sebi:WTM/PS/106/ERO/BLO/DEC/2015

SEBI · SEBI · 2015-03-20 · Prashant Saran, Whole Time Member

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Facts / Headnote

Directions issued requiring refund of Rs. 21,18,65,380 with 15% per annum interest compounded half-yearly, market access ban for 4 years post-refund, asset inventory, and public notice requirements.

Provisions invoked

Regulations

Parties

Holding

RVIL's issuance of Redeemable Preference Shares constituted a deemed public issue under the first proviso to Section 67(3) of the Companies Act, 1956, and the company along with its directors and promoters violated Sections 56, 60, and 73 of that Act. RVIL and its directors/promoters were directed to refund Rs. 21,18,65,380 with 15% interest compounded half-yearly to investors.

Full text

1.2 On receipt of information from investors alleging non-payment of their invested money by RVIL and subsequent enquiry by SEBI, it was observed that RVIL allotted Redeemable preference shares (hereinafter referred to as RPS) of face value Rs. 10/- each to 136 persons in the Financial Year 2010-11, to 10,716 persons in the Financial Year 2011-12 and to 980 persons in Financial Year 2012-13 and collected a total amount of Rs. 21,18,65,380. 1.3 Since the above said issuance of RPS was found prima facie in violation of respective provisions of the SEBI Act, 1992 ("SEBI Act"); the Companies Act, 1956, SEBI passed an interim order dated March 20, 2015 (hereinafter referred to as interim

Financial Year Date of Allotment Number of Allottees Number of RPS Amount raised (in Rs.) 2012-13 14-Apr-2012 49 215000 2150000 18-Apr-2012 49 199550 1995500 23-Apr-2012 49 105600 1056000 27-Apr-2012 49 128180 1281800 02-May-2012 49 102050 1020500 07-May-2012 49 142500 1425000 11-May-2012 49 96100 961000 15-May-2012 49 49750 497500 19-May-2012 49 177300 1773000 22-May-2012 49 129100 1291000 26-May-2012 49 138860 1388600 29-May-2012 49 222000 2220000 02-June-2012 49 83600 836000 06-June-2012 49 186100 1861000 09-June-2012 49 161200 1612000 13-June-2012 49 168200 1682000 18-June-2012 49 75200 752000 Total 11,832 2,11,86,538 21,18,65,380 2.2 The Offer of RPS was a deemed public issue of securities under the first proviso to Section 67(3) of the Companies Act, 1956, Accordingly, the resultant requirements under Section 60, Section 56(1) and 56(3), Sections 73(1), (2) and (3) of the Companies Act, were not complied with by RVIL. 2.3 In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated March 20, 2015 with immediate effect. a. RVIL shall forthwith cease to mobilize any fresh funds from investors through the offer of RPS or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; b. RVIL and its Directors/Promoters, viz. Shri Sudhir Kumar Behera (DIN:02052368, PAN: AHTPB4511B), Shri Asho

(DIN:05102958, PAN: AJGPM6875J), Shri Prasanna Kumar Nayak (PAN: AIFPN1886Q), Shri Sukanta Biswal (PAN:AJKPB5669B) and Shri Pabitra Kumar Rath (PAN: AGKPR5219G) are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders; c. RVIL and its abovementioned Directors/Promoters, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; d. RVIL shall provide a full inventory of all its assets and properties; e. RVIL's abovementioned Directors/Promoters shall provide a full inventory of all their assets and properties; f. RVIL and its abovementioned Directors/Promoters shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the offer of RPS, without prior permission from SEBI; g. RVIL and its abovementioned Directors/Promoters shall not divert any funds raised from public at large through the offer of RPS, which are kept in bank account(s) and/or in the custody of RVIL; h. RVIL and its abovementioned Directors/Promoters shall furnish complete and relevant information within 21 days from the date of receipt of this

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Source: SecMarx — sebi:WTM/PS/106/ERO/BLO/DEC/2015. 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.