sebi:WTM/SM/NRO/NRO/18703/2022-23

SEBI · SEBI · 2021-06-15 · S.K. Mohanty, Whole Time Member

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Facts / Headnote

Company and Directors (Noticees 1-5) directed to jointly and severally refund NCRD monies with 15% per annum interest; Noticees 1-5 restrained from securities market access for 4 years post-refund; Noticees 6-7 restrained from associating with listed/public companies and intermediaries for 2 years; Noticee 8 directed not to act as Debenture Trustee and restrained from securities market for 2 years.

Provisions invoked

• s. 11A
• s. 11
• s. 12
• s. 73
• s. 4A
• s. 67(3)
• s. 67
• s. 73(2)
• s. 73(1)
• s. 2(36)
• s. 60
• s. 27(2)
• s. 56(1)
• s. 56(3)
• s. 56(4)
• s. 117

Regulations

• Reg. 7
• Reg. 6
• Reg. 9
• Reg. 12
• Reg. 8
• Reg. 14
• Reg. 5
• Reg. 4(2)
• Reg. 200
• Reg. 10
• Reg. 4(2)(a)
• Reg. 19
• Reg. 26
• Reg. 5(2)(b)

Parties

• Dolphin Infra Powerproject Ltd. (Noticee no. 1)
• Debraj Mitra (Noticee no. 2)
• Koushik Dutta (Noticee no. 3)
• Subham Bose (Noticee no. 4)
• Anindyo Paul (Noticee no. 5)
• Saugata Basu (Noticee no. 6)
• Rana Sikdar (Noticee no. 7)
• Dolphin Infrapower Debenture Trust (represented by its trustee Arindam Adhya) (Noticee no. 8)

Holding

Dolphin Infra Powerproject Ltd. made a deemed public issue of NCRDs to 134 investors in FY 2013-14 (exceeding the 49-investor threshold under Section 67(3) of the Companies Act, 1956) without complying with the Companies Act, 1956 and ILDS Regulations, 2008; its Directors are jointly and severally liable to refund investors with 15% interest, and Dolphin Infrapower Debenture Trust acted as an unregistered Debenture Trustee in violation of Section 12 of the SEBI Act.

Full text

Order in the Matter of Dolphin Powerproject Limited Page 1 of 28 WTM/SM/NRO/NRO/18703/2022-23 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the Matter of Dolphin Powerproject Limited Page 2 of 28 1. Background – 1.1. The present proceeding before me emanates from the complaints received by Securities and Exchange Board of India (hereinafter referred to as “SEBI”) with respect to the issuance of Non-Convertible Redeemable Debentures (hereinafter referred to as “NCRDs”) by Dolphin Infra Powerproject Ltd. (hereinafter referred to as “DIPPL”/ “Company”). 1.2. Pursuant to the receipt of the complaints, an examination was undertaken by SEBI to verify the veracity of the information brought out in the complaints and ascertain whether there had been any violation of the provisions of the Companies Act, 1956 and SEBI (Issue and Listing of Debt Securities), 2008 (hereinafter referred to as “ILDS Regulations’) with respect to the issuance of NCRDs in the Financial Years 2012-13, 2013-14 and 2014-15. The said examination entailed the issuance of multiple letters to the Company and its Directors, Auditor of the Company, however, no response was received by SEBI from the said entities. Further, in order to examine the activities of the Company, SEBI had also issued letters to the complainants seeking additional information from them, out of which, a few of the complainants furnished certain information/documents. Consequent to the completion of the examination in the matter, a Show-cause Notice dated June 15, 2021 (hereinafter referred to as the “SCN”) was issued to the Noticees herein, and the said SCN is the subject

Order in the Matter of Dolphin Powerproject Limited Page 3 of 28 terms of the meeting of the Board held on May 17, 2012; and in terms of the approval of the shareholders received in the Extraordinary General Meeting (“EGM”) held on May 18, 2012. b. The Company created a charge of INR 100 Crore in favour of Dolphin Infrapower Debenture Trustee (represented by its trustee Arindam Adhya) (Noticee no. 8). c. The Company floated two schemes viz., (i) Monthly Income Scheme (“MIS”) and (ii) Single Time Scheme (“STS”). The plans under the MIS scheme were having tenure of 15 months, 24 months, 36 months and 60 months. The plans under STS were for the tenure of 1 year, 3 years and 5 years. d. The certificates of DIPPL stated that the issue of debentures was “Private and Confidential Placement”. e. The total number of allottees of NCRD for the FY 2012-13, FY 2013- 14, FY 2013-14 and FY 2014-15, are tabulated herein below: Table no. 1 Financial Year No. of Allottees Amount 2012-13 14 78, 200 2013-14 134 1,09, 63,000 2014-15 44 17,32,644 2.2. On the basis of the above findings, the SCN has alleged that DIPPL has issued NCRDs to more than 49 investors (i.e., 134 investors) during FY 2013-14 without complying with the provisions of Sections 56 (1), 56 (3), 60 and 73 read with

Source: SecMarx — sebi:WTM/SM/NRO/NRO/18703/2022-23. 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.