sebi:WTM/MPB/EFD-1-DRA-IV/24/2018
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Directions issued: refund of Rs. 44,07,000 with 15% interest, market access ban for 4 years, asset inventory, escrow account, public notice, and compliance reporting
Provisions invoked
- s. 19
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 56
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 67(1)
- s. 27(2)
- s. 56(1)
- s. 56(3)
- s. 67(2)
- s. 56(4)
Regulations
- Reg. 107
Holding
Zenith's offer of Redeemable Preference Shares to 47+ investors constituted a public issue under Section 67(1) of the Companies Act, 1956, and the company and its directors violated Sections 56, 60, and 73 of that Act by failing to register a prospectus, issue an abridged prospectus, and list the securities. Zenith and directors Kalyan Banerjee, Shipra Banerjee, and Kuntal Banerjee are jointly and severally liable to refund Rs. 44,07,000 with 15% interest, and are barred from the securities market for 4 years.
Full text
Order in the matter of M/s Zenith Highrise Infracon Limited Page 2 of 23 complaints from three persons, namely Mr. Mohadeb Das, Mr. Joydeb Lohar and Ms. Suchitra Thandar, against Zenith in respect of issue of Redeemable Preference Shares (“RPS”) and undertook an enquiry to ascertain whether Zenith 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.
Order in the matter of M/s Zenith Highrise Infracon Limited Page 3 of 23 Total 43,04,000 49 6. However, based on the complaints received by SEBI from three persons, there was a mismatch between the data as appearing in the RoC records, and the information provided by the complainants.
Order in the matter of M/s Zenith Highrise Infracon Limited Page 4 of 23 9. The interim order also directed the Zenith and its abovementioned directors to show cause as to why suitable directions/prohibitions under sections 11(1), 11(4) and 11B of the SEBI Act should not be passed against them, including the following directions: i. Zenith and its above named directors, to jointly and severally refund money collected through the offer and allotment of preference shares, with an interest of 15% per annum (the interest being calculated from the date when the repayments became due in terms of Section 73(2) of the Companies Act, 1956 till the date of actual payment) within a period of 180 days from the date of receipt of this order, supported by a certificate of two independent Chartered Accountants to the satisfaction of SEBI; and ii. Zenith and its above named directors be refrained / prohibited from accessing the securities market by issue of prospectus / offer document / advertisement and buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly, for a period of four years from the date of effecting the refund as directed above.
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-IV/24/2018. 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.