sebi:WTM/RKA/CFD-DIL-1/14/2012
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Facts / Headnote
SCN dated December 02, 2008 disposed of; directions issued to company to pay interest on application monies in up to 7 quarterly installments; three-year market restraint imposed on company and two directors in case of default
Provisions invoked
- s. 11
- s. 19
- s. 73
- s. 73(2)
- s. 22A
Regulations
- Reg. 107
Parties
- M/s. SVPCL Limited
- Mr. K. Mallikarjuna Reddy
- Mr. K. Sudhakar Reddy
- Ms. K. Mahitha
- Ms. K. Aparna
- Dr. K. Sudhakara Reddy
- Dr. K. Seshaiah
- Mr. P. P. Reddy
- Mr. K. V. Kondaiah Sastry
- Dr. Y. R. Nagarjuna Kumar
Holding
SEBI directed SVPCL Limited to pay interest at 15% per annum on delayed refund of application monies and interest at 9% per annum on that interest, in a maximum of 7 quarterly installments, with a three-year market restraint on the company and two directors if payments defaulted. The independent and non-executive directors were not held liable as they were not established to be 'officers in default'.
Full text
Page 2 of 11 2. The BSE refused the final listing permission of shares of the company vide its order dated January 21, 2008 for the reasons stated in that order. The company’s application for listing made with NSE stood ‘deemed to be refused’ in terms of section 73 (5) of the Companies Act, 1956. Against the decision of BSE the company filed a writ petition no. 1061 of 2008 before the Hon’ble High Court of Judicature at Andhra Pradesh. Hon’ble High Court vide its order dated February 29, 2008 disposed off the writ petition without expressing any opinion on merits and held that questions raised therein can be effectively gone into by the Securities Appellate Tribunal (SAT) under Section 22A of the Securities Contracts (Regulation) Act, 1956. Thereafter, the company filed an appeal no.47/2008 before the Hon’ble SAT challenging the aforesaid
Page 3 of 11 6. The company vide letter dated September 01, 2008 requested SEBI to allow it to refund the money lying in the escrow account to all investors and sought three weeks’ time to pay the interest amount. SEBI vide letter dated September 17, 2008 advised the company to ensure that the application money along with the interest at applicable rate as stipulated under section 73 of the Companies Act is paid to all the investors/applicants in the IPO of the company within the period of three weeks from the date of the aforesaid letter of the company (i.e. by September 21, 2008), failing which SEBI may take action, as it may deem appropriate, in accordance with law.
Page 4 of 11 10. In view of the aforesaid, SEBI issued Show Cause Notices (SCNs) to the company, its promoter and directors on December 2, 2008 to show cause as to why without prejudice to their liability as stated above , appropriate action including direction under sections 11, 11A and 11B read with clause 17 of DIP Guidelines should not be initiated against them.
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Source: SecMarx — sebi:WTM/RKA/CFD-DIL-1/14/2012. 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.