Sr. No. Name PAN 1 Ruchi Soya Industries Limited AAACR2892L 2 National Steel and Agro Industries Limited AAACN3548H

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Registered Office: 1st Floor, Akruti Corporate Park, Near G.E. Garden, LBS Road, Kanjurmarg West, Mumbai 400 078, India. CIN No. U51909MH2003PLC140116

NATIONAL COMMODITY & DERIVATIVES EXCHANGE LIMITED

Circular to all trading and clearing members of the Exchange Circular No : NCDEX/LEGAL-006/2016/118

Date : May 25, 2016

Subject : SEBI order in the matter of trading in castor seed contracts

SEBI vide its Order No. WTM/RKA/ISD/CDD2/55/2016 dated May 24, 2016 has restrained following clients from buying, selling or dealing in the securities market, either directly or indirectly, in any manner whatsoever, till further directions:

Sr. No. Name PAN

1 Ruchi Soya Industries Limited AAACR2892L 2 National Steel and Agro Industries Limited AAACN3548H The above directions shall take effect immediately and shall be in force until further Orders. The detailed order is available on SEBI website (http://www.sebi.gov.in). A copy of the SEBI order is enclosed for ready reference.

Members and market participants are advised to take note of the above and ensure compliance. For and on behalf of

National Commodity & Derivatives Exchange Limited

Suresh Nair

Senior Vice President – Legal

For further information / clarifications, please contact

1. Customer Service Group on toll free number: 1800 26 62339 2. Customer Service Group by E-mail to: askus@ncdex.com

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WTM/RKA/ISD/CDD2/55/2016 SECURITIES AND EXCHANGE BOARD OF INDIA

EX-PARTE AD-INTERIM ORDER

UNDER SECTION 11 AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN THE MATTER OF TRADING IN CASTOR SEED CONTRACTS AT NATIONAL COMMODITY & DERIVATIVES EXCHANGE LIMITED.

___________________________________________________________________________

1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) noticed that prices in Castor Seed February 2016 Contract at NCDEX fell by around 20% in month of January 2016. It was observed that futures prices of Castor Seed Contracts touched lower circuit of 4% on January 25, 2016 and hit lower circuit of 6% on January 27, 2016. It was also noticed that there was a very high concentration of open interest in February 2016 Castor Seed Contract. On January 27, 2016 National Commodity & Derivatives Exchange Ltd. (hereinafter referred to as “NCDEX/the exchange”) under the provisions of its Rules, Bye-laws and Regulations suspended the trading in Castor Seed Contracts at the close of business hours, vide its circular (NCDEX/TRADING-007/2016/012) dated 27 January, 2016. Pursuant to this, SEBI after examination, passed an ex-parte ad interim order on March 2, 2016 in the matter of trading in Castor Seed Contracts at NCDEX, and restrained 16 entities from buying, selling or dealing in the securities market, either directly or indirectly, in any manner whatsoever, till further directions.

2. As a part of preliminary examination, the bank statements of the concerned suspected entities were analysed. During preliminary examination several acts and omissions, in connection with dealing in Castor Seed Contracts trading at NCDEX having a bearing on the commodities market, including circulation/transfer of funds for creating position in Castor Seed Contracts were also observed.

3. The preliminary examination, inter alia, revealed that one client namely, Ruchi Soya Industries Limited hereinafter referred to as 'Ruchi Soya' (who was holding significant position in Castor Seed Contracts) has transferred funds of around ₹ 76.77 crore during the period of Jan 01, 2015 to Jan 27, 2016 to 5 clients who were also holding significant position in Castor Seed Contracts. It has been also noticed that the funds transferred by Ruchi Soya to these clients were then transferred to the respective Commodity Trading Members by the clients and using which these clients created position in Castor Seed Contracts. A flowchart showing transfer of funds by Ruchi Soya to 5 clients is as follows:

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4. From the bank statement analysis of above stated entities and their pattern of trading / manner of creating position in Castor Seed Contracts, it has been prima facie observed that Ruchi Soya has financed/ provided funds to aforesaid 5 clients for taking open position in Castor Seed Contracts and further to maintain positions held by them in Castor Seed Contracts. Date wise details of fund transfer to aforesaid 5 clients and subsequent details of fund transfer to Commodity Trading Members and manner in which position in Castor Seed Contracts was created by the clients is explained below :

