SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI ORDER

WTM/RKA/EFD/DRA-III/ 82 /2016 SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI ORDER UNDER SECTION 11(1),11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 IN RESPECT OF ATHERSTONE CAPITAL MARKETS LTD. IN THE MATTER OF ONELIFE CAPITAL ADVISORS LTD. 1. Onelife Capital Advisors Limited (hereinafter referred to as "OCAL"), a company incorporated under the Companies Act, 1956, came out with an Initial Public Offering ("IPO") to raise 36,85,00,000 through the issue of 33,50,000 equity shares of 10 each with a premium of 100 through 100% book building route. The IPO opened for subscription on September 28, 2011 and closed on October 04, 2011. The issue was over-subscribed by 1.53 times though it was graded "1"(CARE IPO rating of 1) that suggests poor fundamentals. The shares of OCAL were listed on October 17, 2011 in the Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE"). 2. On the basis of the preliminary examination, SEBI passed an ad-interim ex-parte order on December 28, 2011(hereinafter referred to as "interim order") against OCAL, its directors, Fincare Financial and Consultancy Services Private Limited (hereinafter referred to as "Fincare"), Precise Consulting & Engineering Pvt. Ltd. (hereinafter referred to as "Precise") on the basis of prima facie findings against them inter alia about alleged mis-statements, nondisclosures and fraudulent activities in respect of the said IPO. 3. SEBI had also prima facie observed that Atherstone Capital Markets Ltd (hereinafter referred to as "ACML"), the Book Running Lead Manager for the IPO had failed to disclose to investors by issuing public advertisements certain material developments which happened after filing of the RHP. Based on such prima facie finding the ACML, its Managing Director Mr. Gurunath Mudlapur and Compliance Officer Mr. Ranjan Agarwal were also prohibited "from taking up any new assignment as Merchant Banker or involvement in any new issue of capital including IPO, follow on issue, etc. from the securities market in any manner whatsoever, from the date of this order till further directions." These directions were confirmed by SEBI vide order dated January 16, 2013 and continue to be in force till date. Order in respect of Atherstone Capital Markets Ltd. Page 1 of 27

4. One of the findings of the investigation undertaken in the matter was that OCAL had made misstatements in the offer document and diverted the proceeds of IPO. In this regard, the investigation had,inter alia, revealed that: (a) OCAL had made mis-statements in its Red-Herring Prospectus ("RHP")/Prospectus, had failed to disclose certain material developments in the prospectus and had also utilized the IPO proceeds for purposes other than the objects stated in the RHP/Prospectus. During the investigation it was also revealed that ACML had failed to exercise due diligence and making adequate and correct disclosures in RHP/ Prospectus and also disclosing material developments to investors through public notice post registration of RHP with Registrar of Companies ("ROC"). (b) It was mentioned in the RHP/ prospectus that the issue proceeds were proposed to be used for following mentioned objects: Sr No Particulars of object Amount (in 1 Development of Portfolio Management Services ("PMS") (c) The material developments which took place after filing of the RHP are as follows: i. Board Meeting of OCAL dated September 30, 2011:- The following material decisions were made in the meeting: % vis-à-vis crore) 11.578 31.42 2 General Corporate Purposes 8.976 issue 24.36 size 3 Brand Building 7.70 20.90 4. Purchase of Corporate Office 7.00 19.00 5 Issue Expenses 1.596 4.33 Total 36.850 100 a. The declaration of appointment of Fincare and Precise was made in board meeting on September 30, 2011. OCAL had entered into two agreements with Precise and Fincare appointing them for development of PMS on October 01, 2011 and October 05, 2011 respectively. It is observed from the board minutes referred earlier, that declaration of appointment of Fincare and Precise was made in the board meeting on September 30, 2011 and the dates of the said agreements were after the date of RHP (September 21, 2011) but well before the date of prospectus i.e. October 10, 2011 and date of allotment of IPO shares i.e. October 12, 2011. Order in respect of Atherstone Capital Markets Ltd. Page 2 of 27

b. Fincare and Precise were claimed to have already identified locations for offices for PMS business and rent/license fee for the premises was urgently required to be paid. c. Finder fee for the mandates referred by Fincare and Precise to OCAL were also claimed to be due. It was also mentioned that the money had to be paid urgently to them for payment of rent/ license fee and finder fee and they could not wait till IPO proceeds were received by OCAL. In view of the urgency of requirement of funds, the board of OCAL approved of availing short term loans from Prudential group to the extent of 11.50 crore for meeting the urgent requirement of making payments to Fincare and Precise for the two objects of the issue, i.e. development of PMS services and General Corporate Purposes. The prudential group consisted of four companies, namely, Prudential Management Advisors Pvt. Ltd., Premier Corporate Securities & Finvest Pvt. Ltd., Prudential Mercantile Pvt. Ltd. and Mercury Fund Management Company Ltd. d. In the aforesaid meeting, the Board of OCAL also approved payments to be made to Fincare and Precise towards two objects to the issue i.e. Development of Portfolio Management Services and General Corporate Purposes. e. Mr. Pandoo Naig, Managing Director of OCAL was authorized by the Board to make payments to Fincare and Precise for setting up of branches of PMS division, finder fees and meeting their short term fund requirements to the extent of 15 crore to Precise and 20 crore to Fincare. ii. Fund transfers: - On October 08, 2011, a short term loan of 5 crore was received by OCAL from Prudential Group and OCAL had transferred 5 crore to Precise on the same day. This short term loan was approved by the board of OCAL in the board meeting on September 30, 2011. By October 13, 2011, a total of 11.5 Cr. was received by OCAL from Prudential Group as short term loan. (d) During the investigation it was revealed that following mis-statements and non-disclosure were made in RHP/prospectus. The extract of page no. 32 of the prospectus dated October 10, 2011 is reproduced herewith: We intend to use part of net proceeds towards such growth plans and opportunities. We intend to deploy the proceeds of this Issue aggregating to 89.76 Million for general Order in respect of Atherstone Capital Markets Ltd. Page 3 of 27

corporate purposes including but not limited to strategic initiatives, partnerships, joint venture, loan repayments/prepayments and meeting exigencies which our Company in the ordinary course may not foresee etc. The management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently the funding requirements and deployment of funds may also change. As of the date of this Prospectus, our Company has not entered into any letter of intent or any other commitment for any such acquisition/investments or definitive commitment for any such strategic initiatives. The Board of Directors of our Company will review various opportunities from time to time. The above extracts pertain to the utilization of fund designated as General Corporate Purposes (GCP). From the above, it can be concluded that the funds under GCP were supposed to be used for strategic initiatives or unforeseen circumstances and also that as on October 10, 2011 i.e. date of prospectus, it was not decided how IPO proceeds designated as GCP were going to be utilized. However, in board meeting of OCAL dated September 30, 2011, it was decided to avail of short-term borrowing to pay finder fees to Fincare and Precise. The short-term loan was to be repaid using IPO proceeds, as per the minutes of said board meeting. The payment of finder fee and even repayment of loan was to be done with the IPO proceeds designated as General Corporate Purposes. Furthermore, as per Board Minutes, the Board of OCAL approved payments to be made to Fincare and Precise towards two objects to the issue i.e Development of Portfolio Management Services and General Corporate Purposes on September 30, 2011 i.e. prior to the date of Prospectus. Thus, OCAL had already decided (on or before September 30, 2011) on the use of IPO proceeds under GCP however, the same was not disclosed thus misleading statements have been made in the prospectus. The extract of page no. 33 of the prospectus dated October 10, 2011 under the head funds deployed is reproduced hereunder: We have not incurred any expenditure for the above mentioned objects as of date. The above extracts pertain to use of funds for all the objects of the issue. However, it is observed that OCAL had transferred funds to the tune of 2 Cr. for development of PMS (one of the objects of the issue) and 3 Cr. as finder fee (which is use of funds of general corporate purposes, another object of the issue) to Precise by October 08, 2011 i.e. before the date of prospectus i.e. October 10, 2011. However, the same was not disclosed and thus above is a misstatement in the prospectus. The extract of page no. 33 of the prospectus dated October 10, 2011 under the head interim use of funds are produced hereunder: Order in respect of Atherstone Capital Markets Ltd. Page 4 of 27

