The document describes an investigation conducted by the Securities and Exchange Board of India (SEBI) into suspicious trading activity in the shares of Adani Enterprises Ltd. during November-December 2003. SEBI found that Manoj T Shah traded shares of the company through a broker in a manner that involved synchronization and reversal trades with other entities, creating artificial volumes. This summary order finds that Shah violated securities market regulations through manipulative trades and orders monetary penalties against him.

1. Page 1 of 21
BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. PG/AO-15/2010]
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF
INDIA ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR
HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING
OFFICER) RULES, 1995
In respect of
Manoj T Shah
(PAN. Not available)
In the matter of
M/s. Adani Enterprises Limited
FACTS OF THE CASE IN BRIEF
1. Securities and Exchange Board of India (hereinafter referred to as
“SEBI”) conducted investigation into trading in the scrip of Adani
Enterprises Ltd. (hereinafter referred to as ‘AEL’) for the period
from November 27, 2003 to December 23, 2003 (hereinafter
referred to as ‘ investigation period ’) due to sharp rise in price
and volume of the scrip on National Stock Exchange of India Ltd.
(hereinafter referred to as ‘NSE’) and Bombay Stock Exchange Ltd.
(hereinafter referred to as ‘BSE’). Prior to September 20, 2006,
Adani Enterprises Ltd. was known as Adani Exports Ltd.

2. Page 2 of 21
2. The role of the brokers, sub-brokers and their clients who had
traded in the scrip was scrutinized. It was observed during the
investigation that certain entities had indulged in synchronization of
deals/reversal trading/fictitious trading in the shares of AEL in such
a manner that led to creation of artificial volume and impacted the
price of the scrip. The entities found to have been involved in the
alleged manipulation are as under:-
Entities which traded on BSE
Sl.
No.
Name of Broker Name of Sub-broker Name of Client
1 ASE Capital Markets Ltd Rajendra J Shah V&S Intermediaries
2 ASE Capital Markets Ltd ESS ESS Intermediaries Pvt Ltd Samir P Shah
3 ASE Capital Markets Ltd Rajesh N Jhaveri Falguni Shah
4 Naman Securities & Finance
P Ltd
--- ESS ESS
Intermediaries Pvt
Ltd
5 Mangal Keshav Securities
Ltd
E Stocks Inc. Dilip Champalal
Jain
6 Vijay Bhagwandas Shah --- Own/director’s
account
7 Sanchay Fincom Ltd --- Tejas Ghelani
Entities which traded on NSE
Sl.
No.
Name of Broker Name of Sub-broker Name of Client
1 Grishma Securities Pvt Ltd --- Rajesh N Jhaveri
2 Mangal Keshav Securities Ltd E Stocks INC Dilip Champalal Jain
3 ASE Capital Markets Ltd --- Manoj T Shah
4 Sanchay Finvest Ltd --- Tejas Ghelani
5 M.G. Capital (**) --- Bela H Kayastha
6 Inventure Growth & Securities
Ltd (**)
--- Mangiram S Sharma
(**)Administrative warning issued.
It was alleged that one of the entities, viz., Mr. Manoj T Shah
(hereinafter referred to as “Noticee/Manoj”), who traded in the
scrip of AEL through ASE Capital Markets Ltd. had violated the
provisions of regulations 4(1), 4(2)(a), 4(2)(b), 4(2)(e), 4(2)(g) and
4(2)(n) of SEBI (Prohibition of Fraudulent and Unfair Trade
Practices Relating to Securities Markets) Regulations, 2003

3. Page 3 of 21
(hereinafter referred to as “PFUTP Regulations”) and therefore,
liable for monetary penalty under sections 15HA and 15HB of
Securities and Exchange Board of India Act, 1992 (hereinafter
referred to as “SEBI Act”). The current address of Manoj T Shah is
84, Jain Temple, P.O. Pansar, Taluka Kalol – 382740.
APPOINTMENT OF ADJUDICATING OFFICER
3. The undersigned was appointed as Adjudicating Officer vide order
dated December 14, 2005 under section 15 I of SEBI Act read with
rule 3 of SEBI (Procedure for Holding Inquiry and Imposing
Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred
to as ‘Rules’) to inquire into and adjudge the alleged violations of
the provisions of PFUTP Regulations.
4. Consequent upon the transfer of the undersigned, Mr. V.S.
Sundaresan was appointed as the Adjudicating Officer vide Order
dated November 19, 2007. Consequent upon the transfer of Mr.
V.S. Sundaresan, the undersigned has been appointed as
Adjudicating Officer vide order dated November 12, 2009.
SHOW CAUSE NOTICE, HEARING AND REPLY
5. Show Cause Notice No. EAD/EAD-5/PG/68701/2006 dated May
31, 2006 (hereinafter referred to as “SCN”) was issued to the
Noticee under rule 4(1) of the Rules to show cause as to why an
inquiry should not be held against the Noticee and penalty be not
imposed under sections 15HA and 15HB of SEBI Act for the
alleged violation specified in the said SCN.
6. The Noticee submitted vide his reply dated June 25, 2006 that two
simultaneous proceedings were initiated against him for the same
violations. The Noticee was informed that both the proceedings are

4. Page 4 of 21
independent of each other. Show Cause Notice No.
IVD/ID1/PKN/JJ/61244/2006 dated February 23, 2006 was issued
to the Noticee as part of proceedings under Sec.11B of the SEBI
Act, 1992. On the other hand, the present proceedings were
different inasmuch as the show cause notice was issued as part of
the adjudication proceedings under the Rules.
7. In the interest of natural justice and in order to conduct an inquiry
as per rule 4(3) of the Rules, the Noticee was granted an
opportunity of hearing on August 25, 2009 vide notice dated August
12, 2009. The Noticee vide letter dated August 24, 2009 submitted
that he had already applied for consent proceedings. However, no
further details were submitted. Another opportunity of hearing was
granted to the Noticee on February 23, 2010 vide notice dated
February 09, 2010. The Noticee himself appeared and submitted
the following:
“Certain mistakes have been committed by me in trading of shares of Adani
Exports Ltd. during the period November- December 2003. I request you to take
a lenient view in the matter. I have no other submissions to make in the matter.”
The Noticee has not made any substantive submissions and has
also admitted his mistakes while dealing in the shares of AEL
during the investigation period.
The Noticee has also not submitted his PAN. The Noticee, vide his
letter dated March 22, 2010 has stated that he had done jobbing in
AEL shares in the ordinary manner of his trading and that the
mistake on his part may be due to shift from jobbing in the “A”
group scrip to “B” group in the case of AEL.