I. National Steel and Agro Industries Ltd. :- It has been prima facie observed that the client National Steel and Agro Industries Ltd. has mainly initiated long positions in Castor Seed Contracts from December 14, 2015. Before that the client was holding minimal positions. Therefore, SEBI analysed bank statements from December 01, 2015 till January 31, 2016. Observations from bank statement analysis (HDFC Bank Ltd.- Account No. 00360330002361) and trading activity of client are give below :

Table 1 : Bank Statement analysis HDFC Bank Ltd.- Account No. 00360330002361

Received from Transferred to

Date Particulars Amt Date Particulars Amt

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15-Dec-15 Angel Commodities Pvt. Ltd. 30000000 11-Jan-16 Ruchi Soya Industries Ltd. 25000000 12-Jan-16 Angel Commodities Pvt. Ltd. 19000000 13-Jan-16 Angel Commodities Pvt. Ltd. 6000000 14-Jan-16 Ruchi Industries Ltd. Soya 15500000 14-Jan-16 Angel Commodities Pvt. Ltd. 15500000 15-Jan-16 Ruchi Industries Ltd. Soya 16000000 16-Jan-16 Angel Commodities Pvt. Ltd. 12500000 21-Jan-16 Ruchi Industries Ltd. Soya 17500000 22-Jan-16 Angel Commodities Pvt. Ltd. 17500000 22-Jan-16 Ruchi Soya Industries Ltd. 5000000 25-Jan-16 Angel Commodities Pvt. Ltd. 5000000

i. National Steel and Agro Industries Ltd. received funds aggregating to around ₹ 12.90 crore

from Ruchi Soya. Out of the said funds received from Ruchi Soya, funds to the tune of ₹

12.55 crore was transferred to the member, Angel Commodities Broking Pvt. Ltd.

ii. From Table 1 it has been observed that on the same day or next day the funds received from Ruchi Soya has been transferred to the member Angel Commodities Broking Ltd. by National Steel and Agro Industries Ltd.

iii. The client National Steel and Agro Industries Ltd. started taking long positions in Castor Seed Contracts in a significant way from December 14, 2015. Before this date the client was holding minimal positions i.e., since 1 Jan 2015 till 13 Dec 2015.

iv. The client initiated a long position of 4750 MT as on December 14, 2015. The long position has then been steadily increased by the client to 7770 MT on December 16, 2015. Prima facie, it has been observed that the funds of ₹ 5 crore received from Ruchi Soya on December 11, 2015 has then been transferred to the member Angel Commodities Pvt. Ltd. on December 15, 2015 for payment towards margin obligations in respect of the positions taken in Castor Seed Contracts by National Steel and Agro Industries Ltd.

v. On January 08, 2016 National Steel and Agro Industries Ltd. was holding long position of 19500 MT which was increased to 25470 MT on January 11, 2016 and further increased to 27470 MT on January 12, 2016 and to 27970 MT on January 13, 2016. Prima facie, it has been observed that the funds received from Ruchi Soya during January 11, 2016 to January 22, 2016 have been used to pay the margin requirements for the increased long positions held by National Steel and Agro Industries Ltd.

vi. Thus it has been prima facie observed that the Castor Seed Contract positions of the client, National Steel and Agro Industries Ltd. were funded by Ruchi Soya

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II. Mr. Anuj Jain :- It has been prima facie observed that the client Mr Anuj Jain has taken positions in Castor Seed Contracts since December 9, 2015. Therefore SEBI analysed bank statements from December 01, 2015 to January 31, 2016. Observations from bank statement analysis (Axis Bank Ltd. - Account No. 912030007771472 and 911020029479389) and trading activity of client are given below :

Table 2 : Bank Statement analysis Axis Bank Ltd. - Account No. 912030007771472 and 911020029479389

Analysis of Bank Transaction of Mr. Anuj Jain ( A/c no.912030007771472)

Received from Transferred to

Date Particulars Amt Date Particulars Amt

3-Dec-15 Ruchi Industries Soya 7100000 9-Dec-15 Neer Multitrade Private Ocean Limited

27500000

5-Dec-15 Ruchi Industries Soya 7900000

9-Dec-15 Ruchi Industries Soya 30000000

10-Dec-15 Ruchi Industries Soya 50000000 10-Dec-15 Neer Multitrade Private Ocean Limited

