sebi:WTM/PS/27/CFD/SRO-KLO/JULY/2015
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Facts / Headnote
Prima facie finding of deemed public issue of equity shares; interim restraint on mobilizing funds, issuing prospectus/advertisement, disposing/alienating assets, diverting funds, and accessing securities market till further orders, with direction to cooperate, furnish documents and inventory, and show cause within 21 days why refund with interest and further prohibitions should not be imposed.
Provisions invoked
- s. 11A
- s. 24
- s. 19
- s. 81
- s. 21
- s. 55A
- s. 73
- s. 4A
- s. 67(3)
- s. 67
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 56(1)
- s. 56(3)
- s. 42
- s. 33(1)
- s. 26
- s. 40
Regulations
- Reg. 47
- Reg. 7
- Reg. 2(1)
- Reg. 46
- Reg. 107
- Reg. 57
- Reg. 25
- Reg. 6
- Reg. 32
- Reg. 4(2)
- Reg. 4
- Reg. 36
- Reg. 5
Parties
- Kerala Housing Finance Limited
- Mr. G. Unnikrishnan Nair
- Mr. N. Krishnan Nair
- Smt. Komala Unnikrishnan
- Mr. G. Sureshkumar
- Mr. P. Parameshwaran
- Mr. B Ajithkumar
- Mr. Shajan P.G.
- Mr. R. Sukumaran
- Adv. B Manmadhan
- Mr. S. Sureshkumar
Holding
KHFL's offers and allotments of equity shares during March 2001-March 2014 are prima facie deemed public issues in violation of sections 56(1), 56(3), 60 and 73 of the Companies Act, 1956 and ICDR/DIP norms, attracting SEBI jurisdiction, warranting ex-parte interim restraints and show-cause for refund and further prohibitions.
Full text
Page 2 of 24 Inspection of the Company by NHB with reference to its position as on March 31, 2013 inter alia revealed the following: (i) the Company raised the share capital in the form of equity, mainly through its branches 'on tap', without issuing any prospectus or letter of invitation, without filing any prospectus or letter of invitation and not adhering to Unlisted Public Companies (Preferential Allotment) Amendment Rules, 2011. (ii) The Company had displayed the offer on its website as "KHFL Shares & Non- convertible Secured debentures on private placement only'. KHFL also accepted the subscription amount in cash in many cases from the subscribers, without adhering to KYC compliances and had allotted shares, in many cases after sixty days and in some cases even after six months. (iii) The Company had also raised money through non-convertible debentures/bonds, mainly through branches.
Page 3 of 24 securities allotted, value of such allotment against each allottee's name, date of allotment, date of dispatch, value of such allotment against each allottee's name, date of allotment, date of dispatch of share/debenture certificate etc vii. Details regarding how the money solicited in the said issues were utilized/invested viii. Copies of Prospectus/Red-herring Prospectus filed with ROC, if any ix. Copies of Board resolution and General meeting resolution authorising such issuance x. Copies of the minutes of Board/committee meeting in which the resolution has been passed for allotment, filed with RoC, if any, regarding issuance xi. Copy of the application forms, Prospectus, Pamphlets, advertisements and other promotional materials circulated for issuance of such securities. xii. Details regarding number of application forms circulated inviting subscription for said issuance. xiii. Date of opening and closing of the subscription list for the particular issue. xiv. Copy of Form 2 under Companies Act, 1956 or its equivalent under Companies Act, 2013) which deals with Return of Allotment (name and address of the shareholders, number of shares allotted to each person) if any filed with RoC xv. Copies of any trust deed concerning this debenture issuance xvi. If any debenture trustee is appointed in the said debenture issuance, details of the names, address, copies of their consent to act as debenture trustee, etc. xvii. Details of any securities created for issuance o
Page 4 of 24 a) its directors; b) its promoters and their shareholding; c) shareholding pattern as on March 31, 2014; d) debentures that were issued; The Company provided sample copies of application forms;annual reports for the years 2012, 2013 and 2014 and a break-up of assets as per Balance Sheet as on March 31, 2014.The Company stated that ‘Kerala Hospitality Limited’ is its group company.
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Source: SecMarx — sebi:WTM/PS/27/CFD/SRO-KLO/JULY/2015. 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.