sebi:WTM/PS/143/ERO/JAN/2016

SEBI · SEBI · 2014-05-16 · Prashant Saran, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Directions issued: refund of ₹14.47 crore with 15% p.a. interest compounded half-yearly, market access restraints, asset inventory, and prohibition of debenture trustees from acting as such without registration

Provisions invoked

Regulations relied on

Parties

Holding

The Company made a public issue of NCDs to more than 49 persons without complying with public issue norms under the Companies Act, 1956 and ILDS Regulations, and the debenture trustees acted without SEBI registration in violation of Section 12(1) of the SEBI Act and Regulation 7 of the DT Regulations. The Company and its directors are directed to refund ₹14.47 crore with 15% interest, and the debenture trustees are restrained from acting in such capacity.

Full text

Page 2 of 19 violated the provisions of Sections 56, 60 [read with Section 2(36)], 73, 117B and 117C of the Companies Act, 1956 read with the Companies Act, 2013 and the relevant provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (hereinafter referred to as ‘the ILDS Regulations’). The interim order also alleged that the debenture trustee, Mr. Ashok Kumar Banerjee and Ms. Chandrima Sarkar had allegedly failed to meet the eligibility conditions specified under the SEBI (Debenture Trustees) Regulations, 1993 (hereinafter referred to as ‘DT Regulations’) and acted as an unregistered debenture trustee in violation of Section 12(1) of the SEBI Act, 1992 (hereinafter referred to as ‘SEBI Act’).

Page 3 of 19 viii. VPIPL and its Directors shall furnish complete and relevant information (as sought by SEBI vide letters dated May 16, 2014, June 10, 2014 and June 27, 2014) including the number of subscribers to the issue of Secured Redeemable Non-Convertible Debentures in the financial years 2010-11 and 2011-12, within 21 days from the date of receipt of this Order. ix. The Debenture Trustees, viz. Shri Ashok Kumar Banerjee and Smt. Chandrima Sarkar, are prohibited from continuing with their present assignment as a debenture trustee in respect of the Offer of NCDs of VPIPL and also from taking up any new assignment or involvement in any new issue of debentures, etc. in a similar capacity, from the date of this order till further directions.

Page 4 of 19 documents. The request of Mr. Janme Jay, Advocate was not supported by any letter of authority. The matter was proceeded further and an opportunity of personal hearing was granted to the Company and its directors on April 22, 2015. The scheduled date was communicated vide SEBI letter dated April 02, 2015. The date of hearing was also communicated vide the public notice in the newspapers namely ‘Ananda Bazar Patrika’ and ‘Times of India’ dated April 14, 2015 and April 15, 2015 respectively. The Company and its directors were advised that in case they fail to appear for the personal hearing before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on the basis of material available on record.

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Source: SecMarx — sebi:WTM/PS/143/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.