sebi:PKB/AO-14/2011

SEBI · SEBI · 2010-11-23 · P. K. Bindlish, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Provisions invoked

• s. 15
• s. 15H
• s. 3(1)
• s. 15J
• s. 119

Regulations

• Reg. 74
• Reg. 36
• Reg. 13
• Reg. 16
• Reg. 10
• Reg. 8
• Reg. 15
• Reg. 14
• Reg. 27
• Reg. 15(1)
• Reg. 13A
• Reg. 23
• Reg. 20
• Reg. 32
• Reg. 42
• Reg. 15(1)(i)
• Reg. 70
• Reg. 49
• Reg. 60
• Reg. 66

Parties

• Central Bank of India

Holding

The Noticee, Central Bank of India, was found to have violated multiple provisions of the SEBI (Debenture Trustees) Regulations, including Regulations 13A(b), 14, 15(1)(a), 15(1)(e), 15(1)(f), and the Code of Conduct under Schedule III read with Regulation 16, but was found not to have violated Regulation 15(1)(c) in respect of the SSNNL issue.

Full text

Adjudication Order in respect of Central Bank of India Page 2 of 64 February 25, 2011 to as “DT Regulations”); SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (hereinafter referred to as “ILDS Regulations”); SEBI (Disclosure and Investor Protection) Guidelines, 2000 (hereinafter referred to as “DIP Guidelines”).

Adjudication Order in respect of Central Bank of India Page 3 of 64 February 25, 2011 III. CONSIDERATIONS AND FINDINGS 5. I have considered the IR, response thereto of the Noticee vide letter dated December 10, 2009 and May 24, 2010, the SCN issued and the subsequent

Adjudication Order in respect of Central Bank of India Page 4 of 64 February 25, 2011 Debenture Trustee to enter into a written agreement with the body corporate before the opening of the subscription list for issue of debentures. In this regard, the Noticee submitted that “The Acceptance of Trusteeship is conveyed which inter alia contain the Terms and Conditions to act as such under the Trust Deed which is executed after allotment. The Written communication by Trustee prior to Execution of Trust Deed is the written agreement between Trustee and the Body Corporate.” I note that in support of their aforesaid submissions, vide letter dated January 31, 2011, the Noticee submitted copies of certain letters which it had sent to issuer body corporates while granting approvals to act as debenture trustee. From the perusal of these letters I find that these letters cannot be said to be comprising of a written agreement as contemplated under the DT Regulations. However, in view of the reply of the Noticee that “We have since introduced the system of ‘Written Agreements’ with the Body Corporate before opening of the subscription for Debenture Issue”, I do not take a serious view of this violation.

Source: SecMarx — sebi:PKB/AO-14/2011. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.