sebi:WTM/PS/26/ERO/IMD/MAY/2016
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Facts / Headnote
Noticees held liable for violations of sections 56, 60 and 73 of the Companies Act, 1956 read with DIP Guidelines; directed to refund monies with 15% interest, restrained from securities market for 4 years from completion of refunds, and directed to provide asset inventory.
Provisions invoked
- s. 19
- s. 27
- s. 28A
- s. 166
- s. 73(2)
- s. 29
- s. 291
- s. 73(1)
- s. 2(36)
- s. 60
- s. 27(2)
- s. 56(1)
- s. 73
- s. 56(3)
- s. 56(4)
Parties
- Mr. Girija Shankar Kumar
- Mr. Awdhesh Kumar Singh
Holding
The noticees, as directors of the Company during April 29, 2002 to April 30, 2011, were held liable for the Company's violations of sections 56, 60 and 73 of the Companies Act, 1956 and the DIP Guidelines in making a public issue of Redeemable Preference Shares without complying with public issue norms, and were directed to jointly and severally refund the mobilized funds with 15% interest and restrained from accessing the securities market for 4 years from completion of refunds.
Full text
Page 2 of 11 2. Thereafter, it came to the notice of SEBI that Mr. Girija Shankar Kumar and Mr. Awdhesh Kumar Singh (collectively referred to as “noticees”) were the directors in the Company from April 29, 2002 to April 30, 2011. In view of the same, they were alleged that they were also engaged in fund mobilizing activity from the public, in the capacity as directors during the relevant period, and have violated the provisions of law mentioned the above paragraph. Accordingly, SEBI issued an
Page 3 of 11 iii. Directing them to refrain from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period.
Page 4 of 11 The noticee had enclosed copy of an undated letter from the Company to him wherein it was stated that the noticee’s resignation dated April 30, 2011 was accepted in the board meeting held on the same day. The noticee was also informed that as on the date of his resignation, he had no liability towards the Company. It was further mentioned that the noticee would not be held liable in the future also and that the present directors have taken full responsibility towards the Company.
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Source: SecMarx — sebi:WTM/PS/26/ERO/IMD/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.