sebi:WTM/GM/ERO-BLO/02/APRIL/2017

SEBI · SEBI · 2015-12-10 · 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

Proceedings against Shri Saswat Sahoo disposed of; directions in orders dated February 20, 2015 and December 10, 2015 revoked

Provisions invoked

• s. 19
• s. 62
• s. 255
• s. 156(3)
• s. 60
• s. 56(1)
• s. 254

Parties

• Shri Saswat Sahoo

Holding

Proceedings against Shri Saswat Sahoo initiated vide SCN dated October 3, 2016 are disposed of and the directions to refund money collected by AMF with 15% interest and the 4-year securities market restraint imposed by orders dated February 20, 2015 and December 10, 2015 stand revoked qua him.

Full text

2 iv. would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. d) AMF and its Directors & Promoters are restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from the date of this Order, till the expiry of 4 years from the date of completion of refunds to investors as directed above.

3 stated that the company has filed Form-2 with their office for issue of 36% Redeemable Preference Shares ('RPS'). RoC, Cuttack also provided copies of Form-2 and list of allottees filed by the company with their office.  From the material available on record, it was observed and charged that– i. Shri Saswat Sahoo was earlier Director in AMF and had since resigned. ii. Promoters of AMF are Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak. iii. It is observed from Form 2 and the lists of allottees available on MCA portal and the information provided by RoC, Cuttak that AMF issued Redeemable Preference Shares (“RPS”) of face value ₹.10/- each amounting to ₹. 1,21,35,000/- to 222 investors during the Financial Years 2009-10 and 2010-11.  Further, it was observed that noticee was a signatory to the Memorandum and Articles of Association dated March 16, 2010, and was the promoter of the Company and in terms of Section 62 of the Companies Act, every person who is a director of the company at the time of the issue of the prospectus and every person who is a promoter of the company, is liable to pay compensation to every person who subscribes for any shares or debentures on the faith of the prospectus for any loss or damage he may have sustained by reason of any untrue statement included therein.  Therefore, noticee being a promoter, by not issuing Prospectus containing the disclosures mentioned in section 56(1) of the Companies Act

4 and was subsequently offered a job with PNB which he accepted and left the employment of the said Company. In April 2011, he joined the services of PNB;  He submitted a copy of the Passbook of his Bank Account evidencing his remuneration during the entire tenure of his employment with the company;  Tha t he had not signed any document as promoter / director of the Company, as alleged;  That he was not aware as to how h i s signatures had appeared on the said documents;  Since h e was not able to peruse the said documents, h e could not take any action in law against the officers of the Company for forging/misusing his signature on incorporation documents of the Company.  He had no knowledge about the Interim Order until he received a communication dated 14th March 2015 from NSDL suspending his DEMAT account;  He responded to the said notice of SEBI by his reply dated 25th March 2015, wherein he had categorically denied the findings in the Interim Order that he was a Promoter / director of the Company;  That SEBI had addressed the letter dated 15th May 2015 at his erstwhile/incorrect address;  Subsequently, while going through SEBI's website, h e came to learn about the Impugned Order dated 1 0 t h December 2015.  That he did not officially receive the Impugned Order dated 10th December 2015 from SEBI till filing of the SAT Appeal.  That during the SAT Appeal, he was able to peruse a copy of the MoA and AoA of the said Company whereby was shown as a Promoter;  Imm

Source: SecMarx — sebi:WTM/GM/ERO-BLO/02/APRIL/2017. 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.