded
Quantity
(Market)
B
Total Buy
of Group
C
% of
total
buy
of
Grou
p to
total
trade
d
quan
tity
(Mar
ket)
D
Total Sale
of Group
E
% of
total
sale
of
grou
p to
total
trade
d
quan
tity
(Mar
ket)
F
Trade
Amongst
Group*
G
% of
trade
amo
ngst
Grou
p to
total
trade
d
quan
tity
(Mar
ket)
H
Synchro
nised
Trades
among
Group**
I
% of
sync
hroni
sed
trade
s to
trade
amo
ng
Grou
p
J
% of
synch
ronis
ed
trade
s
amon
g
Grou
p to
total
trade
d
quant
ity
(Mark
et)

Supertex
Industries
Ltd. 19421886 10376495 53.42 10161354 52.32 5664204 29.16 3012803 53.19 15.51
Bridge
Securities
Ltd. 484790 212984 43.93 79899 16.48 34931 7.21 5970 17.09 1.23
Aarey Drugs
and
Pharmaceuti
cals Ltd. 8883052 4589697 51.67 4439211 49.97 2486523 27.99 846184 34.03 9.53

Supertex Industries Limited
13. It was alleged based on the IR that the noticee along with the group had
executed synchronised trades, reversal trades and circular trades in the scrip
of SIL. It is noted that out of 161 days during which the scrip was traded during
period of investigation, the trades amongst group were executed on 100 days.
The individual contribution of the noticee in such trades is as mentioned below:
Client Name
Total
Buy
(Market)
Buy
amongst
Group
Total Sell
(Market)
Sell
amongst
Group
Synchro-
nised
Trades
amongst
Group
(Buy)
Synchro-
nised
Trades
amongst
Group
(Sell)
Apexa J agdishbhai Patel 5,000 0 5,000 5,000 0 0

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14. It is observed from the above table that the noticee has not executed any
synchronised trades with the group entities. Further, there is no material made
available on record to establish noticee's reversal and circular trading in the
scrip of SIL.
15. Thus, from the above it can be concluded that the noticee has not done any
manipulative trading in the scrip of SIL.
Bridge Securities Limited
16. It was alleged based on the IR that out of 122 days during which the scrip was
traded during period of investigation, the trades amongst group were executed
on 8 days. The individual contribution of the noticee in such trades is as
mentioned below:
Client Name
Total
Buy
(Market)
Buy
amongst
Group
Total
Sell
(Market)
Sell
amongst
Group
Synchronised
Trades
amongst
Group (Buy)
Synchronised
Trades
amongst
Group (Sell)
Apexa J agdishbhai
Patel
16,783 4,972 11,617 11,592 0 4,490

17. It is observed from the table above that the noticee had executed
synchronised trades for only 4,490 shares in the scrip of BSL during the entire
investigation period of 8 months. However, it is observed from the order log
trade log made available on record that for the noticee's trades in the scrip of
BSL, there is a huge difference between the trade time vis-a vis buy order time
/ sell order time. In view of the same it is difficult to conclude that the noticee
has executed synchronised trades in the scrip of BSL.

18. There is no material made available on record to establish noticee's reversal
and circular trading in the scrip of BSL. Thus, from the above it can be
concluded that the noticee has not done any manipulative trading in the scrip
of BSL.

Aarey Drugs and Pharmaceuticals Limited
19. It was alleged based on the IR that the noticee along with the group had
executed synchronised trades, reversal trades and circular trades in the scrip
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Page 13 of 18

of ADPL. It is noted that out of 161 days during which the scrip was traded
during period of investigation, the trades amongst group were executed on 145
days. The individual contribution of the noticee in such trades is as mentioned
below:
Client Name
Total
Buy
(Market)
Buy
amongst
Group
Total
Sell
(Market)
Sell
amongst
Group
Synchronised
Trades
amongst
Group (Buy)
Synchronised
Trades
amongst
Group (Sell)
Apexa J agdishbhai Patel 2,05,760 1,02,757 1,31,413 87,256 16,303 32,357

