sebi:WTM/PS/21/IMD-ERO/MAY/2016
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Facts / Headnote
Company and its present and former directors held liable for violations of sections 56, 60 and 73 of the Companies Act, 1956 and RPS Regulations; directed to refund Rs.60.59 crore with 15% p.a. interest compounded half-yearly, jointly and severally; restrained from accessing capital market for 4 years from completion of refunds; references to be made to police, MCA and State Government.
Provisions invoked
- s. 11A
- s. 19
- s. 27
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 391
- s. 67(3)
- s. 67
- s. 73(2)
- s. 29
- s. 291
- s. 73(1)
- s. 2(36)
- s. 60
- s. 56(1)
- s. 56(3)
- s. 73(3)
- s. 56(4)
Regulations
- Reg. 13
- Reg. 15
- Reg. 16
- Reg. 22
- Reg. 7
- Reg. 8
- Reg. 107
- Reg. 6
- Reg. 5
- Reg. 4(5)
- Reg. 4(2)(a)
- Reg. 4(2)(b)
- Reg. 4(2)(c)
- Reg. 9
- Reg. 4(2)(e)
- Reg. 4(2)(d)
- Reg. 4(3)
Parties
- GBC Enterprise Limited
- Krishnendu Das
- Sugata Bal Das
- Pramathes Dutta
- Sujoy Nandi
- Basab Dasgupta
Holding
GBC Enterprise Limited made a public issue of Redeemable Preference Shares to more than 50 persons raising Rs.60.59 crore without complying with sections 56, 60 and 73 of the Companies Act, 1956 and the RPS Regulations, and its present and former directors during the relevant period are jointly and severally liable to refund the amounts with 15% interest.
Full text
Page 2 of 24 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”), vide an ex- parte interim Order dated February 20, 2015 (hereinafter referred to as "the interim order") had observed that the company, GBC Enterprise Limited (hereinafter referred to as "GEL" or "the Company") was prima facie engaged in fund mobilizing activity from the public through its offer and issue of Redeemable Preference Shares (hereinafter referred to as "RPSs") and allegedly violated the provisions of sections 56, 60 read with section 2(36), 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 (the ‘RPS Regulations”).
Page 3 of 24 vii. GEL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares, which are kept in bank account(s) and/or in the custody of GEL”.
Page 4 of 24 (d) The noticee made further investment of Rs.1,21,775/- during February 2006 and August 2006 at the request of the said managing director. (e) During the end of 2007, Mr. Basab Dasgupta informed that the Company would not be able to return the investments of the noticee and proposed to allot 1000 equity shares of Rs.100/- each of the Company in his name against the investment of Rs.1,00,000/- and that the balance of Rs.71,775/- was to be returned. The noticee was also assured that the equity shares shall be bought back and the sum of Rs.1 lakh would also be returned. (f) The noticee accepted the proposal and on January 15, 2008, 1000 equity shares bearing distinctive nos. 5791 to 6790 were allotted to him. The Company returned Rs.71,775/- vide a cheque on April 11, 2008 to the noticee. (g) The noticee vide letter dated November 24, 2008 requested the board of directors of the Company to buy back the said 1000 shares. Thereafter, vide letter dated December 05, 2008 the noticee had submitted his resignation from the board of directors. (h) The Company paid Rs.1 lakh on December 06, 2008 and Mr. Basab Dasgupta purchased the shares. Necessary transfer deeds were also handed over. (i) On December 11, 2008, the Company accepted his resignation and paid a sum of Rs.25,000/- as a gesture towards the noticee’s services rendered for the Company. (j) The said Mr. Basab Dasgupta vacated the office of managing director and remained a director of the Company. He passed away o
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Source: SecMarx — sebi:WTM/PS/21/IMD-ERO/MAY/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.