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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page of !"
BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO. AK/AO-135 t 1!"/"#1$%
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UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT& 1''" READ
(ITH RU)E 5 OF SEBI *PROCEDURE FOR HO)DING IN+UIR, AND I-POSING PENA)TIES
B, ADJUDICATING OFFICER. RU)ES& 1''5
In respect of

-/. Nat0a/1a1 ) Ka2a23 (A$%P&"'(!E)) -/. -a45/ N Ka2a23 (A*FP&+(,-%))
-/.K367/e859a/ Pa52 (A./PP,"!'*)) -/. :a;5 N Ke670a1a (0&SP&-",'$)) -6. A67a
N Ka2a23 (A.1P&-+,($)) -/. -a26587 )a1 )a;3 Ka2a23 ($eceased)) -6. K3/t3 Be2 Pa52
(A$*PP23'-4)) -6. )ee2a Pa52 (AEEPP+,23L)) -/. D32e67 B7a3 Pa52 (AEEPP(!++5))
-/. Ha/367 B7a3 Pa52 (AEEPP((!E)) -/. P34567 Pa52 (A$*PP23'(P)) -/. C73/ag N
Ka2a23 (A*6P&+,,M)) -6. De<852<a/=e2 Pa52 ($eceased)) -/. B7a<e67 Pa52
(A$$PP(!,2.)) -/. Ra;51 Pa52 (A$$PP(!(%)) -6. )a13ta Be2 Pa52 (A$*PP23'"7))
-/.-31a> Pa52 (A$*PP23''.)) -/. Ra8e67 K Pa52 (A$$PP(!,'$)) -/. Nat0a/1a1 Pa52
(AEEPP((5)) -/. N3852; Pa52 (A8PPP,2-E)) -/. -5852? T Kte@7a) -/. :32? G
Kte@7a) -/. A231 T Kte@7a) -/. -a25=7a3 T Kte@7a) -/. T51673?a6 :a11a=7?a6
Kte@7a ($eceased)) -6.Ra?7a=e2 Kte@7a ($eceased)) -/. A231 C T7a8/a/) -/.
Ja4e2?/a G Kte@7a ($eceased)) -6. Ka2ta=e2 Ka85=7a3 T7a8/a/ (AA9P/3-33$)) -/.
:3>51 S5/e67=7a3 Kte@7a) -/. Utta9=7a3 Kte@7a(A$EP&""-E)) -6. S5?7a H
T7a8/a/ (A0AP/+23+5) -/. Na132 Ra6381a1 Ka2a23 (A.1P&-+,'%)) -/. J3te2?/a ) Ka2a23
(A$9P&,23+8)) -6. I2?59at3 Be2 Pa52 (A$$PP(!-,4)) -6. Ja467/3 Be2 Pa52
(A*1PP+,(&)) -6. Pe22a=e2 Pa52 (A$*PP23'!)) -/. B7a/at B7a3 Pa52 (AEEPP((+8))
-/. Ha/;3<a2 Na/a2?a6 T7a8/a/ (AEFP$"!"-&)) -/. De<=7a3 C7aga2 Ke670a1a)
-/.:a;673=7a3 C7aga2 Ke670a1a) -/6. Ka2t F32a2@e P/3<ate )393te? (AA0.&,'(5))
-6. :3=7a D Datta23) -/. B3;a1 Nat7a O?e?/a) -/. Ra2a K739;3 K752t3) -/. Ra;e2 Ra2a
K752t3) -/. B739a S -a7e/ a2? -6. B7a/at3 Ke670a1a.
In the matter of
M/s. Essen Supplements India Ltd. (no: ;no:n as Square Four Projects India Ltd)
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FACTS OF THE CASE

. An <ffer document (letter of <ffer) :as filed :ith Securities and E=chan>e 0oard
of India (hereinafter referred to as ASEBIB) ?@ Mr. 8anesh &umar Sin>hania and
Ms. Anita Sin>hania (the Acquirers) to acquire !+.++A of the e=panded
su?scri?ed equit@ share capital and !+.!A of the e=panded Botin> share capital
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ! of !"
of M/s. Essen Supplements India Ltd. (no: ;no:n as Square Four Projects India
Ltd.) *hereinafter referred to as At7e C9>a24B. at a price of 4s. +/C per full@
paidCup equit@ shares and 4s. -/C per partl@ paidCup equit@ shares pa@a?le in
cash. /he pu?lic announcement for the same :as made on <cto?er !+) !++ and
the shares of the compan@ :ere listed on 0om?a@ Stoc; E=chan>e Ltd.
*hereinafter referred to as DBSEB.& Ahmeda?ad Stoc; E=chan>e Ltd. *hereinafter
referred to as AASEB) and /he 5@dera?ad Stoc; E=chan>e Ltd. *hereinafter
referred to as AHSEB).

!. <n perusal of the letter of offer *7e/e32aCte/ /eCe//e? t a6 D)OOD)) SE0I
o?serBed that the erst:hile promoters of the compan@ BiE. Mr. %at:arlal L
&anani) Mr. Ma@ur % &anani) Mr.&ishore;umar Paun) Mr. Faju % &esh:ala) Ms.
Asha % &anani) Mr. Mansu;h Lal Laji &anani) Ms. &irti 0en Paun) Ms. Leena Paun)
Mr. $inesh 0hai Paun) Mr. 5arish 0hai Paun) Mr. Pi@ush Paun) Mr. .hira> %
&anani) Ms. $eB;unBar?en Paun) Mr. 0haBesh Paun) Mr. 4ajul Paun) Ms. Lalita
0en Paun) Mr.Milap Paun) Mr. 4a;esh & Paun) Mr. %at:arlal Paun) Mr. %i;unj
Paun) Mr. Mu;und / &otecha) Mr. Finod 8 &otecha) Mr. Anil / &otecha) Mr.
Manu?hai / &otecha) Mr. /ulshidas Falla?hdas &otecha) Ms.4adha?en &otecha)
Mr. Anil . /ha;rar) Mr. *a@endra 8 &otecha) Ms. &anta?en &a;u?hai /ha;rar) Mr.
Fipul Suresh?hai &otecha) Mr. Gttam?hai &otecha) Ms. Sudha 5 /ha;rar) Mr.
%alin 4asi;lal &anani) Mr. *itendra L &anani) Ms. Indumati 0en Paun) Ms. *a@shri
0en Paun) Ms. Penna?en Paun) Mr. 0harat 0hai Paun) Mr. 5arjiBan %arandas
/ha;rar) Mr. $eB?hai .ha>an &esh:ala) Mr.Fajshi?hai .ha>an &esh:ala) M/s.
&ant Finance PriBate Limited) Ms. Fi?ha $ $attani) Mr. 0ijal %atha <dedra) Mr.
4ana &himji &hunti) Mr. 4ajen 4ana &hunti) Mr. 0hima S Maher) Ms. 0harati
&esh:ala *hereinafter referred to as At7e Nt3@ee6/t7e e/6t0731e >/9te/6B.
had failed to compl@ :ith proBision of re>ulation ((A) read :ith ((!) of SE0I
(Su?stantial Acquisition of Shares and /a;eoBers) 4e>ulations) 22( (hereinafter
referred to as ETa8e<e/ Reg51at326E) durin> the @ears !++" and/ or !++() as
applica?le.

