sebi:WTM/GM/SEBI/ERO/IMD/39/2017-18
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Facts / Headnote
Interim directions issued restraining SIPL and its six directors from accessing the securities market, disposing of assets, and diverting funds; show cause notice issued as to why directions under Sections 11, 11(4) and 11B of the SEBI Act including refund with 15% interest and four-year market ban should not be imposed.
Provisions invoked
- s. 62
- s. 73
- s. 4A
- s. 67(3)
- s. 67
- s. 56
- s. 73(2)
- s. 73(1)
- s. 60
Parties
- Sankar Pailan
- Saumen Mondal
- Nityananda Baidya
- Sadhon Bachhar
- Giri Dhari Naskar
- Ratan Naskar
Holding
The order prima facie finds that SIPL's offer and allotment of redeemable preference shares to more than 50 persons constitutes a public offer under Section 67(3) of the Companies Act, 1956, and that SIPL is prima facie in breach of Sections 73, 56 and 60 of that Act. Interim directions were issued restraining SIPL and its directors from accessing the securities market and disposing of assets, pending show cause.
Full text
Page 2 of 9 namely Shri Sankar Pailan, Shri Saumen Mondal, Shri Nityananda Baidya, and Shri Giri Dhari Naskar, returned undelivered. (ii) SEBI again issued letters dated March 07, 2016 to SPIL and its six directors. Out of the same, letters sent to SIPL and four directors, namely Shri Sankar Pailan, Shri Sadhon Bachhar, Shri Saumen Mondal and Shri Giri Dhari Naskar, returned undelivered and letters sent to two directors, namely Shri Nityananda Baidya and Shri Ratan Naskar, were delivered to them. (iii) Shri Nityananda Baidya, one of the directors of SIPL, responded to the SEBI letter through letter (undated) received by SEBI on March 22, 2016 and submitted inter alia that “… … the company is not functioning for more than three years or more years, and I had no knowledge about the information / documents (copy of Audited Annual and Annual Returns of the company, copy of prospectus / Red Herring Prospectus / Statement in lieu of prospectus / Information memorandum filed with Roc for issuance of Shares / Debentures) that is required or to be maintained for compliance under SEBI’s statutes. Therefore, I am totally ignorant and innocent in this regards. Under such situation I may be absolved of all such charges and no reference in this regard may please be made to me.” (iv) SEBI issued a letter dated April 29, 2016 to the Registrar of Companies, Ministry of Corporate Affairs, Kolkata, seeking various information pertaining to SIPL. (v) In the meantime, various documents pertaining
Page 3 of 9 4. From the different sets of Form-2 filed by SIPL with RoC, it was observed that the company had issued Redeemable Preference Shares during the Financial Years (FYs) 2009-10, 2010-11 and 2011-12 to 167 persons, 256 persons and 146 persons respectively. The documents submitted by the complainants include a blank ‘Share Application Form’ pertaining to ‘Issue of 40 Lacs Redeemable Preference Shares – Face Value of Rs.10/- Per Share Aggregating to Rs. 400 Lacs’, issued by the company. The said form describes the said offer as a private placement and mentions 28-2-2011 as the ‘Issue Open Date’. However, as stated above, it is evident from the Form-2 filed by the company with RoC that the company has allotted RPS to investors even before and after the said date. The details of issuance of RPS by the Company during FYs 2009-10, 2010-11 and 2011-12, as collated from the available documents, are provided in the table below: Details of Redeemable Preference Shares Issued Year Date of Allotment Type No of Allottees Amount (Rs.) Source of Information 2009-10 01/01/2010 Redeemable Preference Shares of Rs. 10/- each 78 5,46,000 Form-2 filed by the Company with RoC. 12/03/2010 Redeemable Preference Shares of Rs. 10/- each 89 13,53,000 Form-2 filed by the Company with RoC. Total 167 18,99,000
Page 4 of 9 amount mobilized thereby during FYs 2012-13 and 2013-14 could not be ascertained since no information has been received from the company / directors. However, from the table provided under para 4 above, it is clearly evident that SIPL has issued RPS to more than 49 persons in FYs 2009-10, 2010-11 and 2011-12.
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Source: SecMarx — sebi:WTM/GM/SEBI/ERO/IMD/39/2017-18. 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.