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2015 (10) TMI 2847
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....h SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations"). In order to protect the investors who have subscribed to the impugned offer and issue of RPS and to ensure that the Company and its directors are restrained from carrying on with their fund mobilizing activity, SEBI had issued the following directions: 17. "In view of the foregoing, I, in exercise of powers conferred upon me under Sections 11(1), 11 (4), 11A and 11B of the SEBI Act and Clause 17 of the DIP Guidelines read with Regulation 111 of the ICDR Regulations, 2009, hereby issue the following directions: a) SURAKSHA AGROTECH shall not mobilize any further funds from investors through the issue of RPS or through the issue of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further orders; b) SURAKSHA AGROTECH (CIN- U01400WB2008PLC130787; PAN- AAMCS7720G) and its past and present Directors viz. Shri Ranjit Daspattanayak (DIN - 02821903; PAN - AKDPD9098A), Shri Barun Kumar Nandi (DIN - 00566937; PAN - ABFPN4182J), Shri Indranil Das (DIN- 00566904; PAN -AFTPD7822F),....
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....The Company requested SEBI to dispose off its properties/assets for making payment to the investors. The Company submitted that it has already started making payments to the investors and that it can submit documentary evidence of payments made to investors. Regarding submission of Annual Accounts and Balance Sheet for 2012-2013 and 2013-2014, the Company informed that the same would be sent at the earliest. The Company queried whether it should approach the Calcutta Stock Exchange ("CSE") for listing of its shares. 4. One of the noticees, Mr. Akhil Chandra Saha, vide his undated letter (received in SEBI on January 12, 2015) inter alia submitted that - (a) He was associated with a leading public sector insurance company for over 27 years and relinquished office in 2005. (b) In the year 2007, he was approached by Late P.C. Das and Mr. Arunabha Mukhopadhyay of 'Suraksha Family Services' to promote mediclaim insurance and became associated with them for the said assignment. In view of the then prevailing IRDA regulations, the promotion of mediclaim insurance was discontinued. (c) Thereafter, Mr. Arunabha Mukhopadhyay, the Managing Director of the Company ....
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....peared and filed his letter dated April 20, 2015 enclosing copies of Form-32 and resignation letter dated August 18, 2010. Vide this letter, the noticee submitted that he was associated with the Company for 7 months from January 2010 to August 2010 and hardly knew anything that they were working as a share trading and corporate agent of Birla Sun Life. The noticee tendered his resignation on August 18, 2010, however, the Company sent Form-32 to RoC only on September 01, 2010. He stated "I shall be obliged to delete my name as a director from the above company considering the fact stated above". (b) Noticee, Barun Kumar Nandi appeared and filed his letter dated April 21, 2015 enclosing copies of his resignation letter and Form-32. The noticee submitted that he has no connection with the above stated company since March 2009 as he had resigned. However, the Company accepted his resignation only after a year of his resignation. The noticee had not taken any remuneration, perks or any financial benefit from the Company as a director. The noticee alleged that his name was used only as a director of the Company. He did not attend any Board meetings/EGMs. He had accepted to be a ....
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....ent Type of Security No of securities No. of persons to whom issued(approx) Total Amount (Rs) 01/04/2009 Preference shares of Rs. 10/ with premium Rs. 40/- 32420 125 16,21,000.00 30/04/2009 -Do- 5200 7 2,60,000.00 02/05/2009 -Do- 30590 158 15,29,500.00 01/06/2009 -Do- 39930 193 19,96,500.00 01/07/2009 -Do- 35965 193 17,98,250.00 2009-10 01/08/2009 -Do- 48110 217 24,05,500.00 01/09/2009 -Do- 43292 221 21,64,600.00 01/10/2009 -Do- 34150 221 17,07,500.00 01/11/2009 -Do- 72313 372 36,15,650.00 01/12/2009 -Do- 48738 253 24,36,900.00 01/01/2010 -Do- 52330 269 26,16,500.00 01/02/2010 -Do- 53044 305 26,52,200.00 Total in 2009-10 496082 2534 2,48,04,100.00 Year Date of allotment Type of Security No of securities No. of persons to whom issued(approx) Total Amount (Rs) 01/04/2010 Preference shares of Rs. 10/ with premium Rs. 40/- 10907....
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....ovided that nothing contained in this sub-section shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more: Provided further that nothing contained in the first proviso shall apply to non-banking financial companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956). In terms of section 67(3), as amended by the Companies (Amendment) Act, 2000, with effect from December 13, 2000, no offer or invitation shall be treated as made to the public by virtue of sub-sections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all circumstances - (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation ; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation. More importantly, in terms of the first proviso to the aforesaid section, the provisions of section 67(3) shall not apply in a case where the offer or invitation to subscribe for shares or d....
