WTM/RKA/ISD/48/2016

SECURITIES AND EXCHANGE BOARD OF INDIA

ORDER
UNDER SECTIONS 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA ACT, 1992 IN THE MATTER OF MISHKA FINANCE AND
TRADING LIMITED
IN RESPECT OF:
Sl. No.
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Name of the entity

Mr. Amit Singh
Badamisati Apartments Private Limited
Function Financial Consultants Private Limited
Cheroot Vanijya Pvt. Ltd.
Dhlriti Traders Private Limited
Esha Securities Limited
Blue Horizon Commosales Private Limited
Helot Properties Private Limited
Helpful Investment Advisory Private Limited
Kapeeshwar Vintrade Pvt. Ltd.
Overload Financial Advisory Pvt. Ltd.
Reachsmart Construction Pvt. Ltd.
Samridhipurn Services Private Limited
Sebika Commodities Private Limited
Sinjan Overseas Private Limited
Swarnprakash Traders Pvt. Ltd.
Topwell Properties Private Limited
Wonder Procon Private Limited
Mr. Arunavo Mukherjee
Indrawati Nirman Private Limited
Dhyaneshwar Dealers Private Limited
Goldensight Traders Private Limited
Reachsmart Dealtrade Pvt. Ltd.
Sulabh Impex Ltd.

PAN
BABPS7447D
AAFCB4546A
AABCF5486H
AAECC9285A
AAECD8235D
AAACE2862P
AAFCB0211J
AACCH8885R
AACCH4303G
AAECK7329P
AABCO6950F
AAGCR4662J
AATCS4365E
AARCS9144H
AAMCS8721P
AATCS6718D
AADCT8403C
AABCW0317N
ATIPM7500N
AADCI5139E
AAECD8010E
AAFCG4773J
AAFCR9881C
AAICS7362Q

1. Pursuant to detection of a huge rise in the traded volume and price of the shares of Mishka
Finance and Trading Limited (formerly known as Pyramid Finance and Trading Limited and
hereinafter referred to as "Mishka") on Bombay Stock Exchange Limited ("BSE") during the
period from February 14, 2013 to December 31, 2014 (hereinafter referred to as "examination

Order in the matter of Mishka Finance and Trading Limited

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period"), Securities and Exchange Board of India ("SEBI") undertook a preliminary inquiry in
the dealings in the said scrip.
2. Upon preliminary examination, it was prima facie observed that Mishka and persons in charge
of its affairs created a facade of preferential issue of equity shares of around `6.74 crore in
order to provide fictitious long term capital gains ("LTCG") to Mishkas preferential allottees
and promoter related entities (i.e., entities to whom Mishkas promoters transferred their shares in
physical form) so as to convert their unaccounted income into accounted one. It was
observed that after the completion of compulsory lock-in period, the preferential allottees and
the promoter related entities were provided exit at a high price by the entities related/connected
amongst themselves and with Mishka (hereinafter referred to as "Exit Providers"). In the
process the Exit Providers and the preferential allottees artificially increased the volume of the
scrip and misused securities market system for making illegal gains and to convert ill-gotten
gains into genuine one to avail fictitious long term capital gains. The modus operandi used by
these entities is as under:
(a). As on September 30, 2011, Mishka had only 7 shareholders (5 under promoters and 2
under public category).
(b). Thereafter, the aforesaid 7 shareholders transferred a total of 4,96,000 shares to 452
entities, i.e., the promoter related entities directly/indirectly during 2011-2013.
(c). In the meantime, Mishka allotted 7,93,700 shares under preferential allotment to 46
related/associated entities including 1 promoter, viz. Pearl Arcade Trading Private
Limited, (i.e., the preferential allottees), at an exorbitant premium of `75/- per share
on September 24, 2012.
(d). Then, on February 06, 2013, Mishka announced bonus shares in the ratio of 7:1. As a
result, the share capital of Mishka increased to 1,03,33,600 shares.
(e). Thereafter, suddenly trading started in the scrip of Mishka from February 14, 2013. In
Patch 1, i.e., from February 14, 2013 to February 14, 2014, the price of the scrip

(f).
(g).

