sebi:WTM/PS/136/ERO/JAN/2016
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Facts / Headnote
Directions issued: refund of Rs. 2,51,94,100/- mobilized through RPS with 15% p.a. interest compounded half-yearly; public notice in national and local dailies; inventory of assets; market access ban for 4 years from completion of refunds; association ban with listed/public companies and SEBI-registered intermediaries; potential referral to police, MCA for winding up, and further SEBI action.
Provisions invoked
- s. 11
- s. 19
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 67(1)
- s. 27(2)
- s. 56(1)
- s. 56(3)
- s. 67(2)
- s. 56(4)
- s. 73(3)
Regulations
- Reg. 107
Parties
- Mondal Construction Company Limited (MCCL)
- Shri Samarjit Mondal
- Shri Swapan Kumaar Mondal
- Shri Sachi Dulal Mondal
- Shri Sanjiv Jain
- Shri Indranil Chattopadhyay (also spelled Indranil Chatterjee)
Holding
MCCL's offer and allotment of redeemable preference shares (RPS) to more than 49 persons constituted a deemed public issue under the first proviso to Section 67(3) of the Companies Act, 1956, and MCCL and its directors violated Sections 56, 60 and 73 of that Act by failing to issue/file a prospectus, seek listing, maintain a separate bank account, and refund monies. MCCL and all five named directors are co-extensively liable to refund Rs. 2,51,94,100/- with 15% p.a. interest and are restrained from the securities market for 4 years from completion of refunds.
Full text
Page 2 of 24 2.1 Prima facie findings/allegations: In the said interim order, the following prima facie findings/allegation were recorded. a. MCCL issued RPS of face value Rs.100/-each inter alia in terms of following terms and conditions:- Table 1
Page 3 of 24 67(3) of the Companies Act, 1956, Accordingly, the resultant requirement under Section 60, Section 56(1) and 56(3), Sections 73(1), (2) and (3) of the Companies Act, were not complied with by MCCL. 2.4 In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated December 15, 2014 with immediate effect. i. MCCL shall not mobilize 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; ii. MCCL and its present Directors, viz. Shri Samarjit Mondal, Shri Swapan Kumaar Mondal and Shri Sachi Dulal Mondal along with its past Directors viz. Shri Sanjiv Jain and Shri Indranil Chattopadhyay 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; iii. MCCL and the abovementioned Directors, 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; iv. MCCL shall provide a full inventory of all its assets and properties; v. The abovementioned Directors of MCCL shall provide a full inventory of all their assets and properties; vi.
Page 4 of 24 opportunities to file their reply, within 21 days from the date of receipt of the said interim Order. The order further stated that the concerned persons may also indicate whether they desired to avail themselves an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard. 4.1 Service of interim order: The copy of the said interim order was sent to the above mentioned entities by letter dated December 16, 2014 through speed post acknowledgement due. Except for Shri Sachi Dulal Mondal and Shri Indranil Chattopadhyay, the interim orders sent were duly delivered 5.1 Subsequently, vide letter dated May 04, 2015 all the persons against whom the above said
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Source: SecMarx — sebi:WTM/PS/136/ERO/JAN/2016. 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.