WTM/PS/191/IVD/MAR/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 front running transactions of Mr. Kamal Jitendra Katkoria
In respect of Mr. Kamal Jitendra Katkoria [PAN: AHCPK7426P]
________________________________________________________________________
1.

Securities and Exchange Board of India (hereinafter referred to as SEBI) had

investigated the trading activities of one Mr. Kamal Jitendra Katkoria (hereinafter
referred to as Kamal), which had revealed that he had indulged in front running the
trades of his employer Mr. Colin P. Shah (hereinafter referred to as Colin) during the
period of January 01, 2010 to December 31, 2010, and had earned 37,99,818. On
completion of the investigation, a show cause notice was issued alleging that Kamal
had traded ahead of the trades of Colin based on the prior knowledge and had
executed matched trades. It was also alleged that such trading had created artificial
volume in the market. Vide the said show cause notice, Kamal was called upon to
show cause as to why directions under Sections 11(1), 11(4) and 11B of the SEBI Act,
1992 (hereinafter referred to as SEBI Act) should not be issued against him for the
violation as alleged including disgorging the alleged ill-gotten gains of 37,99,818.

2.

During the course of proceedings, Kamal on December 17, 2013, had pleaded that he
should not be disgorged the entire alleged profits as the trades were for the benefit of
Colin. He further claimed that all the profits earned by him on account of such trades
including those which he had undertaken directly was extorted by Colin. As the
submissions were made orally, he was granted seven days time for making the
submissions by way of an affidavit. However, Kamal had failed to submit such an
affidavit.

3.

Upon considering the case on merits, SEBI vide order dated May 26, 2014, found that
Kamal had indulged in fraudulent transactions by way of placing orders ahead of
Colins orders based on the prior knowledge about Colins trades and restrained him

Page 1 of 11

from accessing the securities market and also prohibited him from buying, selling and
otherwise dealing in the securities market, directly or indirectly, in any manner
whatsoever for a period of three years.
The said order also observed that the role of Kamal in the impugned transaction is
established and the probable role of Colin has not been examined in the investigation.
While observing the above, the order directed that in view of the statement of the Noticee
during investigation and also during the hearing, the ill-gotten gain, if any, of the Noticee cannot be
computed with certainty at this stage. I, therefore, find that the role of Colin in the impugned
transactions and profit, if any, earned by him also need to be investigated. It also needs to be
ascertained, by further investigation in the matter, as to how much ill-gotten profit the Noticee earned
on account of his trades.
4.

In compliance with the directions, SEBI conducted investigation for ascertaining the
role of Colin in front running transactions and to ascertain the ill-gotten profits earned
by Kamal. The findings of the same are as under:
a. Role of Colin in front running transactions:
-

Kamal vide his letters dated March 13, 2012 and March 26, 2012, had stated that
he had placed orders on behalf of Colin by using the e-mail account of Colin. He
also stated that Colin used to call Kamal in the morning and used to instruct him
to buy/ sell shares, on his behalf. Accordingly, Kamal used to inform the broker
or send e-mail from the e-mail account of Colin to the broker. It was further stated
by him that some of the transactions were done by Colin himself. He had also
stated that in certain cases, he had traded before Colin (where he got to know
about Colins trading plan) and squared off later and earned some profit. Kamal
during the course of personal hearing before the Competent Authority had
claimed that all the profits earned by him on account of such trades including those
which he had undertaken directly was extorted by Colin.

For ascertaining the role of Colin in the transactions, SEBI had issued summons
dated August 07, 2014, to Colin, while asking for the details of amounts received
by him from Kamal. Colin vide his letter dated September 01, 2014, had replied to
the summon and submitted that neither he nor his company namely Kama

Page 2 of 11

Schachter Jewelry Pvt. Limited or any of his related entities/ directors/

shareholders have taken any money from Kamal. The statements of Colin and Mr.
Pradeep Shah (the erstwhile CFO of Colins company Kama Schachter Jewelry
Pvt. Limited) were also recorded during the course of investigation.
-

The statements of Colin and Pradeep Shah were compared with the submissions
made by Kamal vide his letters dated March 13, 2012 and March 26, 2012, which
revealed that Kamal used to place orders on behalf of Colin and had indulged in
front running the trades of Colin without his knowledge.

