sebi:WTM/PS/32/IMD/ERO/MAY/2016

SEBI · SEBI · 2015-03-17 · Prashant Saran, Whole Time Member

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Facts / Headnote

Cell Industries Limited and 10 directors held jointly and severally liable to forthwith refund NCD and RPS collections with 15% p.a. interest compounded half-yearly, file asset inventories and completion certificate, restrained from securities market till 4 years after completion of refunds; unregistered debenture trustees held in violation; proceedings against Late Samrat Sinha abated.

Provisions invoked

• s. 11A
• s. 19
• s. 12(1)
• s. 27
• s. 55A
• s. 28A
• s. 4A
• s. 67(3)
• s. 117B
• s. 73(2)
• s. 29
• s. 291
• s. 73(1)
• s. 2(36)
• s. 60
• s. 56(1)
• s. 117C
• s. 56(3)
• s. 73
• s. 56(4)

Regulations

• Reg. 7
• Reg. 6
• Reg. 16
• Reg. 9
• Reg. 17
• Reg. 12
• Reg. 28
• Reg. 8
• Reg. 15
• Reg. 14
• Reg. 4(4)
• 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

• Cell Industries Limited
• Mr. Kumar Kanti Bhattacharya
• Mr. Debi Prasad Mookherji
• Mr. Sourav Bardhan
• Mr. Ashim Gupta
• Mr. Asraf Ali Shaikh
• Mr. Shaikh Ajgar Ali
• Mr. Saik Majaffar
• Mr. Rajesh Jaiswal
• Mr. Sekh Rezaul Karim
• Mr. Koushik Mukherjee
• Mr. Ashish Kumar De Sarkar
• Mr. Samrat Sinha
• Mr. Abdul Basad Molla

Holding

Cell Industries Limited made public issues of Redeemable Preference Shares to 213 persons and Non-Convertible Debentures to the general public in violation of sections 56, 60, 73, 117B, 117C of the Companies Act, 1956 and ILDS Regulations, and the Company with its past and present directors must jointly and severally refund with 15% interest and are restrained from the securities market; Ashish Kumar De Sarkar and Abdul Basad Molla acted as unregistered debenture trustees in violation of section 12(1) SEBI Act and regulation 7 DT Regulations.

Full text

Page 2 of 34 3. Noticee, Ashish Kumar De Sarkar was represented by his Advocates M/s. Ashish Shah and Sarosij Dasgupta. 4. Noticee, Debi Prasad Mookherji appeared along with his representative, Mr, Ashok Kumar Daga, Practicing Company Secretary.

Page 3 of 34 conditions under regulation 7 of the SEBI (Debenture Trustees) Regulations, 1993 (“the DT Regulations”) and acted as unregistered debenture trustees in violation of section 12(1) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”).

Page 4 of 34 viii. CIL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares and Offer of NCDs, which are kept in bank account(s) and/or in the custody of CIL; ix. CIL and its abovementioned present Directors shall furnish complete and relevant information (as sought by SEBI letters dated June 17, 2014; June 19, 2014 and July 31, 2014), within 14 days from the date of receipt of this Order; x. CIL shall, within 14 days from the date of receipt of this Order, provide SEBI with information regarding refund made to the holders of NCDs [as claimed by the company in its letter dated August 20, 2014, which is reproduced at paragraph 2.3.1 of page 2] such as name of the NCD holder, address, amount mobilized, number of NCDs issued, promised maturity amount with date of maturity, amount refunded and date thereof; xi. The Debenture Trustees, viz. Shri Ashish Kumar De Sarkar, Shri Samrat Sinha and Shri Abdul Basad Molla, are prohibited from continuing with their assignment as debenture trustee in respect of the Offer of NCDs of CIL 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”.

Source: SecMarx — sebi:WTM/PS/32/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.