sebi:WTM/PS/44/ERO-GLO/MAY/2016
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Facts / Headnote
Interim order cum show cause notice issued restraining the company and its promoters/directors from mobilizing funds through issue of equity shares or other securities, prohibiting them from issuing prospectus or offer documents, restraining them from accessing the securities market, directing them not to divert funds, and directing them to co-operate with SEBI and provide asset inventory; show cause notice issued as to why further directions including refund with 15% interest should not be imposed.
Provisions invoked
- s. 24
- s. 19
- s. 27
- s. 55A
- s. 73
- s. 67(3)
- s. 67
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 27(2)
- s. 56(1)
- s. 60B(9)
- s. 56(4)
- s. 73(3)
- s. 621
- s. 60B(2)
- s. 60B(3)
Regulations
- Reg. 107
- Reg. 111
- Reg. 111(1)
- Reg. 111(2)
Parties
- Jeevan Suraksha Real Estate Limited
- Mr. Chandan Das
- Mr. Ashok Chakraborty
- Mr. Uttam Acharjee
- Mr. Pankaj Biswas
- Ms. Champa Biswas
- Ms. Sangita Das
- Mr. Arju Acharjee
- Ms. Dipamoni Acharjee
Holding
SEBI held that Jeevan Suraksha Real Estate Limited's allotment of equity shares to 65 investors during 2006-07 constituted a public issue under Section 67(3) of the Companies Act, 1956, and the company prima facie failed to comply with the applicable Companies Act provisions and DIP Guidelines, warranting an interim order cum show cause notice restraining the company and its directors from further fund mobilization and securities market access.
Full text
Page 2 of 11 Profit and Loss account of the company for Financial Year 2008-09, 2009-10 and 2010-11 of Jeevan Suraksha were scrutinized with respect to the issuance of equity shares.
Page 3 of 11 5. As the equity shares had been issued by Jeevan Suraksha during the year 2006-07, the provisions of sub-sections (1), (2) and (3) of the Section 67 of the Companies Act, 1956, are applicable to the allotments made by the Company. In terms of Section 67(3), no offer or invitation shall be treated as made to the public by virtue of sub- sections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all circumstances – (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation.
Page 4 of 11 SEBI (Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the ‘Sahara Case’), wherein the Hon'ble Court inter alia observed as under: “… after 13.12.2000, any offer of securities by a public company to fifty persons or more will be treated as a public issue under the Companies Act, even if it is of domestic concern or it is proved that the shares or debentures are not available for subscription or purchase by persons other than those receiving the offer or invitation. …
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Source: SecMarx — sebi:WTM/PS/44/ERO-GLO/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.