47500000

14-Dec-15 Neer Multitrade Private Ocean Limited

5000000

16-Dec-15 Ruchi Industries Soya 180099

30-Dec-15 Anuj Jain A/c no. 911020029479389 5000000

30-Dec-15 Ruchi Industries Soya 5000000

12-Jan-16 Ruchi Industries Soya 211739 12-Jan-16 Anuj Jain A/c no. 911020029479389 4000000

12-Jan-16 Ruchi Industries Soya 5000000

13-Jan-16 Ruchi Industries Soya 5400000 13-Jan-16 Anuj Jain A/c no. 911020029479389 1000000

14-Jan-16 Ruchi Industries Soya 8500000 14-Jan-16 Anuj Jain A/c no. 911020029479389 8500000

15-Jan-16 Ruchi Industries Soya 9000000 15-Jan-16 Anuj Jain A/c no. 911020029479389 9500000

20-Jan-16 Ruchi Industries Soya 2900000 22-Jan-16 Anuj Jain A/c no. 911020029479389 7000000

21-Jan-16 Ruchi Industries Soya 7500000

22-Jan-16 Ruchi Industries Soya 5000000 22-Jan-16 Anuj Jain A/c no. 911020029479389 5100000

Analysis of Bank Transaction of Mr. Anuj Jain ( A/c no.911020029479839)

Received from Transferred to

Date Particulars Amt Date Particulars Amt

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Dec-15 912030007771472 Dec-15 Multitrade Limited Private

12-Jan-16 Anuj Jain A/c No. 912030007771472 4000000 12-Jan-16 Neer Multitrade Private Ocean Limited

4000000

13-Jan-16 Anuj Jain A/c No. 912030007771472 1000000 13-Jan-16 Neer Multitrade Private Ocean Limited

1000000

14-Jan-16 Anuj Jain A/c No. 912030007771472 8500000 14-Jan-16 Neer Multitrade Private Ocean Limited

8500000

15-Jan-16 Anuj Jain A/c No. 912030007771472 9500000 15-Jan-16 Neer Multitrade Private Ocean Limited

9000000

22-Jan-16

Anuj Jain A/c No. 912030007771472 7000000 22-Jan-16 Neer Ocean Multitrade Private Limited 7000000

22-Jan-16 Anuj Jain A/c No. 912030007771472 5100000 22-Jan-16 Neer Multitrade Private Ocean Limited

5100000

i. During the period from December 01, 2015 to January 30, 2016, the client Mr Anuj Jain has received around ₹ 14.37 crore from Ruchi Soya in his account number 912030007771472 held with Axis Bank.

ii. Out of these ₹ 14.37 crore received from Ruchi Soya, ₹ 8 crore has been transferred by Mr. Anuj Jain to the member Neer Ocean Multitrade Pvt. Ltd from the said bank account on 9th ,10th and 14th December 2015.

iii. From the remaining funds received by Mr. Anuj Jain, ₹ 4.01 crore has been transferred by Mr. Anuj Jain to his another Axis Bank account 911020029479389 from which ₹ 3.96 crore has been then transferred to the trading member Neer Ocean Multitrade Pvt. Ltd between December 30, 2015 to January 22, 2016.

iv. From Table 2 it has been observed that the client Mr Anuj Jain has received funds from Ruchi Soya and same has been immediately transferred to the member Neer Ocean Multitrade Pvt. Ltd.

v. The client Mr Anuj Jain had no position in Castor Seed Contracts prior to December 9, 2015 and has taken a long position of 5450 MT in Castor Seed Contracts as on December 9, 2015 which was increased to 14950 MT on December 10, 2015 and further increased to 16950 MT as on December 11, 2015. Prima facie, it has been observed that Mr Anuj Jain received funds to the tune of ₹ 9.5 crore from Ruchi Soya between December 3, 2015 - December 10, 2015 and of which ₹ 8 crore were paid to Neer Ocean Multitrade Pvt between December 9, 2015 - December 14, 2015 for trading and taking fresh positions in Castor Seed Contracts.

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vi. Thus it has been prima facie observed that the Castor Seed Contract positions of the client, Mr. Anuj Jain were funded by Ruchi Soya.