5. Page 5 of 21
CONSIDERATION OF ISSUES AND FINDINGS
8. I have carefully perused the documents available on record. The
issues that arise for consideration in the present case are :
a) Whether the Noticee had violated regulations 4 (1), 4(2) (a), 4(2)
(b), 4(2) (e), 4(2) (g) and 4(2) (n) of PFUTP Regulations?
b) Does the violation, if any, on the part of the Noticee attract
monetary penalty under sections 15HA and 15HB of SEBI Act?
c) If so, what would be the monetary penalty that can be imposed
taking into consideration the factors mentioned in section 15J of
SEBI Act?
9. Before moving forward, it will be appropriate to refer to the relevant
provisions of PFUTP Regulations, which read as under:
PFUTP Regulations
“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;
(c) …
(d) …
(e) any act or omission amounting to manipulation of the price of a
security;
(f) …
(g) entering into a transaction in securities without intention of
performing it or without intention of change of ownership of such
security.
(h) …
(i) …
(j) …
(k) …

6. Page 6 of 21
(l) …
(m)…
(n) circular transactions in respect of a security entered into between
intermediaries in order to increase commission to provide a false
appearance of trading in such security or to inflate, depress or
cause fluctuations in the price of such security;”
10. On perusal of the documents available on record and the
submissions made by the Noticee, I find the following:
a) The price of the scrip increased from Rs.204.90 (on November
27, 2003) to Rs.441.90 (on December 23, 2003) in a span of 19
trading days. The scrip touched a highest price of Rs.478.70 on
December 19, 2003.
b) The Noticee had traded in the scrip of AEL on NSE through
ASE Capital Market Ltd.
c) The gross volume of AEL shares on NSE during the
investigation period was 38,91,856 shares.
d) During the investigation period, the Noticee and other brokers
and clients entered into 228 synchronized/reversal trades
involving 2,96,943 shares (7.63% of the gross market volume
during the investigation period). The details are as under:
S.
No.
Buy broker
name (sub-
broker)
Buying
client
Selling Broker
name (sub-
broker)
Selling
client
No. of
trades
Synchron
ized
quantity
No. of
days
traded
% Range of
synchronized
deals to qty
traded in the day
1. Grishma
Securities Pvt
Ltd
Rajesh
Jhaveri
ASE Capital Manoj T
Shah
105 143440 11 22% to 42%
2. Mangal Keshav
(E Stocks INC)
Dilip C.
Jain
Sanchay
Finvest
Tejas
Ghelani
23 54654 9 2% to 16%
3. ASE Capital Manoj T
Shah
M G Capital Bela H
Kayastha
33 31450 3 28% to 29%
4. Mangal Keshav
(E Stocks INC)
Dilip C
Jain
Inventure
Growth
Mangiram
S Sharma
22 22399 10 2.98% to 8.44%
5. Inventure
Growth
Mangiram
S Sharma
Sanchay
Finvest
Tejas
Ghelani
10 18750 5 2.98% to
18.39%
6. Inventure
Growth
Mangiram
S Sharma
Kotak Sec. Mangiram
S Sharma
24 16250 7 1.39% to 8.44%
7. Grishma Sec. Rajesh
Jhaveri
M G Capital Bela H
Kayastha
11 10000 1 34.70%
TOTAL 228 296943