Pending utilization of the Net Proceeds for the purposes described above, the Company intends to temporarily invest the funds in interest bearing liquid instruments including deposits with banks and investments in money market mutual funds and other financial products and investment grade interest bearing securities as may be approved by the Board. It is observed that the IPO proceeds were to be utilized by OCAL by the end of financial year 2014 in a phase-wise manner as per the IPO proceeds utilization schedule at page no. 33 of the prospectus. Pending utilization of net proceeds, the funds with OCAL were to be invested in interest bearing liquid instruments, as mentioned above. However, during investigation it was revealed that almost all the IPO proceeds were utilized by OCAL within two months. OCAL made advance payments to the tune of 35.24 cr. of IPO proceeds to 3 entities viz. Fincare ( 15.54 crore), Precise ( 12 crore) and KPT Infotech Ltd. ("KPT") ( 7.7 crore). It was further revealed that the funds received from OCAL by Precise and Fincare have been further transferred by them in suspicious manner. Hence, in the present case by transferring almost entire IPO proceeds, OCAL also lost out the interest in short term on such huge amount which is highly unusual and imprudent. Thus from the above facts, it appeared that the utilization schedule furnished in the offer documents and interim use of funds as mentioned in prospectus amount to misstatements made by OCAL and were intended to misguide public. The extract of page no. 30, at para 3 under the head Development of Portfolio Management Services of the prospectus dated October 10, 2011 are reproduced hereunder: Presently, no expenditure has been incurred by us towards this objective. The above extracts pertain to use of funds for development of Portfolio Management Services, one major IPO object. In the present case, it is observed that.2 Cr. were already transferred by OCAL to Precise by the date of prospectus for the said object. Therefore, the above is a mis-statement in the prospectus. The extract of point no 17 at page no. 28 of the prospectus dated October 10, 2011 is reproduced hereunder: Our Company has not raised any bridge loans against the Issue Proceeds. With regard to the above, it is observed that OCAL raised loan of 11.5 crore from Prudential Group vide loan agreements dated October 03, 2011, out of 11.5 crore, 5 crore was received by OCAL by October 08, 2011 i.e. before the date of prospectus. Thus, the above is a mis-statement in the prospectus. Order in respect of Atherstone Capital Markets Ltd. Page 5 of 27

Under the object of issue, Purchase of corporate office the RHP dated September 21, 2011 and Prospectus dated October 10, 2011 mentions that the Company had entered in an MOU to purchase new office premises at Mumbai with M/s Masala Gruh Properties Private Limited and the company expected to receive possession of this premise in Fiscal year 2012. With regard to the above, it is observed that the MOU was entered on December 14, 2010 with a token amount of 1 lac. Further, as per the terms of the said MOU, in any event whatsoever if the MOU was not followed by a definitive agreement signed beyond June 13, 2011 the MOU was to be construed as fully cancelled. Therefore, it is noted that as on date of filing the RHP, the MOU between OCAL and Masala Gruh Properties Private Limited was not valid. This fact was not disclosed by ACML in the RHP/Prospectus. During investigation, it was revealed that the MoU was extended by way of a letter dated June 02, 2011. However, it was later terminated on October 27, 2011. As a part of due diligence, ACML should have clearly brought out the above fact in the RHP/Prospectus that the MOU between OCAL and M/s Masala Gruh Properties Private Limited was valid upto June 13, 2011 and that the same had been extended vide letter dated June 02, 2011. However, ACML did not highlight this point in the RHP/Prospectus. The extract of point no. 3 under the heading Capital Structure in section III of the Prospectus are reproduced below: The funds that were received from issue of these shares was utilised in setting up the business viz. long term working capital expenses. A part of the funds received from this allotment has been advanced to one of our promoter group companies and a part invested in another group company. This advance and investment aggregate to 94.45 million. The above statement pertains to issue and utilization of paid-up capital brought by promoters of OCAL in year 2010. It has been observed that in 2010, 9.995 cr. was introduced as paid-up capital by promoters. In the above declaration in RHP/ Prospectus, it can be seen that company has declared to utilize the same for setting up of business as long term working capital and a part has been transferred to promoter entities as advance and investment. However, a part as stated in the statement accounts for 94.5% of the paid- up capital introduced. Out of approx. 10 cr., only 51 lacs remained with OCAL to be used as long-term working capital. Order in respect of Atherstone Capital Markets Ltd. Page 6 of 27

Hence, it is inferred that there was hardly any genuine need of issuing paid-up capital by OCAL as just a small portion of the same was retained by OCAL. It is further observed that almost the entire amount of capital brought in by way of further allotment was advanced to promoter group company and only an amount of 0.05 million was retained by OCAL as working capital. As around 95% of the capital of OCAL has been advanced to group company ACML should have highlighted this point and mentioned it as one of the risk factor. During investigation it was revealed that in the prospectus of OCAL, in internal risk factor no. 7, it is mentioned that an income tax demand notice of about 17.5 cr. dated December 28, 2010 was received by Mr. Pandoo Naig, one of the promoter of OCAL. During investigation, ACML could not produce the documents related to income tax demand notice of 17.58 crore against Mr. Pandoo Naig. The said documents could not be produced when the SEBI officials visited corporate office of ACML at Nariman Point, Mumbai on November 23, 2011. Further, ACML could not produce the said document when it was summoned to SEBI office on November 24, 2011. However, vide statement dated November 24, 2011 ACML had submitted that the same may be produced to SEBI shortly after sourcing it from the company, hence, it can be inferred that the said document was not available in the records of ACML. Further, summons dated December 08, 2011 under Section 11C of SEBI Act, 1992 was issued to ACML to produce the copy of the said Income Tax Order for claim of 17.5 cr giving the details and nature of underlying transactions, to SEBI by December 9, 2011. However, ACML just provided the covering letter (first page) of the said Income Tax Order. Details -such as nature of transactions, value of transactions, period of the said liability etc. - were not furnished by it. Vide reply dated March 19, 2012, ACML submitted that the details of income tax demand notice were submitted to SEBI. However it is observed from the email dated December 12, 2011 sent by ACML to SEBI that ACML only has the first page of the said income tax demand notice in its due diligence records which it has provided to SEBI. In the statement dated November 24, 2011 at SEBI, the compliance officer of ACML and Managing Director of ACML admitted that the said notice was not available in the records of ACML and the same had to be sourced from OCAL. Hence, ACML in its reply dated March 19, 2012 made false and contradictory submissions. It was further revealed that internal risk factor no. 7 in RHP merely mentions about the receipt of income tax demand notice of about 17.58 cr. received against Mr. Pandoo Naig and no further details about the Income Tax Notice is given so as to give the full picture of said income tax demand notice, which is material as the amount of income tax demand is Order in respect of Atherstone Capital Markets Ltd. Page 7 of 27