(h).

(i).

gradually increased from `5.50/- to `499/- (unadjusted) and `49.90/- (adjusted) with
very low volume.
Prior to February 14, 2013, the entire share capital of Mishka was with the promoters,
the promoter related entities and the preferential allottees.
Once the price of the scrip increased exponentially, Mishka announced a stock-split in
the ratio of 1:10 on January 16, 2014 to make a passage for preferential allottees to
exit since the stock split would reduce the per share price and increase liquidity.
One month after the stock split, i.e. from February 17, 2014 59 entities, connected/
related, directly or indirectly, to Mishka, started providing hugely profitable exit to the
preferential allottees and the promoter related entities.
The said price movement was not backed by fundamentals of Mishka and its
financials.

Order in the matter of Mishka Finance and Trading Limited

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3. In this backdrop, SEBI, vide an ad interim ex-parte order dated April 17, 2015 (hereinafter
referred to as interim order), restrained Mishka along with other 128 entities, including 24
entities mentioned above (hereinafter referred to as "noticees"), from accessing the securities
market and further prohibited them from buying, selling or dealing in securities in any manner
whatsoever, till further directions.
4. Vide the interim order SEBI also advised the noticees that they may file their objections, if any,
within twenty one days from the date of the said order and, if they so desire, to avail
themselves of an opportunity of personal hearing before SEBI, on a date and time to be fixed
on a specific request, received from them.
5. I note that though the copy of the interim order was served to the noticees, except to
Badamisati Apartments Private Limited and Dhlriti Traders Private Limited, either through
courier or through their respective brokers, but the Noticees have failed to submit their reply
till date. Moreover, the advertisement was published in the Times of India and Nav Bharat
Times (Mumbai Edition) on November 10, 2015 for Dhlriti Traders Private Limited and in
the Telegraph and Sanmarg (Kolkata Edition) for Badamisati Apartments Private Limited on
November 07, 2015 intimating them about the interim order and the date of personal hearing.
The interim order also advised the noticees to request for an opportunity of hearing, if required.
However, though an opportunity of personal hearing has been granted to the noticees but
none of the noticees appeared for the personal hearing. As regards Esha Securities Limited, it
has been brought to my notice that the said company is under liquidation. Further, none of
the noticees have sought an opportunity of hearing till date. I note that although more than
ten months have elapsed since the interim order has been passed, but the noticees chose not to
submit their reply nor sought an opportunity of personal hearing till date. Therefore, in my
opinion, an ample time has been provided to the noticees to respond to the interim order and to
seek an opportunity of personal hearing, and hence, I am constrained to proceed with the
matter on the basis of the material available on record.
6. I have considered the allegations levelled against the noticees and have perused the
documents available on record. I note that in the instant case, the directions issued against the
noticees are interim in nature and have been issued on the basis of prima facie findings. SEBI
had issued directions vide the interim order in the matter in order to protect the interests of
investors in the securities market. Detailed investigation in the matter is still in progress. Thus,
the issue for consideration at this stage is whether the interim directions, issued against the
noticees vide the interim order, need to be confirmed, vacated or modified in any manner,
during pendency of investigation in the matter.
7. The facts and circumstances of the instant case indicate beyond doubt the modus operandi
employed by MIshka, its directors, its promoters, preferential allottees, promoter related entities
and Exit Providers, wherein Mishka in nexus with the preferential allottees made faade of
Order in the matter of Mishka Finance and Trading Limited