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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page 3 of !"
APPOINT-ENT OF ADJUDICATING OFFICER

3. /he undersi>ned :as appointed as the Adjudicatin> <fficer Bide <rder dated
Au>ust +') !+3 under Section -CI of SE0I Act read :ith 4ule 3 of SE0I
(Procedure for 5oldin> Inquir@ and Imposin> Penalties ?@ Adjudicatin> <fficer)
4ules) 22- (hereinafter referred to as DR51e6B) to inquire into and adjud>e under
Section -A(?) of the Securities And E=chan>e 0oard of India Act) 22!
(hereinafter referred to as DSEBI A@tB)) the alle>ed Biolations of /a;eoBer
4e>ulations.

SHO( CAUSE NOTICE& HEARING AND REP),

". A common Sho: .ause %otice %o. EA$C,/A&/F4P/3+(!3/!+3/ to EA$C
,/A&/F4P/3+(!3/!+3/"' dated %oBem?er !2) !+3 (hereinafter referred to as
ESCN6E) :ere issued to the %oticees under 4ule "() of 4ules communicatin> the
alle>ed Biolation of /a;eoBer 4e>ulations as detailed ?elo:H

%ame of
the
Acquirer
$ate of
/ransaction
$ue date
of
compliance

Purchase
Shareholdin> of
the Acquirers
(in A)
/otal
Promoters
Shareholdin>
(in A)
Status

PreC
acquisit
ion
PostC
acqui
sition
PreC
acquis
ition
PostC
acquis
ition
%oticees 3.+3.!++" +!.+".!++"
!)2')(+"
(reclassifi
cation)
'.-+ !'. '.-+ !'.
%ot
complied


It :as further alle>ed in the said S.%s that the follo:in> t:o %oticees BiE. Mr.
Ma@ur % &anani and Mr. %at:arlal L. &anani) in addition to the aforesaid) had also
failed to compl@ :ith proBision of re>ulation ((A) read :ith ((!) of /a;eoBer
4e>ulations durin> the @ear !++() details of :hich are as >iBen ?elo:H



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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page " of !"

%ame of
the
Acquirer
$ate of
/ransaction
$ue date
of
compliance
Purchase Shareholdin> of
the acquirer
(in A)
/otal
Promoters
Shareholdin> in
A
Status

PreC
acquisit
ion
PostC
acqui
sition
PreC
acquis
ition
PostC
acquis
ition
Mr.
Ma@ur
&anani I
Mr.
%at:ar
Lal L.
&anani
-.+!.!++( (.+!.!++(
)!2)!++
(<ffCM;t)
J
!,.,, 3+.'! !,.,, 3+.'!
%ot
complied
Mr.
Ma@ur
&anani
3+.+,.!++( +!.+(.!++(
2,)'++
(<ffCM;t)
JJ
3+.'! 33.23 3+.'! 33.23
%ot
complied

* During the year 2006-07, Mr. Mayur N Kanani & Mr Natwarlal L Kanani had
acquired 62,500 quity !hare" at a #rice $% &". 2.'( #er "hare & 66,700 quity
!hare" at a #rice $% &". )5*- #er "hare re"#ecti+ely %r$, n$n-#r$,$ter
"hareh$lder" in $%% ,ar-et tran"acti$n" %$r which n$ c$,#liance wa" ,ade .y
the,.

**During the year 2007-0/, Mr. Mayur N Kanani had acquired 06,/00 equity
"hare" $% the 1$,#any at a #rice $% &". )5*- #er "hare %r$, n$n-#r$,$ter
"hareh$lder in 2%%-,ar-et tran"acti$n %$r which n$ c$,#liance wa" ,ade .y
hi,.

-. /he %oticees :ere called upon to sho: cause as to :h@ an inquir@ should not ?e
initiated a>ainst them and penalt@ ?e not imposed under Section - A(?) of the
SE0I Act for the alle>ed Biolations. Su?sequent to the same) one of the %oticees
BiE. Mr. %at:arlal L &anani Bide email dated $ecem?er ") !+3 ac;no:led>ed
receipt of the S.% ?@ him and the other %oticees/ erst:hile promoters. Further)
since the matter pertained to the period !++" and !++() he requested time to
reBert :ith the details on ?ehalf of all the %oticees.

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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page - of !"
,. Su?sequent to the same) the %oticees BiE. Mr. %at:arlal L. &anani and Mr.
Ma@ur %. &anani Bide letter dated *anuar@ +2) !+" su?mitted that the@ :ere in
the process of consolidatin> the shareholdin> details of the promoter >roup and
the same :ill ?e proBided at the earliest. It :as also stated therein that the@
:ere erst:hile directors of the compan@ and the@ had resi>ned from the 0oard
of the compan@ :ith effect from Fe?ruar@ ') !++ and after resi>nin> from the
0oard of the .ompan@ the@ ceased to ?e associated :ith the compan@. It :as
inter alia further su?mitted that intimations for the transactions mentioned in
the S.%s :ere >iBen to the compan@ as required under 4e>ulation ((A) and
4e>ulation ((!) of the /a;eoBer 4e>ulations) as such) the@ :ere under the
impression that the same intimations and disclosures :ere made to the stoc;
E=chan>es ?@ the person so authoriEed at the compan@) hence) the@ failed to
loo; further in the matter. It :as also su?mitted that since the@ :ere totall@
disconnected :ith the compan@ for a lon> time) the@ :ere ma;in> their ?est
efforts to collect the supportin> documents. A passin> reference to considerin>
the settlement process throu>h consent order :as also made.

(. <n *anuar@ !!) !+") the %oticees BiE. Mr. %at:arlal L. &anani and Mr. .hira> %
&anani alon> :ith Mr. S. 4adha &rishna) .ompan@ Secretar@ and Mr. Fen;ata
4amana 4ajaBou) .ompan@ Secretar@) AuthoriEed 4epresentatiBes (hereinafter
collectiBel@ referred to as DAR6B) came and requested the undersi>ned to conduct
the hearin> on ?ehalf of the %oticees BiE. Mr. %at:arlal L &anani) Mr. Ma@ur %.
&anani and Mr. .hira> %. &anani) since the@ happened to ?e in Mum?ai. Earlier
Bide email dated *anuar@ () !+" receiBed from the %oticee Mr. %at:arlal L.
&anani) it :as communicated that the aforesaid persons :ould ?e appearin> for
hearin> on *anuar@ !!) !+". .onsiderin> the old a>e of Mr. %at:arlal L &anani)
the request of the %oticees BiE. Mr. %at:arlal L &anani) Mr. Ma@ur %. &anani and
Mr. .hira> %. &anani to conduct their hearin> on the said date :as acceded to on
su?mission of the Authorit@ Letters. $urin> the hearin>) the A4s Bide letter dated
*anuar@ !!) !+" su?mitted repl@ to the S.% on ?ehalf of the %oticees BiE. Mr.
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page , of !"
%at:arlal L &anani) Mr. Ma@ur %. &anani and Mr. .hira> %. &anani. Fide the said
repl@) it :as inter alia su?mitted as underH
(.. /hat the@ :ere the erst:hile promoter shareholders of the compan@
holdin> in a>>re>ate '.-+A of the total shareholdin> of the compan@ till
March 3) !++"K
(.!. /hat durin> the @ear !++3C+") there :as a reclassification in the Promoter
>roup cate>or@. /he compan@ reclassified the promoter >roup
shareholdin> ?@ inclusion of a fe: pu?lic shareholders names in the
promoter cate>or@. $ue to such reclassification) the promoter >roup
shareholdin> increased ?@ !)2')(+" equit@ shares and the percenta>e
shareholdin> from '.-+A to !'.A i.e. an increase of 2.,AK
(.3. /hat there :as no purchase or acquisition of shares ?@ an@ of the
promoters leadin> to increase in their indiBidual shareholdin>. It :as the
promoter >roup holdin> :hich increased) hence the erst:hile promoters
had not filed the necessar@ information under 4e>ulation ((A) and ((!)
of the /a;eoBer 4e>ulationsK
(.". /hat there :as no malafide intention or undue ?enefit in not ma;in>
such disclosures. It :as onl@ due to lac; of understandin> or
interpretation of the proBision requirin> su?mission of intimationK
(.-. /hat in the @ear !++,C+() ,!)-++ equit@ shares :ere acquired at a price of
4s. !."3 per share and ,,)(++ Equit@ shares at a price of 4s. -/C per
share respectiBel@ from non promoter shareholders. Further) in the @ear
!++(C+') Mr. Ma@ur &anani had acquired 2,)'++ equit@ shares at a price
of 4s) -/C per share from the non promoter shareholders in off mar;et
transaction. /hat the acquisition) as such) :as made to proBide an e=it for
the non promoter shareholders to offload their shares. As the mar;et
price :as Insi>nificant and lo:er than the face Balue of the shares) the
Shareholders had approached them for e=it. Further that there :as no
direct or indirect undue monetar@ >ain or financial ?enefit out of such
acquisitionK
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ( of !"
(.,. /hat the non compliance :as onl@ due to inadBertence and lac; of
understandin> of proBision and there :as no malafide intention or undue
adBanta>e or monetar@ ?enefit out of the transaction.

