sebi:WTM/MPB/EFD-1-DRA-IV/150/2018
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Facts / Headnote
Directions issued: refund of Rs. 10,76,71,616 with 15% interest to investors, asset inventory disclosures, escrow account restrictions, public notice, market access ban for 4 years post-refund for certain directors, 4-year market ban for Shri Joydeb Biswas and Shri Avijit Chakraborty, and 4-year market ban for SCL Debenture Trust and Shri Amal Kumar Chatterjee.
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. 73(3)
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
SCLL's offer of NCDs to 10,945 investors was deemed a public issue under the first proviso to Section 67(3) of the Companies Act, 1956, and SCLL and its directors were held liable for violating Sections 56, 60, 73, 117B, 117C of the Companies Act, 1956 and the ILDS Regulations, with joint and several liability to refund Rs. 10,76,71,616 with 15% interest. SCL Debenture Trust and Shri Amal Kumar Chatterjee were held liable for acting as debenture trustees without registration under Section 12(1) of the SEBI Act.
Full text
Order in the matter of M/s SCL Steel Corporation Limited Page 2 of 30 Madhya Pradesh, 485001. 2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) received a letter/complaint from some persons against ROC, Madhya Pradesh dated October 29, 2013 against SCLL in respect of issue of Secured Non Convertible Redeemable Debentures (hereinafter referred to as “NCDs”) and undertook an enquiry to ascertain whether SCLL had made any public issue of securities without complying with the provisions of the Companies Act, 1956; Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act”) and the Rules and Regulations framed thereunder including the Securities and Exchange Board of India (Issue and Listing of Debt Securities), Regulations, 2008 (hereinafter referred to as “ILDS Regulations”).
Order in the matter of M/s SCL Steel Corporation Limited Page 3 of 30 resolution "to raise or borrow from time to time at its discretion by issue of secured redeemable non-convertible debentures of Rs.100/- each upto a limit of One Thousand Crores. ii. As per the application form cum brochure, the schemes offered claimingly for private placement of Secured Non Convertible Redeemable Debentures of Rs.1000 Crore are as follows: Scheme I-Multipler Secured Debentures Plan A B C D E Issue price (Minimum 10 debentures of Rs.100) 1000 1000 1000 1000 1000 Redemption period 5 years 7 years 10 years 13 years 15 years Maturity value (including all taxes) 2000 3000 5000 10000 1200 0
Order in the matter of M/s SCL Steel Corporation Limited Page 4 of 30 iii. SCLL had made an Offer of NCDs during the financial year 2012-2013 and raised an amount of Rs. 10.77 Crores as shown below: Year of Issue Security Issued Amount raised (Rs.) (in crores) Number of allottees 2012-2013 NCDs 10.77 10945 Total 10.77 10945
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Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-IV/150/2018. 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.