sebi:WTM/PS/49/EFD/SEPTEMPER/2015

SEBI · SEBI · 2015-04-01 · Prashant Saran, Whole Time Member

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Facts / Headnote

Violations held proved; SICL and seven directors directed to jointly and severally refund amounts collected through deemed public issues with interest, issue newspaper public notice within 15 days, complete refunds and file CA-certified report within three months with repayments only by Bank Demand Draft/Pay Order and asset-sale proceeds in escrow; company and directors restrained from securities market and associating with listed/public fundraising companies/intermediaries for 4 years from completion of refunds; HR Trustee restrained for 4 years; default to invite recovery under section 28A SEBI Act, adjudication, criminal reference and winding-up reference.

Provisions invoked

Regulations

Parties

Holding

SICL's FY 2010-11 to 2012-13 offers of Unsecured, Secured Non-Convertible and Partly Paid Optionally Convertible Debentures to 8,071 investors collecting Rs. 26,62,81,300 were deemed public issues violating Sections 56, 60, 73, 117B and 117C of the Companies Act, 1956 and the Debt Securities Regulations, with HR Trustee violating Section 12(1) SEBI Act; SICL with its present and former directors held jointly liable to refund with interest and restrained, and the trustee restrained.

Full text

Page 2 of 32 Delhi and Haryana. SICL with its as CIN U45400DL2008PLC183645, is having its registered office at Royal Palace Complex, First Floor, G-55, Vikas Marg Laxmi Nagar, Delhi- 110092. 1.2 On enquiry, SEBI found that the Company had made, in FY 2010-11 to 2012-13, offers and issuances of Unsecured Redeemable Debentures, Secured Redeemable Non-Convertible Debentures and Partly Paid Optionally Convertible Unsecured Debentures (hereinafter referred to as 'issuance of Debentures'), to more than 49 persons and collected Rs. 26,62,81,300. 2.1 As the above said Offer of debentures were found prima facie in violation of respective provisions of the SEBI Act, 1992 ("SEBI Act") the Companies Act, 1956 and SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI passed an ex-parte interim order dated April 1, 2015 and issued directions mentioned therein against SICL and its Directors and Debenture Trustee. 2.2 Prima facie findings/allegations: The said interim order recorded the following prima facie

Page 3 of 32 Table No. 2 Series Amount invested Maturity Value compounded interest Terms(months) B1 1,000 1,600 11.92% 48 B2 1,000 1,800 11.93% 60 B3 1,000 2,288 12.00% 84 B4 1,000 2,595 12,10% 96

Page 4 of 32 2.7 The present Directors in SICL are Shri Surendra Singh Baghel, Shri Dharm Singh Kushwah, Shri Mukesh Singh and Shri Banwari Lal Baghel. The former directors of SICL, namely, Shri Bakil Singh, Shri Sanjeev Singh and Shri Rajveer Singh resigned on June 01, 2011. 2.8 The Offer of debentures was a deemed public issue of securities under the first proviso to Section 67(3) of the Companies Act, 1956, Accordingly, SICL, its directors and debenture trustee did not comply with the relevant provisions of Section 60, Sections 56(1) and (3), Sections 73(1), (2) and (3) and 117B and 117C of the Companies Act, 1956 and the Debt securities Regulations. 2.9 In view of the prima facie findings on the violations committed by the Company and the directors, the following directions were issued in the said interim order dated April 1, 2015 with immediate effect.

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Source: SecMarx — sebi:WTM/PS/49/EFD/SEPTEMPER/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.