During the personal hearing before the Competent Authority, Kamal had pleaded
that he is a person of meagre means. In this regard, during the investigation, an
analysis of Kamals bank account for an extended period i.e. January 01, 2010 to
December 31, 2012 was carried out. The analysis revealed that the bank balances
of Kamal was not commensurate with his annual income. Kamal had entered in
some large financial transactions with some broking entities with whom he did not
have trading accounts. Upon enquiry, the broking entities informed that the
financial transaction was either loan taken from Kamal or refund of the loan taken
by Kamal.

Further, an analysis and comparison of income tax returns of Kamal for the
financial years 2009-10 and 2010-11 revealed that his assets had increased
substantially in the financial year 2010-11. Further, no fund flow was revealed
from/ to Colin to/ from the bank account Kamal or his wife Ms. Jagruti Katkoria,
except from regular payments towards salary. The analysis of bank statements
revealed no instances of extortion of money by Colin from Kamal or sharing of
any profit in the front running transactions.

An examination of the property documents of Kamal (i.e. Flat no. 302, Building
no-1, C-wing, Mody Park, Pruthvi Classique, Iraniwadi, Kandiwali (West)
Mumbai) revealed that the Agreement for Sale was dated July 08, 2010 and the
same was in the name of Kamal and his wife. A perusal of the share certificates
of the said flat revealed that Kamal had transferred his shares in the aforesaid flat

Page 3 of 11

in favour of his mother, Ms. Saroj Katkoria, vide gift deed dated November 08,
2013. The transfer of shares was approved on September 29, 2014 in the Annual
General Meeting of the society where the flat was situated. No other transfer of
the subject flat was observed during the years of 2010 - 2014. The chronology of
events in respect of the trades and the flat are summarised, as follows:
TABLE A
Date/ Period
January 01, 2010 to
December 31, 2010
July 08, 2010

Nature/ description of Event

Front running by Kamal and earning an ill-gotten gain of
37,99,818
Purchase of flat from ill-gotten gains having address at Kandiwali
(West) Mumbai
August 08, 2013
Show cause notice was issued to Kamal by SEBI
October 11, 2013
Opportunity of personal hearing to Kamal (The letter was sent
twice however the same had returned undelivered with remark
refused to accept and unclaimed.
November 08, 2013 The shares of the aforesaid flat were transferred by Kamal to his
mother vide a gift deed.
November 12, 2013 Kamal submitted reply to the SCN dated August 08, 2013 stating
that due to some family problem he was out of town and hence he could not
reply to the SCN earlier.
December 17, 2013 Personal hearing before the Competent Authority.

From the above, it can be said that Kamal had never sold his flat rather he had
transferred his share of flat to his mother on receipt of the SCN. During the course
of investigation. On enquiry, it was revealed that Kamal was staying in the said flat
till July 2015. Therefore, the claim of Kamal regarding selling of flat and extortion
of money was found to be totally false and a mere afterthought to mislead SEBI.
-

The bank account statement of Kamal was also analysed during the course of
investigation from where the pay-in and pay-out for the stock broking transactions
were done. It was observed that the flat was sold to Kamal for 15,00,000 and the
entire payment was made by him only. The relevant transactions from Kamal's
bank account are as follows:
TABLE B

Sr.
No.
1
2
3
4

Date
June 18, 2010
June 19, 2010
June 19, 2010
June 24, 2010

Amount

Debit/ Balance
Credit
18,970.56
1,15,777.74 Credit
1,34,638.30
91,844,.45 Credit
2,26,482.75
2,00,000.00 Credit
3,56,552.75

Page 4 of 11

Remarks
Balance in Kamal's Account
Amount received from Share broker Satco Securities
Amount received from Share broker Satco Securities
Amount received from Share broker Satco Securities

