sebi:WTM/MPB/EFD-1-DRA-IV/10/2018
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Facts / Headnote
Directions issued under section 19 of the SEBI Act read with sections 11, 11(4), 11A and 11B: PAIL and its directors directed to refund monies collected with interest to investors; interim directions (paragraph 8(iii), (iv), (vi) of the July 27, 2015 interim order) to continue against Noticees who do not file objections within 30 days of service; copies forwarded to Ministry of Corporate Affairs/ROC and Local Police/State Government.
Provisions invoked
- s. 19
- s. 12(1)
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 117B
- s. 56
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 67(1)
- s. 27(2)
- s. 56(1)
- s. 117C
- s. 56(3)
- s. 67(2)
Regulations
- Reg. 7
- Reg. 6
- Reg. 9
- Reg. 17
- Reg. 12
- Reg. 8
- Reg. 15
- Reg. 14
- Reg. 4(4)
- Reg. 2(e)
- Reg. 4(2)(a)
- Reg. 19
- Reg. 26
- Reg. 107
- Reg. 4(2)(b)
- Reg. 4(2)(d)
- Reg. 4(2)(c)
- Reg. 5(2)(b)
Holding
PAIL's offer of NCDs to at least 23,685 allottees raising Rs. 83.42 Crores was a deemed public issue under the first proviso to section 67(3) of the Companies Act, 1956, and PAIL and its directors violated sections 56(1), 56(3), 2(36) read with 60, 73(1), 73(2), 73(3), 117B and 117C of the Companies Act, 1956 and multiple provisions of the ILDS Regulations; Pailan Agro Debenture Trust and Shri Dilip Das violated section 12(1) of the SEBI Act and Regulation 7 of the Debenture Trustees Regulations by acting as debenture trustee without registration.
Full text
Order in the matter of M/s. Pailan Agro India Limited Page 2 of 43 13. Debenture Trustee, viz. Pailan Agro Debenture Trust (Represented by its Trustee, viz. Shri Dilip Das) Address – 34/1, New Santoshpur Mail Road Dist: South 24 PGS, Kolkata - 700075
Order in the matter of M/s. Pailan Agro India Limited Page 3 of 43 4. As the above said Offer of NCDs was found prima facie in violation of respective provisions of the SEBI Act, 1992, the Companies Act, 1956, and the ILDS Regulations, SEBI passed an interim order dated July 27, 2015 (hereinafter referred to as “interim
Order in the matter of M/s. Pailan Agro India Limited Page 4 of 43 7. The above Offer of NCDs and pursuant allotment were deemed public issue of securities under the first proviso to section 67(3) of the Companies Act, 1956. Accordingly, the resultant requirement under section 60 read with section 2(36), section 56, sections 73(1), 73(2) and 73(3) and sections 117B and 117C of the Companies Act, 1956 and the relevant provisions of the ILDS Regulations were not complied with by PAIL in respect of the Offer of NCDs. Further, the Debenture Trustee viz. Pailan Agro Debenture Trust (represented by its trustee, viz. Shri Dilip Das) has prima facie violated section 12(1) of the SEBI Act and regulation 7 of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 (hereinafter referred to as " Debenture Trustees Regulations ").
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Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-IV/10/2018. 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.