sebi:WTM/MPB/EFD-1-DRA-IV/28/2019
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Facts / Headnote
CAICO found to have violated section 40 of the Companies Act, 2013 and ICDR Regulations by making a deemed public issue of FCDs without compliance; directed to refund Rs. 2,83,50,000 with 12% interest from date of collection; CAICO and its directors debarred from accessing securities market for 4 years from completion of refunds; Mr. Joseph Chiramel found to have violated section 12(1) of SEBI Act and regulation 7 of Debenture Trustees Regulations for acting as Debenture Trustee without registration, and debarred for an appropriate period.
Provisions invoked
- s. 11B
- s. 11
- s. 19
- s. 12(1)
- s. 62
- s. 28A
- s. 4A
- s. 67
- s. 26
- s. 24(1)
- s. 24
- s. 62(1)
- s. 42
- s. 24(2)
- s. 71
- s. 40
- s. 42(4)
- s. 40(3)
- s. 42(1)
- s. 42(10)
Regulations
- Reg. 7
- Reg. 58
- Reg. 57
- Reg. 25
- Reg. 6
- Reg. 32
- Reg. 59
- Reg. 46
- Reg. 63
- Reg. 4(2)(e)
- Reg. 4(2)(d)
- Reg. 47
- Reg. 5
- Reg. 49
Holding
The offer of FCDs by CAICO to 1,929 existing shareholders was a deemed 'public issue' under Section 42(4) of the Companies Act, 2013 read with Rule 14(2)(b) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, and CAICO violated Section 40 of the Companies Act and ICDR Regulations by failing to comply with public issue norms. Mr. Joseph Chiramel 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 the Canning Industries Cochin Limited Page 2 of 33 10. Mr. Ovungal Pyloth Rappai ACKPR9190A 00870144 11. Mr. Joseph Chiramel (Debenture Trustee) AQXPJ4232C Not applicable
Order in the matter of the Canning Industries Cochin Limited Page 3 of 33 5. The above Offer of FCDs and pursuant allotment were deemed public issue of securities under Section 42 of the Companies Act, 2013 read with Rule 14 (2) (b) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. The resultant requirement under section 40 of the Companies Act, 2013 and the relevant provisions of the SEBI Act and the ICDR Regulations were not complied with by CAICO in respect of the Offer of FCDs. Further, the Debenture Trustee viz. Mr. Joseph Chiramel 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").
Order in the matter of the Canning Industries Cochin Limited Page 4 of 33 iii. CAICO and its abovementioned Directors shall provide a full inventory of all their assets and properties;
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Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-IV/28/2019. 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.