sebi:WTM/SR/ERO/RLO/62/03/2015
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
SEBI prima facie held ERIL's offer of Redeemable Preference Shares was an illegal public issue and directed ERIL and its directors to cease mobilization, not issue prospectus/advertisement, not access securities market, provide asset inventory, not dispose/alienate/divert assets/funds, furnish information within 21 days, and show cause why refund with interest and further restraints under Sections 11(1), 11(4), 11A, 11B SEBI Act should not be imposed; directions effective immediately until further orders.
Provisions invoked
- s. 11
- s. 55A
- s. 22
- s. 73
- s. 4A
- s. 30
- s. 67(3)
- s. 67
- s. 56
- s. 67(1)
- s. 67(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 73(2)
- s. 56(1)
- s. 56(3)
Regulations
- Reg. 13
- Reg. 15
- Reg. 16
- Reg. 22
- Reg. 7
- Reg. 8
- Reg. 6
- Reg. 5
- Reg. 4(5)
- Reg. 4(2)(a)
- Reg. 4(2)(b)
- Reg. 4(2)(c)
- Reg. 9
- Reg. 4(2)(e)
- Reg. 4(2)(d)
- Reg. 4(3)
Parties
- ERIL
- Mr. Biplab Kumar Dey
- Ms. Juthika Ghosh
- Mr. Seikh Kutubuddin
- Mr. Chandan Sinha Roy
Holding
ERIL's offer and allotment of Redeemable Preference Shares of face value Rs.10 to at least 131 investors mobilising Rs.71,64,170 during FY 2011-12 to 2013-14 was prima facie a public issue in violation of Sections 56, 60, 67 and 73 of the Companies Act, 1956 and the Issue and Listing of Non-Convertible Redeemable Preference Shares Regulations, warranting interim restraints and a show-cause for joint and several refund with interest.
Full text
Page 2 of 13 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 has been passed for allotment; j. Date of dispatch of shares/debentures certificates; k. Details of the total number of applicants for each of the company's schemes besides the list of final allottees; 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.
Page 3 of 13 6. SEBI also received a letter dated January 07, 2015 from Additional District Magistrate, Rajnandgaon, Chhattisgarh forwarding a complaint from investors alleging illegal mobilization of funds by ERIL.
Page 4 of 13 a. Authorised Redeemable Preference Shares Capital of ERIL as on March 31, 2012 was Rs.19,95,00,000/- while Authorised Redeemable Preference Shares Capital as on March 31, 2013 was mentioned as Rs.15,00,00,000/-. b. An amount of Rs.8,50,46,694/- was mentioned as 'Share application money pending allotment' in the Balance Sheet of the company as on March 31,
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Source: SecMarx — sebi:WTM/SR/ERO/RLO/62/03/2015. 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.