sebi:WTM/PS/145/ERO/JAN/2016

SEBI · SEBI · 2015-01-30 · Prashant Saran, Whole Time Member

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Facts / Headnote

Directions issued requiring refund of money collected through issuance of RPS with 15% per annum interest compounded half-yearly, along with market access restraints for four years from completion of refunds.

Provisions invoked

Regulations

Parties

Holding

AAPL's issuance of 14,757 redeemable preference shares to 1,169 persons constituted a deemed public issue under the first proviso to Section 67(3) of the Companies Act, 1956, and the company and its directors violated Sections 56, 60 and 73 of that Act by failing to issue/file a prospectus, list the securities, maintain a separate bank account, or refund monies. The company and all ten named directors are jointly and severally liable to refund the collected amount with 15% per annum interest compounded half-yearly.

Full text

Page 2 of 17 Table 1 Year Type of Security No. of securities Amount per share (in Rs.) Total Amount Raised (in Rs.) No. of Allottees 2009 – 10 Non-Convertible Redeemable Preference Shares 14757 200 29,51,400 1169

Page 3 of 17 soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders; iii. AAPL and its 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. AAPL shall provide a full inventory of all its assets and properties; v. AAPL's abovementioned Directors shall provide a full inventory of all their assets and properties; vi. AAPL and its abovementioned Directors 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; vii. AAPL and its abovementioned Directors 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 AAPL; viii. AAPL and its abovementioned Directors shall furnish complete and relevant information including the details regarding issuance of the NCDs within 21 days from the date of receipt of this Order. 2.6 The direction for furnishing the information regarding the NCDs was pursuant to the complaints against the Company regarding issuance of NCDs during the financial year 2009-10 and 2010-2011 and non-cooperation by the Company during the enquiry. 2.7 Vide the said interim order, AAPL and its abovementioned directors

Page 4 of 17 4.2 In addition to this, vide notification dated April 14, 2015, published in newspaper Ananda Bazar Patrika, and notification dated April 15, 2015 published in newspaper Times of India, AAPL and the directors were notified that they will be given the final opportunity of being heard on April 22, 2015 at the time and the venue mentioned therein. 5.1 Hearing and submissions: One Mr. Joydeb Garai, vide his letter dated April 16, 2015, while writing on behalf of the Company and Shri Pahari Basu, Shri Basudeb Garai, Shri Dinabandhu Das, Shri Joydeb Garai, Gargi Biswas, Shri Dilip Kumar Gangopadhyay, Shri Manigrib Bag, Shri Sunil Kumar Brahamchari, Shri Samir Das and Shri Debabrata Ghosh, sought for an adjournment of the personal hearing by two months, on the ground that the Company is under liquidation and the records of the company, are in the custody of the Official Liquidator appointed by the High court of Calcutta. 5.2 On the date fixed for the personal hearing i.e. April 22, 2015, Mr. Samir Das was represented by one Mr. Arun Kumar Singh. As the representative did not file his authority letter, his representation was not considered and liberty was granted to the Mr. Samir Das to file his written submissions within a period of 7 days. 5.3 In view of the request made by Mr. Joydeb Garai, vide his letter dated April 16, 2015, another opportunity of hearing was scheduled on July 30, 2015. The same was communicated by SEBI through speed post vide letter dated July 15

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Source: SecMarx — sebi:WTM/PS/145/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.