20. A few instances of synchronised trades of the noticee in the scrip of ADPL
within the group are as follows:
Trade
Date
Trade
Time
Buy Client
Name
Buy
Order
Time
Buy
Order
Qty
Buy
Order
Price
Sell
Client
Name
Sell
Order
Time
Sell
Order
Qty
Sell
Order
Price
06/04/09 13:03:01 Apexa
Patel
13;03:01 4,950 32.5 J ipal Shah 13:02:57 5,000 32.5
23/06/09 09:58:12

Apexa
Patel
09:58:10

5,120 36 Nita
Bhavsar
09:58:11

5,120 36
14/07/09 12:44:09

Nita
Bhavsar
12:44:03

15,000 41.75 Apexa
Patel
12:44:09

15,000 41.75
21/08/09 10:15:14

Apexa
Patel
10:13:42

6,200 42

J ipal Shah 10:14:25

6,200 56


21. It is observed from the IR that the noticee's 15.86% of buy amongst the group
is synschronised trades while her 37.08% of sell amongst the group is
synchronised trades. Further as seen from the order log trade log noticee's
synchronised trades were frequent in nature with the group members during
the period April-August 2009.

22. An instance of reversal trade of the noticee in the scrip of ADPL within the
group is as follows:
Seller Date No. of
shares
No. of
Trades
Average
Rate (`)
Buyer
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Nita Bhavsar 23.06.2009 5,155 2 36.05 Apexa Patel
Apexa Patel 24.06.2009 5,000

4

34.18

Nita Bhavsar, J ipal
Shah

23. The instance of circular trading made available on record does not establish
circular trading by the noticee as there is substantial gap between the trades
(thus there was transfer of beneficial ownership).
24. Thus, from the above it can be concluded that the noticee had executed
synchronised and reversal trades in the scrip of ADPL.

25. From the IR it is observed that the consolidated contribution of the noticee in
the aforementioned 3 scrips taken together is as follows:

Client Name
Total
Buy
(Market)
Buy
amongst
Group
Total Sell
(Market)
Sell
amongst
Group
Synchro-
nised
Trades
amongst
Group
(Buy)
Synchro-
nised
Trades
amongst
Group
(Sell)
Apexa J agdishbhai Patel 2,27,543 1,07,729 1,48,030 1,03,848 16,303 36,847

26. Further analysis of the aforesaid trades amongst Group is as follows:


Client Name
No. of
Days
traded
amongst
group
No. of
Trades
amongst
group
LTP
Difference (%)
Apexa J agdishbhai Patel

40 170 -6.7 to 3.35

27. The price impact of trades of the Group is as follows :
Scrip
No. of
trades
with +
LTP
% of
trades
with +
LTP
Impact
of
trades
with +
LTP (`)
No. of
trades
with -
LTP
% of
trades
with -
LTP
Impact
of
trades
with
LTP (`)
Net
LTP
impact
(`)
Sum of
NHP
Diff
(Market)
(`)
Sum of
NHP
Diff
(Group)
(`)
Aarey Drugs
and
Pharmaceuticals
Ltd.
1870 46.18% 780.9 1557 37.02% -360.35 420.55 33.95 20.6

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Page 15 of 18

It is noted from the above that the trades of the Group resulted in increase in
price of the scrip.
28. At this juncture, I would like to quote the order of the Honble Securities
Appellate Tribunal (herein after referred to as 'SAT') in Sparkline Mercantile
Co. Pvt. Ltd. Vs SEBI dated 16.01.2012 wherein it was held as follows:
..It is an admitted position that it is difficult to get direct evidence with
regard to synchronization of trades for the purpose of upsetting the market
equilibrium or to manipulate the market. It is only on the basis of
circumstantial evidence that such a connection can be proved

..A large number of trades were executed among the group entities within
a minute of placing the order. This cannot happen without prior meeting of
minds among the connected entities. From the details of the trades
executed and having regard to the trading system, we do not think that
such large number of trades could match between the same parties
unless the trading system was being abused..

29. Further, Hon'ble SAT in M/s. Octant Industries Ltd.V SEBI decided on
15.01.2014 has held that :

"..a large number of reverse trades could not have taken place through the
mechanism of the system. These have obviously been manipulated.
Reverse trades are fictitious in nature and are only meant to increase
volumes on the screen of the trading system as there is hardly any change
of beneficial ownership in the traded shares..."