5
6

June 25, 2010

July 10, 2010

1,09,631.23 Credit
1,00,000 Debit

7
8
9

July 14, 2010

July 20, 2010
July 23, 2010

1,00,000 Credit
1,00,000 Credit
4,00,000 Debit

10
11

July 23, 2010

Aug 03, 2010
to August 11,
2010
Aug 12, 2010

2,00,000 Credit
8,00,000 Credit

12

10,00,000 Debit

4,66,183.98 Amount received from Share broker Satco Securities

3,43,245.98 Cheque no. 594520: Amount paid pursuant to
Agreement for sale dated July 08, 2010 for the flat
3,61,798.25 Amount received from Share broker Satco Securities
4,43,298.25 Amount received from Share broker Satco Securities
38,521.25 Cheque No. 594525: Amount paid pursuant to
Agreement for sale dated July 08, 2010 for the flat
2,38,521.25 Amount received from Share broker Satco Securities
10,92,954.25 Received money from three entities on August 03,
2010 and August 11, 2010
89,996.25 DD/Cheque No. 615501: Amount paid pursuant to
Agreement for sale dated July 08, 2010 for the flat

From the above, it can be seen that Kamal had made payments for the purchase
of flat from the money which he had received from his broker. The above
instances shows that without the money received by him from the broker, he could
not have made payment to the seller for the purchase of the flat. Therefore, it is
can be said that Kamal had used the gains which he had made from trading in the
securities market in purchasing the aforesaid flat.
-

An analysis of the trades of Colin and Kamal for the period of January 01, 2010 to
December 31, 2010, for ascertaining the front running trades of Kamal and
original trades of Colin and profit, if any, earned revealed that Kamal had traded
ahead of Colins trades in 59 scrip days1 at NSE and in 38 scrip days at BSE. Colin
had accepted his trades during the investigation period and provided his daily trade
details for the same period. Colin also stated that he was not aware of any front
running trades of Kamal.

From the discussion above, it can be concluded that Kamal had placed orders on
behalf of Colin and without the knowledge of Colin he had indulged in front-running
of Colins trades. Kamal had attempted to mislead SEBI by stating that he was forced
to sell the flat he had purchased from the ill-gotten gains of front running transactions
and Colin had extorted the said money. From the above findings of investigation, it is
clear that Colin had neither extorted money from Kamal nor had he shared any profit
from Kamal. Having considered the above, it can be said that Kamal had siphoned off

A scrip day denotes each day on which a scrip is traded. Total number of scrip days may be higher than total number
of days on which trading has been done, as one trading day may be counted as multiple scrip days on the basis of
different scrips traded on one day. E.g. suppose a person has traded in 3 scrips in one trading day, then it would be
counted as 3 scrip days.
1

Page 5 of 11

the ill-gotten gains, by purchasing a flat and subsequently transferred his share in the
said flat to his mother just after the issuance of the SCN by SEBI, so that he can escape
the disgorgement of ill-gotten gains of 37,99,818.
b. Ill-gotten profits earned by Kamal: Having considered the above, I note that Kamal
had the information of Colins sell and buy order details i.e., scrip, quantity, time and
price range. The investigation had revealed two kind of trading patterns of Kamal
through which he had indulged in front running activities, the details of these are as
under:
-

Front running of sell trades of Colin: Under this pattern, before Colins sell
orders in the scrip were entered, Kamal had sold the shares in advance. Thereafter,
he had entered buy orders for squaring up his positions in the scrip just before the
sell orders of Colin were entered in the same scrip. Kamal followed the same
pattern of trading on 23 scrip days out of 59 scrip days at NSE and on 16 scrip
days out of 38 scrip days at BSE. While trading in this pattern, most of his buy
trades were matched with Colins sell trades.

Front running of buy trades of Colin: Before Colins buy orders in the scrip
were entered, Kamal had bought the shares in advance. Thereafter, he entered sell
orders to square up his position in the scrip just before Colins buy orders in the
same scrip were entered. Kamal followed the same pattern of trading on 37 scrip
days out of 59 scrip days at NSE and on 23 scrip days out of 38 scrip days at BSE.
While trading in this pattern, most of his buy trades were matched with Colins sell
trades.

