sebi:WTM/GM/ERO/57/2019-20

SEBI · SEBI · 2014-02-03 · G. Mahalingam, Whole Time Member

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Facts / Headnote

Noticees held liable for running unregistered CIS; directed to wind up scheme and refund investors, restrained from securities market access

Provisions invoked

• s. 11B
• s. 11A
• s. 11(4)
• s. 12
• s. 141

Regulations

• Reg. 65
• Reg. 3

Parties

• Soumen Ghosh
• Kaushik Roy

Holding

The Noticees, as Directors of Sumangal Industries Limited during the period of fund mobilisation, were held responsible for running a Collective Investment Scheme without registration, in violation of Section 12(1B) of the SEBI Act, 1992 and Regulation 3 of the CIS Regulations read with Section 11AA. They were directed to wind up the scheme and refund investors, and restrained from accessing the securities market until refund completion.

Full text

Order in the matter of Sumangal Industries Limited Page 2 of 29 date the WTM would serve the show-cause notice along with the material, if any, and thereafter proceed in the matter after giving an opportunity of hearing. 1.3. Before proceeding further, it will be relevant to narrate briefly the events in the matter prior to the Hon’ble SAT’s Order of September 04, 2019:- Sl. No. Event Date a. Ex parte ad interim order passed by SEBI (the “Interim Order”) holding that Sumangal Industries Limited (the “Company”/ “SIL”) was involved in the running of a ‘Flexi Potato Purchase Scheme’ which was prima facie an unregistered Collective Investment Scheme (“CIS”). April 10, 2013 b. Final Order passed by SEBI holding that SIL was involved in the running of unregistered CIS activities. July 9, 2013 c. SIL filed Appeal No. 210 of 2013 before SAT against the above Final

Order in the matter of Sumangal Industries Limited Page 3 of 29 f. SIL along with seven directors of the Company, namely, Subrata Adhikary, Madhumita Adhikary, Somnath Adhikary, Gopal Chandra Adhikary, Sarbani Adhikary, Astick Kumar Roy, Debika Adhikary filed

Order in the matter of Sumangal Industries Limited Page 4 of 29 2. Issuance of Show-Cause Notice – 2.1. Pursuant to the directions contained in the Hon’ble SAT’s Order of September 04, 2019, the Noticees by way of letters dated September 25, 2019 were informed to present themselves before me on October 10, 2019 at the SEBI Head Office in Mumbai. Further to the same, letters dated September 27, 2019 and October 03, 2019 were received from the Noticees communicating their inability to appear before me in Mumbai. In consideration of the said letters, SEBI by way of letters dated October 03, 2019 informed the Noticees to collect the Show-Cause Notice dated October 10, 2019 (the “SCN”) from SEBI’s Eastern Regional Office in Kolkata. 2.2. Accordingly, in compliance of the Hon’ble SAT’s Order of September 04, 2019, a SCN was issued to the Noticees on October 10, 2019. The SCN has inter alia alleged: a. that the Noticees were the Directors of SIL at the relevant time when the CIS Scheme was floated and are liable to wind up the Scheme and refund the amount to the investors; that the Register of Directors obtained from MCA shows the Noticees as Directors of SIL during the period of money mobilization; that the Form 23AC filed by SIL with the Registrar of Companies, West Bengal bears the signature of Kaushik Roy, who has signed the balance sheet of SIL for the period 2010-2011 as a Director of SIL; that the inquiry report dated September 25, 2012 of the Enforcement Branch, West Bengal

Source: SecMarx — sebi:WTM/GM/ERO/57/2019-20. 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.