sebi:WTM/PS/65/ERO/BLO/JAN/2015
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Facts / Headnote
Interim restraining directions issued against MFL and its promoters/directors; show cause notice issued as to why further directions including refund, market access prohibition, and asset freezing should not be imposed.
Provisions invoked
- s. 24
- s. 19
- s. 370
- s. 11
- s. 55A
- s. 73
- s. 67(3)
- s. 67
- s. 73(2)
- s. 58A
- s. 2(46)
- s. 67(1)
- s. 67(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 301
- s. 56(1)
- s. 73(3)
- s. 621
Regulations
- Reg. 7
- Reg. 2(1)
- Reg. 107
- Reg. 57
- Reg. 25
- Reg. 6
- Reg. 4(2)
- Reg. 36
- Reg. 46
- Reg. 63
- Reg. 47
- Reg. 5
- Reg. 15
Parties
- Micro Finance Limited (MFL)
- Mr. Durga Prasad Misra
- Mr. Ashok Kumar Patnaik
- Mr. Baikuntha Nath Patnaik
- Ms. Padmabati Patnaik
- Ms. Santilata Patnaik
- Ms. Sashi Patnaik
- Mr. Haricharan Jena
- Mr. Dharmananda Swain
- Dr. Jugal Kishor Satapathy
- Mr. Bijoy Kumar Routray
Holding
SEBI held that MFL's issuance of Cumulative Convertible Preference Shares (CCPS) to 1,21,222 allottees was prima facie a public issue, not a private placement, and that MFL had contravened the Companies Act, 1956 and the ICDR Regulations by failing to file a prospectus, seek listing, and comply with applicable disclosure norms. SEBI issued interim restraining directions against MFL and its promoters/directors and issued a show cause notice for further directions including refund of monies raised.
Full text
Page 2 of 15 b. Details regarding the number of application forms circulated inviting subscription for debentures/ preference shares. c. Details regarding the number of applications received. d. Details regarding the number of allottees and list of such allottees. e. Number of debentures/ preference shares allotted and value of such allotment against each allotee's name. f. Details regarding subscription amount raised. g. Date of allotment of the debenture/ preference shares. h. Copies of the minutes of Board/ committee meeting in which the resolution has been passed for allotment. i. Date of dispatch of debenture/ preference shares certificates etc. j. Details of the total number of applicants for each of its scheme besides the list of final allottees. k. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of debentures/ preference shares. l. Terms and conditions of the issue of debentures/ preference shares.
Page 3 of 15 'NBFC'). The reason stated for cancellation was that the 'Certificate of Registration' granted to MFL was being misused by another entity namely 'Micro Leasing and Funding Limited', promoted by some of the directors of MFL. The letter also stated that 'Micro Leasing and Funding Limited' had applied for a new 'Certificate of Registration' to function as an NBFC, which was rejected by Reserve Bank of India in May 2014.
Page 4 of 15 16 17-07-2009 2,66,043 1,989 2,66,04,300 2,66,04,300 17 27-07-2009 47,916 768 47,91,600 47,91,600 18 19-10-2009 2,19,732 1,677 2,19,73,200 2,19,73,200 19 26-12-2009 1,63,379 1,676 1,63,37,900 1,63,37,900 20 15-02-2010 37,141 403 37,14,100 37,14,100 21 06-03-2010 36,612 307 36,61,200 36,61,200 22 29-03-2010 36,035 342 36,03,500 36,03,500 23 11-05-2010 40,180 412 40,18,000 40,18,000 24 17-07-2010 53,795 587 53,79,500 53,79,500 25 21-08-2010 30,550 289 30,55,000 30,55,000 26 22-09-2010 41,250 388 41,25,000 41,25,000 27 30-10-2010 35,075 304 35,07,500 35,07,500 28 16-12-2010 1,68,171 1,247 1,68,17,100 1,68,17,100 29 28-02-2011 2,71,167 1,376 2,71,16,700 2,71,16,700 30 12-04-2011 1,29,566 659 1,29,56,600 1,29,56,600 31 20-05-2011 1,38,569 881 1,38,56,900 1,38,56,900 32 12-08-2011 1,10,833 643 1,10,83,300 1,10,83,300 33 25-10-2011 2,97,283 1,325 2,97,28,300 2,97,28,300 34 21-03-2012 2,68,235 1,074 2,68,23,500 2,68,23,500 35 31-03-2012 3,76,574 1,553 3,76,57,400 3,76,57,400 36 18-06-2012 9,92,371 4,798 9,92,37,100 9,92,37,100 37 17-08-2012 6,65,366 2,829 6,65,36,600 6,65,36,600 38 25-03-2013 8,63,740 3,221 8,63,74,000 8,63,74,000 Total 88,91,984 1,21,222 88,91,98,400
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Source: SecMarx — sebi:WTM/PS/65/ERO/BLO/JAN/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.