2017 (11) TMI 2043 - AT - SEBI

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

Akhil Chandra Saha Versus Securities and Exchange Board of India

Akhil Chandra Saha Versus Securities and Exchange Board of India - TMI 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.