7. Page 7 of 21
e) The Noticee trading through ASE Capital Markets Ltd. entered
into synchronized trades in the said scrip with Rajesh Jhaveri
(hereinafter referred to as “Rajesh”), client of Grishma
Securities (hereinafter referred to as “Grishma”) and with Mrs.
Bela H Kayastha (hereinafter referred to as “Bela”), client of M/s
M G Capital (hereinafter referred to as “MG”).
f) The Noticee and Rajesh executed 105 synchronized orders with
each other creating an artificial volume of 1,43,440 shares on 11
trading days during the period from November 27, 2003 to
December 15, 2003. Details of the same are given below:
Sl.
No.
Trade Date Trade
Time
Traded
Price
Traded
Qty
Buy Order
Entry Time
Buy TM
Name
Buy
Orig
Vol
Buy
Limit
Price
(Rs.)
Sell Order
Entry Time
Sell TM
Name
Sell
Orig
Vol
Sell
Limit
Price
(Rs.)
1. 27-Nov-03 14:48:41 207.55 4000 14:48:40 GS 4000 207.55 14:48:41 ACM 4000 207.55
2. 27-Nov-03 14:55:07 208.30 4000 14:55:07 ACM 4000 208.30 14:55:06 GS 4000 208.30
3. 28-Nov-03 14:40:22 214.10 4000 14:40:22 GS 4000 214.10 14:40:18 ACM 4000 214.10
4. 28-Nov-03 14:52:02 214.20 4000 14:52:01 ACM 4000 214.20 14:52:02 GS 4000 214.20
5. 1-Dec-03 13:32:11 218.40 1000 13:32:11 GS 1000 218.40 13:32:11 ACM 1000 218.40
6. 1-Dec-03 13:32:31 218.65 2000 13:32:31 ACM 2000 218.65 13:32:30 GS 2000 218.65
7. 1-Dec-03 13:32:46 218.45 990 13:32:44 GS 1000 218.45 13:32:46 ACM 1000 218.45
8. 1-Dec-03 13:33:11 219.15 1000 13:33:11 ACM 1000 219.15 13:33:10 GS 1000 219.15
9. 1-Dec-03 13:33:23 219.10 1000 13:33:21 GS 1000 219.10 13:33:23 ACM 1000 219.10
10. 1-Dec-03 13:48:52 219.15 1000 13:48:51 GS 1000 219.15 13:48:52 ACM 1000 219.15
11. 1-Dec-03 13:49:04 219.40 1000 13:49:04 ACM 1000 219.40 13:49:04 GS 1000 219.40
12. 1-Dec-03 13:49:11 219.05 1000 13:49:11 GS 1000 219.05 13:49:11 ACM 1000 219.05
13. 1-Dec-03 13:49:19 219.35 1000 13:49:19 ACM 1000 219.35 13:49:18 GS 1000 219.35
14. 1-Dec-03 13:53:49 218.60 1000 13:53:49 GS 1000 218.60 13:53:49 ACM 1000 218.60
15. 1-Dec-03 13:53:59 218.80 1000 13:53:59 ACM 1000 218.80 13:53:58 GS 1000 218.80
16. 1-Dec-03 13:54:10 218.75 1000 13:54:10 GS 1000 218.75 13:54:10 ACM 1000 218.75
17. 1-Dec-03 13:54:20 218.95 1000 13:54:20 ACM 1000 218.95 13:54:19 GS 1000 218.95
18. 3-Dec-03 12:40:41 221.15 1000 12:40:40 GS 1000 221.15 12:40:41 ACM 1000 221.15
19. 3-Dec-03 12:40:51 221.30 1000 12:40:50 ACM 1000 221.30 12:40:50 GS 1000 221.30
20. 3-Dec-03 12:41:00 221.45 1000 12:41:00 ACM 1000 221.45 12:40:59 GS 1000 221.45
21. 3-Dec-03 12:41:09 221.25 1000 12:41:08 GS 1000 221.25 12:41:09 ACM 1000 221.25
22. 3-Dec-03 13:18:20 222.45 2000 13:18:19 GS 2000 222.45 13:18:20 ACM 2000 222.45
23. 3-Dec-03 13:18:28 222.65 2000 13:18:28 ACM 2000 222.65 13:18:28 GS 2000 222.65
24. 3-Dec-03 13:18:39 222.35 2000 13:18:38 GS 2000 222.35 13:18:39 ACM 2000 222.35
25. 3-Dec-03 13:18:47 222.80 2000 13:18:47 ACM 2000 222.80 13:18:47 GS 2000 222.80
26. 3-Dec-03 14:25:19 225.15 2000 14:25:18 GS 2000 225.15 14:25:19 ACM 2000 225.15
27. 3-Dec-03 14:25:28 225.40 2000 14:25:28 ACM 2000 225.40 14:25:27 GS 2000 225.40
28. 3-Dec-03 14:25:39 225.10 1000 14:25:37 GS 1000 225.10 14:25:39 ACM 1000 225.10

8. Page 8 of 21
29. 3-Dec-03 14:25:52 225.45 1000 14:25:52 ACM 1000 225.45 14:25:50 GS 1000 225.45
30. 4-Dec-03 12:39:39 221.80 1000 12:39:35 GS 1000 221.80 12:39:39 ACM 1000 221.80
31. 4-Dec-03 12:39:52 221.90 500 12:39:52 ACM 1000 221.90 12:39:50 GS 1000 221.90
32. 4-Dec-03 12:40:28 222.05 1000 12:40:26 GS 1000 222.05 12:40:28 ACM 1000 222.05
33. 4-Dec-03 12:40:37 222.15 1000 12:40:37 ACM 1000 222.15 12:40:36 GS 1000 222.15
34. 4-Dec-03 12:40:47 222.10 1000 12:40:46 GS 1000 222.10 12:40:47 ACM 1000 222.10
35. 4-Dec-03 12:40:55 222.30 1000 12:40:55 ACM 1000 222.30 12:40:54 GS 1000 222.30
36. 4-Dec-03 12:41:03 222.00 1000 12:41:03 GS 1000 222.00 12:41:03 ACM 1000 222.00
37. 4-Dec-03 12:41:13 222.25 1000 12:41:13 ACM 1000 222.25 12:41:12 GS 1000 222.25
38. 4-Dec-03 13:09:13 222.15 1000 13:09:13 GS 1000 222.15 13:09:13 ACM 1000 222.15
39. 4-Dec-03 13:09:22 222.30 1000 13:09:22 ACM 1000 222.30 13:09:22 GS 1000 222.30
40. 4-Dec-03 13:09:35 222.40 1000 13:09:33 GS 1000 222.40 13:09:35 ACM 1000 222.40
41. 4-Dec-03 13:09:44 222.60 1000 13:09:44 ACM 1000 222.60 13:09:43 GS 1000 222.60
42. 4-Dec-03 14:01:45 222.65 1000 14:01:44 GS 1000 222.65 14:01:45 ACM 1000 222.65
43. 4-Dec-03 14:01:56 222.75 1000 14:01:56 ACM 1000 222.75 14:01:54 GS 1000 222.75
44. 4-Dec-03 14:02:04 222.70 1000 14:02:02 GS 1000 222.70 14:02:04 ACM 1000 222.70
45. 4-Dec-03 14:02:14 222.80 1000 14:02:14 ACM 1000 222.80 14:02:13 GS 1000 222.80
46. 5-Dec-03 12:29:18 226.30 1000 12:29:17 GS 1000 226.30 12:29:18 ACM 1000 226.30
47. 5-Dec-03 12:29:28 226.50 1000 12:29:28 ACM 1000 226.50 12:29:28 GS 1000 226.50
48. 5-Dec-03 12:29:37 226.60 1000 12:29:37 ACM 1000 226.60 12:29:36 GS 1000 226.60
49. 5-Dec-03 12:29:45 226.40 1000 12:29:43 GS 1000 226.40 12:29:45 ACM 1000 226.40
50. 5-Dec-03 12:29:55 226.55 1000 12:29:53 GS 1000 226.55 12:29:55 ACM 1000 226.55
51. 5-Dec-03 12:30:03 226.65 1000 12:30:03 ACM 1000 226.65 12:30:02 GS 1000 226.65
52. 5-Dec-03 12:30:11 226.70 1000 12:30:11 ACM 1000 226.70 12:30:10 GS 1000 226.70
53. 5-Dec-03 12:30:30 226.60 1000 12:30:30 GS 1000 226.60 12:30:18 ACM 1000 226.60
54. 5-Dec-03 13:30:29 225.10 1000 13:30:27 GS 1000 225.10 13:30:28 ACM 1000 225.10
55. 5-Dec-03 13:30:42 225.35 1000 13:30:42 ACM 1000 225.35 13:30:42 GS 1000 225.35
56. 5-Dec-03 13:30:55 225.60 1000 13:30:54 GS 1000 225.60 13:30:55 ACM 1000 225.60
57. 5-Dec-03 13:31:07 225.80 1000 13:31:06 ACM 1000 225.80 13:31:06 GS 1000 225.80
58. 5-Dec-03 13:49:43 224.50 1000 13:49:42 ACM 1000 224.50 13:49:43 GS 1000 224.50
59. 5-Dec-03 13:49:57 224.55 1000 13:49:56 GS 1000 224.55 13:49:57 ACM 1000 224.55
60. 5-Dec-03 13:50:17 224.75 1000 13:50:17 ACM 1000 224.75 13:50:15 GS 1000 224.75
61. 5-Dec-03 13:50:40 224.85 1000 13:50:39 GS 1000 224.85 13:50:40 ACM 1000 224.85
62. 8-Dec-03 13:43:58 223.35 1000 13:43:57 GS 1000 223.35 13:43:58 ACM 1000 223.35
63. 8-Dec-03 13:44:09 223.40 1000 13:44:09 ACM 1000 223.40 13:44:08 GS 1000 223.40
64. 8-Dec-03 13:44:17 223.25 1000 13:44:16 GS 1000 223.25 13:44:17 ACM 1000 223.25
65. 8-Dec-03 13:44:24 223.30 1000 13:44:24 ACM 1000 223.30 13:44:23 GS 1000 223.30
66. 8-Dec-03 13:58:53 223.15 1000 13:58:53 GS 1000 223.15 13:58:53 ACM 1000 223.15
67. 8-Dec-03 13:59:03 223.20 1000 13:59:03 ACM 1000 223.20 13:59:02 GS 1000 223.20
68. 8-Dec-03 13:59:10 223.15 1000 13:59:10 GS 1000 223.15 13:59:10 ACM 1000 223.15
69. 8-Dec-03 13:59:19 223.20 1000 13:59:17 ACM 1000 223.20 13:59:19 GS 1000 223.20
70. 10-Dec-03 12:03:25 245.50 1000 12:03:13 GS 1000 245.50 12:03:15 ACM 1000 245.50
71. 10-Dec-03 12:03:42 245.65 1000 12:03:42 ACM 1000 245.65 12:03:36 GS 1000 245.65
72. 10-Dec-03 12:05:46 245.75 1000 12:05:46 GS 1000 245.75 12:05:46 ACM 1000 245.75
73. 10-Dec-03 12:05:56 245.80 1000 12:05:56 ACM 1000 245.80 12:05:54 GS 1000 245.80
74. 10-Dec-03 12:06:09 245.35 1000 12:06:08 GS 1000 245.35 12:06:09 ACM 1000 245.35