around 47% of IPO proceeds. As per regulation 57 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 read with schedule VIII Part A of Clause 2 (IV) (H) (24) and Clause 2 (IV) (H) (31), the details of litigations should be described. The act of non-disclosure about the details of income tax demand notice on part of ACML is misleading and in violation of above mentioned regulation. In this regard, vide letter dated March 19, 2012, ACML also submitted that its disclosures in the RHP with respect to above mentioned risk factor were rather detailed. However, during investigation it was revealed that the period for which such demand was outstanding, value of transactions etc. was not mentioned in the said risk factor and hence, it is a violation of Regulation 57 of ICDR read with schedule VIII Part A of Clause 2 (IV) (H) (31). Further as per schedule VIII Part A of Clause 2 (IV) (H) (31) of the abovementioned regulations, a summary of outstanding litigations have to be mentioned as a risk factor along with giving reference of the page number of RHP/ Prospectus where the said litigations are discussed in detail. In this regard, it is noted that on the page 126of RHP, the same information as given in the risk factor has been repeated and no additional details have been provided. Since ACML was not in possession of the said income tax demand notice hence, there was no question of discussing the same in detail. With regard to objects of IPO issue, OCAL, in prospectus at page no. 29, stated that the Company had entered into an MOU to purchase new office premises at Mumbai with Masala Gruh Properties Private Limited, admeasuring approximately 3000 sq. ft. at a rate of approximately 23,334 per sq. ft. which amounts to 70 million. It is noted that other than the statement of ACML dated November 24, 2011 to SEBI stating that it had done oral verification over phone, ACML has not produced any written documents to show that it has done any independent verification of the said claim of OCAL that the going rate of the property is valued at 23,334 per sq. ft. It is also noted that there were no written records with ACML to show that they it had done an independent verification to ascertain whether the said property is indeed registered in the name of Masala Gruh Properties Private Limited. Vide reply dated March 19, 2012, ACML also submitted that its officers visited the said property and checked the prevailing rates of property from local real estate brokers. ACML also submitted that it was not clear as to what document it could have shown to SEBI to prove that it had done independent verification. In this regard, it was observed that these submissions appear to be an afterthought as the same were not submitted by ACML at the time of the statement recording at SEBI on November 24, 2011. ACML could have Order in respect of Atherstone Capital Markets Ltd. Page 8 of 27

obtained a copy of the title of the above mentioned property from OCAL and kept the same in its due diligence records and produced the same to SEBI when asked. With regard to objects of IPO issue, OCAL, in its prospectus, proposed to utilize 11.57 cr. from the IPO proceeds for development of portfolio management services. During the course of investigation it was revealed that OCAL had itself arrived at the said figure for the purpose of establishing the offices for PMS business across India and provided supporting document in the form of an excel sheet to ACML which mentioned city-wise amounts for lease rental/deposit for taking premises on lease and for purchasing office equipment. It is noted that ACML has not produced any written records to show that it had done an independent verification of the claim of OCAL or obtained/ maintained documentary evidence of verification of the rates of rental etc. Vide reply dated March 19, 2012, ACML submitted that for verifying the estimates of OCAL on this subject, the rental prevailing in the cities where the branches of OCAL were purportedly to be developed were checked using internet through property websites like India Property mart, Magic Bricks, Makaan, etc. In this regard, it is noted that for the purpose of due diligence records ACML could have obtained/ maintained documentary evidence of verification of the rates of rental etc and provided the same to SEBI when asked. It is further noted that the websites mentioned by ACML were checked on random basis for a few cities where OCAL proposed to open offices for PMS. It was observed that the rentals mentioned in the list provided by ACML to SEBI, which it had received from OCAL, to support the utilization of IPO proceeds of 11.578 cr. for developing 20 offices were in no way close to the rate per sq. ft. mentioned in the said websites for commercial property. It is pertinent to note that the rates mentioned in the said list were at least twice the prevailing rate for Mumbai and for other cities the rates mentioned were even found inflated by 5-6 times of the prevailing rate. Therefore, the submission of ACML that a proper verification of the rates was done is not tenable. It was also mentioned in the prospectus that OCAL had fund raising mandates of 473 cr. as on July 15, 2011. During investigation, ACML submitted copies of these mandates. It was observed that for three mandates (Paramount Print-packaging Private Ltd., Trim Plastics and Janta Glass) there were copies of finder fee agreements along with the mandates which clearly mentioned the amount of finder fee payable by OCAL to the finders. ACML should have verified the same with OCAL and mentioned about it in RHP/ Prospectus. Though under internal risk factor mentioned in the RHP/Prospectus, there is a risk factor highlighting importance of third parties and names of several third parties are listed but the word finder is nowhere to be found. Given the significant role of finders Order in respect of Atherstone Capital Markets Ltd. Page 9 of 27

and their share in the primary earnings of OCAL, the same must have been duly highlighted in RHP/ Prospectus. Though ACML has considered the mandate letters and estimated order book value for OCAL, which formed a basis to decide issue price band, yet the fact that there were finders involved in getting these mandates and these finders were third parties which shared the earnings from the said mandates was nowhere mentioned in the offer documents. ACML has claimed to rely on letters of OCAL stating there were no material developments post registering the RHP and hence not having made disclosure of material developments to public through advertisement. While relying on the letters received from OCAL, ACML should have done its due diligence properly. Had ACML checked bank statement of OCAL, it would have noticed many high value transactions before the date of prospectus and then material developments could have been disclosed. ACML should have specifically enquired about any board meeting of OCAL being held/ any major decisions taken and then disclosed the same to public. (e) SEBI also conducted an inspection with respect to the role of ACML pertaining to due diligence in the matter of IPO of OCAL. Following findings of inspection corroborate findings of investigation that ACML has grossly failed in exercising due diligence. i. ACML had failed to disclose by way of due diligence certificate, the material development, which took place during the period between the date of registering the RHP and the date of allotment of specified securities. ii. ACML did not check the title deed of the property, which was proposed to be purchased through the proceeds of the issue. iii. ACML had not furnished any documentary evidence to support the web search done for evaluating the rentals in connection with the setting up of PMS business across various cities in India, which was one of the objects of the issue. iv. In regard to one of the objects of the issue namely brand building, ACML had not ascertained whether any firm tie-ups were made by the issuer company for events and sponsorships and failed to furnish documents in support thereof v. ACML could not furnish any documentary evidence to support how the total mandate size of the issues handled by the issuer company (Issuer Company being a merchant banker) and consequently the price band was arrived at. vi. Details in respect of 8 group companies were not disclosed in the offer document. vii. Accounting ratios of the issuer company, which is a merchant banker, portfolio manager and stock broker, had been compared with an NBFC rather than a merchant banker. Order in respect of Atherstone Capital Markets Ltd. Page 10 of 27

