sebi:WTM/PS/59/ERO/SEPT/2015
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Facts / Headnote
Directions issued for refund of money collected through preference share issuance with 15% p.a. interest, market access ban, and association ban for 4 years post-refund
Provisions invoked
- s. 11
- s. 19
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 73(2)
- s. 67(1)
- s. 67(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 27(2)
- s. 56(1)
- s. 56(3)
- s. 56(4)
- s. 73(3)
Regulations
- Reg. 107
Parties
- Federal Agro Commercials Limited
- Shri Sunil Kumar Barnwal
- Shri Raghbendra Kumar
- Shri Anil Kumar
- Shri Anjeev Kumar
- Smt. Rajani Barnwal
- Smt. Babita Kumari
Holding
FACL's offer of preference shares to 310 persons was a deemed public issue under the first proviso to Section 67(3) of the Companies Act, 1956, and the company and its directors violated Sections 56, 60, and 73 of that Act by failing to issue a prospectus, register it with the RoC, and list the securities. The company and all six directors are co-extensively liable to refund the collected amount with 15% interest.
Full text
Page 2 of 15 and Smt. Babita Kumari. 2.1 Prima facie findings/allegations: In the said interim order, the following prima facie
Page 3 of 15 iii. FACL 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; iv. FACL shall provide a full inventory of all its assets and properties; v. The abovementioned past and present Directors of FACL shall provide a full inventory of all their assets and properties; vi. FACL 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 Preference Shares, without prior permission from SEBI; vii. FACL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Preference Shares, which are kept in bank account(s) and/or in the custody of FACL; viii. FACL and its abovementioned present Directors shall furnish complete and relevant information in respect of the Offer of preference shares (as sought by SEBI letters dated April 18, 2013 and January 31, 2014), within 21 days from the date of receipt of this Order. 3.1 Vide the said interim order FACL and its abovementioned Directors were given the opportunity to file their reply, within 21 days from the date of receipt of the said interim
Page 4 of 15 Bazar Patrika, and notification dated April 15, 2015 published in newspaper ‘Times of India’, FACL and the directors were notified by SEBI, that they will be given the final opportunity of being heard on April 22, 2015 at the time and the venue mentioned therein. 5.1 Hearing and submissions: Neither FACL nor its directors of FACL availed the opportunity of hearing held on April 22, 2015. They did not file any submissions controverting the allegations leveled against them. 6.1 I have considered the allegations, and materials on record. On perusal of the same, the following issues arise for consideration. Each question is dealt with separately under different headings.
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Source: SecMarx — sebi:WTM/PS/59/ERO/SEPT/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.