sebi:WTM/PS/121/ERO/IMD/DEC/2015
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Facts / Headnote
Noticee held liable for violations of sections 56, 60 and 73 of the Companies Act, 1956; directed to refund monies with 15% interest, restrained from securities market for 4 years from completion of refunds, and other consequential directions.
Provisions invoked
- s. 19
- s. 27
- s. 28A
- s. 56
- s. 73(2)
- s. 29
- s. 291
- s. 73(1)
- s. 2(36)
- s. 60
- s. 56(1)
- s. 56(3)
- s. 56(4)
Parties
- Prashanta Ghosh (DIN-02861411; PAN-AJSPG1087A)
Holding
The noticee, Mr. Prashanta Ghosh, being a director of the Company from July 28, 2010 to May 10, 2011, was held liable for the violation of sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013, committed by the Company in respect of the offer and issue of RPS during 2010-2011, and was directed to jointly and severally refund the money collected with 15% interest per annum compounded half-yearly, and restrained from accessing the securities market.
Full text
Page 2 of 9 169 persons and raised an amount of Rs.20,30,500/- during the financial year 2010-2011. The noticee was a director in the Company from July 28, 2010 to May 10, 2011(as per the “Register of directors, managing director etc” of the Company). Therefore, it can be inferred that he was a director in the Company when above offer and allotment of RPSs were made in violation of the public issue norms mandated under sections 56, 60 and 73 of the Companies Act, 1956. Accordingly, SEBI issued a notice dated November 02, 2015 (“the notice”) to noticee, Mr. Prashanta Ghosh alleging that he would also be liable and responsible for –
Page 3 of 9 (e) He did not have any idea regarding the issuance of RPS at any point of time and was also not informed of the same by the Company. As soon as he came to know about the collection of funds from the market, he had insisted for accepting his resignation and ultimately managed to resign on May 10, 2011 as stated above. (f) The noticee never received and / or accepted any benefits from the Company. (g) If at all these alleged RPS were issued by the said company, the same was done without his consent or information. The noticee was neither a shareholder nor a regular Director in the Company. (h) He being an Independent Director should not be held responsible for the alleged allegations when he was personally not aware and never consented to the same. (i) In view of his submissions, the noticee requested SEBI to discharge him from the proceedings and to withdraw the notice dated November 02, 2015.
Page 4 of 9 The noticee was a director in the Company,when the Company made the offer and allotted RPS to 169 persons during the financial year 2010-2011, without complying with the requirements under sections 56, 60 and 73 of the Companies Act, 1956.
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Source: SecMarx — sebi:WTM/PS/121/ERO/IMD/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.