sebi:WTM/PS/162/ERO/FEB/2016

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

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Facts / Headnote

Violations established; joint and several refund with interest ordered against company and directors with 4-year securities market restraint; unregistered debenture trustee restrained for 4 years

Provisions invoked

• s. 11A
• s. 19
• s. 12(1)
• s. 27
• s. 55A
• s. 73
• s. 28A
• s. 4A
• s. 67(3)
• s. 117B
• s. 56
• s. 73(2)
• s. 67(1)
• s. 67(2)
• s. 67
• s. 73(1)
• s. 2(36)
• s. 60
• s. 56(1)
• s. 117C

Regulations

• Reg. 7
• Reg. 6
• Reg. 16
• Reg. 9
• Reg. 17
• Reg. 12
• Reg. 8
• Reg. 15
• Reg. 14
• Reg. 4(4)
• Reg. 21
• Reg. 4(2)(a)
• Reg. 19
• Reg. 26
• Reg. 107
• Reg. 4(2)(b)
• Reg. 4(2)(d)
• Reg. 4(2)(c)
• Reg. 5(2)(b)

Parties

• Hooghly Agrotech Limited
• Mr. Subhrajit Banik
• Mr. Uma Shankar Shaw
• Mr. Debdulal Banik Chowdhury
• Mr. Avijit Chowdhury
• Mr. Sekhar Chandra Koley
• Mr. Himadri Bag
• Mr. Arjun Saha
• Ms. Sumita Das
• Mr. Subrata Das
• Mr. Devid Haslaf
• Mr. Miarul Sekh
• Mr. Kedar Chandra Bera
• Hooghly Debenture Trust
• Mr. Bijay Sarkar

Holding

Hooghly Agrotech Limited made a deemed public issue of Non-Convertible Redeemable Secured Debentures to more than 49 persons in violation of Sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the ILDS Regulations, and Hooghly Debenture Trust acted as an unregistered debenture trustee in violation of Section 12(1) SEBI Act and DT Regulations. The Company and its directors were directed to jointly and severally refund the money with 15% interest compounded half-yearly and were restrained from the securities market, and the debenture trustee was restrained for four years.

Full text

Page 2 of 21 as ‘Hoogly’ or ‘the Company’) is prima facie engaged in fund mobilising activity from the public, by making offer and issuing Non-Convertible Redeemable Secured Debentures (hereinafter referred to as ‘NCD’) and had allegedly violated the provisions of Sections 56, 60 [read with Section 2(36)], 73, 117B and 117C of the Companies Act, 1956 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 Hooghly Debenture Trust (through its trustee namely Mr. Bijay 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 21 v. Hooghly Agrotech's abovementioned Directors shall provide a full inventory of all their assets and properties; vi. Hooghly Agrotech 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 NCDs, without prior permission from SEBI; vii. Hooghly Agrotech and its abovementioned Directors shall not divert any funds raised from public at large through the Offer of NCDs, which are kept in bank account(s) and/or in the custody of Hooghly Agrotech; viii. Hooghly Agrotech and its abovementioned Directors shall furnish complete and relevant information (as sought by SEBI letters dated May 05, 2014 and June 13, 2014) within 21 days from the date of receipt of this Order. ix. The Debenture Trustee, viz. Hooghly Debenture Trust (represented by its trustee viz. Mr. Bijay Sarkar), is prohibited from continuing with its present assignment as a debenture trustee in respect of the Offer of NCDs of Hooghly Agrotech 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 21 Mr. Arjun Saha and Mr. Kedar Chandra Bera. The letters issued to others had returned undelivered. Thereafter, attempts were made to deliver the interim order by hand delivery/ pasting on the last known addresses of these persons. In the meantime, one Mr. Kabir Hossain, advocate while writing on behalf of Mr. Avijit Chowdhury, a director of the Company vide letter dated March 17, 2015, submitted a brief reply to the interim order. Mr. Arjun Saha vide his letter dated March 09, 2015, replied to the

Source: SecMarx — sebi:WTM/PS/162/ERO/FEB/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.