III. Sisne Polymers Pvt. Ltd. :- It has been prima facie observed that the client Sisne Polymers Pvt. Ltd. has taken substantial position in Castor Seed Contracts from December 01, 2015 onwards. Therefore SEBI analysed bank statements from December 01, 2015 to January 31, 2016. Observations from bank statement analysis (Dena Bank Account No. 112211023965 and Kotak Bank Account No. 2611260408) and trading activity of client are given below :

Table 3 : Bank Statement analysis Kotak Bank Account No. 2611260408

Received from Transferred to

Date Particulars Amt Date Particulars Amt

02-Dec-15 Ruchi Soya Industries Ltd 35000000 02-Dec-15 Mid India Commodities Pvt. Ltd. 5000000

03-Dec-15 Dena Bank Account of Sisne Polymers 25000000 05-Dec-15

Dena Bank Account

of Sisne Polymers 7500000

07-Dec-15 Ruchi Industries Ltd 20000000 Soya 07-Dec-15 Dena Bank Account of Sisne Polymers 20000000

10-Dec-15 Ruchi Industries Ltd 25000000 Soya 10-Dec-15 Dena Bank Account of Sisne Polymers 24000000 12-Jan-16 Ruchi Industries Ltd 10000000 Soya 13-Jan-16 Dena Bank Account of Sisne Polymers 10000000 14-Jan-16

Ruchi Soya

Industries Ltd 10000000 14-Jan--16

Dena Bank Account

of Sisne Polymers 11000000 15-Jan-16 Ruchi Industries Ltd 10000000 Soya 15-Jan-16 Dena Bank Account of Sisne Polymers 10000000 16-Jan-16 Dena Bank Account of Sisne Polymers 8000000 21-Jan-16 Ruchi Industries Ltd 20000000 Soya 22-Jan-16 Dena Bank Account of Sisne Polymers 10000000

Table 4 : Bank Statement analysis Dena Bank Account No. 112211023965

Received from Transferred to

Date Particulars Amt Date Particulars Amt

03-Dec-15 Kotak Bank of Sisne Polymers 25000000 03-Dec-15 Mid India Commodities Pvt. Ltd. 23000000 05-Dec-15 Kotak Bank of Sisne Polymers 7500000 05-Dec-15 Mid India Commodities Pvt. Ltd. 7500000 07-Dec-15 Kotak Bank of Sisne Polymers 20000000 07-Dec-15 Mid India Commodities Pvt. Ltd. 19000000

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Polymers Ltd. 13-Jan-16 Kotak Bank of Sisne Polymers 10000000 13-Jan-16 Mid India Commodities Pvt. Ltd. 9000000 14-Jan-16 Kotak Bank of Sisne Polymers 11000000 14-Jan-16 Mid India Commodities Pvt. Ltd. 10000000 15-Jan-16 Kotak Bank of Sisne Polymers 10000000 15-Jan-16 Mid India Commodities Pvt. Ltd. 11000000 16-Jan-16 Kotak Bank of Sisne Polymers 8000000

22-Jan-16 Mid India Commodities Pvt. Ltd. 17500000 22-Jan-16 Kotak Bank of Sisne Polymers 10000000

i. Sisne Polymers Pvt. Ltd. has received funds aggregating to ₹ 13 crore approximately from Ruchi Soya in its bank account no. 2611260408 with Kotak Bank, from which Sisne Polymers Pvt. Ltd. transferred ₹12.55 crore to his other bank account no. 112211023965 held with Dena Bank. Sisne Polymers Pvt. Ltd. finally transferred ₹ 50 lakhs from Kotak Bank account and ₹ 12 crore from Dena Bank account to the trading member, Mid India Commodities Pvt. Ltd. through which he has traded in Castor Seed Contracts.

ii. From Table 3 and Table 4 it has been observed that the amounts received from Ruchi Soya has been transferred on the same or next day to the member, Mid India Commodities Pvt. Ltd. by the client through his two bank accounts.

iii. The client initiated long positions of 670 MT as on November 30, 2015 which was increased to 5990 MT on December 1, 2015 and further increased to 11140 MT on December 2, 2015. Prima facie, it has been observed that the funds required to meet the margins in respect of the said positions has been met through the funds received from Ruchi Soya since December 02, 2015.

iv. Thus it has been prima facie observed that the Castor Seed positions of the client, Sisne Polymers Pvt. Ltd. were funded by Ruchi Soya .