'. Further the A4s su?mitted that the@ :ould ma;e further su?mission ?@ Fe?ruar@
!-) !+". /he %oticee Mr. %at:arlal L. &anani Bide undated letter receiBed on
March !) !+" on ?ehalf of himself and all the other %oticees inter alia
su?mitted as underH
'.. /hat the compan@ :as promoted ?@ them and an Initial Pu?lic <fferin>
(IP<) :as made in the @ear 22" to >et the shares listed on the stoc;
e=chan>es. /hat there had ?een no chan>e in the share capital of the
compan@ from that date till *ul@ !") !++2. /he compan@ :as thereafter
sold to Mr. 8anesh &umar Sin>hania and Ms. Anita Sin>hania) pursuant to
allotment of equit@ shares on Preferential 0asis for !+)++)+++ full@ paidC
up equit@ shares and Share Purchase A>reement (SPA) for +)-")-'' full@
paidCup equit@ shares ?oth dated *ul@ !") !++2) and that the@ haBe had
no relationship :hatsoeBer :ith the compan@ from that date on:ardsK
'.!. 9ith re>ard to the alle>ation that the@ had not made a disclosure under
4e>ulation ((A) for the acquisition of !)2')(+" shares) it :as su?mitted
that the increase :as onl@ due to reclassification of the promoters
shareholdin>. It :as su?mitted that there :ere some shareholders :ho
:ere associates of the promoters and :ere holdin> shares) ho:eBer)
their names :ere inadBertentl@ left out from the shareholdin> pattern
filed :ith the Stoc; e=chan>e under .lause 3- of the listin> a>reement
and also under the disclosures made under 4e>ulation '(3) of the
/a;eoBer 4e>ulations) hence) the Mana>ement) thou>ht it fit to reclassif@
the promoter >roup shareholdin> ?@ inclusion of the name of these
shareholders) :ho :ere not sho:n in the promoter cate>or@) ?@
includin> their name in the shareholdin> pattern. /hat there :as no real
increase in the promoter shareholdin>. Since 4e>ulation ((A) requires a
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ' of !"
disclosure to ?e made onl@ :hen there are additional acquisitions and
chan>e in the shareholdin> ?@ more than !A) the@ did not ma;e the
necessar@ disclosure under 4e>ulation ((A). 5o:eBer the chan>e in the
promoter shareholdin> due to the inclusion of these entities :as
reflected in the Shareholdin> Pattern filed :ith the stoc; e=chan>es for
the releBant quarterK
'.3. /hat as re>ards the alle>ation that no disclosure :as made for the
acquisition of )!2)!++ shares ?@ Mr Ma@ur &anani and Mr %at:arlal
&anani on Fe?ruar@ -) !++() this pertains to t:o sets of transactions. <f
the total num?er of shares acquired) ,,)(++ shares :ere acquired from
Andhra Pradesh Industrial $eBelopment .orporation Ltd. (hereinafter
referred to as DAPIDCL) at a price of 4s.-/C per share as per a preBious
a>reement :ith API$.. Since the compan@ :as ma;in> continuous losses
and >oin> throu>h difficult time) there :as no professional help)
therefore disclosures :ere not made under 4e>ulation ((A) of the
/a;eoBer 4e>ulations) merel@ due to i>norance) ho:eBer there :as no
chan>e in the promoters durin> this periodK
'.". /hat as re>ards the alle>ation that no disclosure :as made for the
acquisition of 2,)'++ shares ?@ Mr Ma@ur &anani) it has ?een su?mitted
that this :as a>ain an acquisition from API$. at 4s. -/C per share) their
term lenders) as a condition precedent to the sanction of loan. A>ain
since the@ did not haBe an@ professional help) the disclosures :ere not
made under 4e>ulation ((A) of the /a;eoBer 4e>ulations) merel@ due to
i>norance. 5o:eBer) the chan>e :as reflected in the shareholdin>
pattern filed ?@ the compan@ for the quarter ended March 3) !++( and
Septem?er 3) !++( :ith 0SE) :hich sho:s API$. as one of shareholders
holdin> more than A in the quarter endin> March) !++() :hile their
name does not fi>ure in the quarter ended Septem?er 3) !++(K
'.-. /hat the nonCdisclosures :ere onl@ due to sheer i>norance of the
requirements and not :ith an@ malafide intentionK
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page 2 of !"
'.,. /hat since the transactions mentioned in the sho: cause notice pertains
to Shri Ma@ur &anani) Shri %at:arlal &anani) no action ma@ ?e ta;en
a>ainst the other promoters for the non filin> of disclosures under
4e>ulation ((A) of the /a;eoBer 4e>ulations.

2. An opportunit@ of hearin> for the %oticees other than %oticees BiE. Mr.
%at:arlal L &anani) Mr. Ma@ur %. &anani and Mr. .hira> %. &anani :as >ranted
on Ma@ +-) !+". Accordin>l@) Ms Shailashri 0has;ar) Practicin> .ompan@
Secretar@ alon> :ith Mr. %at:arlal L. &anani appeared on ?ehalf of the %oticees)
e=cept for the %oticees BiE. Mr. $eB?hai .han>an &esh:ala) Ms. Fi?ha $ $attani
and Mr. Fajshi?hai .ha>an &esh:ala.

