sebi:WTM/RKA/EFD/174/2016

SEBI · SEBI · Rajeev Kumar Agarwal, Whole Time Member

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Facts / Headnote

Company and directors held liable for contravention; refund of subscription money with 15% p.a. interest directed; market access and association bans imposed for four years; debenture trustee and its trustee found guilty of unregistered activity; interim order disposed of.

Provisions invoked

• s. 19
• s. 12(1)
• s. 73
• s. 28A
• s. 67(3)
• s. 56
• s. 73(2)
• s. 291
• s. 2(36)
• s. 60
• s. 56(1)
• s. 56(4)

Regulations

• Reg. 7
• Reg. 4(2)(a)

Parties

• United Medicine and Surgical Industries Limited
• Mr. Santosh Kumar Hati
• Mr. Suvendu Ganguly
• Mr. Biplab Sarkar
• Mr. Satyanarayan Karmakar
• Mr. Sumit Guria
• Mr. Biplab Banerjee
• Mr. Rajib Bhattacharya
• Mr. Md. Saifuddin Halder
• Mr. Tozemmul Islam
• Mr. Harendra Nath Sinha
• United Debenture Trust
• Mr. Abbas Ali Molla

Holding

UMSIL and its directors were held liable for contravening the Companies Act, 1956, the NPRS Regulations and the ILDS Regulations by making a public issue of RPS and NCDs without compliance, and were directed to jointly and severally refund subscription money with 15% p.a. interest; United Debenture Trust and Mr. Abbas Ali Molla were held guilty of acting as unregistered debenture trustees in contravention of section 12(1) of the SEBI Act and regulation 7 of the Debenture Trustee Regulations.

Full text

Order in respect of United Medicine and Surgical Industries Limited and others Page 2 of 12 (i) “….. UMSIL is prima facie engaged in fund mobilising activity from the public, through the Offer of Redeemable Preference Shares and Offer of NCDs 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, Sections 117B–117C) read with the Non– Convertible Redeemable Preference Shares Regulations and the Debt Securities Regulations”. (ii) “United Debenture Trust (represented by Shri Abbas Ali Molla) has acted as unregistered Debenture Trustee, which amounts to violation of the abovementioned provisions of the SEBI Act read with the Debenture Trustee Regulations”.

Order in respect of United Medicine and Surgical Industries Limited and others Page 3 of 12 viii. UMSIL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of Redeemable Preference Shares and Offer of NCDs, which are kept in bank account(s) and/or in the custody of UMSIL; ix. The Debenture Trustee, viz. United Debenture Trust (represented by Shri Abbas Ali Molla), is prohibited from continuing with its assignment as debenture trustee in respect of the Offer of NCDs of UMSIL and also from taking up any new assignment or involvement in any new issue of debentures, etc. in a similar capacity, from the date of this order till further directions.”

Order in respect of United Medicine and Surgical Industries Limited and others Page 4 of 12 (c) Upon discovering such fraudulent acts of the company and the fraudulent fact in making him the debenture trustee, he tendered his resignation on September 30, 2013. The same was acknowledged by the company and/or its directors. (d) After wrongfully made a debenture trustee in respect of the mortgage deed dated January 14, 2012, he was compelled to file a suit before the City Civil Court at Calcutta. Thereafter, company and others accepted that his name was fraudulently included as a debenture trustee in the mortgage deed and vide a Board Resolution dated November 29, 2013 unanimously decided that his name should be deleted as a debenture trustee. (e) By a newspaper publication dated January 02, 2014, such facts have also been intimated to the general public and the debenture holders have not disputed to the same. (f) He submitted therefore that the interim order against him is not maintainable and in view of the subsequent acts of the company and its directors it became apparent that his name was included in a fraudulent manner without his knowledge. (g) He also submitted that he was not related to the affairs of the company except that he was entrusted with certain activities which he performed for his clients as an Advocate. (h) He enclosed copy of the Mortgage Deed dated January 14, 2012, Notice dated September 30, 2013 issued by the noticee to the company and directors, plaint

Source: SecMarx — sebi:WTM/RKA/EFD/174/2016. 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.