IV. Stride Multitrade Pvt. Ltd. :- It has been prima facie observed that the client Stride Multitrade Pvt. Ltd. has been consistently holding long positions in Castor Seed Contracts from January 2015. Therefore SEBI analysed bank statements from January 01, 2015 to January 31, 2016. Observations from bank statement analysis (HDFC Bank Ltd. - Account No. 00600310002679) and trading activity of client are given below :

Table 5 : Bank Statement analysis HDFC Bank Ltd. - Account No. 00600310002679

Received from Transferred to

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2-Jan-15 Ruchi Industries Ltd Soya 30000000 2-Jan-15

Mid India Commodities Pvt

Ltd. 30000000

19-Jan-15 Ruchi Industries Ltd Soya 45000000 19-Jan-15

Mid India Commodities Pvt Ltd. 45000000 5-Feb-15 Ruchi Soya Industries Ltd 15000000 5-Feb-15 Mid India Commodities Pvt Ltd. 15000000

10-Feb-15 Ruchi Industries Ltd Soya 20000000 10-Feb-15

Mid India Commodities Pvt

Ltd. 20000000

18-Feb-15 Ruchi Industries Ltd Soya 20000000 18-Feb-15

Mid India Commodities Pvt

Ltd. 20000000

24-Feb-15 Ruchi Industries Ltd Soya 20000000 25-Feb-15

Mid India Commodities Pvt

Ltd. 20000000

8-Apr-15 Ruchi Industries Ltd Soya 30000000 8-Apr-15

Mid India Commodities Pvt

Ltd. 30000000

25-May-15 Ruchi Industries Ltd Soya 35000000 25-May-15

Mid India Commodities Pvt Ltd. 35000000 30-Dec-15 Ruchi Soya Industries Ltd 20000000 30-Dec-15 Mid India Commodities Pvt Ltd. 20000000

i. During the period on various instances Stride Multitrade Pvt. Ltd. received funds aggregating to around ₹23.50 crore from Ruchi Soya which has been fully transferred on the same day or next day to the member Mid India Commodities Pvt. Ltd. through which the client has traded and was holding positions in Castor Seed Contracts.

ii. Stride Multitrade Pvt. Ltd. received ₹4.5 crore from Ruchi Soya on January 19, 2015 and transferred it to its member Mid India Commodities Pvt. Ltd. on the same day. The Long positions of Stride Multitrade increased from 5050 MT as on January 19, 2015 to 11590 MT on January 21, 2015 and further increased to 12000 MT on January 22, 2015.

iii. Stride Multitrade Pvt. Ltd. has received an amount of ₹ 7.5 crores from Ruchi Soya in the month of February 2015 which were transferred to the member Mid India Commodities Pvt. Ltd immediately or on the next day. The long position of the client increased from 8830 MT as on February 12, 2015 to 12000 MT as on February 24, 2015.

iv. Stride Multitrade Pvt. Ltd. has received an amount of ₹ 3.5 crores from Ruchi Soya on May 25, 2015 which were transferred to the member Mid India Commodities Pvt. Ltd on the same day. The long position of the client increased from 11950 MT as on May 20, 2015 to 15400 MT on May 28, 2015.

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v. Thus it has been prima facie observed that the margin requirements in respect of the said Castor Seed positions of the client through the member Mid India Commodities Pvt. Ltd. has been funded by Ruchi Soya

V. Bharat Food Co-operative Ltd:- It has been prima facie observed that the client Bharat Foods Co-operative Ltd. has been consistently holding long positions in Castor Seed Contracts. Observations from bank statement analysis (HDFC Bank- Account No. 02162320002297) and trading activity of client are given below :

i. The client Bharat Foods Co-operative Ltd. has been consistently holding long positions in Castor Seed Contracts.

ii. On October 14, 2015, Bharat Food Co-operative Ltd received ₹ 13 crore from Ruchi Soya and on the same day ₹ 5.50 crore was transferred to member, Investsmart Commodities Ltd. through which client was holding position in Castor Seed Contracts.

iii. The client was allocated delivery in Castor Seed for 5780 MT on October 12, 2015. Thus it has been prima facie observed that the amount of ₹5.50 crore paid to the member, Investsmart Commodities Ltd. was towards pay-in obligation for the said deliveries in Castor Seed Contracts.

