sebi:WTM/MPB/EFD-1-DRA-IV/155/2018
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Facts / Headnote
Directions issued: refund of monies with 15% interest by GKIL and its directors jointly and severally (limited to amounts collected during their respective tenures), asset inventory, escrow account, public notice, debarment from securities market for 4 years (3 months for Sarcar, Bhadury, Mishra), and 4-year restraint on the debenture trustee.
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)
Parties
- Greater Kolkata Infracon Limited (GKIL)
- Mr. Subir Dutta
- Mr. Nakhat Sing Agarwalla
- Mr. Bimalendu Rakshit
- Mr. Amitava Sarkar
- Mr. Himangshu Mukherjee
- Mr. Sutanu Sarcar
- Mr. Paramasish Bhadury
- Mr. Anil Kumar Mishra
- Greater Kolkata Debenture Trust Company
- Mr. K.R. Udayaraj
Holding
GKIL's offer of NCDs to 1,676+ investors was a 'public issue' under the first proviso to section 67(3) of the Companies Act, 1956, and GKIL and its directors violated sections 56, 60, 73, 117B and 117C of that Act and the ILDS Regulations; the debenture trustee and its trustee violated section 12(1) of the SEBI Act read with Regulation 7 of the Debenture Trustees Regulations. Directors are jointly and severally liable to refund with 15% interest, limited to amounts collected during their respective tenures.
Full text
Order in the matter of Greater Kolkata Infracon Limited Page 2 of 33 2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) received a letter/complaint from some persons against GKIL in respect of issue of Secured Redeemable Non-Convertible Debentures (hereinafter referred to as “NCDs”) and undertook an enquiry to ascertain whether GKIL 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 Greater Kolkata Infracon Limited Page 3 of 33 (hereinafter collectively referred to as “Noticees”).
Order in the matter of Greater Kolkata Infracon Limited Page 4 of 33 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 read with section 27(2) of the SEBI Act and the relevant provisions of the ILDS Regulations were not complied with by GKIL in respect of the Offer of NCDs. Further, the Debenture Trustee viz. Greater Kolkata Debenture Trust Company (represented by its trustees, viz. Mr. K.R. Udayaraj 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/155/2018. 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.