sebi:WTM/PS/69/ERO/FEB/2015
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Facts / Headnote
Held NCD issue was illegal deemed public issue; directed company, promoters and three directors jointly and severally to refund with 15% p.a. interest, escrow sale proceeds, publish refund notice and file CA certification; restrained company/directors from capital market access and from associating with listed/public fundraising companies for 4 years from completion of refunds; restrained three unregistered debenture trustees from acting as intermediaries and from securities market for 4 years.
Provisions invoked
- s. 19
- s. 12(1)
- s. 73
- s. 4A
- s. 67(3)
- s. 67
- s. 117B
- s. 56
- s. 67(1)
- s. 67(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 73(2)
- s. 56(1)
- s. 117C
- s. 56(3)
- s. 73(3)
Regulations
- Reg. 7
- Reg. 6
- Reg. 9
- Reg. 17
- Reg. 12
- Reg. 28
- Reg. 8
- Reg. 15
- Reg. 14
- Reg. 4(4)
- Reg. 4(2)(a)
- Reg. 19
- Reg. 26
- Reg. 16(1)
- Reg. 4(2)(b)
- Reg. 4(2)(d)
- Reg. 4(2)(c)
- Reg. 5(2)(b)
Parties
- Greater Kolkata Infrastructure Limited
- Mr. Subir Dutta
- Mr. Nakhat Sing Agarwalla
- Mr. Bimalendu Rakshit
- Mr. Sujay Roy Choudhury
- Smt. Sherrie Lal Vasdev
- Greater Kolkata Infrastructure Debenture Trust
Holding
SEBI held GKIL's 2009-2012 offer and allotment of Secured Non-Convertible Redeemable Debentures to 10,083 subscribers for Rs.9 crores was a deemed public issue made without prospectus, listing and ILDS compliance, and directed joint and several refund with 15% interest plus 4-year market access and association restraints, including restraint of unregistered debenture trustees.
Full text
Page 2 of 19 (c) The Directors of the Company are Mr. Subir Dutta, Mr. Nakhat Sing Agarwalla and Mr. Bimalendu Rakshit. (d) The Company has invited subscription for its Secured Non-convertible Redeemable Debentures ("NCDs") and that the Company claimed that it made its offer of NCDs to “only to the registered member of the Calcutta Government Employee's Shelter and Welfare Association, a registered association under the provisions of West Bengal Society Registration Act, 1961 … on purely Private Placement Basis”. (e) Since its incorporation, the Company had issued NCDs to a large number of investors, as per details below: Year Type of Security No. of Subscribers to the Issue Total Amount (`in Crores) 2009 – 10 Secured Non – Convertible Redeemable Debenture
Page 3 of 19 mobilizing activity under its offer of NCDs, SEBI passed an ex-parte interim Order dated May 30, 2014 (hereinafter referred to as "the SEBI Order"), wherein the following directions were issued against the Company, its directors and persons named as debenture trustees: " ...........................
Page 4 of 19 14. The above directions shall take effect immediately and shall be in force until further orders. 15. The prima facie observations contained in this Order are made on the basis of the material available on record i.e. correspondences exchanged between SEBI and GKIL alongwith the documents contained therein. In this context, GKIL and its abovementioned Directors; its Debenture Trustees, viz. Shri Bimalendu Rakshit, Shri Sujay Roy Choudhury and Smt. Sherrie Lal Vasdev may, within 21 days from the date of receipt of this Order, file their reply, if any, to this Order and may also indicate whether they desire to avail themselves an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.
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Source: SecMarx — sebi:WTM/PS/69/ERO/FEB/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.