sebi:WTM/MPB/EFD-1-DRA-IV/29/2017
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Facts / Headnote
Directions issued requiring refund of NCD monies with interest, debarment from securities market for four years, and other compliance directions
Provisions invoked
- s. 19
- s. 73
- s. 283(1)
- s. 73(2)
- s. 283
- s. 168(1)
Regulations
- Reg. 28
Parties
- Mr. Girishchandra Mukundram Baluni
Holding
Mr. Baluni, as a continuing director of Neesa Technologies Ltd. (NTL), is obligated to ensure that NTL refunds the money raised through issuance of NCDs to investors with 15% per annum interest compounded half-yearly, and is debarred from the securities market for four years. He is not liable as an 'officer in default' specifically for the offer, issue and allotment of NCDs since he was not a director during that period.
Full text
Order in respect of Mr. Girishchandra Mukundram Baluni in the matter of Neesa Technologies Ltd. Page 2 of 12 WTM for passing a fresh order on merits and in accordance with law. Relevant paragraphs of the SAT order are as under: “…
Order in respect of Mr. Girishchandra Mukundram Baluni in the matter of Neesa Technologies Ltd. Page 3 of 12 appellant relating to the tenure of various Directors including the appellant herein that many Directors would join for a short period then resign and thereafter rejoined again after sometime. Whether this is a part of a strategy also needs to be considered. Therefore, in the facts and circumstances of the matter we set aside the impugned order dated June 2, 2016 qua the appellant and direct SEBI to consider the matter afresh and pass fresh order on merit as expeditiously as possible and in any event within a period of three months from today.
Order in respect of Mr. Girishchandra Mukundram Baluni in the matter of Neesa Technologies Ltd. Page 4 of 12 tenure with NTL , he was not a part of the decision making process related to the NCDs of NTL and did not sign any board resolution/ decision relating to the matter of NCDs. vii. That since he had not attended any board meeting of NTL during his association with NTL thus by virtue of Section 283(1) (g) of the Companies Act, 1956 his directorship with NTL automatically stands vacated if he remains absent from all the meetings. viii. That he does not fall in the category of Officer in Default or Key Managerial Personnel or Interested Directors of NTL in terms of provisions of Companies Act, 1956. ix. That his arrival in the company as an Additional, Professional and Non-executive Director was theoretical, incidental and accidental and without any intention of defrauding any investor and public. That was neither part of any strategy nor any intention to defraud. x. That SEBI vide final order June 02, 2016 exonerated Mr. Suresh Kumar, who was the director before the issuance of Non-Convertible Debentures (NCDs) and during the time when decision of the Board of Directors for issuing of NCDs was taken on November 21, 2011. xi. That SEBI vide order dated September 07, 2016 exonerated Mr. Nimain Charan Biswal, who was the director after the issuance of NCDs. xii. That he was the director before and after the issuance of NCDs and not at the time of issuance of NCDs. Hence, his
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Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-IV/29/2017. 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.