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preferential allotment and the promoters of the company transferred their holding to the
entities belonging to promoter related entities. After the expiry of the lock-in period, the Exit
Providers provided the exit opportunity to the preferential allottees and promoter related entities by
buying the shares of Mishka at artificially increased prices. In the whole process, the entities of
Exit Providers provided a hugely profitable exit to the preferential allottees and the promoter
related entities. Hence, the preferential allottees and the promoter related entities with the aid of the
Exit Providers misused the stock exchange mechanism to exit at a high price in order to book
illegitimate gains with no payment of taxes as long term capital gain (LTCG) is tax exempt
under section 10(38) of the Income Tax Act, 1961. Further, the interim order especially
discusses the manner in which the preferential allottees and the promoter related entities sold their
shares pursuant to abnormal increase in price in a manipulative way and made huge
illegitimate profit in the whole event. It is in this background and the facts and circumstances,
I find that the acts and deeds of Mishka, its directors, its promoters, preferential allottees, the
promoter related entities and the Exit Providers are fraudulent and in contravention of the
Securities Laws.
8. I also note that investigation in the matter is in progress and appropriate decision, in
accordance with law, would be taken after completion thereof. As prima facie found in the
interim order, Mishka, its promoters, its directors, preferential allottees, the promoter related entities
and the Exit Providers have acted in connivance for implementation of dubious plan, device
and artifice that has led to the misuse of stock exchange mechanism to artificially increase
price and volume of the scrip to provide illegitimate gains to the preferential allottees and the
promoter related entities in order to claim LTCG benefits that has not only eroded the market
integrity but has also been detrimental to the interests of investors who might have been lured
to invest in the scrip due to such manipulative and fraudulent trading in the scrip and price
movement. I, therefore, do not find any reason to revoke or modify the directions of the ad
interim ex parte order dated April 17, 2015 in the matter of Mishka Finance and Trading Limited
against the noticees.
9. I, therefore, in exercise of the powers conferred upon me under section 19 of the SEBI Act,
read with sections 11(1), 11(4) and 11B thereof, hereby confirm the directions issued vide the
ad interim ex-parte order dated April 17, 2015 against the following entities:
Sl. No.

Name

PAN

Mr. Amit Singh

BABPS7447D

2
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Badamisati Apartments Private Limited

Function Financial Consultants Private Limited

AAFCB4546A
AABCF5486H

Cheroot Vanijya Pvt. Ltd.

AAECC9285A

Dhlriti Traders Private Limited

AAECD8235D

Order in the matter of Mishka Finance and Trading Limited

Page 4 of 5

Esha Securities Limited

AAACE2862P

Blue Horizon Commosales Private Limited

AAFCB0211J

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Helot Properties Private Limited

Helpful Investment Advisory Private Limited

AACCH8885R
AACCH4303G

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Kapeeshwar Vintrade Pvt. Ltd.

AAECK7329P

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Overload Financial Advisory Pvt. Ltd.

AABCO6950F

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Reachsmart Construction Pvt. Ltd.

Samridhipurn Services Private Limited
Sebika Commodities Private Limited

AAGCR4662J
AATCS4365E
AARCS9144H

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Sinjan Overseas Private Limited

Swarnprakash Traders Pvt. Ltd.
Topwell Properties Private Limited
Wonder Procon Private Limited
Mr. Arunavo Mukherjee
Indrawati Nirman Private Limited
Dhyaneshwar Dealers Private Limited
Goldensight Traders Private Limited

AAMCS8721P
AATCS6718D
AADCT8403C
AABCW0317N
ATIPM7500N
AADCI5139E
AAECD8010E
AAFCG4773J

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Reachsmart Dealtrade Pvt. Ltd.

Sulabh Impex Ltd.

AAFCR9881C
AAICS7362Q

10.Accordingly, the directions issued vide para 36 of the interim order dated April 17, 2015 shall
remain in force till further directions.
11.A copy of this order shall be served on all recognized stock exchanges and depositories to
ensure compliance with above directions.

Sd/DATE : APRIL 13th, 2016

PLACE : MUMBAI

RAJEEV KUMAR AGARWAL

WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the matter of Mishka Finance and Trading Limited

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