5. Mr. Gurunath Mudlapur was the Managing Director of ACMLwas responsible for conduct of its business/ acts. Further, Mr. Ranjan Agarwal was Compliance Officer of ACML at the relevant time and as such he was responsible for monitoring the compliance of SEBI Act, 1992, rules and regulations, notifications, guidelines and instructions issued by SEBI. However, they failed to ensure adequate disclosures as regards the material developments which took place during the period between the date of registering the RHP and the date of allotment of specified securities and also failed to ensure that there were no mis-statements/non-disclosures in the RHP/Prospectus. 6. Based on the above, a Show Cause Notice dated November 23, 2015 (hereinafter referred to as the SCN ) was issued to ACML, Mr. Gurunath Mudlapur and Mr. Ranjan Agarwal (hereinafter collectively referred to as Noticees") alleging that they have violated the following provisions: a. Regulation 64 (1) of ICDR Regulations by failing to exercise due diligence and satisfy themselves about all the aspects of the issue including the veracity and adequacy of disclosure in the offer documents; b. Regulation 8 (2) (b), (e) and (f) of ICDR Regulations by failing to ensure that the prospectus was suitably updated and contained all the material disclosures in respect of the issuer; c. Regulation 57 of ICDR Regulations read with schedule VIII Part A of Clause 2 (IV) (H) (24) and Clause 2(IV) (H) (31) by failing to ensure that the offer document contained all material disclosures which are true and adequate so as to enable the applicants to take an informed investment decision which is violation of Regulation; d. Regulation 13 read with Clauses 1,2,3,4,6,7 and 21 of the Code of Conduct specified under Schedule III of Securities And Exchange Board Of India (Merchant Bankers) Regulations, 1992 (Merchant Banker Regulations); e. Sections 11C (2) and (3) of SEBI Act, 1992 by failing to produce documents in compliance with summons dated December 08, 2011. 7. The Noticees were called upon to show cause, as to why appropriate directions as deemed appropriate under section 11(1), (4) and 11B of the SEBI Act, 1992 should not be issued against them for the aforesaid violations. 8. Vide letter dated December 01, 2015, the Noticees sought 90 days time to file a reply to the SCN. The Noticees filed their reply vide letters dated January 11, 2016 and January 12, 2016 to the SCN inter alia submitting the following: Order in respect of Atherstone Capital Markets Ltd. Page 11 of 27

1) The present proceeding is one among several proceedings initiated by SEBI against them in the matter of the Initial Public Offering ( IPO ) of OCAL. The first action taken by SEBI in the matter was passing directions against them in an ad interim ex parte order dated December 28, 2011. These directions prohibiting the Noticees from taking up new assignments as a Merchant Banker and from involving themselves in any new issue of capital etc. were confirmed by an order dated January 16, 2013. Thereafter, ACML received a Show Cause Notice dated October 25, 2013 under the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 to which a detailed reply dated November 29, 2013 was submitted and a hearing was held on February 07, 2014. However, despite several reminders, no orders have been passed in the matter till date. Subsequently, the Noticees have received the said SCN containing the very same narration of facts and allegations. The Noticees submitted that such multiplicity of proceedings in the same facts and for the same alleged violations is a gross violation of the well-established principles of natural justice and the said SCN ought to be withdrawn on this ground alone. 2) Further, the proceedings against the OCAL were also initiated by the ad interim ex parte order dated December 28, 2011 and the directions passed therein were confirmed by the same confirmatory order dated January 16, 2013. As a result of the interim directions passed in the ad interim ex parte order in respect of OCAL in which the Noticees acted as the Book Running Lead Manager ( BRLM ), which continue till date, the business of the Noticees as a Merchant Banker was terminally affected and they are making losses till date in their business. However, the final orders were passed against OCAL vide order dated August 30, 2013 prohibiting it from accessing the securities market for a period of 3 years, which included the period for which the interim directions were in operation; thus, with effect from December 29, 2013, OCAL which was accused of withholding information from investors and diverting IPO funds, is fully permitted to access the securities market and its directors are permitted to buy, sell and deal in securities. The Noticees also submitted that that the dichotomy of approach that SEBI has adopted in the case of OCAL and in their case and the fact that as on date no prohibitory orders are in effect against the OCAL while the same are in effect against them, is a complete travesty of justice. 3) The fundamentals of OCAL were not poor; it was only the opinion of the rating agency that they were; in any event, the oversubscription in the IPO and the continued interest Order in respect of Atherstone Capital Markets Ltd. Page 12 of 27

shown by investors in the scrip of the Company show that the credit rating agency s opinion was not accepted by the investors. Also, rating agencies, objectivity and success on such ratings and the subsequent performance of the IPO are not accurate or very perfect. They can at best be an optional indicator to the investors at large. Further, it is important to note that the statutory disclaimers provided by the Client Company on all aspects being declared in the offer document were the full and final responsibility of the Client Company. 4) The Noticees denied that they failed to exercise due diligence and make adequate and correct disclosures in the Red Herring Prospectus or the Prospectus or otherwise and that the listed companies selected by them for the purpose of comparing accounting ratios were not in similar business. The companies that were chosen to compare the accounting ratios viz. Almondz Global Securities Limited, Arihant Capital Market Limited and Indiabulls Financial Services Limited were engaged in the business of merchant banking and other financial services; they were also relatively recent entrants into the segment and hence a better choice for comparing a new entrant like OCAL rather than longstanding companies such as Motilal Oswal Securities Limited. It is also pertinent to note that the P/E multiples that were compared in the offer documents were conservative and therefore, more correctly reflected the fair value of the business to prospective investors. 5) In fact, all observations which are being highlighted on the non-performance of the Noticees have been extracted by SEBI from the offer documents itself. Therefore, as a responsible Merchant Bankers, the Noticees have never tried to hide or declare wrong statements in the offer documents. 6) The Noticees have further submitted that they have not been provided with copies of the complete investigation report or other relevant documents such as statements made before SEBI by the representatives. 7) The Noticees first came across the fact that a meeting of the Board of Directors of OCAL was held on September 30, 2011 from the ad interim ex parte order dated December 28, 2011. In this regard, vide reply dated March 19, 2012, the Noticees have submitted letters/confirmations obtained from OCAL confirming that no material developments had taken place between the date of the Red Herring Prospectus and the date of the Prospectus and the same has been accepted by SEBI. However, it was observed that while relying on the letters received from OCAL, the Noticees should have done their diligence properly. In this regard, it was submitted that the Merchant Banking Order in respect of Atherstone Capital Markets Ltd. Page 13 of 27

