sebi:WTM/PS/40/ERO/AUGUST/2015
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Facts / Headnote
AGIL and its three directors held to have made a deemed public issue in violation of Sections 56, 60 and 73 of Companies Act, 1956 and directed to forthwith refund money collected through preference shares with 15% p.a. interest compounded half-yearly, via Bank Demand Draft/Pay Order, with asset-sale only for refund into escrow, public notice, CA-certified compliance report within 3 months, inventory of assets/accounts, and 4-year securities market access and association bar till 4 years after completion of refunds; failure to attract recovery under Section 28A SEBI Act, adjudication, criminal reference and winding-up reference.
Provisions invoked
- s. 19
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 67(1)
- s. 56(1)
- s. 56(3)
- s. 67(2)
- s. 56(4)
- s. 73(3)
Regulations
- Reg. 107
Parties
- Aditya Global Industries Limited
- Shri Arunava Bose Munshi
- Shri Anup Kumar Munsi
- Shri Amitava Bose Munshi
Holding
AGIL's offer and allotment of preference shares on March 28, 2010 to 1070 persons collecting Rs. 92.42 lakhs was a deemed public issue that contravened Sections 56(1), 56(3), 60 and 73(1), (2) and (3) of the Companies Act, 1956, and AGIL and its directors Shri Arunava Bose Munshi, Shri Anup Kumar Munsi and Shri Amitava Bose Munshi were directed to refund the amounts with 15% interest and were restrained from the securities market.
Full text
Page 2 of 12 on March 28, 2010 to 1070 persons in the year 2009–10 and collected an amount of Rs. 92.42 lakhs. The said Offer of Preference shares and pursuant allotment was a deemed public issue of securities under the first proviso to Section 67(3) of the Companies Act, 1956, Accordingly, the resultant requirement under Section 60, Section 56(1) and 56(3), Sections 73(1), (2) and (3) of the Companies Act,1956 were not complied with by AGIL. 2.2 In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated December 3, 2014 with immediate effect. a) AGIL shall not mobilize funds from investors through the Offer of Preference Shares or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; b) AGIL and its Directors, Shri Arunava Bose Munshi, Shri Anup Kumar Munsi and Shri Amitava Bose Munshi. are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders; c) AGIL and its abovementioned 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
Page 3 of 12 h) AGIL and its abovementioned Directors shall furnish complete and relevant information in respect of the Offer of preference shares (as sought vide SEBI letters each dated July 15, 2014), within 21 days from the date of receipt of this
Page 4 of 12 7.2 I have also perused the documents/ information obtained from the 'MCA 21 Portal' and other documents filed before the Registrar of Companies. On perusal of Form 2 filed in respect of allotment dated March 28, 2010, I find that AGIL made an Offer of Preference shares and made allotment on March 28, 2010 to 1070 persons in the year 2009–10 and collected an amount of Rs. 92.42 lakhs. 8.1 If so, whether the said issues are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1) (2) (3), the Companies Act,1956?: The provisions alleged to have been violated by the noticees and mentioned in this issue are applicable to the offer made to the public. Therefore the primary question that arises for consideration is whether the issue of preference shares is public issue. At this juncture, reference may be made to section 67(1) & (3) of the Companies Act, 1956:
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Source: SecMarx — sebi:WTM/PS/40/ERO/AUGUST/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.