sebi:WTM/SR/ERO/15/05/2014
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Facts / Headnote
Interim directions issued restraining GLAIL and its directors from mobilizing funds, issuing offer documents, disposing of assets, or diverting funds; debenture trustees prohibited from continuing in their assignment; reply invited within 21 days
Provisions invoked
- s. 12(1)
- s. 55A
- s. 73
- s. 4A
- s. 30
- s. 67(3)
- s. 67
- s. 117B
- 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. 117C
- s. 56(3)
- s. 465(2)
Regulations
- Reg. 7
- Reg. 6
- Reg. 16
- Reg. 9
- Reg. 17
- Reg. 12
- Reg. 8
- Reg. 15
- Reg. 14
- Reg. 4(4)
- Reg. 4(2)(a)
- Reg. 19
- Reg. 26
- Reg. 4(2)(b)
- Reg. 4(2)(d)
- Reg. 4(2)(c)
- Reg. 5(2)(b)
Parties
- GLAIL
- Shri Tipu Sultan
- Shri Biswanath Mondal
- Shri Subhas Sarkar
- Shri Nirjal Pal
- Shri Swapan Sadhukhan
- Shri Chandan Debnath
- Shri Uttam Chakraborty
- Smt. Jyotsna Sadhukhan
- Smt. Jharna Sarkar
Holding
SEBI held that GLAIL's 'Offer of NCDs' made to 24,915 investors was prima facie a public issue under Section 67(3) of the Companies Act, 1956, and that GLAIL prima facie violated the Companies Act, 1956 and the Debt Securities Regulations by mobilizing funds without listing, filing a prospectus, or complying with other requirements. SEBI issued interim directions restraining GLAIL, its directors, and its debenture trustees from further fund mobilization and asset disposal.
Full text
Page 2 of 19 i. Copy of Prospectus/Red Herring Prospectus/Statement in lieu of Prospectus/Information Memorandum filed with ROC for issuance of NCDs. ii. Copy of the Memorandum and Articles of Association of the company; iii. Audited Balance Sheet and Profit & Loss Account of the company for the last 3 years; iv. Name, addresses and occupation of all the promoters/directors of the company; v. Names and details of the Key Managerial Personnel of the company; vi. Other information in respect of every series of NCDs issued by the company, viz. – a. Date of opening and closing of the subscription list; b. Details regarding the number of application forms circulated inviting subscription; c. Details regarding the number of applications received; d. Details regarding the number of allottees and list of such allottees; e. Number of NCDs allotted and value of such allotment against each allottee's name. f. Details regarding subscription amount raised; g. Date of allotment of NCDs; h. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment; i. Date of dispatch of NCDs; j. Details of the total number of applicants for each of GLAIL's scheme besides the list of final allottee; k. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of NCDs. l. Terms and conditions of the issue of NCDs.
Page 3 of 19 iii. Details regarding the number of applications – No application form circulated to the general public. The application form provided only to the intended subscribers without any right to pass on the offer to any other person to whom the offer was not made directly."
Page 4 of 19 7.1 During the intervening period i.e. August 6, 2013 – September 2, 2013, SEBI, vide letter dated August 30, 2013, sought clarifications from CK Jain & Company, Chartered Accountants (Auditors for GLAIL) ("CK Jain"), regarding the following as observed from the Audit Report for the year ended March 31, 2013, viz. –
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Source: SecMarx — sebi:WTM/SR/ERO/15/05/2014. 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.