The details of 59 scrip days at NSE are as follows:

TABLE C

S.No.
1
2
3
4
5
6
7

Date
29-Jun-10
06-Aug-10
21-Jan-10
27-Apr-10
05-May-10
26-May-10
27-May-10

Scrip Symbol
ALOKTEXT
ALOKTEXT
BANKRAJAS
BANKRAJAS
BANKRAJAS
BANKRAJAS
BANKRAJAS

Kamals
Buy Qty.
1,90,000
2,00,000
2,500
80,833
1,25,600
47,000
10,000

Kamals
Sell Qty.
1,90,000
2,00,000
2,500
80,833
1,25,600
47,000
10,000

Page 6 of 11

Square off Matched Qty. Matched

Earnings
with Colin
%
1,23,951.20
1,10,000
57.89
2,01,450.50
2,00,000
100.00
1,016.10
0.00
81,414.15
47,583
58.87
1,72,201.00
45,747
36.42
37,653.65
14,152
30.11
8,686.25
10,000
100.00

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59

07-Jan-10 CREWBOS
13-Aug-10 DBREALTY
16-Aug-10 DBREALTY
24-Sep-10 DBREALTY
11-Jun-10 EDELWEISS
14-Jun-10 EDELWEISS
21-Jun-10 EDELWEISS
23-Jun-10 EDELWEISS
09-Aug-10 EDELWEISS
24-Aug-10 EDELWEISS
13-Sep-10 EDELWEISS
14-Sep-10 EDELWEISS
12-Apr-10 ESSAROIL
01-Jun-10 FEDERALBNK
11-Jun-10 FEDERALBNK
07-Jul-10 GRABALALK
08-Jul-10 GRABALALK
09-Jul-10 GRABALALK
12-Jul-10 GRABALALK
13-Jul-10 GRABALALK
26-Aug-10 GRABALALK
26-May-10 KTKBANK
27-May-10 KTKBANK
16-Jun-10 KTKBANK
13-Jul-10 MOSERBAER
13-Aug-10 MOSERBAER
28-Jul-10 MSKPROJ
30-Jul-10 MSKPROJ
03-Aug-10 MSKPROJ
06-Aug-10 MSKPROJ
10-Aug-10 MSKPROJ
13-Sep-10 MSKPROJ
14-Sep-10 MSKPROJ
20-Sep-10 MSKPROJ
24-Aug-10 ORCHIDCHEM
27-Aug-10 ORCHIDCHEM
31-Mar-10 SPICEMOBIL
11-Jun-10 SPICEMOBIL
14-Jun-10 SPICEMOBIL
21-Jun-10 SPICEMOBIL
13-Jul-10 SPICEMOBIL
14-Jul-10 SPICEMOBIL
29-Jul-10 SPICEMOBIL
10-Aug-10 SPICEMOBIL
16-Aug-10 SPICEMOBIL
23-Aug-10 SPICEMOBIL
22-Jun-10 VISHALRET
23-Jun-10 VISHALRET
24-Jun-10 VISHALRET
01-Jul-10 VISHALRET
07-Jul-10 VISHALRET
09-Jul-10 VISHALRET
Total

200
6,000
1,500
6,000
421
622
2,120
6,200
5,000
7,000
50,000
50,000
23,200
15,500
14,000
14,500
8,568
10,184
21,500
16,332
1,311
40,354
45,190
68,502
29,000
40,000
7,100
4,600
11,000
30,000
8,500
15,000
28,750
22,000
9,000
10,000
15,000
20,000
3,000
9,500
30,399
19,500
20,000
25,000
15,510
50,000
27,237
10,000
10,101
6,000
30,000
11,000
15,87,334

200
6,000
1,500
6,000
421
622
2,120
6,200
5,000
10,000
50,000
50,165
23,200
15,000
14,000
14,000
8,568
13,784
21,500
20,000
3,311
40,354
45,190
68,702
29,000
41,500
5,600
5,100
11,000
30,000
8,500
15,000
28,000
22,000
9,000
10,000
15,000
20,000
3,000
9,500
30,399
19,500
20,000
25,000
15,510
50,000
27,237
10,000
8,101
6,000
30,000
11,000
15,96,717