9. Page 9 of 21
75. 10-Dec-03 12:06:19 245.60 975 12:06:19 ACM 1000 245.60 12:06:17 GS 1000 245.60
76. 10-Dec-03 12:06:38 245.70 1000 12:06:37 GS 1000 245.70 12:06:38 ACM 1000 245.70
77. 10-Dec-03 12:06:56 245.40 1000 12:06:56 ACM 1000 245.40 12:06:55 GS 1000 245.40
78. 10-Dec-03 12:07:16 245.35 1000 12:07:14 GS 1000 245.35 12:07:16 ACM 1000 245.35
79. 10-Dec-03 12:07:24 245.50 1000 12:07:24 ACM 1000 245.50 12:07:22 GS 1000 245.50
80. 11-Dec-03 13:03:30 245.55 2000 13:03:29 GS 2000 245.55 13:03:30 ACM 2000 245.55
81. 11-Dec-03 13:03:40 245.80 2000 13:03:40 ACM 2000 245.80 13:03:39 GS 2000 245.80
82. 11-Dec-03 13:03:49 245.40 1975 13:03:48 GS 2000 245.40 13:03:49 ACM 2000 245.40
83. 11-Dec-03 13:04:03 245.80 2000 13:04:03 ACM 2000 245.80 13:04:02 GS 2000 245.80
84. 11-Dec-03 13:04:19 245.50 1000 13:04:18 GS 1000 245.50 13:04:19 ACM 1000 245.50
85. 11-Dec-03 13:04:28 245.75 1000 13:04:28 ACM 1000 245.75 13:04:27 GS 1000 245.75
86. 12-Dec-03 12:19:54 247.15 2000 12:19:54 GS 2000 247.15 12:19:54 ACM 2000 247.15
87. 12-Dec-03 12:20:03 247.35 2000 12:20:02 ACM 2000 247.35 12:20:02 GS 2000 247.35
88. 12-Dec-03 12:20:15 247.45 2000 12:20:12 GS 2000 247.45 12:20:14 ACM 2000 247.45
89. 12-Dec-03 12:20:23 247.65 2000 12:20:23 ACM 2000 247.65 12:20:22 GS 2000 247.65
90. 12-Dec-03 12:20:32 247.55 1000 12:20:32 GS 1000 247.55 12:20:32 ACM 1000 247.55
91. 12-Dec-03 12:20:40 247.35 1000 12:20:40 ACM 1000 247.35 12:20:40 GS 1000 247.35
92. 12-Dec-03 14:26:18 249.05 2000 14:26:18 GS 2000 249.05 14:26:18 ACM 2000 249.05
93. 12-Dec-03 14:26:26 249.30 2000 14:26:26 ACM 2000 249.30 14:26:25 GS 2000 249.30
94. 12-Dec-03 14:26:40 249.25 2000 14:26:34 GS 2000 249.25 14:26:40 ACM 2000 249.25
95. 12-Dec-03 14:26:50 249.45 2000 14:26:50 ACM 2000 249.45 14:26:49 GS 2000 249.45
96. 15-Dec-03 11:45:36 259.10 2000 11:45:36 ACM 2000 259.10 11:45:33 GS 2000 259.10
97. 15-Dec-03 11:45:57 259.50 2000 11:45:54 GS 2000 259.50 11:45:57 ACM 2000 259.50
98. 15-Dec-03 11:46:20 259.00 2000 11:46:20 ACM 2000 259.00 11:46:19 GS 2000 259.00
99. 15-Dec-03 11:46:38 259.45 2000 11:46:38 GS 2000 259.45 11:46:38 ACM 2000 259.45
100. 15-Dec-03 13:40:59 263.55 2000 13:40:59 ACM 2000 263.55 13:40:56 GS 2000 263.55
101. 15-Dec-03 13:41:53 264.10 2000 13:41:52 GS 2000 264.10 13:41:53 ACM 2000 264.10
102. 15-Dec-03 13:42:16 263.60 2000 13:42:16 ACM 2000 263.60 13:42:14 GS 2000 263.60
103. 15-Dec-03 13:42:32 264.15 2000 13:42:32 GS 2000 264.15 13:42:32 ACM 2000 264.15
104. 15-Dec-03 13:42:58 263.55 1000 13:42:58 ACM 1000 263.55 13:42:58 GS 1000 263.55
105. 15-Dec-03 13:43:12 263.75 1000 13:43:12 GS 1000 263.75 13:43:12 ACM 1000 263.75
(Note : GS – Grishma Securities Pvt Ltd.; ACM – ASE Capital Markets Ltd.)
g) The analysis of the table given above reveals the following:
¾ It is observed that at 14:48:40 on 27.11.2003, Rajesh put in
a buy order for 4,000 shares of AEL @ Rs.207.55 through
Grishma. At 14:48:41, the Noticee, trading through ASE
Capital Markets Ltd., entered a sell order for 4,000 AEL
shares @ Rs.207.55. The said orders matched with each
other and were executed at 14:48:41 for 4000 shares. The
time gap between purchase and sale order was 1 second.