5. In view of the above, prima facie it has been observed that Ruchi Soya has provided funds to 5 clients for creating / maintaining open position on Long Side in Castor Seed Contract. Therefore, all 6 entities i.e. Ruchi Soya and 5 clients funded by Ruchi Soya (namely National Steel and Agro Industries Ltd., Mr. Anuj Jain, Sisne Polymers Pvt. Ltd., Bharat Food Co-operative Ltd. and Stride Multitrade Pvt. Ltd. ) are connected with each other and hereinafter referred to as 'Ruchi Group Entities'. Further, National Steel and Agro Industries is a Ruchi Group Company (as per website of Ruchi group). Independent Director Mr Navin Khandelwal is common to both National Steel and Agro Industries Ltd. and Ruchi Soya Industries Ltd.

6. Further, it has been prima facie observed that Ruchi Soya and 5 clients funded by Ruchi Soya were also among the top 15 clients on Long Side in Castor Seed February – 2016 Contract during the month of January 2016. Collectively, 'Ruchi Group Entities' were holding 111600 MT of Castor Seed position in February – 2016 out of total 283260 MT which was 39.39% of open position in February – 2016 Contract of Castor Seed (as on 27th January 2016) which in value terms was approximately to the tune of ₹ 340 crore. Details of open interest position held by aforesaid 6 clients in Castor Seed February - 2016 Contract is as given below :

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Table 6 : Open Position held by 'Ruchi Group Entities' in Castor Seed February – 2016 Contract as on 27 Jan , 2016

Sr No Client Name Pan No

Long OI in MT

1 National Steel and Agro Industries Limited AAACN3548H 24130 2 Stride Multitrade Private Limited AAGCS5768N 23910 3 Ruchi Soya Industries Limited AAACR2892L 18930 4 Bharat Foods Co-Operative Limited AAAAB3160D 18660

5 Mr. Anuj Jain ABEPJ8083F 13080

6 Sisne Polymers Private Limited AAPCS4092L 12890 7. In view of the above, it has been prima facie observed that the manner in which Open Interest

positions are held jointly by the 'Ruchi Group Entities' in Castor Seed Contracts suggests a "acting in concert" pattern and this combined with the fact that they collectively were holding a substantial open position, indicates a scenario which has a potential to disturb the market equilibrium and harm market integrity. Hence, open positions held by 'Ruchi Group Entities' are being treated as clubbed position in view of the fact that, it has been prima facie observed that though the position in Castor Seeds were taken by different clients through different Commodity Trading Members, there was a meeting of minds and intention to corner the market on Long Side in Castor Seed Contracts by 'Ruchi Group Entities'. Further, Ruchi Soya Industries Limited has continuously provided the financial means / assistance to other clients for creating / maintaining position in Castor Seed Contracts whenever required by them. 8. Therefore above prima facie findings indicate that, 'Ruchi Group Entities' has traded in Castor

Seed Contracts with a dubious plan and premeditated arrangement and artifice to corner /control the market on Long Side in Castor Seed Contracts.

9. Further, on account of clubbed position held by 'Ruchi Group Entities' in Castor Seed Contracts across different expiries it has been noticed that there were several continuous instances where position limit violations were observed. During the period of Jan 01, 2016 to Jan 27, 2016 (examination period indicated in aforesaid ex-parte ad interim order dated March 2, 2016), Client level position limit violations as prescribed by Forward Market Commission (hereinafter referred to as “FMC”) vide its circular FMC/3/2014/C/128 dated October 22, 2014 and FMC/3/2014/C/137 dated December 11, 2014 were observed on most of the trading days. Counts of position limit violations are given below and details placed as Annexure A :

I. On 18 occasions 'Ruchi Group Entities' have violated commodity level client position limits as prescribed by FMC.

II. On 6 occasions 'Ruchi Group Entities' have violated near month client position limit as prescribed by FMC.

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10. Further, out of the aforesaid 6 clients, 4 entities namely Stride Multitrade Pvt. Ltd., Bharat Foods Co-operative Limited, Mr Anuj Jain and Sisne Polymers Pvt. Ltd., were restrained from buying, selling or dealing in the securities market, either directly or indirectly, in any manner whatsoever, till further directions vide SEBI Ex Parte Ad Interim Order dated March 02, 2016 in matter of trading in Castor seed Contracts at NCDEX. The said order clearly demonstrates that the aforesaid 4 clients have failed to discharge their MTM obligation and have disturbed the market equilibrium.

