sebi:WTM/PS/200/ERO-BLO/MAR/2016
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Facts / Headnote
Held issue of Redeemable Preference Shares to 50,262 persons was an illegal public issue in violation of Sections 56, 60 and 73 of Companies Act, 1956; directed Company and six directors jointly and severally to refund Rs. 58,06,45,200 with 15% p.a. interest compounded half-yearly, restrained them from securities market and associating with listed/public fundraising companies for 4 years after refunds, ordered inventory of assets, escrow mechanism and referrals for recovery and criminal/MCA action.
Provisions invoked
- s. 19
- s. 27
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- 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. 56(3)
- s. 73(3)
Parties
- Micro Leasing and Funding Limited
- Mr. Upendra Nath Mishra
- Mr. Durga Prasad Misra
- Mr. Bijoy Kumar Routray
- Mr. Durga Prasad Shadangi
- Mr. Kali Prasad Mishra
- Ms. Banaja Pattnaik
Holding
The Company made a public issue of Redeemable Preference Shares to 50,262 allottees raising Rs. 58,06,45,200 in violation of Sections 56, 60 and 73 of the Companies Act, 1956. The Company and its six named directors were held jointly and severally liable to refund with 15% interest and were restrained from the securities market with consequential directions.
Full text
Page 2 of 15 activities are carried on by the Company and its directors, SEBI had issued the following directions: “… … 6. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act, hereby issue the following directions – i. MLFL shall not mobilize funds from investors through the Offer of Redeemable Preference Shares 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. MLFL and its present Directors, viz. Shri Upendra Nath Mishra (PAN: AHDPM1535G; DIN: 01733091), Shri Bijoy Kumar Routray (PAN: AIBPR3316B; DIN: 02382909) and Shri Durga Prasad Shadangi (PAN: AZAPS2983D; DIN: 06585224) alongwith it past Directors, viz. Shri Durga Prasad Misra (PAN: AATPM7049N; DIN: 00627749), Shri Kali Prasad Mishra (PAN: ANZPM6759L; DIN: 00577580) and Smt. Banaja Pattnaik (PAN: AGTPP2815R; DIN: 01690637), 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. MLFL 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. MLFL shall provid
Page 3 of 15 replies within 21 days from the date of its receipt and also seek an opportunity of personal hearing. 3. The interim order was forwarded to the Company and its directors namely Mr. Upendra Nath Mishra, Mr. Durga Prasad Misra, Mr. Bijoy Kumar Routray, Mr. Durga Prasad Shadangi, Mr. Kali Prasad Mishra and Ms. Banaja Pattnaik vide letters dated November 21, 2014. The letter issued to the Company, Mr. Upendra Nath Mishra, Mr. Bijoy Kumar Routray and Mr. Durga Prasad Shadangi had returned undelivered. Thereafter, attempts were made to deliver the interim order by pasting on the last known addresses of these persons.
Page 4 of 15 attend the hearing. This request was considered and another opportunity was afforded on September 15, 2015. The date of hearing was later postponed to September 24, 2015 and November 23, 2015 due to certain administrative exigencies. On the date fixed i.e. November 23, 2015, Mr. Durga Prasad Sadangi appeared in person. On his request a copy of the interim order was furnished to him and he was allowed a period of one month to file the written submissions/ response to the interim order along with the documents, if any.
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Source: SecMarx — sebi:WTM/PS/200/ERO-BLO/MAR/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.