sebi:WTM/RKA/EFD/150/2016

SEBI · SEBI · 2010-01-08 · Rajeev Kumar Agarwal, Whole Time Member

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Facts / Headnote

Company and directors held liable for contravention of Companies Act, 1956 and NPRS Regulations; directed to refund subscription money with 15% interest, restrained from securities market for four years or till refund, whichever is later; interim order disposed of.

Provisions invoked

• s. 19
• s. 73
• s. 28A
• s. 67(3)
• s. 56
• s. 73(2)
• s. 291
• s. 2(36)
• s. 60
• s. 27(2)
• s. 56(1)
• s. 56(4)

Regulations

• Reg. 4(2)(a)

Parties

• United Cosmetics Manufacturing (I) Limited
• Mr. Samir Chattopadhyay Kumar
• Mr. Nirapada Maiti
• Mr. Amal Patra
• Mr. Kartik Jana
• Mr. Balwant Kumar Singh
• Ms. Debashree Bhowmik
• Mr. Rajib Bhattacharya

Holding

The company's offer of redeemable preference shares to 2,955 persons raising at least Rs. 3.84 crore constituted a public issue under the first proviso to Section 67(3) of the Companies Act, 1956, and the company and its directors are liable for contravention of sections 56, 60 and 73 of the Companies Act, 1956 and the NPRS Regulations, with refund of subscription money plus 15% interest directed.

Full text

Order in respect of United Cosmetics Manufacturing (I) Limited and others Page 2 of 10 2013-14 ….. would prima facie indicate that such Offer was a public issue of securities, as prescribed under the first proviso to Section 67(3) of the Companies Act, 1956.” (ii) “….. the number of allottees and amount raised under the Offer of Redeemable Preference Shares for the Financial Years 2006-07, 2008-09 and 2013-14, have only been taken from the documents obtained from MCA21 Portal and also the information/documents furnished by the company. Also, the details regarding the offer of redeemable preference shares of Rs. 500 Lakhs issued on January 08, 2010 (as observed from the copy of the brochure furnished by the company) has not been provided by the company. It is therefore possible that the actual number of allottees and amount mobilized by UCM(I)L could be much more than the figures indicated ….”. (iii) “…..the Offer of Redeemable Preference Shares by UCM(I)L during the Financial Year 2006- 07, 2008-09 and 2013-14, will prima facie qualify as a public issue under the first proviso to Section 67(3) of the Companies Act, 1956”. (iv) “UCM(I)L is prima facie engaged in fund mobilizing activity from the public, through the Offer of Redeemable Preference Shares and as a result of the aforesaid activity has violated the aforementioned provisions of the Companies Act, 1956 (Section 56, Section 60 read with Section 2(36), Section 73), and SEBI NRPS Regulations”. (v) “…. Mr. Samir Chattopa

Order in respect of United Cosmetics Manufacturing (I) Limited and others Page 3 of 10 iii. UCM(I)L and its abovementioned 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. UCM(I)L shall provide a full inventory of all its assets and properties; v. UCM(I)L 's abovementioned Directors shall provide a full inventory of all their assets and properties; vi. UCM(I)L and its abovementioned 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 Redeemable Preference Shares, without prior permission from SEBI; vii. UCM(I)L and its abovementioned Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares, which are kept in bank account(s) and/or in the custody of UCM(I)L; viii. UCM(I)L and its abovementioned Directors shall furnish complete and relevant information in respect of the Offer of Redeemable Preference Shares (as sought by SEBI letter dated December 17, 2014), within 14 days from the date of receipt of this Order, including,  Details of the offer of redeemable preference shares of Rs. 500 Lakhs issued on January 08, 2010 (as mentioned in Paragraph No. 6(iii) above),  Details of the "Secured Redeemable Debentures" issued by the company (as mentioned in Paragraph No.

Order in respect of United Cosmetics Manufacturing (I) Limited and others Page 4 of 10 only and looked after the insurance development division. He used to report to Mr. Nirapada Maiti, Managing Director and Head of the company. Mr. Nirapada Maiti was the key person in respect of legal, financial and administrative functions of the company and took all major decisions related to the company. (b) He may have been given the designation of a Director. However, he never received any privilege or benefits of any standard like a director and was treated as an employee of a company. Mr. Rajib Bhattacharya had attached copies of his Income Tax Returns for AYs 2015-16, 2014- 15 and 2013-14 along with the above reply.

Source: SecMarx — sebi:WTM/RKA/EFD/150/2016. 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.