sebi:WTM/PS/80/ERO/OCT/2015
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Facts / Headnote
Weird Industries Limited and its directors held liable for deemed public issues of RPS and NCDs and directed to forthwith refund money with 15% p.a. interest compounded half-yearly via demand draft/pay order, with escrow, public notice, audit certification and asset inventory; on default recovery under section 28A, adjudication, criminal reference and winding-up reference; company and specified directors barred from securities market for 4 years from completion of refunds; Hari Pada Seth restrained for 4 years from acting as intermediary/accessing market.
Provisions invoked
- s. 11
- s. 19
- s. 12(1)
- s. 12
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 117B
- s. 73(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 67(1)
- s. 27(2)
- s. 56(1)
- s. 117C
- s. 56(3)
Regulations
- Reg. 7
- Reg. 6
- Reg. 9
- Reg. 17
- Reg. 12
- Reg. 8
- Reg. 15
- Reg. 14
- Reg. 4(4)
- Reg. 4(2)(a)
- Reg. 19
- Reg. 26
- Reg. 16(1)
- Reg. 107
- Reg. 4(2)(b)
- Reg. 4(2)(d)
- Reg. 4(2)(c)
- Reg. 5(2)(b)
Parties
- Weird Industries Limited
- Shri Chand Mohan Ghosh
- Shri Ramprosad Mondal
- Shri Gopal Dalapati
- Shri Sahajahan Khan
- Shri Sanjay Kumar Das
- Shri Jadunath Jena
- Shri Mohammed Ariff Billa
- Shri Bhabagrahi Behera
- Shri Sachin Kumar Thakur
- Shri Pradip Ghosh
- Shri SK Asadul
- Shri Hari Pada Seth
Holding
WIL's issues of Redeemable Preference Shares (Rs.3.45 crore) and Non-Convertible Debentures (Rs.14 crore) were deemed public issues that violated Sections 56, 60, 73, 117B, 117C of the Companies Act, 1956, DIP Guidelines/ICDR Regulations and Debt Securities Regulations, and the Company, its past, present and subsequent directors and unregistered debenture trustee were directed to refund with interest and subjected to market restraints.
Full text
Page 2 of 26 1.1 Weird Industries Limited (WIL) having its Office at Bhagyalaxmi Building, Howrah Amta Road, Post Office–Dasnagar, Kolkata–711105, West Bengal, India, was incorporated on March 7, 2008, with the Registrar of Companies ( ROC), Kolkata. 1.2 On receipt of information about collection of money by WIL and subsequent enquiry by SEBI, it was observed that WIL had issued:- a. Redeemable Preference Shares, to 2053 persons in the year 2008-09 and 2009- 2010 ("hereafter referred to as RPS") and collected an amount of Rs. 3.45 crore and b. Non–Convertible Debentures during 2009-10 and 2010-11 and had mobilized an amount of Rs. 14.00 crores ("hereafter referred to as offer of NCDs") 1.3 As the above said RPS and offer of NCDs were found prima facie in violation of respective provisions of the SEBI Act, 1992 ("SEBI Act"), the Companies Act, 1956, SEBI (Disclosure and Investor Protection) Guidelines, 2000 ("DIP Guidelines") read with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations"), SEBI (Issue and Listing of Debt Securities), Regulations, 2008 ("Debt Securities Regulations"), SEBI passed an interim order dated September 15, 2014 and issued directions mentioned therein against WIL and its Directors, Shri Chand Mohan Ghosh , Shri Ramprosad Mondal, Shri Gopal Dalapati , Shri Sahajahan Khan, Shri Sanjay Kumar Das , Shri Jadunath Jena, Shri Mohammed Ariff Billa and Shri Bhabagrahi Behera ; its Debenture Trustee, viz. Shri. Hari Pada
Page 3 of 26 and conditions. a. "The offer is being made on a private placement basis and cannot be accepted by any person other than to whom it has been offered. Further, the offer cannot be transferred or renounce in anyone's favour. b. The application can be made for a minimum amount of ₹1000 and in multiples of ₹1000 thereafter. c. As the issue for NCDs is on private placement basis, no prior approval/rating is required from Government/SEBI and other statutory authorities. d. The debentures are being issued pursuant to the resolution passed at a meeting of Board of Directors of the Company at its meeting held on May 25, 2009. e. Size of the Issue: ₹5 Crore, with an option to retain oversubscription to be decided by Board of Directors. f. Allotment of NCDs will be made within 60 days from the date of receipt of application. g. Security: The NCDs will be secured by mortgage of assets, water plant to register of the company. h. Who Can Invest: Individuals, Trusts, Corporate Bodies, Minors (through Guardians), Institutions, Mutual Funds, HUFs and Co-operative Bodies." 2.3 WIL offered NCDs with varying periods of redemption as shown below in respect of different amounts under different schemes MULTIPLIER SECURED DEBENTURE PLAN A B C D E Redemption Period 2 Years 11 Months 4 Years 11 Months 7 Years 11 Months 10 Years 12 Years Amount Payable per Debenture 100 100 100 100 100 Minimum No. of Debenture 10 10 10 10 10 Redemption Value 1500 2000 4000 6000 10000 Annualised Yield on In
Page 4 of 26 REGULAR INCOME SECURED DEBENTURE PLAN MINIMUM Redemption Period Annualised Yield on Investment Payable RA Debenture Amount (₹) 3 Years 11 Months 15.50% Monthly 250 25000
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Source: SecMarx — sebi:WTM/PS/80/ERO/OCT/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.