WTM/RKA/ISD/128/2016
SECURITIES AND EXCHANGE BOARD OF INDIA
CLARIFICATION TO THE CONFIRMATORY ORDER DATED AUGUST 26,
2016 BEARING REFERENCE NUMBER WTM/RKA/ISD/116/2016 IN THE
MATTER OF MISHKA FINANCE AND TRADING LIMITED IN VIEW OF THE
REPRESENTATION MADE BY MS. ROHINI VIJAYSINGH PATWARDHAN
1. Securities and Exchange Board of India ("SEBI"), vide an ad interim ex-parte order dated
April 17, 2015 (hereinafter referred to as “interim order”) in the matter of Mishka Finance
and Trading Ltd, restrained 129 entities, including Ms. Rohini Vijaysingh Patwardhan
from accessing the securities market and further prohibited them from buying, selling or
dealing in securities, either directly or indirectly, in any manner whatsoever, till further
directions.
2. The directions issued by SEBI vide the interim order qua Ms. Rohini Vijaysingh Patwardhan
were confirmed vide order dated July 05, 2016 (hereinafter referred to as “the confirmatory
order”) subject to certain relaxations as mentioned therin. Subsequently, Ms. Rohini
Vijaysingh Patwardhan filed an appeal before Hon’ble Securities Appellate Tribunal
(“SAT”) challenging the confirmatory order. While the said appeal was pending before
Hon’ble SAT, SEBI passed an order dated August 26, 2016 confirming the directions
issued vide the interim order with respect to other 99 entities subject to certain additional
relaxations mentioned therein and the same was also extended to Ms. Rohini Vijaysingh
Patwardhan. When the aforesaid appeal came up for hearing on August 30, 2016, Hon’ble
SAT directed Ms. Rohini Vijaysingh Patwardhan to make a fresh application before SEBI
since the order dated August 26, 2016 has been passed after filing of the said appeal.
3. Thereafter, Ms. Rohini Vijaysingh Patwardhan vide letter dated September 1, 2016, inter
alia, submitted the following:
i.
“Para 84 of the order refers to the 99 parties mentioned in Para 82 and my name is not included
in the list of these 99 parties. So it is not clear as to how will the reliefs granted to these 99 parties
will apply to me.
ii.
Further Para 85(b)(ii) of the order dealing with explanation regarding my relief allows calculation
of value of portfolio based on the securities lying in my demat account on the date of the order,
where I am the first holder, which seems to be grossly erroneous and issued without considering my
submissions. In similar relief granted to my husband on May 16, 2016, I had responded drawing
Clarification to the confirmatory order dated August 26, 2016
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iii.
your attention to the fact that Mutual Funds investments are held in physical form and after
intervention of SAT, you revised the relief to allow release of Mutual Funds of my husband vide
relief letter dated June 9, 2016.
It is brought to your kind notice that on the date of the order, I held the following investments in
demat and physical mode:
Sl. n
l
2
iv.
v.
vi.
vii.
Account Details
Mode
130259000115231 Demat
5 with Union Bank
Security
Type
Shares
10631824.75
Bonds
Gold ETFs
30791279.86
2708235.92
Statement of
Physical MF
investment in MF
TOTAL
Value
22397425.55
Annexure
1
2
66,528,766.08
As the order only considers the values of securities held in demat form, the physical MFs will
remain out of the relief even if the relief is extended to me along with 99 other parties to the order.
Even further in my Misc. Application No. 85 of 2016 in Appeal No. 449 of 2015, I had
submitted "Exhibit 5" reflecting a loss of about Rs. 1,84,33,194.37 (working furnished as
A n n e x u r e 3 with this letter) inflicted on Mutual Fund investments owned by me and my
husband's by illegally withholding / freezing / attaching our Mutual Fund investments, which are
completely unrelated to the dealings on stock Exchanges, of which my husband's investments were
released only after several rounds of interference by Hon'ble SAT. Taking into account that my
alleged bogus LTCG in the order is Rs. 1,97,72,775/-, which is almost equal to illegal and
unwarranted loss inflicted upon me and my husband there is no need to maintain a single rupee in
the escrow account as suggested in the order. This request is without prejudice to my and my
husband's right to recover the said amount from SEBI.