11. Based on the above stated facts and analysis, I prima facie find that:

 'Ruchi Group Entities' have taken huge long positions in Castor Seed Contracts and have violated the position limits prescribed by FMC.

 There was a prior meeting of mind among 'Ruchi Group Entities' to form a cartel and execute their trades in Castor Seed Contracts.

 'Ruchi Group Entities' have traded in Castor Seed Contracts with a dubious plan and premeditated arrangement and artifice to corner /control the market on Long Side in Castor Seed Contract.

 'Ruchi Group Entities' have traded in such a manner and in high magnitude which has potential to disturb the market equilibrium and harm market integrity.

12. It is noted that the role of commodity derivative market is to provide price discovery and risk management to stakeholders in the market such as farmers, traders, exporters and consumers etc. and in this context the dominant position created by 'Ruchi Group Entities' in Castor Seed in a concealed manner, which was also in violation of prescribed limits for client level position, oblivious to other market participants has disturbed the market equilibrium and has thus harmed the market integrity. Also the dictum 'disturbing the market equilibrium' has a wide meaning and any such disturbance in commodity derivative markets may lead to disturbance in underlying physical market, as well. Therefore, in present case conduct of the aforesaid 6 entities holding 39.39% of total open interest in February-2016 Castor Seed Contract has to be seen in that context.

13. Considering the above facts and circumstances, I, prima facie, find that the acts and omissions of Ruchi Soya Industries Limited and National Steel and Agro Industries Limited has, not only disturbed market equilibrium, but also indicate manipulative and fraudulent design to form a cartel and corner the Castor Seed market. I further, prima facie find that Ruchi Soya Industries Limited and National Steel and Agro Industries Limited being part of 'Ruchi Group Entities' have violated the position limits prescribed by FMC vide its circular FMC/3/2014/C/128 dated October 22, 2014 and FMC/3/2014/C/137 dated December 11, 2014.

14. I, therefore, prima facie find that Ruchi Soya Industries Limited and National Steel and Agro Industries Limited have contravened the provisions of the Securities and Exchange Board of

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India Act, 1992 (the SEBI Act) and have acted in fraudulent and deceitful manner which attracts prohibitions enshrined in section 12A(a), (b) and (c) of the SEBI Act and provisions of regulation 3(a) and (d) and regulation 4(1), 4(2)(a) and (g) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ('PFUTP Regulations') which read as following:-

Section 12A of the SEBI Act-

"Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control.

12A. No person shall directly or indirectly—

(a) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made there under;

(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognized stock exchange;

(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognized stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder;"

PFUTP Regulations –

"3. Prohibition of certain dealings in securities No person shall directly or indirectly—

(a) buy, sell or otherwise deal in securities in a fraudulent manner

(b) ………

(c) ………

(d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under."

"4. Prohibition of manipulative, fraudulent and unfair trade practices

(1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities.

(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely:—

(a) indulging in an act which creates false or misleading appearance of trading in the securities market;

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……… (g) entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security;

……….…..…." 15. I am of the opinion that detailed investigation of entire scheme, plan, device and artifice

employed by concerned entities is necessary. I further note that role of other 4 entities funded by Ruchi Soya Industries Limited i.e. Stride Multitrade Pvt. Ltd., Bharat Foods Co-operative Limited, Mr Anuj Jain and Sisne Polymers Pvt. Ltd. against whom SEBI already has passed an Ex Parte Ad Interim Order dated March 02, 2016 in matter of trading in Castor seed Contracts at NCDEX, may also be looked upon during investigation in this matter. The connected entities, acting in concert under a premeditated plan, have acquired dominant market share in Castor Seed Contracts traded at NCDEX. Their acts, conduct, behaviour and dealings connote a deceptive conduct designed to deceive or defraud market participants and by camouflaging /masking their actual position in Castor Seed, they have interfered with free market forces of supply and demand.