+. $urin> the course of hearin> it :as noted that in all there :ere "' Erst:hile
Promoters/ %oticees :ho had failed to compl@ :ith proBision of 4e>ulation
((A) read :ith ((!) of /a;eoBer 4e>ulations durin> the @ear !++") out of :hich
hearin>s in respect of the %oticees BiE. Mr. %at:arlal L &anani) Mr. Ma@ur &anani
and Mr. .hira> &anani :ere conducted on *anuar@ !!) !+". It :as further noted
that out of the remainin> "- %oticees) the follo:in> - %oticees BiE. Mr. Mansu;h
Lal Laji &anani) Ms. $eB;unBar?en Paun) Mr. /ulshidas Falla?hdas &otecha) Ms.
4adha?en &otecha and Mr. *a@endra 8 &otecha had passed a:a@. /he copies of
the death certificate :ere su?mitted ?@ Mr. %at:arlal L. &anani Bide undated
letter that :as receiBed on March !) !+" on ?ehalf of himself and the other
%oticees. Also that 3 %oticees BiE. %oticees Mr. $eB?hai .ha>an &esh:ala& Ms.
Fi?ha $ $attani and Mr. Fajshi?hai .ha>an &esh:ala had not authoriEed Ms
Shailashri 0has;ar) Practicin> .ompan@ Secretar@ and/ or Mr. %at:arlal L.
&anani. /hus) leaBin> a ?alance of 3' %oticees) :ho had authoriEed Mr.
%at:arlal L. &anani and Mr. S. 4adha &rishna) Practicin> .ompan@ Secretar@
from 5@dera?ad. At the hearin>) ho:eBer) Mr. %at:arlal L. &anani appeared
alon> :ith Ms. Shailashri 0has;ar) Practicin> .ompan@ Secretar@ (hereinafter
referred to as Dt7e 2e0 AR6B) and proBided a cop@ of noCo?jection certificate
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page + of !"
from Mr. S. 4adha &rishna) Practisin> .ompan@ Secretar@. In Bie: of the same) it
:as clarified to the A4s that the hearin> shall ?e proceeded su?ject to the
condition that the authorit@ letters from all the 3' %oticees authoriEin> Mr.
%at:arlal L. &anani and Ms. Shailashri 0has;ar are su?mitted to the Adjudicatin>
<fficer. Mr. %at:arlal L. &anani requested for a monthLs time to produce the
fresh authorit@ letters) since some of the entities :ere sta@in> a?road. 9hile
accedin> to the said request) it :as clarified to the ne: A4s that in case the
authorit@ letters :ere not su?mitted :ithin a monthLs time) the hearin>
conducted shall ?ecome null and Boid. /he ne: A4s reiterated the su?mission
made Bide the undated letter filed ?@ Mr. %at:arlal L. &anani on ?ehalf of
himself and the other %oticees. At the hearin>) the details of the reCclassification
of promoters share holdin> durin> the @ear !++3C+" :ere inter alia sou>ht from
the ne: A4s.

. /he %oticee Mr. %at:arlal L. &anani Bide undated letter receiBed on *une +-)
!+" furnished the reBised authorit@ letters from the 3' %oticees authoriEin>
Mr. %at:arlal L. &anani and Ms. Shailashri 0has;ar. Further) in addition to the 3'
%oticees) the %oticee Ms. Fi?ha $ $attani also authoriEed Mr. %at:arlal L.
&anani and Ms. Shailashri 0has;ar to represent on her ?ehalf in the matter.
/hus) onl@ t:o %oticees BiE. Mr. $eB?hai .han>an &esh:ala and Mr. Fajshi?hai
.ha>an &esh:ala neither personall@ appeared for the hearin>) nor) authoriEed
an@ representatiBe on their ?ehalf.

!. Fide the said undated letter receiBed on *une +-) !+") the %oticee Mr.
%at:arlal L. &anani made further su?missions) inter alia) as follo:sH
!.. /hat thou>h the@ had sent a letter to Mr. 8autam Sin>hania) the present
Mana>in> $irector of the compan@ requestin> to proBide the documents
pertainin> to the reclassification of the holdin>s of certain promotersL
from the pu?lic to promoters cate>or@) the@ had not receiBed an@ repl@
from them till dateK
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page of !"
!.!. /hat in the meantime) the@ :ere a?le to collect the copies of .ertificate
of Forei>n In:ard 4emittance :hich reBeal that the erst:hile promoters/
%oticees BiE. Mr. Fi?ha $. $attani) Mr. 0ilal %atha <dedra) Mr. 4ana
&himji &hunti) Mr. 4ajen 4ana &hunti) Mr. 0hima S. Maher) :ho :ere
%4Is :ere allotted and holdin> shares of the compan@ from the @ear
22") i.e. ?efore 22() the @ear in :hich the /a;eoBer 4e>ulations :ere
notified. .opies of the said .ertificates of Forei>n In:ard 4emittances
:ere enclosed :ith the said letter. It :as further stated that the Annual
4eport for the @ear 22- of M/s. &ant Finance PBt. Ltd.) one of the
%oticees) reBealed that the %oticee BiE. M/s. &ant Finance PBt. Ltd. held
!)!)-+++ shares from the @ear 22-. /he copies of releBant pa>es of the
Annual 4eport :ere enclosed :ith the said letter. Also) a declaration
letter from the %oticee BiE. Mr. Faju %. &esh:ala) declarin> that %oticee
BiE. Ms. 0harti &esh:ala) his dau>hter in la: residin> in Gnited &in>dom)
had purchased -++ shares of the compan@ from the primar@ mar;et at
the time of the pu?lic issue in the @ear 22" :as enclosedK
!.3. It :as su?mitted that since the shares :ere held ?@ them ?efore the @ear
22() and :ere :ron>l@ classified under the head DPu?licL) the@ :ere onl@
reclassified and there :as no further acquisition or increase to their
holdin>s. It :as further su?mitted that almost all of the erst:hile
promoters/ %oticees) e=cept M/s. &ant Finance PriBate Limited :ere
%onC4esident Indians (%4Is) and since .lause 3- format at that point of
time did not >iBe the detailed indiBidual ?rea;Cup of the shareholdin> of
eBer@ constituent of the Promoter 8roup) there :as no manner in :hich
these erst:hile promoters/ %oticees :ould haBe ?een a:are that there
:as an error in the classificationK
!.". /hat there :ere no nonCcompliances of PI/ and /a;eoBer 4e>ulations in
the past ?@ the %oticees and that no action has ?een ta;en ?@ SE0I in the
past a>ainst the %oticeesK
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ! of !"
!.-. Further that the shares :ere under suspension) the compan@ :as ma;in>
hu>e losses durin> that time and the non disclosure :as onl@ due to
sheer oBersi>ht) lac; of professional help and i>norance and :ith no
malafide intention.