Regulations and the Mandate letter dated October 14, 2010 did not confer powers or means on the Noticees to procure information regarding Board Meetings except through the client company (OCAL). 8) Furthermore, it is pertinent to note that OCAL was itself a merchant banker and well aware of the requirements of disclosure to be made under the ICDR and the meaning and implication of the words material development. There was no need for the Noticees to educate OCAL regarding the need to disclose all material developments to the Noticees and in the offer documents. It was in the above circumstances that the Noticees did not specifically seek details of board meetings, rather they requested the client company to provide details of all and any material development after the date of RHP. 9) At the relevant time, there were no circumstances or actions by OCAL that warranted an extensive investigations by the Noticees that they ought to have asked for the aforesaid details. 10) OCAL chose not to inform the Noticees about the Board meeting held on September 30, 2011 or the decisions taken therein. As a result, the Noticees were not privy to the following information relating to: The decision to appoint Fincare and Precise for development of PMS. The decision to take short term loans from Mercury Fund Management Co. Ltd and their associates (Prudential Group) to the extent of 11.50 Crores for making payment of finder fee to Fincare and Precise. 11) The Noticees further submitted that at the relevant time, the Noticees were not privy to the agreements dated October 1, 2011 and October 5, 2011 for development of PMS entered into with Precise and Fincare respectively and that they came to know about the existence of the aforesaid agreements for the first time from the ad interim ex parte order dated December 28, 2011. It is pertinent to note that even SEBI does not attribute knowledge of the existence of the aforesaid agreements to them. 12) With regard to the fund transfers between OCAL and the Prudential Group or between OCAL and Precise or between OCAL and Fincare, the Noticees submitted that they became aware of the aforesaid fund transfers for the first time upon reading the ad interim ex parte order dated December 28, 2011. OCAL chose not to disclose the aforesaid fund transfers to the Noticees. As mentioned earlier, the OCAL was itself a SEBI registered active merchant banker and portfolio manager and therefore, there was Order in respect of Atherstone Capital Markets Ltd. Page 14 of 27

no reason for the Noticees to presume that they would consciously withhold key and material facts such as short term loans and fund transfers from them. 13) The Noticees submitted that they could not have disclosed or arranged to disclose facts that were not in their knowledge. Since, the Noticees came to know about the aforesaid material developments viz the Board Meeting on September 30, 2011, the Short Term loans availed from the Prudential Group and the payments made to Fincare and Precise, only from the ad interim ex parte order dated December 28, 2011 and not before, they could not have disclosed the same by way of a public announcement or otherwise as suggested in the said SCN. 14) Moreover, the Noticees submitted that they conducted an adequate and complete due diligence of OCAL based on the documents and records provided to them, representations made by OCAL and its authorized representatives and information available in the public domain. The ICDR and other laws in force and industry practices do not require any more to be done by the Noticees in this regard. OCAL alone is liable for any misstatement or non-disclosure regarding the same in the offer documents and the Noticees cannot not be held liable for the same. 15) As BRLMs the Noticees are not responsible for monitoring the end use of IPO proceeds by OCAL. The role of BRLM ends with listing of the shares of the client company on the stock exchange/s. In the case of OCAL, the shares were listed on October 17, 2011, on which date, the IPO proceeds were released from the escrow account to the client company. Thereafter, the company alone is responsible for the use of the IPO proceeds. It is understood from the ad interim ex parte order and other directions passed by SEBI that OCAL transferred funds to KPT and to Fincare and Precise on October 17, 2011 after the funds were received from the escrow account. Therefore, the Noticees cannot be held liable for any diversion of funds. Furthermore, it has been inferred by SEBI that the utilization schedule in the offer documents is misleading because the IPO proceeds were diverted by OCAL. Such an inference is erroneous and misleading. It is because OCAL did not adhere to the utilization schedule that an inference is drawn of diversion of funds in a suspicious manner and not vice versa. Therefore, the allegation that the utilization schedule set out in the offer documents was misleading is erroneous and false. 16) With regard to incurring of expenditure towards Development of PMS Services and the statement in the Prospectus dated October 10, 2011, it is submitted that the Noticees were not aware of the transfer of 2 Crores to Precise because the same was not Order in respect of Atherstone Capital Markets Ltd. Page 15 of 27

disclosed to them by OCAL. In this regard, it is also pertinent to note that the said sum of 2. Crores was paid to Precise from the short term loan availed by OCAL from Prudential. It is only because the said short term loan was repaid from the issue proceeds that it is alleged that the above statement in the prospectus is erroneous. The Noticees were not aware of the short term borrowing by the company and therefore, they may not be held liable for any misstatements in the Prospectus, if at all. 17) With regard to the Objects of the Issue and Purchase of Corporate Office from Masala Gruh Properties, following was submitted:- It is not stated in the RHP or in the Prospectus that the MOU was valid only till June13, 2011; in fact, the tenure of the MOU was never mentioned in the RHP or the Prospectus. Therefore, there was no need to specifically and separately mention the renewal of the MOU on June 2, 2011. In any event, as on the dates of the RHP and Prospectus, there was a valid MOU in existence between OCAL and M/s Masala Gruh Properties. The termination of the aforesaid MoU took place on October 27, 2011 i.e. after the shares of the client company were listed on the BSE and NSE. As mentioned above, the responsibility of the Noticees as a BRLM ends with listing of the shares and therefore, they were not only not aware of the aforesaid termination, but not concerned with the same. Furthermore, as mentioned above, the MoU was valid and in existence till October 27, 2011. Therefore, the allegation that there was no valid contract for purchase of property on October 10, 2011 is belied by the facts as stated above and as recorded in the various orders passed by SEBI. 18) With reference to the advance and investment of 94.45 million made by the client companies in promoter group company and the non-inclusion of the same under Risk Factors, following was submitted: The increase in capital of OCAL and the investment of the same are clearly set out not only in the chapter Capital Structure of the RHP and Prospectus, but also set out in Related Party Transactions. There was no reason to consider the investment of capital by the client company in its promoter group companies as a risk. In this regard, it is pertinent to note that one of the ways in which the amount of 9.49 Crores was deployed towards advance deposit and rental ( 4 Crores) to Mint Street Estate Pvt. Ltd for use of their premises as the corporate office of Order in respect of Atherstone Capital Markets Ltd. Page 16 of 27

the client company. The advance was repayable on termination of the Advance/Rent Agreement and therefore, there was no risk regarding the same. The opinion of the peer reviewed auditor of OCAL was sought on this matter and they had concurred that these were normal commercial transactions of any business enterprise and cannot be considered as eroding the capital of OCAL in any manner. 19) The income tax notice received by the promoter are set out in the Internal Risk Factor No.7 in the RHP/Prospectus. It may be noted that the income tax demand was made on one of the promoters of OCAL and not on OCAL itself. The amount demanded and the status of the case are mentioned; there cannot be any financial implication of such a demand on OCAL and therefore, no financial implication was mentioned. OCAL cannot be made liable for the income tax dues of one of its promoters. The first page of the Income Tax Notice contained all the above relevant details and therefore, OCAL did not provide any further details. On receiving the summons from SEBI to produce the entire income tax notice and other connected papers, the Noticees asked OCAL for the same, but they refused to provide the same because it was related to their promoter and not to them. It is also pertinent to note that even SEBI did not raise any observations regarding this Risk Factor in the DRPH, RPH or Prospectus. 20) It is pertinent to note that while recording the statement on November 24, 2011, authorized representatives of the Noticees had clearly stated that the price/rates of the property were verified over phone with property dealers. This was reiterated in their reply dated March 19, 2012 and it was further submitted that these rates were further verified after a search over the internet. Therefore, there is no question of the same being an afterthought. 21) The price was a negotiated price between OCAL and the seller and was lower than the prevailing market price in that area. For this reason and also since the property was not in the name of OCAL, the Noticees did not insist on a valuation report from an approved valuer. 22) The rental rates prevailing in a few of the areas/cities in which OCAL proposed to establish offices for the purpose of carrying on PMS were compared on a random basis. This comparison between the figures given by OCAL and the rates as set out in various websites showed that the rates mentioned by OCAL were comparable and similar to the rates mentioned in the websites. Order in respect of Atherstone Capital Markets Ltd. Page 17 of 27