30. As observed in pre paras that trades executed by the noticee was not of one
instance but aforesaid transactions were repeatedly carried out over a period
of time within the group. It is pertinent to note that such trading patterns lead to
price fluctuation and creates false appearance of trading in securities market
and thereby tending to mislead the gullible investors.

31. It can be concluded from the above that the noticee has executed
synchronised trades in the scrip of ADPL which had resulted in creation of
artificial volume in the scrip of ADPL leading to false and misleading
appearance of trading in the scrip. Further, this has also artificially increased
the price in the scrip and hence is fraudulent in nature.
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Page 16 of 18


32. In view of the above facts and circumstances it can be concluded that the
noticee had violated Regulations 3 (a), (b), (c), (d), 4 (1), (2), (a), (b), (e) and
(g) of PFUTP Regulations in the scrip of ADPL as discussed above. The text
of the said provisions are as follows:
SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities
Market) Regulations, 2003
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 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 fraudulent or an unfair trade practice in securities.

(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade
practice if it involves fraud and may include all or any of the following, namely:

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

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

(e) any act or omission amounting to manipulation of the price of a security;

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Page 17 of 18

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

33. The said violations attract penalty under Section 15HA of the SEBI Act which
provides that:
15HA. Penalty for fraudulent and unfair trade practices- If any person indulges in
fraudulent and unfair trade practices relating to securities, he shall be
liable to a penalty of twenty-five crore rupees or three times the amount of
profits made out of such practices, whichever is higher.

34. In this regard, the provisions of Section 15J of the SEBI Act and Rule 5 of the
Rules require that while adjudging the quantum of penalty, the adjudicating
officer shall have due regard to the following factors namely;
a. the amount of disproportionate gain or unfair advantage wherever
quantifiable, made as a result of the default
b. the amount of loss caused to an investor or group of investors as a
result of the default
c. the repetitive nature of the default

35. The IR has not quantified any gain or unfair advantage accrued to the noticee
as a result of noticee's trading in the scrip of ADPL. Further, there is no
material made available on record to assess the disproportionate gain or unfair
advantage and amount of loss caused to an investor or group of investors as a
result of noticee's violation.

36. In view of the abovementioned conclusion and after considering the factors
under Section 15J of the SEBI Act, I hereby impose a penalty of
` 4,00,000/- (Rupees Four Lakh only) on Ms. Apexa J agdishbhai Patel under
Section 15HA of the Securities and Exchange Board of India Act, 1992 which
is appropriate in the facts and circumstances of the case.

ORDER
37. In exercise of the powers conferred under Section 15 I of the Securities and
Exchange Board of India Act, 1992, and Rule 5 of Securities and Exchange
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Page 18 of 18

Board of India (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995, I hereby impose a penalty of ` 4,00,000/-
(Rupees Four Lakh only) on Ms. Apexa J agdishbhai Patel (PAN No.
AFXPP3167P) in terms of the provisions of Section 15HA of the Securities and
Exchange Board of India Act 1992 for the violation of Regulations 3 (a), (b),
(c), (d), 4 (1), 4 (2) (a), (b), (e) and (g) of SEBI (Prohibition of Fraudulent and
Unfair Trade Practices Relating to Securities Market) Regulations, 2003. In the
facts and circumstances of the case, I am of the view that the said penalty is
commensurate with the violations committed by the noticee.

38. The penalty shall be paid by way of Demand Draft drawn in favour of SEBI
Penalties Remittable to Government of India payable at Mumbai within 45
days of receipt of this order. The said demand draft shall be forwarded to Chief
General Manager- IVD, Securities and Exchange Board of India, Plot No. C4-
A, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051.

39. In terms of the provisions of Rule 6 of the Securities and Exchange Board of
India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules 1995, copies of this order are being sent to Ms. Apexa
J agdishbhai Patel residing at C/44, Greenwood Society, Oppo Sarvoday - 2,
Sola Road, Ahmedabad- 380061 and also to the Securities and Exchange
Board of India, Mumbai.





Place: Mumbai D. RAVI KUMAR
CHIEF GENERAL MANAGER &
Date: 22.09.2014 ADJUDICATING OFFICER

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