sebi:WTM/SR/ERO/57/08/2014
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Facts / Headnote
Interim directions issued restraining MIL and its Directors from mobilizing funds, issuing prospectus, accessing securities market, and requiring inventory of assets; prima facie violations of Companies Act, 1956 provisions found.
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
- MIL
- Shri Dipankar Das
- Shri Sudip Rauth
- Shri Debasish Debnath
- Shri Samrat Bikash Barua
- Shri Vim Cent Pal
- Shri Purnendu Sekhar Halder
Holding
MIL's issuance of Redeemable Preference Shares to 2110 allottees constitutes a public issue under Section 67(3) first proviso of the Companies Act, 1956, triggering obligations of listing under Section 73(1), prospectus registration under Section 60, and compliance with Section 56, which MIL prima facie violated. SEBI issued interim directions restraining MIL and its Directors from further fund mobilization and securities market activity.
Full text
Page 2 of 10 f. Details regarding the number of applications received; g. Details regarding the number of allottees and list of such allottees, etc.; h. Number of preference shares/debentures allotted and value of such allotment against each allottee's name. i. Details regarding subscription amount raised; j. Date of allotment of preference shares/debentures; k. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment; l. Date of dispatch of preference shares/debentures Certificates; m. Details of the total number of applicants for each of MIL's scheme besides the list of final allottee; n. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of preference shares/debentures; o. Terms and conditions of the issue of preference shares/debentures; p. Details of debenture trustee, etc.
Page 3 of 10 iii. MIL issued "Redeemable Preference Shares" ("Preference Shares Issue") during the Financial Year 2012–13, details of which are provided below –
Page 4 of 10 "67. (1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner. (2) ... (3) No offer or invitation shall be treated as made to the public by virtue of sub- section (1) or sub- section (2), as the case may be, if the offer or invitation can properly be regarded, in all the circumstances- (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation … Provided that nothing contained in this sub-section shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more: Provided further that nothing contained in the first proviso shall apply to non-banking financial companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956).”
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Source: SecMarx — sebi:WTM/SR/ERO/57/08/2014. 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.