sebi:WTM/GM/ERO/43/2018-19

SEBI · SEBI · 2016-04-21 · G. Mahalingam, Whole Time Member

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

Facts / Headnote

Soumen Ghosh along with Sumangal Industries Ltd. and other directors directed to wind up the collective investment scheme and refund money with returns, and restrained from accessing/dealing in securities market till completion of refund; failure to comply within three months to lead to recovery and other proceedings as per law

Provisions invoked

• s. 28A

Regulations

• Reg. 65

Parties

• Soumen Ghosh

Holding

Soumen Ghosh along with Sumangal Industries Ltd. and other directors shall wind up the existing collective investment scheme and refund the money collected with returns due to investors, and Soumen Ghosh shall not access or deal in the securities market till completion of refund.

Full text

_____________________________________________________________________________ Order in respect of Soumen Ghosh in the matter of Sumangal Industries Ltd. Page 2 of 6 February 3, 2014 and permitted SEBI to take such steps as it deems fit and proper so as to enforce the order. Accordingly, recovery proceedings were initiated against SIL & its Directors, including Soumen Ghosh. After initiation of recovery, SIL, Subrata Adhikary and others filed an appeal (Appeal No. 75 of 2016) before SAT challenging the amount quantified in the recovery certificate issued by the recovery officer. SAT did not find any fault with the recovery certificate issued by SEBI; therefore vide order dated April 21, 2016, they dismissed the appeal filed by the company.

_____________________________________________________________________________ Order in respect of Soumen Ghosh in the matter of Sumangal Industries Ltd. Page 3 of 6 due course, he started representing Mr. Subtrata Adhikary and his companies in various courts, tribunals and departments.  Subrata Adhikary also offered him the post of directorship in the company on honorary basis till the next annual general meeting of the company. In this connection, a copy of the resolution passed by the Board of Directors of SIL in the meeting held on May 11, 2012 has been furnished. It has been also stated that he was neither involved in the management and day to day affairs of the company nor paid any remuneration as director of the company.  It has been also stated that Mr. Adhikary’s behavior towards Mr. Ghosh became rude and the payment of his professional fees and expenses were also stopped. He severed his ties with Mr. Adhikary and his company. He resigned from the post of directorship of the company on April 24, 2013.  He was not instrumental in publishing any advertisement issued by SIL on September 11, 2012 whereby funds were mobilized from the public under potato purchase scheme. There must be something more than mentioning of his name in the category of directors to make him liable for the violations.

_____________________________________________________________________________ Order in respect of Soumen Ghosh in the matter of Sumangal Industries Ltd. Page 4 of 6 appointed on honorary basis, i.e., I was not involved in the management of the company and I was not getting any pecuniary benefit/sitting fee from the company. Q.3. As a director of SIL, you must have been receiving notices of board meeting, agenda items etc. Therefore, you must be aware of the illegal money mobilization activity which was going on in the company. What did you do to prevent it? Ans. I was told by the managing director not to look into all these things, so I did not interfere. Q.4. The company had issued advertisement about the potato scheme offered by the company when you were one of the directors in Sumangal and sitting in the same office premises. What was your response? Ans. I was not instrumental in issuing the advertisement. While in the premises/office space of the company, I used to be involved in my work and not in the work of the company. Q.5. Why did you resign from the company? Ans. There were several cases of cheque bouncing which I was handling. Apart from this, the managing director of the company was running the company like a proprietary concern and the directors were only for namesake, so I resigned.

Source: SecMarx — sebi:WTM/GM/ERO/43/2018-19. 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.