80.00
23,569.40
4,400.50
46,938.35
2,773.00
2,788.75
13,902.35
42,518.90
51,400.55
9,940.00
51,174.35
81,157.55
16,374.75
43,873.50
27,819.05
69,448.31
34,897.80
21,530.34
61,658.95
56,037.20
4,978.50
60,975.05
69,619.10
1,81,765.01
41,084.80
57,185.34
9,382.13
14,735.94
31,073.15
99,993.95
30,683.50
1,06,928.90
1,42,104.98
90,803.55
6,504.60
16,634.55
17,195.55
30,995.25
3,458.75
18,441.60
57,130.05
20,967.15
3,638.90
40,212.50
18,849.85
46,102.30
34,440.85
26,863.20
12,682.29
9,979.10
60,410.30
14,966.80
26,69,443.94

Note: Square off earnings are calculated on the basis of lower of Kamal's buy quantity or sell quantity

Page 7 of 11

6,000
1,500
3,902
237
422
2,070
2,947
5,000
10,000
39,853
49,454
10,000
15,000
13,000
14,000
6,000
21,500
20,000
3,311
39,000
42,126
68,203
28,999
40,000
4,823
5,100
11,000
30,000
8,500
15,000
27,865
16,264
9,000
10,000
15,000
20,000
3,000
9,500
28,000
19,500
20,000
23,431
15,000
50,000
17,000
5,455
5,501
6,000
30,000
11,000
12,85,945

0.00
100.00
100.00
65.03
56.29
67.84
97.64
47.53
100.00
100.00
79.71
98.58
43.10
100.00
92.86
100.00
70.03
0.00
100.00
100.00
100.00
96.64
93.22
99.56
100.00
100.00
86.13
100.00
100.00
100.00
100.00
100.00
96.92
73.93
100.00
100.00
100.00
100.00
100.00
100.00
92.11
100.00
100.00
93.72
96.71
100.00
62.42
54.55
67.91
100.00
100.00
100.00

The details of 38 scrip days at BSE are as follows:

TABLE D

S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

Date

Scrip Symbol

21-Jan-10 BANKOFRAJ.
26-May-10 BANKOFRAJ.
14-Sep-10 DBREALTY
22-Sep-10 DBREALTY
23-Sep-10 DBREALTY
24-Sep-10 DBREALTY
11-Jun-10 EDELWEISSFS
15-Jun-10 EDELWEISSFS
18-Jun-10 EDELWEISSFS
27-Sep-10 EDELWEISSFS
6-Oct-10 EDELWEISSFS
26-Oct-10 EDELWEISSFS
12-Nov-10 EDELWEISSFS
22-Nov-10 EDELWEISSFS
25-Nov-10 EDELWEISSFS
2-Dec-10 EDELWEISSFS
7-Dec-10 EDELWEISSFS
18-Oct-10 GEODLTD
26-Oct-10 GEODLTD
8-Jul-10 GRABALALOK
15-Jul-10 GRABALALOK
22-Sep-10 GRABALALOK
15-Nov-10 GRABALALOK
8-Jan-10 GUJARANREC
16-Jun-10 KARNATAKABK
13-Aug-10 MOSERBAER
24-Aug-10 ORCHIDCHEM
1-Sep-10 PUNJLLOYD
11-Jan-10 SMOBILITY
6-Dec-10 TATASTL
6-Jul-10 V2RETAIL
15-Jul-10 V2RETAIL
12-Aug-10 V2RETAIL
20-Sep-10 WELPROJ
22-Sep-10 WELPROJ
1-Oct-10 WELPROJ
29-Oct-10 WELPROJ
16-Nov-10 WELPROJ
Total

Kamals
Buy Qty.
1,000
12,000
8,500
5,611
3,000
11,000
195
900
650
85,500
85,000
37,000
80,000
60,981
29,505
33,641
45,000
25,000
11,748
2,000
5,132
2,000
15,000
1,000
12,000
6,000
1,400
500
500
10,500
4,000
7,000
5,000
8,500
33,662
10,000
3,100
11,000
6,74,525

