sebi:WTM/RKA/EFD-DRA-II/160/2014
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Facts / Headnote
Charges established; RDB Rasayans Ltd. and the three Noticee directors debarred from accessing the securities market and prohibited from buying, selling or dealing in securities for a period of four years (credit given for period already served under interim order); RDB directed to utilize IPO funds in escrow account for purposes disclosed in the Prospectus.
Provisions invoked
- s. 11B
- s. 19
- s. 12
- s. 372A
- s. 21
- s. 58
- s. 12A
- s. 192A
- s. 60
- s. 171(1)
Regulations
- Reg. 11
- Reg. 3
- Reg. 47
- Reg. 3(a)
- Reg. 55
- Reg. 57(1)
- Reg. 60(4)
- Reg. 107
Parties
- RDB Rasayans Limited
- Mr. Sunder Lal Dugar
- Mr. Shanti Lal Baid
- Mr. Sandeep Baid
Holding
The charges in the SCN dated August 05, 2013 alleging violations of ICDR Regulations, Listing Agreement clause 49, Companies Act, SEBI Act and PFUTP Regulations are established against RDB Rasayans Ltd. and its directors Sunder Lal Dugar, Shanti Lal Baid and Sandeep Baid, who are debarred from the securities market for four years.
Full text
Order in the matter of RDB Rasayans Limited Page 2 of 23 failing to disclose certain material developments; (b) RDB had mis-utilized the IPO proceeds for the purposes other than the objects stated in the RHP/Prospectus; (c) RDB had transferred `31.6 crores from the IPO proceeds to its group entity, RDB Realty and Infrastructure Limited (RDBRIL) which was not in line with the objects of the issues as stated in the Prospectus; (d) There were several transfers of issue proceeds of RDB to certain trading clients namely, Prakashbhai Ishwarbhai Rana (“Prakashbhai”), Dave Harihar Kiritbhai (“Dave”), BMD Exports Pvt. Ltd. (“BMD”) and Shreyanshnath Shares and Financial Services Private Limited (“Shreyashnath”) (hereinafter collectively referred to as the “trading clients” or individually by their respective names) who had incurred losses by trading in the scrip on the listing day.
Order in the matter of RDB Rasayans Limited Page 3 of 23 pendency of the petition. 7. Pursuant to the same, the two petitioners filed an application before the Ld. Single Judge of the Hon'ble High Court seeking modification of the order dated February 08, 2012 to the extent that RDB be allowed to withdraw an amount of `6.5 Crores from the amount deposited in the escrow bank account. Vide interim order dated July 18, 2012, the Ld. Single Judge allowed RDB to withdraw the said amount. Aggrieved by the said order, SEBI preferred an appeal before the Division Bench of the Hon'ble High Court which, vide
Order in the matter of RDB Rasayans Limited Page 4 of 23 up the trading losses incurred by them. 9. It may be relevant to state here that before the matter came up for hearing before the Hon'ble Supreme Court, a common show cause notice (SCN) dated August 05, 2013 was issued to the aforesaid Noticees inter alia alleging that RDB and its directors Mr. Shanti Lal Baid, Mr. Sunder Lal Dugar and Mr. Sandeep Baid had failed in their duties and responsibilities towards the investors and thus had violated the provisions of regulation 57(1) and (2) read with Schedule VIII Part A (16), and 60(4) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the ICDR Regulations); Clause 49 of Listing agreement read with section 21 of the SCRA; sections 62, 63 and 68 read with 55A of the Companies Act, 1956; and section 12A(a), (b) and (c) of the SEBI Act read with regulations 3(a), (b), (c), (d), 4(1), 4(2)(a), (d), (e) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (the PFUTP Regulations) and therefore advised the Noticees to show cause as to why suitable directions should not be issued against them under sections 11(1), 11(4) read with section 11B of the SEBI Act, 1992, for allegedly violating the aforesaid provisions of law. The relevant provisions of law that are alleged to have been contravened in this case are reproduced hereunder
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Source: SecMarx — sebi:WTM/RKA/EFD-DRA-II/160/2014. 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.