10. Page 10 of 21
The order quantity and price was matching between the
buying and selling entities.
¾ It is also observed that at 14:55:06 on 27.11.2003, Rajesh
entered a sale order for 4000 shares of AEL at a price of
Rs.208.30. At 14:55:07, Noticee also entered a buy order
for 4000 AEL shares @ Rs.208.30. The said orders matched
with each other and were executed at 14:55:07 for 4000
shares. The time gap between purchase and sale order was
1 second and the order quantity and price was also
matching. It is also observed that while the previous trade as
mentioned above was reversed, the price of share has been
higher.
¾ Similarly, at 12:05:46 on 10.12.2003, the noticee entered a
sell order for 1000 shares of AEL at a price of Rs.245.75. At
the same moment i.e. 12:05:46, Rajesh entered a buy order
for 1000 shares @ Rs.245.75 through its broker. The said
orders matched with each other and were executed at
12:05:46 for 1000 shares. The time gap between purchase
and sale order was 0 second and the order quantity and
price was also matching. It is also observed that the price of
the share has been rising over the investigation period.
¾ Out of 105 synchronized orders entered between the
Noticee and Rajesh, in 25 orders the buy and sell orders
were placed with the time difference of zero seconds, for 51
orders the time difference was 1 second, for 25 orders the
time difference was 2-3 seconds and for the balance 4
orders the time difference was more than 3 seconds.
Hence, 76 out of 105 or 72.38% of buy and sell orders were
placed with the time difference of zero or 1 second.
h) The summary of day wise purchase and sale of AEL shares by
the Noticee is given below:

11. Page 11 of 21
Date Buy
Quantity
Sell
Quantity
Total Market
Volume
% to
Market
Volume
27-Nov-03 4000 4000 8000 31810 25.15
28-Nov-03 4000 4000 8000 33321 24.01
1-Dec-03 7000 6990 13990 34525 40.52
3-Dec-03 9000 9000 18000 40401 44.55
4-Dec-03 7500 8000 15500 38891 39.85
5-Dec-03 8000 8000 16000 43112 37.11
8-Dec-03 4000 4000 8000 26404 30.30
10-Dec-03 4975 5000 9975 44104 22.62
11-Dec-03 5000 4975 9975 37153 26.85
12-Dec-03 9000 9000 18000 43242 41.63
15-Dec-03 9000 9000 18000 46939 38.35
Total 71475 71965 143440 419902 34.16(avg)
i) The analysis of the table given above reveals the following:
¾ The Noticee and Rajesh had indulged in synchronized
trading and created a volume of 1,43,440 shares. The
Noticee had bought 71,475 shares and sold 71,965 shares.,
i.e a net quantity of 490 shares. In other words, almost all
the quantity purchased had been squared off.
¾ Almost all the quantity of AEL shares purchased/sold by the
Noticee on a particular day, was being reversed on the same
day. This proves that the noticee, in coordination with
Rajesh, was only creating artificial volumes in the market.
¾ The Noticee and Rajesh indulged in synchronized reversal/
circular trading for 11 days.
¾ The average contribution of the synchronized reversal /
circular trading was 34.16% of days’ quantity traded.
¾ On 7 days, the contribution of synchronized circular/reversal
trades was more than 30% of day’s quantity traded and on 4
days, it was between 20% and 30% of day’s quantity traded.
¾ Both the Noticee and Rajesh had the same address, viz.
410, Wallstreet, Opposite Orient Club, Ellisbridge,
Ahmedabad – 380 006 which indicates that they had some
relationship. While having a common address, they carried
out synchronized circular / reversal trades over the
investigation period wherein both were counterparties to
each other’s trades.

