sebi:WTM/SR/ERO/47/08/2014
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Facts / Headnote
Prima facie held Offer of RPS was a public issue in violation of Companies Act, 1956; FIIL and its three Directors restrained from mobilizing funds, issuing prospectus/advertisement, and accessing/dealing in securities market till further directions, directed not to dispose/alienate/divert assets/funds, to provide full inventory of assets and all information sought by SEBI letters dated July 9, 2013, September 30, 2013 and October 31, 2013 within 21 days.
Provisions invoked
- s. 55A
- 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)
- s. 465(1)
Parties
- FIIL
- Shri Manirul Islam (DIN: 02283709)
- Shri Indraj Singh Jat (DIN: 02697317)
- Shri Afzal Miah (DIN: 05300338)
Holding
FIIL's Offer of Redeemable Preference Shares to 714 investors in 2009-10 mobilizing approximately Rs 48.58 Lakhs was prima facie a public issue in violation of Sections 56, 60 read with 2(36), and 73 of the Companies Act, 1956. Interim directions were issued restraining further fund mobilization and market access pending further orders.
Full text
Page 2 of 11 d. Details regarding the number of allottees and list of such allottees; e. Number of SRDs allotted and value of such allotment against each allottee's name. f. Details regarding subscription amount raised; g. Date of allotment of SRDs; h. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment; i. Date of dispatch of SRDs Certificates; j. Details of the total number of applicants for each of FIIL's scheme besides the list of final allottee; k. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of SRDs; l. Terms and conditions of the issue of SRDs.
Page 3 of 11 iii. As per filings made by FIIL with the ROC, Kolkata, it was observed that the company created Charge for the issue of SRDs in the following manner:
Page 4 of 11 4.2 I note that the jurisdiction of SEBI over various provisions of the Companies Act in the case of public companies, whether listed or unlisted, when they issue and transfer securities, flows from the provisions of Section 55A of the Companies Act, 1956. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara India Real Estate Corporation Limited & Ors. vs. SEBI (Civil Appeal no. 9813 of 2011) (Judgment dated August 31, 2012) (hereinafter referred to as the "Sahara Case"), had observed that:
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Source: SecMarx — sebi:WTM/SR/ERO/47/08/2014. 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.