sebi:WTM/MPB/ERO/ERO-RLO/105/2020
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Facts / Headnote
Held Offer of RPS was deemed public issue in violation of Sections 56, 60, 73 Companies Act, 1956; directed OIL and six directors (Md Mahfuz Alam, Parwez Alam, Md Kamal Koshar, Mohammad Salimuddin Ansari, Manzur Alam, Punam Bharati) to jointly and severally refund with 15% p.a. interest and restrained them from securities market for 4 years from completion of refund; exonerated Mohammed Afaque Ahmad on benefit of doubt; granted Santanu Sen Choudhury 365 days to produce Competent Authority order on forgery claim, till when interim restraint not to take effect.
Provisions invoked
- s. 11
- 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. 73(3)
- s. 67(2)
- s. 56(4)
Regulations
- Reg. 107
Parties
- Orion Industries Limited
- Md Mahfuz Alam
- Parwez Alam
- Md Kamal Koshar
- Mohammad Salimuddin Ansari
- Manzur Alam
- Punam Bharati
- Mohammed Afaque Ahmad
- Santanu Sen Choudhury
Holding
OIL's Offer and allotment of Redeemable Preference Shares to over 4,100 allottees was a deemed public issue that contravened Sections 56, 60 and 73 of the Companies Act, 1956, and OIL with six directors were ordered to jointly and severally refund the mobilized money with 15% interest and were restrained from the securities market.
Full text
Order in the matter of Orion Industries Limited Page 2 of 24 2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) received a complaint on December 06, 2018 from Ms. Shahjahan Begam (hereinafter referred to as “Complainant”) alleging money mobilization by OIL. The Complainant had also enclosed copies of two certificates of Redeemable Preference Share (hereinafter referred to as “RPS”) and therefore, the matter was taken up for examination as to whether the provisions of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act, 1992”) read with the relevant provisions of Companies Act, 1956 (hereinafter referred to as “Companies Act”) were complied with or not in the alleged issuance of RPS by the Company. On enquiry by SEBI, it was observed that OIL had issued RPS and the amount mobilized by the company are as follows:
Order in the matter of Orion Industries Limited Page 3 of 24 4.2. The above Offer of RPS and pursuant allotment were deemed public issue of securities under the first proviso to Section 67(3) of the Companies Act. Accordingly, the resultant requirement under Sections 56, 60, 73(1), 73(2) of the Companies Act were not complied with by OIL in respect of the Offer of RPS.
Order in the matter of Orion Industries Limited Page 4 of 24 the satisfaction of SEBI (to be submitted within seven days of completion of the refund); and
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Source: SecMarx — sebi:WTM/MPB/ERO/ERO-RLO/105/2020. 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.