sebi:WTM/PS/34/IMD/ERO-RLO/MAY/2016
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Facts / Headnote
Held BHAPL's offer and issue of Redeemable Preference Shares was an illegal public issue in violation of sections 56, 60 and 73 of the Companies Act, 1956 and DIP Guidelines/ICDR Regulations; directed BHAPL and 14 past and present directors to jointly and severally refund Rs.2.84 crore with 15% p.a. interest within three months, restrained them from the securities market till 4 years after completion of refunds, and provided for recovery under section 28A of the SEBI Act and references to State Government/Police and MCA on default.
Provisions invoked
- s. 11A
- s. 19
- s. 27
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- 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. 107
- Reg. 111
Holding
BHAPL's issue of Redeemable Preference Shares to 3,487 persons raising Rs.2.84 crore was a deemed public issue violating sections 56, 60 and 73 of the Companies Act, 1956 and the DIP Guidelines/ICDR Regulations, and BHAPL with all past and present directors was directed to jointly and severally refund the amount with 15% p.a. interest and was restrained from the securities market.
Full text
Page 2 of 32 (a) Mr. Aniruddha Dasgupta, Advocate appeared for Chandan Shah on September 03, 2015. (a) Mr. Kamal Das, Advocate appeared on September 04, 2015 on behalf of noticees, Gautam Kumar Halder, Mohammad Kalimullah Baidya, Tushar Kanti Nandi, Santosh Kumar Paul and Swapan Kumar Bose.
Page 3 of 32 investors who have subscribed to the impugned offer and issue of RPS and to ensure that the Company and its directors are restrained from carrying on with their fund mobilizing activity, SEBI had issued the following directions:
Page 4 of 32 viii. BHAPL 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 BHAPL; ix. BHAPL and its abovementioned past and present Directors shall furnish complete and relevant information (as sought by SEBI letter dated October 9, 2014), within 14 days from the date of receipt of this Order”.
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Source: SecMarx — sebi:WTM/PS/34/IMD/ERO-RLO/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.