23) It is true that the Noticees did not maintain a record of the search results of the websites for the relevant period; however, by itself, that is not sufficient to establish the charge that they did not carry out due diligence of the data provided by OCAL. At worst, it can only show that the due diligence carried out by the Noticees was not perfect or that they did not maintain records of their due diligence. It is pertinent to note that at the relevant time, it was not mandatory to maintain records of the diligence conducted by the Noticees; this is acknowledged by SEBI in the said SCN in paragraph 16 wherein it is stated that for the purpose of due diligence records you could have obtained/maintained documentary evidence of verification of the rental etc 24) It is pertinent to note that till date no investor has complained to SEBI or otherwise that the data relating to rental rates which has been relied on by the OCAL to arrive at the proposed expenditure for setting up Branch /PMs offices was incorrect or inflated. It is further pertinent to note that the rental was only one part of the proposed expenditure for setting up Branch/PMS offices. The print outs of the results of a web search by SEBI for prevailing commercial rental rates in Indore and Surat, have been provided to the Noticees as annexure to SCN for the first time despite having been relied upon by SEBI to arrive at the allegation/charge against them. It is pertinent to note that the said web search relates only to 2 cities whereas OCAL had proposed to set up Branch/PMS offices in 20 cities across India. Moreover, premium location, frontage based office locations generally commanded a premium of about 65-75% on normal listings. Under these considerations the Noticees were evaluating the tentative rates of acquisition cost for the various PMS locations. 25) Even now, the record of comparison of OCAL and the results of the web search carried out by SEBI has not been made available to the Noticee. In the absence of the same, it is erroneous to allege that the Noticees had not carried out a proper verification of the prevailing rental rates for commercial properties and/or that our submission regarding the same was not correct/true as falsely alleged or otherwise. 26) Finders are only one of several professionals who help a merchant banker to procure mandates and to provide services in accordance with such mandates. The fee paid to Finders is accounted by OCAL as professional fees. Thus, as far as OCAL is concerned, there is no material difference between a Finder and other third parties relied upon by them to conduct their business. Therefore, the mere absence of the word Finder in the Risk Factors cannot be construed as a non-disclosure of a material fact. Order in respect of Atherstone Capital Markets Ltd. Page 18 of 27

The statement of risk set out in Risk Factor No. 19 sufficiently addresses the risk posed by third party service providers including Finders to the client company s business. 27) It is understood from the ad interim ex parte order and other orders, that the finder fee to Fincare and Precise was paid out of short term loan availed by the client company from the Prudential Group. This short term loan was repaid using the IPO proceeds. Therefore, it is erroneous to hold that the Finder Fees were paid from the issue proceeds. 28) The Noticees stated that they have submitted a detailed reply dated April 10, 2012 to the observations made by SEBI vide letter dated March 30, 2012 during their inspection. The Noticees submitted a copy of the aforesaid reply. Vide the said reply the Noticees inter alia submitted thati. Although various clauses in the MoU signed between the issuer and ACML, gave the Noticees the right to call for any reports or documents that would enable them as Merchant banker to conduct their due-diligence exercise effectively, it was possible for them to use the power conferred through these clauses to ask for the minutes of any board meeting or any other document. But the Noticees could have known of a meeting only when it was conveyed to them by OCAL. ii. With regard to page 29 of RHP under the "Objects of the issue", ICDR Regulations do not state that a title deed search is necessary and has to be followed as a basis of due-diligence. Also, the Noticees have clarified that their due diligence was restricted to meeting the owner of Masala Gruh Properties Pvt. Ltd. and check on the MoU validity and terms and physical verification of the premises, which they had done and there seems to be no dispute from SEBI on the ownership status of the property for now. It was also submitted that there is no observation of SEBI regarding any misleading or incorrect disclosure regarding title of the property in question. Even unregistered documents have contractual validity and they had independently verified the same by meeting the owner of the premises on their premises itself. The Noticees submitted the visit report in support of their submission. iii. With regard to page 37 of RHP under the head 'Comparison of Accounting Ratio with Industry Peers', the Noticees submitted that there could have been better comparables in this instance based on the business model barring the fact that, most profit making ventures in this space of comparable companies were trading at very high PE multiples, which could have led to unrealistic investor expectations. By giving a company like Indiabulls Financial Services Ltd. (IFSL) in Order in respect of Atherstone Capital Markets Ltd. Page 19 of 27

the peer group, the Noticees tried to ensure that as merchant bankers the Noticees are conservative while pricing the issue. Hence, the Noticees took IFSL as a peer as both IFSL and OCAL fall in the category of "Financial Services" as the sector in which they operate. The Noticees also submitted that they believe that they have not eroded on this count by stating that the same could have been put across better. 29) The Noticees further submitted that the SCN does not set out what directions are proposed to be issued to them; it merely calls upon to them to. Show cause as to why appropriate directions as deemed fit and proper under Sections 11(1), (4) and 11B of the SEBI Act, 1992 should not be issued against you all for the aforesaid alleged violations. The noticee submitted that the SCN is vague and does not set out the particulars of the directions proposed to be issued to and actions proposed to be taken against the Noticees. The Noticees referred to the case of Gorkha Security Services vs Government (NCT of Delhi) and others 2014 (9) SCC 105, the Supreme Court of India stating that in the said case Supreme Court of India has set out the two requirements that a show cause notice should meet to fulfil the requirements of principles of natural justice. These are: i. The material/grounds to be stated which according to the department necessitates an action ii. Particular penalty/action which is proposed to be taken. 10. An opportunity of personal hearing was provided to the Noticees on March 29, 2016 when their authorized representatives appeared and made submissions on their behalf in line with their replies. The entities were also given 10 days time to file their written submissions. Vide letter dated April 11, 2016, the Noticees requested to grant time till April 25, 2016 for filing additional written submissions. Subsequently, vide letter dated April 22, 2016, the Noticees submitted their written submissions submitting, inter alia, that: a. neither the ICDR Regulations nor the existing practice among merchant bankers/brlms required them to call for and examine the bank statements of the issuer company after filing of the RHP; b. as per the ICDR Regulations, it is statutory/peer reviewed auditor who examines financial records and opines on them. The statutory/peer reviewed auditor did not inform the Noticees regarding transfer of funds from OCAL to precise and Fincare and no remark to that effect was set out by them in the financial statements or review in the prospectus. Order in respect of Atherstone Capital Markets Ltd. Page 20 of 27