12. Page 12 of 21
11. The Noticee and Bela executed 33 synchronized orders on 3
trading days during the investigation period creating an artificial
volume of 31,450 shares. Details of their trades are given below:
Trade Date Trade Time Traded
Price
Traded
Qty
Buy Order
Entry Time
Buy TM
Name
Buy
Orig
Vol
Buy
Limit
Price
(Rs.)
Sell Order
Entry Time
Sell TM
Name
Sell
Orig
Vol
Sell
Limit
Price
(Rs.)
27-Nov-03 11:02:50 206.55 950 11:02:49 MGCS 1000 206.55 11:02:50 ACM 1000 206.55
27-Nov-03 11:21:22 207.10 1000 11:21:22 ACM 1000 207.10 11:21:21 MGCS 1000 207.10
27-Nov-03 11:22:00 207.30 250 11:22:00 ACM 250 207.30 11:22:00 MGCS 250 207.30
27-Nov-03 12:30:20 207.15 250 12:30:20 MGCS 250 207.15 12:30:20 ACM 250 207.15
27-Nov-03 12:30:34 207.20 1000 12:30:33 MGCS 1000 207.20 12:30:34 ACM 1000 207.20
27-Nov-03 13:54:22 207.35 1000 13:54:21 ACM 1000 207.35 13:54:22 MGCS 1000 207.35
27-Nov-03 13:54:32 207.40 1000 13:54:32 ACM 1000 207.40 13:54:32 MGCS 1000 207.40
27-Nov-03 14:07:43 207.15 1000 14:07:41 MGCS 1000 207.15 14:07:43 ACM 1000 207.15
27-Nov-03 14:07:53 207.20 1000 14:07:53 MGCS 1000 207.20 14:07:53 ACM 1000 207.20
27-Nov-03 14:19:44 207.80 1000 14:19:44 ACM 1000 207.80 14:19:43 MGCS 1000 207.80
27-Nov-03 14:20:02 207.90 1000 14:20:02 ACM 1000 207.90 14:20:02 MGCS 1000 207.90
27-Nov-03 14:36:16 207.70 1000 14:36:14 MGCS 1000 207.70 14:36:15 ACM 1000 207.70
28-Nov-03 10:46:51 214.10 1000 10:46:51 MGCS 1000 214.10 10:46:51 ACM 1000 214.10
28-Nov-03 11:13:10 212.55 1000 11:13:10 MGCS 1000 212.55 11:13:08 ACM 1000 212.55
28-Nov-03 11:13:21 212.65 1000 11:13:21 MGCS 1000 212.65 11:13:21 ACM. 1000 212.65
28-Nov-03 11:17:21 213.15 1000 11:17:21 ACM 1000 213.15 11:17:20 MGCS 1000 213.15
28-Nov-03 11:19:23 213.30 1000 11:19:23 ACM 1000 213.30 11:19:22 MGCS 1000 213.30
28-Nov-03 12:21:49 213.65 1000 12:21:49 ACM 1000 213.65 12:21:48 MGCS 1000 213.65
28-Nov-03 13:27:44 213.25 1000 13:27:43 MGCS 1000 213.25 13:27:44 ACM 1000 213.25
28-Nov-03 13:56:12 213.35 1000 13:56:12 ACM 1000 213.35 13:56:10 MGCS 1000 213.35
28-Nov-03 13:56:39 213.30 1000 13:56:39 ACM 1000 213.30 13:56:37 MGCS 1000 213.30
28-Nov-03 14:30:01 214.10 1000 14:30:00 MGCS 1000 214.10 14:30:01 ACM 1000 214.10
8-Dec-03 11:59:07 224.30 1000 11:59:07 MGCS 1000 224.30 11:59:05 ACM 1000 224.30
8-Dec-03 12:22:33 223.60 1000 12:22:33 ACM 1000 223.60 12:22:32 MGCS 1000 223.60
8-Dec-03 12:54:24 223.05 1000 12:54:24 MGCS 1000 223.05 12:54:24 ACM 1000 223.05
8-Dec-03 12:54:33 223.10 1000 12:54:33 MGCS 1000 223.10 12:54:33 ACM 1000 223.10
8-Dec-03 13:10:23 222.55 1000 13:10:23 ACM 1000 222.55 13:10:23 MGCS 1000 222.55
8-Dec-03 13:10:34 222.65 1000 13:10:34 ACM 1000 222.65 13:10:33 MGCS 1000 222.65
8-Dec-03 13:28:47 222.60 1000 13:28:47 MGCS 1000 222.60 13:28:46 ACM 1000 222.60
8-Dec-03 14:31:18 222.55 1000 14:31:18 MGCS 1000 222.55 14:31:18 ACM 1000 222.55
8-Dec-03 14:42:34 221.55 1000 14:42:34 ACM 1000 221.55 14:42:32 MGCS 1000 221.55
8-Dec-03 15:11:16 222.05 1000 15:11:14 MGCS 1000 222.05 15:11:16 ACM 1000 222.05
8-Dec-03 15:11:27 222.35 1000 15:11:27 ACM 1000 222.35 15:11:27 MGCS 1000 222.35
( Note : MGCS – M G Capital Services Ltd.; ACM – ASE Capital Markets Ltd.)

13. Page 13 of 21
12. The analysis of the table given above reveals the following :
¾ It is observed that on 27.11.2003, Bela put in a buy order for
1,000 shares of AEL at 12:30:33 at a price of Rs.207.20. At
12:30:34, the Noticee entered a sell order for 1,000 AEL shares
@ Rs.207.20. The said orders matched with each other and
were executed at 12:30:34 for 1000 shares. The time gap
between purchase and sale order was 1 seconds. The order
quantity and price was matching between the buying and selling
entities.
¾ It is also observed that on 27.11.2003, the noticee thereafter
entered a purchase order for 1000 shares of AEL at 14:20:02 at
a price of Rs.207.90. At the same moment i.e. 14:20:02 on
27.11.2003, Bela entered a buy order for 1000 AEL shares @
Rs.207.90. The said orders matched with each other and were
executed at 14:20:02 for 1000 shares. There was no time gap
between purchase and sale order and the order quantity and
price was also matching.
¾ Similarly, on 08.12.2003, the Noticee entered a buy order for
1000 shares of AEL at 15:11:27 at a price of Rs.222.35. At the
same time, i.e.15:11:27, Bela entered a sell order for 1000
shares @ Rs.222.35. The said orders matched with each other
and were executed at 15:11:27 for 1000 shares. The time gap
between purchase and sale order was 0 second and the order
quantity and price was also matching.
¾ Out of these 33 synchronized orders entered between the
Noticee and Bela, in 12 orders the time difference between buy
and sell orders was zero second, in 14 orders it was 1 second
and in 7 orders it was 2 seconds. The buy and sell rates and
the quantities also matched in 100 % of the orders.
13. The summary of day wise purchases and sales made by the
Noticee with Bela are given below:

