sebi:WTM/SR/ERO/113/12/2014
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Facts / Headnote
Prima facie finding of unlawful public issue of Redeemable Preference Shares; interim directions restraining further fund mobilization, securities market access, asset disposal/diversion, requiring full inventory, effective until further orders
Provisions invoked
- s. 55A
- s. 22
- s. 73
- s. 4A
- s. 67(3)
- s. 67
- s. 56
- s. 73(2)
- s. 465
- s. 67(1)
- s. 67(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 56(1)
- s. 56(3)
- s. 465(2)
- s. 73(3)
Parties
- Adorable Agrotech Limited (formerly Adorable Agrotech Private Limited)
- Shri Biswajit Biswas
- Shri Dilip Shaw
- Shri Bana Bihari Biswas
- Shri Dhiraj Kumar Shrivastava
- Shri Basant Kumar Singh
- Shri Prashanta Ghosh
- Ms. Moumita Biswas
- Shri Binod Majumder
Holding
SEBI prima facie held AAL's issue of Redeemable Preference Shares to approximately 6545 persons was a deemed public issue in violation of Sections 56, 60, 67 and 73 of the Companies Act, 1956, and issued interim restraints against AAL and its directors.
Full text
Page 2 of 15 b. Date of opening and closing of the subscription list; c. Details regarding the number of application forms circulated inviting subscription; d. Details regarding the number of applications received; e. Details regarding the number of allottees and list of such allottees; f. Number of shares/debentures allotted and value of such allotment against each allottee's name; g. Details regarding subscription amount raised; h. Date of allotment of shares/debentures ; i. Copies of the minutes of Board/Committee meeting in which the resolution was passed for allotment; j. Date of dispatch of debenture/share certificates etc.; k. Details of the total number of applicants for each of AAL's scheme besides the list of final allottee; l. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of shares/debentures; m. Terms and conditions of the issue of shares/debentures; n. Whether AAL has applied for listing of its securities with any of the stock exchanges; o. Copy of Form 2 and Form 10 filed with "RoC" (along with all the attachments) p. Details of debenture trustee viz. name , address, board resolution authorizing their appointment, etc. vi. Other information in respect of any other schemes launched by AAL for raising funds.
Page 3 of 15 d. Details regarding the number of applications received; e. Details regarding total number of allottees and list of such allottees; f. Number of shares allotted and value of such allotment against each allottee's name. g. Details regarding subscription amount raised; h. Date of allotment of the securities issued; i. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment; j. Date of dispatch of share certificates, etc.; k. Whether the company has submitted any details of the total number of applicants for each of its scheme besides the list of final allottees; l. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of said securities; m. Terms and conditions of the issue of shares;
Page 4 of 15 i. No such Prospectus/Red Herring Prospectus/SLP/Information Memorandum filled with ROC for issuance of shares as the company issued Preference Shares on strictly Private Placement basis to its associates only. ii. There were no opening or closing date, neither there was any offers made for subscribing shares or debentures. iii. No application forms circulated, invited, subscribed to any general public for issue of shares or debentures. iv. Except on Private placement basis to Equity & Preference Share holders, no applications received for allotment of shares/Debentures. v. Except on Private placement basis to Preference Share holders, no such allotment done. vi. The Company is into the business of trading of various Agro and FMCG products as mentioned in its Memorandum of Association and have a wide network of direct selling associates who work on a commission basis............ In order to procure this FMCG product from the company for the purpose of marketing this agent give security deposit to the company in order to procure the product for marketing. This agents demand for interest and safety on their security deposits. Thus the Company issued the preference shares against those security deposits and other than the direct selling associates of the Company, no general public has subscribed to the issue of Preference Shares... vii. No application forms, pamphlets, advertisement and other promotional materials circulated to general public for issuance of Shares/
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Source: SecMarx — sebi:WTM/SR/ERO/113/12/2014. 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.