CONSIDERATION OF ISSUES AND FINDINGS

3. I haBe carefull@ perused the :ritten su?missions :hereBer su?mitted ?@ the
%oticees) the facts put forth durin> the hearin> and the documents aBaila?le on
record. /he issues that arise for consideration in the present case areH
3.. 9hether the %oticees) ?ein> part of the erst:hile promoter >roup) :ere
required to disclose the chan>e in their shareholdin> pursuant to the
reclassification done on March 3) !++" to the compan@ and to the stoc;
e=chan>e under 4e>ulation ((A) read ((!) of the /a;eoBer 4e>ulationsM
3.!. 9hether the %oticees BiE. Mr. %at:arlal L. &anani and Mr. Ma@ur %
&anani) in addition to the aforesaid disclosures required to ?e made in
the @ear !++") :ere also required to disclose to the compan@ and to the
stoc; e=chan>e as required under 4e>ulation ((A) read :ith ((!) of the
/a;eoBer 4e>ulations) the chan>e in their shareholdin> due to acquisition
of )!2)!++ shares made throu>h off mar;et transaction on Fe?ruar@ -)
!++(M
3.3. 9hether the %oticee BiE. Ma@ur % &anani) in addition to the aforesaid
disclosures required to ?e made in the @ear !++") :as required to
disclose to the compan@ and to the stoc; e=chan>e as required under
4e>ulation ((A) read :ith ((!) of the /a;eoBer 4e>ulations) the chan>e
in his shareholdin> due to acquisition of 2,)'++ shares throu>h off
mar;et transaction on *une 3+) !++(M
3.". If so) :hether %oticees had Biolated the proBisions of 4e>ulation ((A)
read :ith ((!) of the /a;eoBer 4e>ulations) as applica?leM
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page 3 of !"
3.-. $oes the Biolation) if an@) on the part of the %oticees attract monetar@
penalt@ under Section -A (?) of SE0I ActM
3.,. If so) :hat :ould ?e the monetar@ penalt@ that can ?e imposed ta;in>
into consideration the factors mentioned in Section -* of the SE0I ActM

FINDINGS

". 0efore moBin> for:ard) it :ill ?e appropriate to refer to the releBant proBisions
of 4e>ulation ((A) read :ith ((!) of the /a;eoBer 4e>ulations) :hich reads as
underH
Regulation 7 (1A) & (2) of Takeover Regulation, 1997:
Acquisition of 5 per cent an !ore s"ares or voting rig"ts of a co!pan#$
7$(1A) 3ny acquirer wh$ ha" acquired "hare" $r +$ting right" $% a c$,#any under
"u.-regulati$n 4)5 $% regulati$n )) "hall di"cl$"e #urcha"e $r "ale aggregating
tw$ #er cent $r ,$re $% the "hare ca#ital $% the target c$,#any t$ the target
c$,#any, and the "t$c- e6change" where "hare" $% the target c$,#any are li"ted
within tw$ day" $% "uch #urcha"e $r "ale al$ng with the aggregate "hareh$lding
a%ter "uch acqui"iti$n $r "ale.

6#lanati$n.78$r the #ur#$"e" $% "u.-regulati$n" 4)5 and 4)35, the ter,
9acquirer: "hall include a #ledgee, $ther than a .an- $r a %inancial in"tituti$n and
"uch #ledgee "hall ,a-e di"cl$"ure t$ the target c$,#any and the "t$c-
e6change within tw$ day" $% creati$n $% #ledge.

7$ (2) ;he di"cl$"ure" ,enti$ned in "u.-regulati$n" 4)5 and 4)35 "hall .e ,ade
within tw$ day" $%,7
4a5 the recei#t $% inti,ati$n $% all$t,ent $% "hare"< $r
4.5 the acqui"iti$n $% "hare" $r +$ting right", a" the ca"e ,ay .e.

-. I no: proceed :ith the alle>ed Biolations of /a;eoBer 4e>ulations. In the instant
case) I find that the alle>ation a>ainst the "' %oticees/ the erst:hile promoters
>roup is that the@ had not disclosed to the .ompan@ and to the Stoc; E=chan>es
their acquisitions/ reclassification of the shares of the compan@ done in March
!++") as required under 4e>ulation ((A) read :ith ((!) of the /a;eoBer
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page " of !"
4e>ulations. I note that for esta?lishin> Biolation of 4e>ulation ((A)) an acquirer
should haBe acquired shares or Botin> ri>hts in a compan@ under 4e>ulation
() of the /a;eoBer 4e>ulations. As per 4e>ulation ()) as it e=isted at the
releBant point of time) an acquirer to>ether :ith persons actin> in concert :ith
him should hold more than -A) ?ut) less than --A of shares or Botin> ri>hts in a
compan@. /hereafter the acquirers) ?ein> :ithin the prescri?ed limit of
shareholdin> of -A to --A) are required to disclose purchase or sale
a>>re>atin> t:o per cent or more of the share capital of the tar>et compan@ to
the tar>et compan@ and to the stoc; e=chan>es :here shares of the tar>et
compan@ are listed) :ithin t:o da@s of such purchase or sale alon> :ith the
a>>re>ate shareholdin>) after such acquisition or sale. In the present matter)
durin> March !++") the total promoter >roup held '.-+A ?efore the alle>ed
reclassification. Further) due to such reclassification) the promoter >roup
shareholdin> increased ?@ !)2')(+" equit@ shares and the percenta>e
shareholdin> from '.-+A to !'.A i.e. an increase of 2.,A. /he same has
?een confirmed ?@ the %oticees in their repl@. 0esides) I note that the %oticees
:ere admittedl@ a part of the erst:hile promoter >roup. I further note that the
5onL?le Securities Appellate /ri?unal (SA/) Bide <rder dated +.+,.!+! in the
matter Mr. 4ajesh /oshni:al Fs. SE0I and <thers has o?serBed thatH

=>..?t i" the .a"ic #rinci#le $% c$r#$rate law that #r$,$ter gr$u# i" a
h$,$gen$u" cla"". ?t i" the n$r,al #ractice t$ clu. the entire #r$,$ter gr$u#
int$ $ne cla"" unle"" $therwi"e #r$+ed .y the acquirer.....@

/herefore) since the chan>e in the a>>re>ate shareholdin> of the promoter
>roup) due to such reCclassification) ?ein> more than !A) the "' %oticees :ho
:ere admittedl@ a part of the promoter >roup) :ere required to disclose the
chan>e in the shareholdin> to the compan@ and to the stoc; e=chan>e :ithin
t:o da@s from the date of acquisitions/ reclassification as required under
4e>ulation ((A) read :ith ((!) of the /a;eoBer 4e>ulations.

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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page - of !"
,. Similarl@) the %oticees BiE. Mr. %at:arlal L &anani and Mr. Ma@ur % &anani) in
addition to the a?oBe :ere also required to disclose the chan>e in their
shareholdin> to the compan@ and to the stoc; e=chan>e :ithin t:o da@s from
the date of acquisition as required under 4e>ulation ((A) read :ith ((!) of the
/a;eoBer 4e>ulations due to the acquisitions made ?@ them in !++(.

(. As per the documents aBaila?le on record) I find that a letter dated Fe?ruar@ ")
!++( :as sent ?@ the erst:hile promoter %oticee Mr. %at:arlal L. &anani to the
FiceC.hairman and Mana>in> $irector of API$.) puttin> on record the meetin>
held on Fe?ruar@ ") !++( ?et:een API$. and Mr. %at:arlal L. &anani) :herein
it :as decided to disinBest ),3)-++ equit@ shares held ?@ API$. in the compan@
at 4s. -/C per share amountin> to 4s. !")-!)-++/C. I further note from the said
letter that it :as a>reed to pa@ the purchase consideration of 4s. !")-!)-++/C as
per the follo:in> scheduleH
4s. + lacs :ithin + da@s from the date of communication of the approBalK
4s. - lacs ?@ April 3+) !++(K
4s. - lacs ?@ Ma@ 3) !++(K and
4s. ")-!)-++/C ?@ *une 3+) !++(.
It is further noted that pa@ment of 4s. +)++)-++/C to:ards ?u@ ?ac; of ,,)(++
shares of the compan@ held ?@ API$. :as made onl@ on March !,) !++()
pa@ment of 4s. ")22)-++/C to:ards ?u@ ?ac; of 33)3++ shares on April !') !++()
pa@ment of 4s. ")22)-++/C to:ards ?u@ ?ac; of 33)3++ shares on Ma@ !2) !++(
and pa@ment of 4s. ")-3)+++/C to:ards 3+)!++ shares on *une !') !++(. It is
further o?serBed from the cop@ of the transfer deed proBided that ,,)(++ shares
:ere to ?e transferred in the name of the erst:hile promoter %oticee Mr.
%at:arlal L. &anani and 2,)'++ shares in the name of the erst:hile promoter
%oticee Mr. Ma@ur %. &anani. 5o:eBer) it is noted that there is no date on the
transfer deed. It is further noted from the contents of API$.Ls letter dated
Septem?er +-) !++( that Bide the said letter) API$. transferred the share
certificates for a total of ),3)-++ equit@ shares alon> :ith t:o dul@ filled in and
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page , of !"
si>ned share transfer forms) for transferrin> ,,)(++ shares in faBour of the
erst:hile promoter %oticee Mr. %at:arlal L. &anani and 2,)'++ shares in faBour
of the erst:hile promoter %oticee Mr. Ma@ur %. &anani.