16. SEBI strives to safeguard and protect the interests of a genuine investor in the Indian securities market. It has been a point of concern when behaviour of few entities put entire market at systemic risk and disturbs the market equilibrium and integrity. Allowing the entities that are prima facie found to be involved in such fraudulent, unfair and manipulative transactions to continue to operate in the market would shake the confidence of the investors in the commodities market. Further, the fraudulent, manipulative and deceptive device, plan, device and artifice as prima facie found in this case, I am convinced that this is a fit case where, pending investigation, effective preventive and remedial action is required to be taken by way of ad interim ex-parte order to protect the interests of investors and preserve the safety and integrity of the securities market.

17. Therefore, in order to protect the interest of investors and the integrity of the securities market, I, in exercise of the powers conferred upon me by virtue of section 19 read with sections 11 and 11B of the SEBI Act, 1992, pending investigation, by way of this ad-interim ex-parte order restrain following clients from buying, selling or dealing in the securities market, either directly or indirectly, in any manner whatsoever, till further directions:

Sr. No. NAME PAN

1 Ruchi Soya Industries Limited AAACR2892L

2 National Steel and Agro Industries Limited AAACN3548H 18. The commodity exchanges, stock exchanges and the depositories are directed to ensure that

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19. The above order is without prejudice the right of SEBI to take any other action that may be initiated against the abovementioned entities in accordance with law.

20. The entities against whom this order is being passed may file their objections, if any, within twenty one days from the date of this Order and, if they so desire, may avail themselves of an opportunity of personal hearing before the Securities and Exchange Board of India at its Head Office at SEBI Bhavan, C4-A, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400 051 on a specific request in this regard.

21. This order shall come into force with immediate effect.

Sd/-

DATE: May 24th, 2016 RAJEEV KUMAR AGARWAL

PLACE: MUMBAI WHOLE TIME MEMBER

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Annexure A

On account of clubbed position held by 'Ruchi Group Entities' in Castor Seed Contracts across different expiries during the period of Jan 01, 2016 to Jan 27, 2016 (examination period indicated in aforesaid ex-parte ad interim order dated March 2, 2016), Client level position limit violations as prescribed by Forward Market Commission (hereinafter referred to as “FMC”) vide its circular FMC/3/2014/C/128 dated October 22, 2014 and FMC/3/2014/C/137 dated December 11, 2014 were observed on most of the trading days. Day wise details of position limit violations are as given below :

On 18 occasions 'Ruchi Group Entities' have violated commodity level client position limits as prescribed by FMC. Details given below :

Sr. No. Date Netted OI of 'Ruchi Group Entities' (across contracts) Market OI (across contracts) 5% of Market OI Absolute OI Limit (commodity level) Excess OI Qty 1 01/01/2016 94440 502220 25111 12000 69329 2 04/01/2016 96220 499010 24950 12000 71270 3 05/01/2016 99350 505910 25295 12000 74055 4 06/01/2016 105790 487310 24365 12000 81425 5 07/01/2016 105920 478200 23910 12000 82010 6 08/01/2016 106320 473610 23680 12000 82640 7 11/01/2016 107520 475410 23770 12000 83750 8 12/01/2016 106320 470130 23506 12000 178264 9 13/01/2016 105780 465980 23299 12000 82481 10 14/01/2016 105800 470980 23549 12000 82251 11 15/01/2016 105780 475840 23792 12000 81988 12 18/01/2016 105650 460890 23044 12000 82606 13 19/01/2016 105760 465850 23292 12000 82468 14 20/01/2016 104080 450390 22519 12000 81561 15 21/01/2016 103580 447890 22394 12000 81186 16 22/01/2016 103290 450060 22503 12000 80787 17 25/01/2016 102770 444040 22202 12000 80568 18 27/01/2016 82690 434602 21730 12000 60960

On 6 occasions 'Ruchi Group Entities' have violated near month client position limit as prescribed by FMC. Details given below :

Sr. No. Date Netted OI of 'Ruchi Group Entities' (near month contract) Market OI (near month contract) 5% of Market OI Absolute OI Limit (near month) Excess OI Qty 1 01/01/2016 12690 203620 10181 6000 2509 2 04/01/2016 12690 198800 9940 6000 2750 3 05/01/2016 13040 200020 10001 6000 3039 4 06/01/2016 14270 174970 8748 6000 5522 5 07/01/2016 14080 163410 8170 6000 5910 6 08/01/2016 10930 129110 6455 6000 4475

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