c. the examination of title of the property forming the subject of MoU between OCAL and M/s Masala Gruh Properties Pvt. Ltd. was premature at an MoU stage and would have been properly done by the legal advisors of the issuer company as and when the parties decided to enter into definitive agreement for purchase of the property, d. the accounting ratios of companies engaged in merchant banking were compared with that of OCAL. It is only a coincidence that one of them was an NBFC; e. that SEBI has not provided a comparison of the rental rates mentioned in the offer documents and as obtained by a web search by SEBI. In the absence of the same, it is erroneous to allege that the Noticee s verification of the rental rates was not properly carried out. At worst, it can only be said that the Noticees failed to maintain records relating to the due diligence through web search done by them; f. mis-utilization of issue proceeds or non-adherence to the disclosed schedule of utilization by the issuer company cannot be the basis to allege non-disclosure or mis-statement. To the best of the Noticee s knowledge, OCAL had not taken any bridge loans during the period between filing of RHP and allotment of shares. Since, OCAL is a registered merchant banker, the Noticees did not have any reason to disbelieve the declaration to that effect given by OCAL; g. the allegation made against the Noticees is not that they connived with the issuer company, rather the allegation is that the Noticees failed to exercise due diligence. However, while final orders have been passed against the issuer company on August 30, 2013, prohibiting from accessing the securities market for a period of 3 years w.e.fdecember 28, 2011, the prohibition/restraints on the Noticees have not been removed even after more than four and half years and final orders are yet to be passed. The Noticees submitted that this action of SBEI is against the well-established principles of natural justice and discriminatory; h. The Noticees while referring to various orders of SEBI submitted that in matters of similar nature, monetary penalties and restraints of much lesser periods have been imposed on Merchant Bankers and the SCN issued against them is against the wellestablished principles of natural justice and discriminatory. 11. I have carefully considered the SCN, reply/submissions of the Noticees and other material on record. The Noticees have made preliminary objection that they have not been provided with copies of the complete investigation report and other relevant documents such as statements made before SEBI. In this regard, it is noted that the relevant excerpts of the investigation report were forwarded to the Noticees as a part of the SCN. Further, all the relevant statements, replies and documents relied upon by SEBI for the purposes of the SCN have Order in respect of Atherstone Capital Markets Ltd. Page 21 of 27

been forwarded to the Noticees along with the SCN. Moreover, the Noticees have never approached SEBI for any additional documents after the SCN was issued to them. In light of the aforesaid, I do not find any merit in the submission of the Noticees in this regard. Another technical contention raised by the Noticees is that the SCN is vague as it does not set out the particular directions/actions proposed to be issued/taken against them and thus it does not fulfil the requirements of principles of natural justice. In this regard, I note that the SCN has been issued under sections 11(1) 11(4) and 11B of the SEBI Act and the basis of allegations have been clearly laid down therein. The provisions of law alleged to have been contravened in this case are also mentioned in the SCN. The directions contemplated under sections 11(1), 11(4) and 11B of the SEBI Act are matters of common knowledge for any person associated with securities market. The possible directions under those sections, apart from being of wide amplitude as upheld by courts, include the directions that are specifically listed in section 11(4) of the SEBI Act. I, therefore, find that no prejudice is caused to the Noticees merely because the specific directions are not listed in the body of the SCN. 12. It is undisputed fact that there is neither any charge of fraud on the part of the Noticees nor their collusion or connivance in the fraudulent activities of the OCAL and its Managing Director Mr. Pandoo P. Naig. The primary charge against the Noticees in these proceedings is that have failed to exercise due diligence as required under the MB Regulations in ensuring that all material disclosures as required under the ICDR Regulations are made in the offer document of OCAL. It is settled position that the observance of due diligence depends upon the facts and circumstances of each case and there must be higher degree of preponderance of probability to hold a merchant banker guilty on such charge. In this regard, Hon'ble SAT in the matter of Imperial Corporate Finance and Services Private Limited Vs. SEBI [2005] 61 SCL 197 (SAT) has held as under: "It can be safely said that lack of due diligence should run from the facts of each case and ultimately there can be no hard and fast rule as to what constitutes lack of due diligence. It depends entirely on the facts of each case. We however hold that before any person is found to have violated the concept of "due diligence", there must be an enquiry and the finding must be sustained by a higher degree of proof than that required in a civil suit, yet falling short of the proof required to sustain a conviction in a criminal prosecution. There must be convincing preponderance of evidence (see AIR 1984 SC 110).A Lead Manager is required to employ reasonable skill and care but he is not required to begin with suspicion and to proceed in a manner of trying to detect a fraud or lie unless such information excites his suspicion or ought to excite his suspicion as a professional man of reasonable competence." Order in respect of Atherstone Capital Markets Ltd. Page 22 of 27

13. It is seen that the provisions of ICDR Regulations that are alleged to have been violated by the Noticees cast primary obligations of the disclosures on the Company. However, the merchant banker who is intermediary engaged in IPO to impart professional service and is primarily responsible for due diligence exercise in the IPO as a matter of investor protection. If the facts and circumstances of the case indicate that the merchant banker could ensure disclosure by employing a reasonable skill and care he cannot escape liability in this regard for any misstatement / non-disclosure. 14. In this case, the cause of action i.e. mis-statements/non-disclosures in the RHP and nondisclosures of material events subsequent to the filing of RHP and the facts and circumstances leading to such allegation have been dealt with in detail in the order dated August 30, 2013 passed against OCAL and its directors in separate proceedings initiated against them under sections 11(1), 11(4), 11A and 11B of the SEBI Act. It is noted that with regard to allegations of non-disclosures of information in respect of Income Tax demand notice of about ` 17.58 core against Mr. Pandoo P. Naig, in the order dated August 30, 2013, it has been found that while all the requisite disclosures with regard to the above demand notice were made in the prospectus, the disclosure with regard to period for which the income tax demand was outstanding was not made as required in clause 2(IV) (H) (31) of Part A of Schedule VIII of the ICDR Regulations. This lapse has been found to be technical and venial and no action against OCAL and its directors have been taken and they have been discharged with respect to this charge. Further, no fault has been found with regard to disclosure in RHP and Prospectus pertaining to the validity of the MoU of OCAL with Masala Gruh Properties Private Limited. Thus the cause of action with regard to these two matters does not survive against the Noticees. In these facts and circumstances I do not find any fault with the due diligence carried out by the Noticees with respect to these two issues. 15. With regard to other mis-statements, non disclosures, etc. the findings on facts have been concluded in the order dated August 30, 2013 as against OCAL and its directors. I do not wish to burden this order again with the same findings on facts except where additional facts have been found during investigations with regard the Noticees. I further find that the merchant banker cannot escape liability with regard to failure to exercise due diligence if the material information could be found by him by employing reasonable skill and care. 16. In the present case, as regards the allegations pertaining to the board meeting of OCAL dated September 30, 2011 and the developments that took place thereafter, the Noticees have made a generic submission that they were not aware of the aforesaid developments since OCAL did Order in respect of Atherstone Capital Markets Ltd. Page 23 of 27