'. /hus) it is noted from the a?oBe that ,,)(++ shares :ere transferred ?@ API$. to
the erst:hile promoter %oticee Mr. %at:arlal L. &anani) :hich comprised !."A
of the paidCup capital of the compan@. In addition to the same) ,!)-++ equit@
shares) comprisin> !.+A of the paidCup capital of the compan@ :ere acquired at
a price of 4s. !."3 per share in offCmar;et ?@ the erst:hile promoter %oticees
BiE. Mr. %at:arlal L. &anani and Mr. Ma@ur %. &anani. /hus) I note that
4e>ulation ((A) read :ith 4e>ulation ((!) :as tri>>ered t:ice) one on
acquisition of ,,)(++ shares ?@ Mr. %at:arlal L. &anani and a>ain on acquisition
of ,!)-++ shares ?@ the erst:hile promoter %oticees BiE. Mr. %at:arlal L. &anani
and Mr. Ma@ur %. &anani. 5o:eBer) I note that the erst:hile promoter %oticees
BiE. Mr. %at:arlal L. &anani and Mr. Ma@ur %. &anani failed to ma;e disclosure as
required under 4e>ulation ((A) read :ith 4e>ulation ((!) of the /a;eoBer
4e>ulations.

2. Also in addition to all of the a?oBe) the erst:hile promoter %oticee Mr. Ma@ur %
&anani) :as also required to disclose the chan>e in his shareholdin> to the
compan@ and to the stoc; e=chan>e :ithin t:o da@s from the date of
acquisition) as required under 4e>ulation ((A) read :ith ((!) of the /a;eoBer
4e>ulations) due to his acquirin> 2,)'++ shares comprisin> 3.A of the paidCup
capital of the compan@ from API$. at 4s. -/C per share throu>h offCmar;et
transactions. 5o:eBer) I note that the erst:hile promoter %oticee Mr. Ma@ur %.
&anani failed to ma;e disclosure as required under 4e>ulation ((A) read :ith
4e>ulation ((!) of the /a;eoBer 4e>ulations eBen in respect of the said
acquisition.

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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ( of !"
!+. I find that the erst:hile promoter %oticee Mr. Mansu;h Lal Laji &anani had
passed a:a@ on *ul@ !() 22") the erst:hile promoter %oticee Ms.
$eB;unBar?en Paun had passed a:a@ on %oBem?er !,) !+!) the erst:hile
promoter %oticee Mr. /ulshidas Falla?hdas &otecha had passed a:a@ in *ul@ !')
!+++) the erst:hile promoter %oticee Ms. 4adha?en &otecha had passed a:a@
in Fe?ruar@ ,) !+" and the erst:hile promoter %oticee Mr. *a@endra 8
&otecha had passed a:a@ on *une -) !+3. /he copies of the death certificate in
respect of the said %oticees :ere proBided :ith the replies for perusal and
records. 5ence) the matter in respect of the - %oticees BiE. late Mr. Mansu;h Lal
Laji &anani) late Ms. $eB;unBar?en Paun) late Mr. /ulshidas Falla?hdas &otecha)
late Ms. 4adha?en &otecha and late Mr. *a@endra 8 &otecha) initiated Bide S.%
dated %oBem?er !2) !+3) cannot ?e proceeded :ith as the %oticees haBe
passed a:a@ and) thus) the matter has ?ecome infructuous. 5ence) the
adjudication proceedin> cannot ?e proceeded :ith a>ainst the aforesaid fiBe (-)
%oticees.

!. In respect of the %oticees BiE.) $eB?hai .ha>an &esh:ala and Fajshi?hai .ha>an
&esh:ala) the S.%s :ere sent at the companies addressK ho:eBer) no repl@ :as
receiBed from them. /hereafter) in the interest of principles of %atural *ustice)
an opportunit@ of hearin> :as also proBided to the said %oticees on Ma@ +-)
!+" Bide hearin> notice dated April +) !+". 5o:eBer) the %oticees BiE. Mr.
$eB?hai .han>an &esh:ala and Mr. Fajshi?hai .ha>an &esh:ala neither
personall@ appeared for the hearin>) nor) authoriEed an@ representatiBe on their
?ehalf. For the reasons mentioned a?oBe) I o?serBe that the %oticees BiE. Mr.
$eB?hai .han>an &esh:ala and Mr. Fajshi?hai .ha>an &esh:ala :ere proBided
:ith an opportunit@ to su?mit their repl@/ to ?e heard) ho:eBer) the@ failed to
su?mit the repl@/ appear for hearin>. 5ence) I am constrained to proceed :ith
the matter in respect of the ! %oticees BiE. Mr. $eB?hai .ha>an &esh:ala and
Mr. Fajshi?hai .ha>an &esh:ala e=Cparte) ta;in> into account the admissions
made ?@ the %oticee Mr. %at:arlal L. &anani and material aBaila?le on record.

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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ' of !"
!!. I find that the erst:hile promoter %oticees Bide their replies receiBed on March
!) !+" and *une +-) !+" inter alia haBe specificall@ admitted the alle>ed
Biolation of 4e>ulation ((A) read :ith ((!) of the /a;eoBer 4e>ulations due to
acquisition/ reclassification of their shareholdin> durin> March !++") Fe?ruar@
!++( and *une !++() as applica?le. /he erst:hile promoter %oticees) I find) haBe
inter alia stated that the nonCdisclosure on their part :as onl@ due to
inadBertence and lac; of understandin> of the proBisions of the /a;eoBer
4e>ulations since the@ did not haBe an@ professional help) as the compan@ :as
ma;in> continuous losses and >oin> throu>h difficult time) and that the@ did not
haBe an@ malafide intention. /hus) it is esta?lished :ithout dou?t that the
erst:hile promoter %oticees had Biolated the proBisions of 4e>ulation ((A)
read :ith ((!) of the /a;eoBer 4e>ulations due to acquisition/ reclassification of
shares durin> !++" and/ or !++() as applica?le.