Kamals
Sell Qty.
1,000
12,000
8,500
5,611
3,000
11,000
195
900
650
85,500
85,000
37,000
79,500
60,981
29,505
33,641
45,000
25,000
11,748
900
5,132
5,600
15,000
1,000
12,000
6,000
1,400
500
1,000
10,500
5,500
10,500
5,000
8,500
37,162
10,600
3,100
11,000
6,86,125

Square off Matched Qty. Matched %

Earnings
with Colin
595.95
1,000
100.00
8,324.80
12,000
100.00
47,427.30
7,973
93.80
28,270.10
5,611
100.00
11,110.10
3,000
100.00
1,13,358.65
11,000
100.00
1,202.90
21
10.77
5,103.00
861
95.67
1,243.50
650
100.00
1,65,861.05
85,500
100.00
75,615.80
74,455
87.59
15,680.20
23,196
62.69
56,236.49
60,000
75.47
73,208.20
40,981
67.20
17,455.50
29,505
100.00
37,903.50
33,641
100.00
50,714.20
15,000
33.33
66,259.25
19,641
78.56
11,579.05
10,086
85.85
940.52
0.00
12,677.05
5,132
100.00
3,064.33
2,914
52.04
11,567.90
14,770
98.47
365.00
1,000
100.00
22,080.00
12,000
100.00
6,750.00
6,000
100.00
1,060.70
0.00
1.90
0.00
49.20
0.00
513.60
1,500
14.29
4,344.36
0.00
12,070.37
2,500
23.81
2,426.10
2,835
56.70
45,592.40
8,500
100.00
1,38,111.01
22,297
66.24
42,124.51
6,300
59.43
8,570.05
3,100
100.00
30,915.25
0.00
11,30,373.79
5,22,969

Note: Square off earnings are calculated on the basis of lower of Kamal's buy quantity or sell quantity

From the table C and D, it is noted that Kamal while indulging in front running
transactions had earned a profit of 37,99,818 (26,69,444 while trading on
NSE on 59 scrip days + 11,30,374 while trading on BSE on 38 scrip days).

Page 8 of 11

5.

As the alleged gains from front running were made during the period of January 2010
- December 2010 and Kamal had used such undue profits, it becomes reasonable and
necessary to levy an interest at 12% simple interest per annum from January 01, 2011
i.e. from the day after the end of investigation period. The amount of interest is
calculated and provided in the table below:

NSE
BSE

Kamal Jitendra Katkoria (AHCPK7426P)

Gain in ()
Interest @ 12% p.a. ()* Total Amount ()
26,69,444
16,67,488
43,36,932
11,30,374
7,06,097
18,36,471

Grand Total
37,99,818
23,73,585
*Interest has been calculated from January 01, 2011 till March 15, 2016.

6.

61,73,403

SEBI vide order dated May 26, 2014 held that Kamal has contravened the provisions
of Regulation 3(a), (b), (c), (d) and 4(1) of the SEBI (Prohibition of Fraudulent and
Unfair Trade Practices Relating to Securities Market) Regulations, 2003 read with
Section 12A(a), (b) and (c) of the SEBI Act, 1992 and had restrained him from
accessing the securities market and also prohibited him from buying, selling and
otherwise dealing in securities market, directly or indirectly, in any manner whatsoever,
for a period of three years. As earlier stated, SEBI had vide the said order stated that
the ill-gotten gains, if any, of Kamal cannot be computed with certainty at this stage.
Now the present investigation has again found that the profit was earned by Kamal
while indulging in front running transactions.
I note that Kamal is aware of the specific purpose of investigation initiated by SEBI
after passing of the order dated May 26, 2014, as also the likely findings of the same,
in the light of the evidences gathered. With the initiation of investigation and quasijudicial proceedings, it is possible that Kamal may divert the unlawful gains (subject to
the adjudication of the allegation on the merits in the final order), which may result in defeating
the effective implementation of the direction of disgorgement. Non-interference by
the Regulator at this stage would therefore result in irreparable injury to interests of
the securities market and the investors.

7.