14. Page 14 of 21
Date Buy
Quantity
Sell
Quantity
Total Market
Volume
% to
Market
Volume
27-Nov-03 Total 5250 5200 10450 31810 32.85
28-Nov-03 Total 5000 5000 10000 33321 30.01
8-Dec-03 Total 5000 6000 11000 26404 41.66
Total 15250 16200 31450 91535 34.36
(average)
14. The analysis of the table given above reveals the following:
¾ The Noticee and Bela had indulged in synchronized trading and
created an volume of 31,450 shares. The Noticee had bought
15,250 shares and sold 16,200 shares., i.e. a net quantity of
950 shares. In other words, most of the quantity purchased had
been squared off.
¾ Most of the quantity of AEL shares purchased/sold by the
Noticee on a particular day, was being reversed on the same
day. This proves that the Noticee, in coordination with Bela, was
only creating artificial volumes in the market.
¾ The Noticee and Bela indulged in synchronized reversal/
circular trading on 3 days during the investigation period.
¾ The average contribution of the synchronized reversal / circular
trading was 34.36% of days’ quantity traded.
¾ On all 3 days the contribution of synchronized circular/reversal
trading was more than 30% of day’s quantity traded.
15. It is also observed that while executing these synchronized
reversal/ circular trades, the price of the AEL shares also increased
from Rs.204.90 (on November 27, 2003) to Rs.441.90 (on
December 23, 2003) within a span of 19 trading days. The scrip
touched a highest price of Rs.478.70 on December 19, 2003. Thus
the Noticee also contributed in increasing the price of AEL shares
through his synchronized reversal/ circular trades.
16. The method and the manner in which the trades were executed are
the most important factors to be considered in these circumstances.
In almost all the trades, the orders were so placed so as to ensure
immediate matching of the buy and sell quantity and the price with

15. Page 15 of 21
the same counterparties viz. between the Noticee and Rajesh &
Bela. The buy and sell orders were placed at almost the same time
between the counterparty entities, with a difference of zero to few
seconds. This proximity in the inputting of orders at the same price
and for the same quantity, resulted in their immediate matching,
thus proving synchronization in placement of the same. Further,
almost all the quantity of AEL shares purchased/sold by the Noticee
on a particular day, was being reversed on the same day. This
proves that the Noticee, in coordination with Rajesh and Bela, was
only creating artificial volumes in the market. This also proves that
the noticee indulged in synchronized circular / reversal trades.
17. A large number of trades got matched between the Noticee and
Rajesh and Bela during the investigation period. The phenomenal
regularity with which the Noticee had indulged in such synchronized
reversal / circular trades leads one to conclude that these
transactions were effectively meant to manipulate the market. It is
my considered belief that these trades were only creating artificial
volumes with the motive to induce general investors to invest in the
said scrip.
18. The fact is that had the aforesaid trades been executed in the
normal course of business, such perfect matching would not have
been possible. The buy and sell prices of one entity were always
same as the buy/sell rates of the other entity in all the settlements,
such that the trades of these entities always matched. The
transactions as mentioned earlier which were spread over a period
of time were definitely done with some inbuilt component of ‘intent’
involved. Greater the number of such synchronized trades, the
larger is the chance of trades not being genuine in nature, which is
bound to affect the market equilibrium. Considering the number of

16. Page 16 of 21
such trades, it is clear that there has been a gross misuse of the
screen based trading system. It is also to be stated that “intention”
is inherent in all cases of synchronized trading involving large scale
manipulation and the same was also brought out in the case of
Nirmal Bang Securities (P) Ltd. vs SEBI by the Hon’ble SAT
whereby it was observed that “Intention is reflected from the action of
the Appellant. Choosing selective time slots does not appear to be an
involuntary action.”
19. In my view, the Noticee by execution of these synchronized
circular/reversal transactions created artificial liquidity in the scrip
and played a role in the manipulation of the trading. In my view, the
Noticee through the said artificial trades interfered with the market
equilibrium and thereby affected the price and volume of the said
scrip. The trades executed herein by the Noticee were not the real
trades as there was no intention to change the beneficial
ownership. When the trades were inherently not genuine, I do not
feel that it is necessary to prove that investors had, in fact, got
induced and bought and/or sold on the basis of these trades.
Similar views were expressed by the Hon’ble SAT in its order dated
14.7.2006 in Ketan Parekh Vs. SEBI wherein it had observed that
“When a person takes part in or enters into transactions in securities with
the intention to artificially raise or depress the price he thereby
automatically induces the innocent investors in the market to buy /sell
their stocks. The buyer or the seller is invariably influenced by the price of
the stocks and if that is being manipulated the person doing so is
necessarily influencing the decision of the buyer / seller thereby inducing
him to buy or sell depending upon how the market has been manipulated.
We are therefore of the view that inducement to any person to buy or sell
securities is the necessary consequence of manipulation and flows
therefrom. In other words, if the factum of manipulation is established it

