SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTION 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 AND SECTION 12A OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 IN THE MATTER OF KELVIN FINCAP LIMITED IN RESPECT OF KELVIN FINCAP LIMITED AND OTHERS.

 
FREE EXCERPT

Mumbai: Securities and Exchange Board of India has issued the following order: ________________________________________________________________________ Confirmatory order in the matter of Kelvin Fincap Limited Page 1 of 18 WTM/RKA/ISD/26/2015 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTION 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 AND SECTION 12A OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 IN THE MATTER OF KELVIN FINCAP LIMITED IN RESPECT OF KELVIN FINCAP LIMITED AND OTHERS. ________________________________________________________________________ Appearances: 1) Mr. J. J. Bhatt, Advocate for Kelvin Fincap Limited, Mr. Mahesh Ramanlal Shah, Mr.

Bhavik Satish Badani, Mr. Bipin Bhikhabhai Patel, Ms. Sushma Vimalkumar Raval 2) Mr. N. K. Rita for Inventure Finance Private Limited 3) Mr. Pratham V. Masurekar, Advocate for Mr. Mukesh Nanubhai Desai 4) Mr. Narendra Shah for Ms. Geeta Narendra Shah 5) Ms. Rinku Valanju, Advocate for Mr. Rajesh Moradia, Ms. Shobhanaben N. Moradia, Mr. Bharat N. Moradiya, Mr. Mukesh N. Moradia, Ms. Shehul V. Moradia, Mr. Hiren Tulsibhai Moradia, Mr. Rajesh Moradia, Mr. Dharmesh Tulsibhai Moradia, Ms. Kavita Sunish Behl, Mr. Hasmukhlal Ramanlal Shah 6) Mr. Dharmesh Joshi, Advocate for Mr. Vallabhbhai D. Sachapra and Mr. Bhimjibhai D. Chanchapara 7) Mr. Jayesh R. Vyas, Advocate for Mr. Dhanjibhai S. Donda and Ms. Vasantben Dhanjibhai Donda ________________________________________________________________________ 1. Securities and Exchange Board of India ("SEBI") examined the dealings in the scrip of Kelvin Fincap Limited {formerly known as "Dahyabhai Sons Limited" and hereinafter referred to as "Kelvin "} on the Bombay Stock Exchange Limited ("BSE") based on the sharp rise in price/volume in the scrip. It was observed that during the period from June 18, 2013 to July 23, 2013 (hereinafter referred to as "Patch 1"), the price of the scrip of Kelvin rose from ₹151.55/- to ₹225/, i.e. an increase of 48% in 26 trading days. On July 24, 2013, the shares of Kelvin were split in the ratio of 1:1 and from July 24, 2013 to May 29, 2014 (hereinafter referred to as "Patch 2"), the price of the scrip increased from ₹118/- to ₹535/- i.e. an increase of 353% in 205 trading days.

2. In this backdrop, SEBI, vide an ad interim ex-parte order dated August 14, 2014, restrained the below mentioned 44 entities (hereinafter collectively referred to as "Noticees" and ________________________________________________________________________ Confirmatory order in the matter of Kelvin Fincap Limited Page 2 of 18 individually by their respective names) from accessing the securities market and further prohibited them from buying, selling or dealing in securities in any manner whatsoever, till further directions:- Table 1: Entities against whom SEBI issued directions vide the interim order.

S. No.

PAN Name of the entity Referred as 1 AAACD1881H Kelvin Fincap Limited Kelvin 2 AAHPS4084K Keyur M Shah Promoters 3 AAAHK5034L Keyur M Shah (HUF) 4 AAYPS3458E Kavita K Shah 5 AAACD1880G Dahyabhai Shares And Stock Brokers Limited 6 BBPPE7839K Sushma Vimalkumar Raval Directors 7 AYBPS0534J Vishal Kumar Shah 8 ABJPS8618E Mansukh Sanghvi 9 ALRPB9295L Bhavik Satish Badani 10 AIDPP3653M Bipin Bhikhabhai Patel 11 AJMPS0962J Mahendrabhai Sakalchand Shah 12 BORPS0804Q Surekhaben K Shah 13 AAACM0623J Inventure Finance Private Limited Preferential 14 AATPD0728R Mukesh Nanubhai Desai Allottees 15 AAJPB7775N Kavita Sunish Behl 16 AADPS8752L Hasmukhlal Ramanlal Shah 17 AIKPM4674N Shobhanaben N. Moradia 18 AMTPM0749H Bharat N. Moradiya 19 AIVPM3622K Mukesh N. Moradia 20 AIVPM3623J Shehul V. Moradia 21 AMTPM8714C Hiren Tulsibhai Moradia 22 ACRPM4534E Rajesh Moradia 23 ALEPM6311R Dharmesh Tulsibhai Moradia 24 AEGPD4889J Vasantben Dhanjibhai Donda 25 AEIPD5332A Dhanjibhai S. Donda 26 ACXPP9049B Bhimjibhai D. Chanchapara 27 ACXPP9026C Vallabhbhai D. Sachapra 28 AAOPS2033H Geeta N. Shah Other Group ________________________________________________________________________ Confirmatory order in the matter of Kelvin Fincap Limited Page 3 of 18 29 AAECC0841Q Cromakem Limited Entities 30 AACCD7020L Do Max Steel Limited 31 AAFCS2725Q Sapan Chemicals Limited 32 AAACF7961Q Fast Track Entertainment Limited 33 AACCS1185R Sonal International Ltd 34 AMVPJ5720H Jalpa Jani 35 AFMPB0449P Jayshree Shankar Bhosle 36 AKSPM3939N Kirti Mehta 37 AAHCS1332H Stardom Trading Company Pvt Ltd 38 AACCC0591P Cornhill Trading Company Pvt Ltd 39 AAACO2454R Nova Gold Petro Resources Limited 40 AABCA7788F Acil Cotton Industries Limited 41 AAACZ6848C Zimig Trading Company Private Limited 42 ALZPB9604R Rupesh Balkrishna Bhoir 43 AAACR9384B RFL International Limited . 44 ARYPS5993F Naresh Nagindas Shah 3. Pursuant to the aforesaid interim order, 30 entities i.e. Kelvin and entities at S. No. 8 to 36 in Table 1) filed their replies. Vide letter dated September 03, 2014, Kelvin, requested for an inspection of documents relied upon by SEBI while passing the aforesaid interim order.