not inform them about the same. On the same basis, the Noticees submitted that they could not have disclosed the aforesaid developments by way of public notice as stated in the SCN. In this regard, I note that it is a matter of fact that the RHP was filed on September 21, 2011 and the issue was opened for subscription on September 28, 2011. Thus, post registration of RHP with ROC, OCAL passed board resolutions to take short term loans against the IPO proceeds and to make payments under two objects of the issue to Fincare and Precise. It also received short-term loans from Prudential Group and made payments to the said two vendors. All these developments were significant and material because these developments were significantly different from statements made in RHP and Prospectus claiming that no expenditures were incurred and no bridge loans were taken etc. and all of these decisions were related to the use of public money received through IPO. This information could influence an investor s decision to invest / remain invested in shares of OCAL. 17. In relation to the above submissions of the Noticees, it is noted that the Noticees in their submission have stated that various clauses in the agreement signed between OCAL and ACML gave them the right to call for any reports or documents that would enable them as Merchant banker to conduct their due-diligence exercise effectively. Thus, it was possible for them to use the power conferred through these clauses to ask for the minutes of any board meeting or any other document. Having admitted the above, the contention of the Noticees that they could have known of the aforesaid developments only when it was conveyed to them by OCAL is not tenable. It is also noteworthy that under the ICDR Regulations, the role and obligations of a Merchant Banker to an IPO do not come to an end when the RHP is filed by the issuer company. Clearly in the present case, when the board meeting of OCAL took place on September 30, 2011, ACML was still continuing as a Merchant Banker to the issue and was under an obligation to carry out due diligence regarding every material development that would take place in the issuer company. The Noticees have also submitted that they became aware of the developments, which took place after the filing of RHP, only after reading the interim order dated December 28, 2011. This fact in itself indicates that the Noticees believed that their obligation related to the IPO had come to an end after the filing of RHP. In fact, the sole reliance on the communication of the issuer company that there were no material developments was in itself the biggest lapse in due diligence exercise of the Noticees. Also, the fact that OCAL itself was a Merchant Banker and was supposed to be aware of SEBI s laws does not have any bearing on the level of due diligence which was expected of ACML. In view of the above, I find that the submission o the Noticees that they were not aware of the board meeting dated September 30, 2011 and the developments which took place thereafter because the issuer did not inform them, and the same could not have Order in respect of Atherstone Capital Markets Ltd. Page 24 of 27

been disclosed to the public, is fallacious and is therefore, rejected. 18. With respect to the allegations pertaining to the disclosures regarding the utilization of issue proceeds for general corporate purposes, incurring of expenditures, temporary investment of funds in liquid instruments, etc. the Noticees have reiterated their stand that they were not aware of the board meeting that took place on September 30, 2011 and the decisions that were taken in the said meeting. They have also submitted that as a Merchant Banker, it was not their obligation to monitor end-use of issue proceeds. In this regard, I note that the allegation in the SCN against the Noticees is not regarding mis-utilization of issue proceeds. Rather, the allegation is that the developments that took place after the filing of RHP were not in accordance with the disclosures made in the RHP. As noted in the above paragraphs, the conduct of the Noticees in the present case showed that they had assumed that their obligations were fulfilled after filing of RHP. Had the Noticees not shown laxity in their approach towards identifying material developments and disclosing them to the public, the issuer company could not have mis-utilize/divert the issue proceeds in the manner it did in the present case. In view of the above, I reject the contentions of the Noticees in this regard. 19. As regards the allegation of non-maintenance of records relating to web search regarding rental rates prevailing in areas where OCAL intended to set up offices for PMS services the Noticees have admitted that they failed to maintain records relating to the due diligence through web searches done by them. It is noted that in absence of any records produced by the Noticees in support of their claim that proper verification of the rental rates was carried out, their submission, that it is erroneous to allege that the Noticee's verification of the rental rates was not properly carried out, is not tenable. 20. It is also alleged in the SCN that the Noticees have not done a proper verification of the rates as mentioned above, particularly in light of the fact that the rates provided by the Noticees (which they obtained from OCAL) were at least twice the prevailing rate for Mumbai and for other cities the rates mentioned were even found inflated by 5-6 times of the prevailing rate. In my view, had the Noticees carried out proper verification of records the fact that the rental rates were inflated would have been brought out and highlighted in the prospectus. The fact, that the Noticees have submitted no records reflecting that verification of rental rates was carried out also indicates that proper verification of the rental rates was not done by the Noticees. 21. It is alleged in the SCN that the Noticees failed to highlight the role of finders in the RHP/prospectus. In view of the significant role of the finders and their share in the primary Order in respect of Atherstone Capital Markets Ltd. Page 25 of 27

earnings of OCAL, the submission of the Noticees that mere omission of the word "finder" cannot imply non-disclosure cannot be accepted. It is pertinent to note here that Managing Director of OCAL was authorized by the board of OCAL to make payments to Fincare and Precise for setting up of branches of PMS division, finder fees and meeting their short term fund requirements to the extent of 15 crore to Precise and 20 crore to Fincare. Considering the substantial payments made towards finder fees, ACML should have highlighted the role of finders in the RHP/prospectus. 22. With regard to the allegation that accounting ratios of OCAL, which is a merchant banker had been compared with an NBFC rather than a merchant banker, the Noticees have admitted that that there could have been better comparables in this instance based on the business model barring the fact that, most profit making ventures in this space of comparable companies were trading at very high PE multiples. The submission of the Noticees that they took India Bulls Financial Services Ltd. (IFSL) as a peer as both IFSL and OCAL fall in the category of "Financial Services" as the sector in which they operate cannot be accepted as "financial services sector" as a category is too broad and vague to be used for categorizing a company, particularly for the purpose of choosing peers for comparing accounting ratios. 23. In view of the foregoing, I find that the Noticees in the present case failed to exercise the due diligence that is expected from a SEBI registered Merchant Banker under the ICDR Regulations except on counts that have been specifically noted above. Thus, it is established that the Noticees have violated the provisions of regulation 64(1) of the ICDR Regulations read with regulation 8(2)(b), (e), (f), 57(1), (2)(a), (b) thereof and regulation 13 of the Merchant Banker Regulations in respect of failure to exercise due diligence in this case as found hereinabove. 24. It is further noted that the SCN has also charged the Noticees with the violation of section 11C(2) and (3) of the SEBI Act for non-compliance with summons. In this regard, the SCN is vague with regard to basis of this charge. This apart, the charge is also unfounded since the subject matter of summons that was basis of charge with regard to Income Tax demand notice as state above does not survive. 25. It is pertinent to note that vide the interim order dated December 28, 2011, the Noticees were prohibited from taking up any new assignment as Merchant Banker or involving in any new issue of capital including IPO, follow on issue, etc. from the securities market in any manner whatsoever, till further directions. These directions were confirmed by SEBI vide order dated January 16, 2013 and continue to be in force till date i.e. for about 4 ½ years. It is also noted Order in respect of Atherstone Capital Markets Ltd. Page 26 of 27

that as on date, ACML is not functioning as a Merchant Banker. 26. Considering the above facts and circumstances, I find that the period of prohibition already undergone by the Noticees is commensurate with the violations that have been found in the present case. I, therefore, do not find it necessary to issue any further directions in the present proceedings against the Noticees. Accordingly, the directions issued vide the interim order dated December 28, 2011 read with the confirmatory order dated January 16, 2013 shall not continue further and the SCN dated November 23, 2015 is disposed of. 27. This Order shall come into force with immediate effect. Sd/- Date: July 5 th, 2016 Place: Mumbai RAJEEV KUMAR AGARWAL WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Order in respect of Atherstone Capital Markets Ltd. Page 27 of 27