17. Page 17 of 21
will necessarily follow that the investors in the market had been induced to
buy or sell and that no further proof in this regard is required. The
market, as already observed, is so wide spread that it may not be humanly
possible for the Board to track the persons who were actually induced to
buy or sell securities as a result of manipulation and law can never
impose on the Board a burden which is impossible to be discharged. This,
in our view, clearly flows from the plain language of Regulation 4(a) of
the Regulations.
20. I find that the Noticee had placed 138 (105 orders with Rajesh and
33 orders with Bela) synchronized circular/reversal orders involving
174,890 shares (1,43,440 shares with Rajesh and 31,450 shares
with Bela). Moreover, out of 138 orders, in 102 orders (76 orders
with Rajesh and 26 orders with Bela) the time difference between
buy orders and sell orders was less than 1 second. This indicates a
high degree of coordination between the Noticee and his
counterparties.
21. Hon’ble SAT in Ketan Parekh Vs. Securities & Exchange Board of India
(Appeal No. 2 of 2004) held that in order to find out whether a
transaction has been executed with the intention to manipulate the
market or defeat its mechanism will depend upon the intention of
the parties which could be inferred from the attending
circumstances because direct evidence in such cases may not be
available. In the case of Ashok K Chaudhary v SEBI, Appeal No 69 of
2008, dated November 5, 2008, the Hon’ble SAT observed that
large number of reverse trades raises a presumption of
manipulative transactions.
22. As per regulation 2 (1) (c) of PFUTP Regulations, "fraud" includes
any act, expression, omission or concealment committed whether in a

18. Page 18 of 21
deceitful manner or not by a person or by any other person with his
connivance or by his agent while dealing in securities in order to induce
another person or his agent to deal in securities, whether or not there is
any wrongful gain or avoidance of any loss….”
23. Regulation 4(2)(a) of PFUTP Regulations prohibits a person from
indulging in an act which creates false or misleading appearance of
trading in the securities market. Regulation 4(2)(b) of PFUTP
Regulations prohibits dealings in a security intended to operate as
a device to inflate, depress or cause fluctuations in the price of
such security for wrongful gains. Regulation 4(2)(e) of PFUTP
Regulations prohibits any act or omission amounting to
manipulation of the price of a security. Regulation 4(2)(g) of
PFUTP Regulations prohibits from entering into a transaction in
securities without intention of performing it or without intention of
change of ownership of such security. As detailed above, the acts
of the Noticee clearly created false and misleading appearance of
trading in the shares of AEL and he did not act in a bonafide
manner. The facts of the case highlight the Noticee’s involvement,
by executing continuous synchronized circular/reversal trades in a
substantial manner, in the manipulation of price/volume of the
shares of AEL which led to creation of artificial volumes and
misleading appearance of trading in the said shares on account of
collusive activities with the entities as discussed in the preceding
paragraphs. The Noticee has also admitted his mistake in respect
of his trading in AEL shares.
24. I am of the view that the facts of the present case clearly bring out
an element of fraud and unfair trade practices indulged in by the
Noticee. Therefore, I hold that the charges leveled against the
Noticee are proved and that the allegation of violation of provisions

19. Page 19 of 21
of regulations 4(1), 4(2)(a), (b), (e) and (g) of PFUTP Regulations
by the Noticee stands established. Regulation 4(2) (n) of PFUTP
Regulations is applicable to intermediaries and hence does not
apply to the Noticee.
25. The Hon’ble Supreme Court of India in the matter of SEBI Vs. Shri
Ram Mutual Fund [2006] 68 SCL 216(SC) held that “In our
considered opinion, penalty is attracted as soon as the contravention of
the statutory obligation as contemplated by the Act and the Regulations is
established and hence the intention of the parties committing such
violation becomes wholly irrelevant…”.
26. Thus, the aforesaid violations of PFUTP Regulations by the Noticee
make him liable for penalty under Section 15HA of SEBI Act which
reads as follows:
“Penalty for fraudulent and unfair trade practices
15HA. 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.
27. While determining the quantum of penalty under section 15HA, it is
important to consider the factors stipulated in section 15J of SEBI
Act, which reads as under:-
“15J - Factors to be taken into account by the adjudicating officer
While adjudging quantum of penalty under section 15-I, 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.”

20. Page 20 of 21
28. It is difficult, in cases of such nature, to quantify exactly the
disproportionate gains or unfair advantage enjoyed by an entity and
the consequent losses suffered by the investors. The investigation
report also does not dwell on the extent of specific gains made by
the Noticee and its counterparties or brokers. Suffice to state that
keeping in mind the practices indulged in by the Noticee, gains per
se were made by the Noticee in that he traded in the scrip in a
manner meant to create artificial volumes and liquidity which is an
important criterion, apart from price, capable of misleading the
investors while making an investment decision. In fact, the increase
in liquidity / volumes raise the ‘demand’ of that scrip in the
securities market. Greater the liquidity, higher is the investors’
attraction towards investing in that scrip. Hence, anyone could have
been carried away by the unusual fluctuations in the volumes and
been induced into investing in the said scrip. Besides, this kind of
activity seriously affects the normal price discovery mechanism of
the securities market. People who indulge in manipulative,
fraudulent and deceptive transactions, or abet the carrying out of
such transactions which are fraudulent and deceptive, should be
suitably penalized for the said acts. Considering the continuous
effort of the Noticee in this aspect where the synchronized circular
/ reversal trades were carried out over a period of time, it can safely
be surmised that the nature of default was also repetitive.
ORDER
29. In terms of provisions of rule 5(1) of the Rules, I impose a penalty
of Rs. 3,00,000/- (Rupees three lacs only) under section 15 HA of
SEBI Act, 1992 on the Noticee, Mr. Manoj T Shah resident of 84,
Jain Temple, P.O. Pansar, Taluka Kalol – 382740. Considering the

21. Page 21 of 21
facts and circumstances of the case, this penalty will be
commensurate with the violations committed by the Noticee.
30. The Noticee shall pay the said amount of penalty by way of
demand draft 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 should be forwarded to Ms
Medha Sonparote, Deputy General Manager, Investigations
Department – ID 1, SEBI, SEBI Bhavan, Plot No. C – 4 A, “G”
Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051.
31. In terms of rule 6 of the Rules, copies of this order are sent to the
Noticee and also to the Securities and Exchange Board of India.
Date: March 31, 2010 Piyoosh Gupta
Place: Mumbai Adjudicating Officer