Further SEBI claims the investments were attached with an intention to protect the interest of
investors and integrity of the markets and holding on to my investments in MFs, Tax Free Bonds
and Gold ETFs have nothing to do with dealings in shares and do not serve the purpose of
protection of the interest of investors and integrity of the markets as falsely claimed.
In light of all the above, you are humbly requested to allow the following reliefs, as requested in my
Para 7 of the SAT Appeal No. 225 of 2016, and other reliefs in light of the current order:
a. Attachment / freeze applied to the demat accounts and of Tax-free bonds, gold ETFs and
Mutual fund investments be withdrawn immediately except for the equity shares of Listed
companies.
b. Alternatively all the investments in bonds, Mutual Funds and Gold ETFs be allowed to be
moved to separate demat account free from any restraint and which should be allowed to be opened
immediately and necessary directions be given to CDSL and banks.
Clarification to the confirmatory order dated August 26, 2016
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Allow me to invest in all instruments other than equity shares of listed companies without any
restraint and without any condition or supervision of any entity like \ Exchanges, Custodians
etc.
d. I may be allowed to sell the securities in my account and invest them in Mutual Funds or interest
bearing instruments of my choice, which are more stable and suitable to my risk appetite at this
age.
e. Further in light of the fact that a loss of Rs. 1.84 Crores is inflicted upon me and my husband
and the alleged LTCG as per the order dated August 26, 2016 is close to that amount, no
restriction of escrow account or any other restriction should apply to my investments. (THIS
WAS NOT A PART OF THE RELIEFS OF SAT APPEAL AS THE ORDER
OF SEBI WAS ISSUED THEREAFTER).”
c.
4. In this regard, it is pertinent to note that vide the confirmatory order dated July 05, 2016 read
with the order dated August 26, 2016, I had confirmed the directions issued vide the
interim order subject to the relaxations that have been specifically mentioned therein. The
said relaxations have been given to the entities against whom the confirmatory order has been
passed (including Ms. Rohini Patwardhan) after a holistic consideration of the facts and
circumstnces of the matter, the replies /submissins of the entities and the prayers made by
them vide various communications in that regard as noted in the confirmatory order. I note
that the representation / application dated September 1, 2016 by Ms. Rohini Patwardhan
has been received by SEBI after passing of the confirmatory order dated August 26, 2016. I
also note that at this stage, there is no quasi-judicial proceeding pending before me in the
matter of Mishka Finance and Trading Ltd. qua Ms. Rohini Patwardhan. However, for the
purpose of administration and implementation of the directions issued vide order dated
August 26, 2016 read with the confirmatory order, in view of the doubts that have arisen out
of the application filed by Ms. Rohini Patwardhan, it is hereby clarified that:
i) It is clearly mentioned in para 86 of the Order dated August 26, 2016 that
reliefs/relaxations/exceptions granted vide the said order shall also be available to
those entities in respect of whom the confirmatory orders have already been passed as
mentioned in para 10 of the order. Thus, paragraphs 84, 85 and 86 of order dated
August 26, 2016 shall always be read with paragraph 10 thereof.
ii) All the entities to whom the order dated August 26, 2016 is applicable have been
allowed to subscribe to units of the mutual funds including through SIP and redeem
the units of the mutual funds so subscribed; deal in Debt/Government Securities;
invest in ETF; enter into delivery based transactions in cash segment in the securities
covered in NSE Nifty 500 Index scrips and / or S&P BSE 500 scrips, etc. in the
manner as mentioned in the paragraph 84 read with paragraphs 85 and 86 of the order
Clarification to the confirmatory order dated August 26, 2016
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dated August 26, 2016.
iii) All the entities, to whom the order dated August 26, 2016 is applicable, are free to
dematerialize the securities held in physical form and thereafter sell the said securities
in the manner as mentioned in paragraph 85 of the order. The proceeds of such sale
can also be utilized in accordance with paragraph 84 read with paragraphs 85 and 86
of the order.
5. The representations made by Ms. Rohini Vijaysingh Patwardhan vide letter dated
September 01, 2016 is disposed of accordingly.
Sd/DATE: September 26th, 2016
PLACE: MUMBAI
RAJEEV KUMAR AGARWAL
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA
Clarification to the confirmatory order dated August 26, 2016
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