!3. /he 5onL?le Supreme .ourt of India in the matter of !A? B". !hri &a, Mutual
8und N!++,O ,' S.L !,(S.) held that =?n $ur c$n"idered $#ini$n, #enalty i"
attracted a" "$$n a" the c$ntra+enti$n $% the "tatut$ry $.ligati$n a"
c$nte,#lated .y the 3ct and the &egulati$n" i" e"ta.li"hed and hence the
intenti$n $% the #artie" c$,,itting "uch +i$lati$n .ec$,e" wh$lly irrele+ant>@.
Further in the matter of 4anjan Far>hese B. SE0I (Appeal %o. (( of !++2 and
<rder dated April +') !++)) the 5onL?le SA/ had o?serBed =2nce it i"
e"ta.li"hed that the ,andat$ry #r$+i"i$n" $% ;a-e$+er 1$de wa" +i$lated the
#enalty ,u"t %$ll$w.P

!". In Bie: of the fore>oin>) I am conBinced that it is a fit case to impose monetar@
penalt@ under Section -A(?) of the SE0I Act) :hich reads as underH
15A$ %enalt# for failure to furnis" infor!ation, return, etc$&
?% any #er"$n, wh$ i" required under thi" 3ct $r any rule" $r regulati$n"
,ade thereunder,-
4a5>
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page 2 of !"
4.5 t$ %ile any return $r %urni"h any in%$r,ati$n, .$$-" $r $ther d$cu,ent"
within the ti,e "#eci%ied there%$r in the regulati$n", %ail" t$ %ile return $r
%urni"h the "a,e within the ti,e "#eci%ied there%$r in the regulati$n", he
"hall .e lia.le t$ Ca #enalty $% $ne la-h ru#ee" %$r each day during which
"uch %ailure c$ntinue" $r $ne cr$re ru#ee", whiche+er i" le""D<

!-. 9hile determinin> the quantum of monetar@ penalt@ under Section -A(?)) I
haBe considered the factors stipulated in Section -C* of SE0I Act) :hich reads as
underH
F15J C Fa@t/6 t =e ta8e2 32t a@@52t =4 t7e a?;5?3@at32g CC3@e/
9hile adjud>in> quantum of penalt@ under Section -CI) the adjudicatin> officer
shall haBe due re>ard to the follo:in> factors) namel@H
(a) the amount of disproportionate >ain or unfair adBanta>e) :hereBer
quantifia?le) made as a result of the defaultK
(?) the amount of loss caused to an inBestor or >roup of inBestors as a result of
the defaultK
(c) the repetitiBe nature of the default.P

!,. In Bie: of the char>es as esta?lished) the facts and circumstances of the case
and the jud>ments referred to and mentioned hereina?oBe) the quantum of
penalt@ :ould depend on the factors referred in Section -C* of SE0I Act and
stated as a?oBe. /he main o?jectiBe of the /a;eoBer 4e>ulations is to afford fair
treatment for shareholders :ho are affected ?@ the chan>e in control. /he
4e>ulation see;s to achieBe fair treatment ?@ inter alia mandatin> disclosure of
timel@ and adequate information to ena?le shareholders to ma;e an informed
decision and ensurin> that there is a fair and informed mar;et in the shares of
companies affected ?@ such chan>e in control. .orrect and timel@ disclosures are
also an essential part of the proper functionin> of the securities mar;et and
failure to do so results in preBentin> inBestors from ta;in> :ellCinformed
decisions /hus) the cornerstone of the /a;eoBer re>ulations is inBestor
protection.
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page !+ of !"
!(. As per Section -A(?) of the SE0I Act) the %oticees are lia?le to a penalt@ of one
la;h rupees for each da@ durin> :hich such failure continues or one crore
rupees) :hicheBer is less. Further) under Section -CI of the SE0I Act) the
adjudicatin> officer has to >iBe due re>ard to certain factors :hich haBe ?een
stated as a?oBe :hile adjud>in> the quantum of penalt@. It is noted that no
quantifia?le fi>ures are aBaila?le to assess the disproportionate >ain or unfair
adBanta>e made as a result of such nonCcompliance ?@ the %oticees. Further
from the material aBaila?le on record) it is not possi?le to ascertain the e=act
monetar@ loss to the inBestors on account of nonCcompliance ?@ the %oticee.

!'. In addition to the aforesaid) I am also inclined to consider the follo:in>
miti>atin> factors :hile adjud>in> the quantum of penalt@H (a) the paidCup
capital/ mar;et capitaliEation of the compan@ at the releBant point of timeK (?)
the tradin> Bolumes of the compan@Ls shares on the E=chan>es durin> the
releBant periodK (c) the num?er of occasions in the instant proceedin> that the
%oticees haBe Biolated the releBant proBisions of the /a;eoBer 4e>ulationsK and
(d) the percenta>e holdin> that :as acquired ?@ the %oticee promoters) as
applica?le) for :hich the %oticee promoters failed to compl@ :ith proBision of
re>ulation ((A) read :ith ((!) of /a;eoBer 4e>ulations in !++" and/ or !++() as
applica?le.

!2. From the 0SE :e?site) I note that the paidCup capital of the compan@ :as
3)+')2++ equit@ share of 4s +/C each a>>re>atin> 4s. 3)+)'2)+++/C. Further) as
per the 0SE :e?site) there :as no tradin> in the shares of the compan@ durin>
the releBant period. <ut of the remainin> "3 erst:hile promoter %oticees
(e=cludin> the - erst:hile promoter %oticees :ho had passed a:a@)) "
%oticees (other than the %oticees BiE. Mr. %at:arlal L. &anani and Mr. Ma@ur %
&anani) had Biolated the proBisions of 4e>ulation ((A) read :ith ((!) of the
/a;eoBer 4e>ulations on one () occasion due to reclassification of the promoter
>roup cate>or@ in !++") ?@ :hich the promoter >roup holdin> increased ?@
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page ! of !"
2.,A. Further) as discussed in the earlier part of the <rder) it is noted that the
erst:hile promoter %oticees BiE. Mr. %at:arlal L. &anani and Mr. Ma@ur %
&anani haBe ?oth Biolated the proBisions of 4e>ulation ((A) read :ith ((!) of
the /a;eoBer 4e>ulations on three (3) occasions each (one each in !++" and
t:ice in !++(). It is noted that Mr. %at:arlal L. &anani and Mr. Ma@ur % &anani
:ere a part of the promoter >roup in March !++") :hen the promoter >roup
due to reCclassification acquired 2.,A) ho:eBer) failed to ma;e the necessar@
disclosure under the proBisions of 4e>ulation ((A) read :ith ((!) of the
/a;eoBer 4e>ulations. In addition to the nonCdisclosure pursuant to
reclassification of the promoter >roup in !++") the erst:hile promoter %oticee
Mr. %at:arlal L. &anani did not disclose under 4e>ulation ((A) read :ith ((!) of
the /a;eoBer 4e>ulations in !++( on t:o occasions BiE. ,,)(++ shares acquired
from API$. comprisin> !."A of the paidCup capital of the compan@ and ,!)-++
shares comprisin> !.+A of the paidCup capital of the compan@) jointl@ acquired
:ith the other erst:hile promoter %oticee Mr. Ma@ur %. &anani) from nonC
promoters throu>h offCmar;et. Similarl@) in addition to the nonCdisclosure
pursuant to reclassification of the promoter >roup in !++") the erst:hile
promoter %oticee Mr. Ma@ur %. &anani did not disclose under 4e>ulation ((A)
read :ith ((!) of the /a;eoBer 4e>ulations in !++( on t:o occasions BiE. 2,)'++
shares acquired from API$. comprisin> 3.A of the paidCup capital of the
compan@ and ,!)-++ shares comprisin> !.+A of the paidCup capital of the
compan@) jointl@ acquired :ith the other erst:hile promoter %oticee Mr.
%at:arlal L. &anani) from nonCpromoters throu>h offCmar;et.