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....ny share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. ..." {Emphasis supplied} 10. In the present matter, it is noted that the Company has made multiple allotments on a monthly basis during the financial years 2009-2010, 2010-2011 and 2011-2012. It can be seen that on every allotment (excluding the solitary allotment made on 30.04.2009), the number of persons to whom RPS were allotted always exceeded 49. The Company is not an NBFC or a Public Financial Institution within the meaning of Section 4A of the Companies Act, 1956 to be covered under the second proviso to section 67(3) of the Companies Act, 1956. Therefore, considering the number of persons from whom monies were mobilized by the Company by issuing RPSs, which is definitely more than 49 persons, it can be concluded that the Company had made a public issue of RPS in terms of the first proviso to section 67(3) of the Companies Act, 1956. Further, the manner of making such offer and issuance of RPS adopted by the Company (i.e., series of allotments made consist....
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.... dealt with in the stock exchange. The Company has not disputed that this allegation is incorrect. Further, there is no material to say that the Company has filed an application with a recognized stock exchange to enable the RPS to be dealt with in such exchange. Therefore, the Company has failed to comply with this requirement. Section 73(2) states that "Where the permission has not been applied under subsection (1) or such permission having been applied for, has not been granted as aforesaid, the company shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the company becomes liable to repay it, the company and every director of the company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at such rate, not less than four per cent and not more than fifteen per cent, as may be prescribed, having regard to the length of the period of delay in making the repayment of such money". As the Company failed to make an application for listing such RPS, the Company had to fort....
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....SE for listing of its shares. As already stated, the Company was mandated to list its shares (when issued to the public) on a stock exchange and in case it failed to do so, it was mandated to make refunds under section 73(2) of the Companies Act. Therefore, regularizing a public issue (made in contravention of public issue norms) by now seeking to list on a stock exchange is not allowed under applicable law. (d) During the personal hearing, the Company's representative submitted that the Company has paid Rs.5,49,97,418/-out of the total amount of Rs.11,45,97,600/-. However, the Company did not submit any proof for such claimed payments. (e) The interim order has also alleged that the Company failed to comply with the DIP Guidelines. In this regard, the following provisions of the DIP Guidelines are supposed to be complied with by any company making a public issue of securities: a. Clause 2.1.1. - (Filing of offer document) b. Clause 2.1.4 - (Application for listing) c. Clause 2.1.5 - (Issue of securities in dematerialized form), d. Clause 2.8 - (Means of finance), e. Clause 4.1 - (Promoters contribution in a public issu....
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....nts,- (a) anything done or any action taken or purported to have been done or taken including observation made in respect of any draft offer document, any enquiry or investigation commenced or show cause notice issued in respect of the said Guidelines shall be deemed to have been done or taken under the corresponding provisions of these regulations; (b) any offer document, whether draft or otherwise, filed or application made to the Board under the said Guidelines and pending before it shall be deemed to have been filed or made under the corresponding provisions of these regulations." The Company has not denied such allegation. There is also no material to suggest compliance with such provisions of law. The Company is therefore found to have contravened the aforesaid provisions of the DIP Guidelines read with ICDR Regulations in respect of its offer and issue of RPS during the relevant period. In view of the foregoing reasons and observations, I conclude that the Company did not comply with the public issue norms mandated under sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the DIP Guidelines read with the ICDR ....
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....ors, inter alia direct the persons concerned to refund the money collected under an issue to the investors with or without requisite interest (as the case may be) and direct the persons concerned not to access the capital market for a particular period. (e) As per the information available in the website of MCA (accessed on October 06, 2015), Indranil Das, Arunabha Mukhopadhyay, Akhil Chandra Saha and Subrata Das are the present directors of the Company. (f) It is noted that Arunabha Mukhopadhyay, Indranil Das and Subrata Das were appointed as directors of the Company on November 24, 2008 and continue to occupy such position till date. Few noticees have stated that Arunabha Mukhopadhyay is the Managing Director of the Company. Though SEBI issued public notices in newspaper, the aforesaid three noticees have neither filed replies to the interim order nor appeared in the personal hearing. Therefore, for the reasons and observations made in sub-paragraph (b) above, the aforesaid directors of the Company are liable for the violations and are also responsible, jointly and severally, for making refunds to investors as mandated under section 73(2) of the Compani....
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....y 06, 2013, he has not informed of any action taken by him in this regard except for forwarding a copy of his resignation letter to the Commissioner of Police, Kolkata. However, the noticee is at liberty to take appropriate steps for the alleged forgery of signature and retention of his name as the director in the Company. As per records forwarded by the RoC (i.e. Register of directors, managing directors, manager and secretary etc.), this noticee was originally appointed as a director on November 24, 2008 and thereafter on August 05, 2013. As per the MCA website/RoC records, this noticee is one of the present directors of the Company. As this noticee was present as a director in the Company during the financial years when the RPSs were offered and issued without complying with the public issue norms, he also becomes liable for the violations committed by the Company. This noticee is also responsible, jointly and severally, for making refunds to investors as mandated under section 73(2) of the Companies Act, 1956 read with section 27 of the SEBI Act and the DIP Guidelines. In view of the above observations, I hereby conclude that the aforesaid 6 persons (present and pas....
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....ate of actual payment. (b) The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay Order. (c) The Company/its present directors are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank. (d) The Company and its promoters and directors shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily (in Bengali) with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this Order coming into effect. (e) After completing the aforesaid repayments, the Company shall file a certificate of such completion with SEBI, within a period of three months from the date of this Order, from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution. For the purpose of this Order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized s....