The request of Kelvin was acceded to and an inspection of all the documents, relied upon by SEBI befoe passing the interim order, was provided to Kelvin on October 11, 2014 when Advocate J. J. Bhatt and Mr. Abhishek N Shah (authorised representatives on behalf of Kelvin) inspected the said documents. The authorized representatives on behalf of Kelvin also sought copies of certain documents which were provided to them on November 07, 2014.

4. With respect to Mr. Mansukh Sanghvi (entity at S. No. 8 in Table 1), vide letter dated September 1, 2014, his nephew (Mr. Kaushik Sanghvi) informed that Mr. Mansukh Sanghvi had passed away on July 05, 2014. He also enclosed a copy of the death certificate issued by the Municipal Corporation of Greater Mumbai. 5. Inventure Finance Private Limited ("IFPL") (entity at S. No. 13 in Table 1) requested for an opportunity of urgent hearing which was provided to it on September 24, 2014. However, it failed to appear on the said date and requested for another date of hearing.

Thereafter, an opportunity of hearing was granted to all the entities in the matter including IFPL (except Kelvin and Mr. Mansukh Sanghvi) on October 29, 2014, which was rescheduled to November 05, 2014. On the said date, authorized representatives on ________________________________________________________________________ Confirmatory order in the matter of Kelvin Fincap Limited Page 4 of 18 behalf of 20 entities, i.e. serial nos. 9 to 28 mentioned in table 1 above appeared and made their submissions.

6. Since the letters for hearing issued to 3 entities, viz. Mr. Vishal Shah, Novagold Petro Resources Limited and Mr. Kirti Mehta were returned undelivered they were given another opportunity of hearing along with Kelvin on January 08, 2015. On the said date only the authorized representative on behalf of Kelvin appeared and made submissions on its behalf. 7. The submissions on behalf of Kelvin and other entities are, inter alia, as under: Submissions on behalf of Kelvin: a) With respect to fund transfer mentioned in the interim order, Kelvin submitted that SEBI has no jurisdiction to sit into judgment of commercial / financial decisions of the company b) Without prejudice to the above, Kelvin submitted that it had paid monies to certain entities by cheques only, accounted in its books of accounts which were duly audited at the relevant time only. c) With respect to purported preferential allotment, Kelvin submitted that it had issued shares under preferential allotment to only 49 entities in only 49 folios upfront on March 20, 2012 and so was accepted by BSE. The same was mentioned in the disclosure made on BSE website on March 21, 2012. Kelvin also submitted that it did not submit false information to BSE as alleged in the interim order. Kelvin also explained that it had allotted the shares in joint names in respect of 8 cases. After 7 months from the time of preferential allotment, Kelvin received requests from 6 joint holders to split the names of joint holders and to issue shares in individual names.

The consequential splitting of share certificates neither increased the number of shares nor any new names of allottees were added. The subsequent increase in number of folios was on account of splitting of existing Issued share certificates between the joint-holders only. Further at the time of splitting the then existing share certificates in individual holder's name the company did not receive any additional allotment money or any money. Hence, Kelvin did not allot shares to 56 entities at the time of allotment on March 20, 2012 and therefore the said preference issue cannot be termed as a public issue. d) Kelvin also submitted that its Registrar and Transfer Agent ("R&TA)", Purva Share Registry (India) Pvt. Limited, in its communication to SEBI may not have properly explained the sequence of activities - pre, at the time and post preferential allotment - and consequently there is some misunderstanding in the matter. Further, the ________________________________________________________________________ Confirmatory order in the matter of Kelvin Fincap Limited Page 5 of 18 communication sent by R&TA to SEBI contained some errors. Kelvin submitted a copy of the letter filed by it before BSE which as per Kelvin contained the correct details regarding the allotment. e) Kelvin submitted that the judgment and order dated August 31, 2012 passed by the Hon'ble Supreme Court in the matter of Sahara India Real Estate Corporation Limited & Ors. V. SEBI & Anr. did not apply to it f) With respect to transfer of shares while under compulsory lock-in, Kelvin submitted that Jitendra Tejmal Dugar and Dhiraj Parasmal Dugar submitted one transfer deed each dated September 26, 2012 with 10 share certificates each i.e. 1,00,000 shares each duly signed by the transferor on September 25, 2012. with Kelvin for transfer in their respective names. Since the...

To continue reading

REQUEST YOUR TRIAL