3+. /hou>h the %oticees haBe claimed that the chan>e in the promoter shareholdin>
due to reclassification/ acquisitions :ere reflected in the Shareholdin> Pattern
filed :ith the stoc; e=chan>es for the releBant quarter) I note that the
disclosures under 4e>ulation ((A) read :ith ((!) of the /a;eoBer 4e>ulations
are required to ?e made :ithin t:o da@s of the receipt of intimation of
allotment of shares) or the acquisition of shares or Botin> ri>hts) as the case ma@
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page !! of !"
?e. /he %oticees ?ein> the promoters of a listed compan@ had a responsi?ilit@ to
compl@ :ith the disclosure requirements in accordance :ith their spirit)
intention and purpose so that the inBestors could ta;e a decision :hether to
?u@) sell) or hold the shares of the compan@. %onCcompliance :ith the disclosure
requirements ?@ the %oticee promoters undermines the re>ulator@ o?jectiBes
and jeopardiEes the achieBement of the underl@in> polic@ >oals.

ORDER

3. After ta;in> into consideration all the facts and circumstances of the case and
material on records) I find that the matter a>ainst the follo:in> fiBe (-) %oticees)
BiE. Late Mr. Mansu;h Lal Laji &anani) Late Ms. $eB;unBar?en Paun) Late Mr.
/ulshidas Falla?hdas &otecha) Late Ms. 4adha?en &otecha and Late Mr.
*a@endra 8 &otecha initiated Bide S.% 4efH %o. EA$C,/A&/F4P/3+(!3/!+3/,)
EA$C,/A&/F4P/3+(!3/!+3/3) EA$C,/A&/F4P/3+(!3/!+3/!-) EA$C
,/A&/F4P/3+(!3/!+3/!,) and EA$C,/A&/F4P/3+(!3/!+3/!' all dated
%oBem?er !2) !+3 cannot ?e proceeded :ith as the %oticees haBe passed a:a@
and) thus) the matter has ?ecome infructuous. 5ence) considerin> the facts and
circumstances of the case) I do not find the instant matter fit for imposition of
penalt@ on the %oticees BiE. Late Mr. Mansu;h Lal Laji &anani) Late Ms.
$eB;unBar?en Paun) Late Mr. /ulshidas Falla?hdas &otecha) Late Ms. 4adha?en
&otecha and Late Mr. *a@endra 8 &otecha in terms of Section -A (?) of SE0I Act
and dispose of the proceedin> accordin>l@K

3!. After e=cludin> these fiBe (-) %oticees :ho haBe passed a:a@& on the remainin>
"3 %oticees BiE. -/. Nat0a/1a1 ) Ka2a23& -/. -a45/ N Ka2a23& -/.K367/e859a/
Pa52& -/. :a;5 N Ke670a1a& -6. A67a N Ka2a23& -6. K3/t3 Be2 Pa52& -6. )ee2a
Pa52& -/. D32e67 B7a3 Pa52& -/. Ha/367 B7a3 Pa52& -/. P34567 Pa52& -/. C73/ag
N Ka2a23& -/. B7a<e67 Pa52& -/. Ra;51 Pa52& -6. )a13ta Be2 Pa52& -/.-31a>
Pa52& -/. Ra8e67 K Pa52& -/. Nat0a/1a1 Pa52& -/. N3852; Pa52& -/. -5852? T
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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page !3 of !"
Kte@7a& -/. :32? G Kte@7a& -/. A231 T Kte@7a& -/. -a25=7a3 T Kte@7a&
-/. A231 C T7a8/a/& -6. Ka2ta=e2 Ka85=7a3 T7a8/a/& -/. :3>51 S5/e67=7a3
Kte@7a& -/. Utta9=7a3 Kte@7a& -6. S5?7a H T7a8/a/& -/. Na132 Ra6381a1
Ka2a23& -/. J3te2?/a ) Ka2a23& -6. I2?59at3 Be2 Pa52& -6. Ja467/3 Be2 Pa52&
-6. Pe22a=e2 Pa52& -/. B7a/at B7a3 Pa52& -/. Ha/;3<a2 Na/a2?a6 T7a8/a/&
-/. De<=7a3 C7aga2 Ke670a1a& -/.:a;673=7a3 C7aga2 Ke670a1a& -/6. Ka2t
F32a2@e P/3<ate )393te?& -6. :3=7a D Datta23& -/. B3;a1 Nat7a O?e?/a& -/. Ra2a
K739;3 K752t3& -/. Ra;e2 Ra2a K752t3& -/. B739a S -a7e/ a2? -6. B7a/at3
Ke670a1a& I impose a penalt@ of R6. !&##&###/- *R5>ee6 E3g7t )a876 214. under
Section - A(?) of the SE0I Act) :hich :ill ?e commensurate :ith the Biolations
committed ?@ the %oticees for the acquisition/ reclassification done in !++". /he
%oticees shall ?e ;32t14 a2? 6e<e/a114 13a=1e to pa@ the said monetar@ penalt@K

33. I further impose a penalt@ of R6.5&##&###/- *R5>ee6 F3<e )a876 214. on the
%oticees BiE. -/. Nat0a/1a1 ) Ka2a23 a2? -/. -a45/ N Ka2a23 under Section -
A(?) of the SE0I Act& :hich :ill ?e commensurate :ith the Biolations committed
?@ them for the joint acquisition made ?@ them in !++(. /he %oticees BiE. Mr.
%at:arlal L &anani and Mr. Ma@ur % &anani shall ?e ;32t14 a2? 6e<e/a114 13a=1e
to pa@ the said monetar@ penalt@K

3". I further also impose a penalt@ of R6.3&##&###/- *R5>ee6 T7/ee )a876 214. on
the %oticee BiE. -/. Nat0a/1a1 ) Ka2a23 under Section - A(?)of the SE0I Act)
:hich :ill ?e commensurate :ith the Biolations committed ?@ him for the
indiBidual acquisition made ?@ him in !++(.

3-. I also impose a penalt@ of R6.3&##&###/- *R5>ee6 T7/ee )a876 214. on the
%oticee BiE. -/. -a45/ N Ka2a23 under Section - A(?)of the SE0I Act) :hich :ill
?e commensurate :ith the Biolations committed ?@ him for the indiBidual
acquisition made ?@ him in !++(.

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Adjudication order in the matter of M/s. Essen Supplements India Ltd. (Square Four Projects India Ltd) Page !" of !"
3,. /he %oticees shall pa@ the said amount of penalt@ amounts) as applica?le) ?@
:a@ of demand draft in faBour of QSE0I C Penalties 4emitta?le to 8oBernment of
IndiaP) pa@a?le at Mum?ai) :ithin "- da@s of receipt of this order. /he said
demand draft should ?e for:arded to Mr. F S Sundaresan) .hief 8eneral
Mana>er) .orporation Finance $epartment) SE0I 0haBan) Plot %o. . R " A) Q8P
0loc;) 0andra &urla .omple=) 0andra (E)) Mum?ai R "++ +-.

3(. In terms of rule , of the 4ules) copies of this order are sent to the %oticees and
also to the Securities and E=chan>e 0oard of India.

DateG A5g56t "H& "#1$ A23ta Ke28a/e
P1a@eG -59=a3 A?;5?3@at32g OCC3@e/

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