Tribunal Upholds SEBI Order: Company Directors Must Refund Rs. 11.46 Crore to RPS Investors, Dismisses Appeal.

The Tribunal dismissed the appeal challenging the SEBI order, which directed a company and its directors to refund money collected through the issuance of Redeemable Preference Shares (RPS) with interest. Despite the appellant's argument of non-involvement in daily management, the Tribunal held him accountable due to his directorship during the RPS issuance period. The Tribunal emphasized established legal principles regarding directors' accountability and upheld the SEBI order, requiring the refund of Rs. 11.46 crore collected from 13,612 investors. No costs were awarded.

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Issues:
Challenge to SEBI order directing refund of money collected through issuance of Redeemable Preference Shares (RPS) with interest.

Analysis:
1. The appeal challenged an order by SEBI directing a company and its directors to refund money collected through RPS issuance with interest. The company collected Rs. 11.46 crore through RPS from 13612 investors, exceeding the limit for a public issue. The appellant argued he was not involved in day-to-day management and should not be liable for refunds.

2. The appellant cited judgments to support his argument that directors not involved in daily operations are not liable. However, the respondent contended the appellant was a director during the RPS issuance period, making him accountable. The Tribunal noted the appellant's directorship during the entire collection period and held him accountable, citing established legal principles.

3. The Tribunal rejected the appellant's argument, emphasizing his presence as a director during the RPS issuance period. The accountability of directors for company actions is well-established in law. The Tribunal distinguished previous judgments cited by the appellant, stating they were not relevant to the current context. The appellant's liability for the company's actions in issuing RPS to the public was upheld.

4. The Tribunal dismissed the appeal, with no costs awarded. The decision highlighted the director's responsibility under relevant laws and regulations, affirming the SEBI order for refunding money collected through RPS issuance with interest.

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