sebi:WTM/PS/35/IMD/ERO-RLO/MAY/2016
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Facts / Headnote
Directions issued: joint and several refund of monies raised through RPS and NCDs with 15% p.a. interest compounded half-yearly; inventory of assets; public notice for refunds; certificate of completion of refunds by peer-reviewed Chartered Accountants; market access ban on Company and directors for 4 years from completion of refunds; debenture trust found in violation of section 12(1) SEBI Act and regulation 7 DT Regulations; matter referred to MCA/RoC and stock exchanges/depositories.
Provisions invoked
- s. 11A
- s. 19
- s. 12(1)
- s. 27
- s. 55A
- s. 73
- 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. 56(3)
- s. 73(3)
- 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)
Holding
BAIL was found to have made a public issue of Redeemable Preference Shares and Non-Convertible Debentures in violation of sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the ILDS Regulations, and the Company along with its past and present directors were directed to jointly and severally refund the monies raised with 15% p.a. interest and barred from accessing the securities market for 4 years from completion of refunds. The debenture trustee, Bishal Abasan Debenture Trust, was found to have violated section 12(1) of the SEBI Act and regulation 7 of the DT Regulations.
Full text
Page 2 of 37 Date of personal hearing: September 03, 2015 Appearance: (a) Mr. Aniruddha Dasgupta, Advocate appeared for Chandan Shah. (b) Benukar Banerjee appeared in-person. (c) Tushar Kanti Nandi and Mohd. Kalimullah Baidya appeared through their Advocate Mr. Kamal Das. (d) Mr. Sumantra Sarathi Mahata appeared for Sachin Kumar Thakur and Himadri Bag.
Page 3 of 37 Regulations”). The interim order also alleged that the debenture trustee, Bishal Abasan Debenture Trust, represented by its trustee, Mr. Tapas Das, had allegedly failed to meet the eligibility conditions specified under regulation 7 of the SEBI (Debenture Trustees) Regulations, 1993 ("DT Regulations") and acted as an unregistered debenture trustee in violation of section 12(1) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”).
Page 4 of 37 iv. BAIL and its abovementioned past and present Directors, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; v. BAIL shall provide a full inventory of all its assets and properties; vi. BAIL's abovementioned past and present Directors shall provide a full inventory of all their assets and properties; vii. BAIL and its abovementioned present Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the Offer of Redeemable Preference Shares and Offer of NCDs, without prior permission from SEBI; viii. BAIL 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 BAIL; ix. BAIL 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; x. The Debenture Trustee, viz. BishalAbasan Debenture Trust (represented by its Trustee, viz. Shri Tapas Das), is prohibited from continuing with its assignment as debenture trustee in respect of the Offer of NCDs of BAIL and also from taking up any new assignment or involvement in any new issue of debentures
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Source: SecMarx — sebi:WTM/PS/35/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.