It therefore becomes necessary for SEBI to take urgent steps of impounding and
retaining the proceeds (unlawful gains) allegedly made by Kamal, by way of an interim
measure. Considering the facts and circumstances of the case, the balance of

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convenience lies in favour of SEBI. Accordingly, as an interim measure, an ad-interim

ex-parte Order for impounding under Section 11(4)(d) of the Securities and Exchange
Board of India Act, 1992, needs to be issued against Kamal.
8.

In view of the foregoing, I, in exercise of the powers conferred upon me by virtue of

Section 19 read with Sections 11(1), 11(4)(d) and 11B of the SEBI Act, 1992, hereby
order to impound the unlawful gains of a sum of 61,73,403 (gain of 37,99,818 +
interest of 23,73,585 from January 01, 2011 till March 15, 2016) from Mr. Kamal
Jitendra Katkoria [PAN: AHCPK7426P]. If the funds are found to be insufficient to
meet the figure of unlawful gains, as directed above, then the securities lying in his
demat account shall be frozen to the extent of the remaining value.

9.

The Banks are directed that no debit shall be made, without permission of SEBI, in
respect of the bank accounts held, by Mr. Kamal Jitendra Katkoria except for the
purposes of transfer of the funds to the escrow account as mentioned at para10 below.
Further, Depositories are hereby directed that no debit shall be made, without
permission of SEBI, in respect of the demat accounts held, by Mr. Kamal Jitendra
Katkoria. However, credits, if any, into the accounts of Mr. Kamal Jitendra Katkoria
may be allowed. The Banks and the Depositories are directed to ensure that all the
above directions are strictly enforced.

10.

Kamal is also directed not to dispose off or alienate any of his assets/ properties/
securities, till such time the amounts mentioned in paragraph 8 are credited to an
escrow account [Escrow Account in Compliance with SEBI Order dated March 17,
2016 A/c (in the name of Mr. Kamal Jitendra Katkoria)] created specifically for the
purpose in a Nationalized Bank. The escrow account/s shall create a lien in favour of
SEBI and the monies kept therein shall not be released without permission from SEBI.
After the said monies are deposited in the escrow account, SEBI shall communicate
to the Banks and Depositories to defreeze the accounts.

11.

Mr. Kamal Jitendra Katkoria is directed to provide, within 7 days of this order, a full
inventory of all his assets and properties and details of all his bank accounts, demat

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accounts and holdings of shares/ securities, if held in physical form and details of
companies in which he holds substantial or controlling interest.
12.

As discussed above, the flat, having address as 302, Building no-1, C-wing, Mody
Park, Pruthvi Classique, Iraniwadi, Kandiwali (West), Mumbai, was bought by
Kamal (in his name and that of his wife) from the ill-gotten gains of front running
transactions. The said flat is now registered in the name of Ms. Jagruti Katkoria and
Ms. Saroj Katkoria (wife and mother of Kamal, respectively). Considering the same, I,
in exercise of the powers conferred upon me under Section 19 read with Section
11(4)(f) of the SEBI Act, 1992, hereby direct Ms. Jagruti Katkoria (wife of Kamal)
and Ms. Saroj Katkoria (mother of Kamal) not to dispose of or alienate the said flat
until the amount mentioned at paragraph 8, above is credited to an escrow account
created for the said purpose.

13.

The above directions shall come into force with immediate effect.

14.

This Order is without prejudice to the right of SEBI to take any other action that may
be initiated against the persons/entities covered under this Order, in accordance with
law. The persons/ entities against whom this Order has been passed may file their
replies to SEBI within 21 days from the date of receipt of this order, if they so desire.
They may also indicate in their replies whether they wish to avail an opportunity of
personal hearing in the matter.

15.

A copy of this order shall be served to the Registrar/ Sub-Registrar (of the area where
the above mentioned property is located) and the Secretary of the housing society of
the Building no. - 1, Mody Park, Pruthvi Classique, Iraniwadi, Kandiwali (West),
Mumbai with a direction not to act upon any documents purporting to be dealing with
transfer, mortgage, charge, lease or creation or alteration of any interest in the said
property mentioned above, if presented for registration.

Date: March 17, 2016

Place: Mumbai

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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