sebi:WTM/SR/WRO/ILO/101/05/2015

SEBI · SEBI · 2014-07-17 · S. Raman, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Interim directions issued restraining RBX and its directors from mobilizing further funds, issuing offer documents, accessing the securities market, disposing of assets, and diverting funds; show cause notice issued as to why further directions including refund of money with interest should not be imposed.

Provisions invoked

• s. 11
• s. 12(1)
• s. 55A
• s. 22
• s. 73
• s. 4A
• s. 30
• s. 67(3)
• s. 67
• s. 117B
• s. 56
• s. 73(1)
• s. 2(36)
• s. 60
• s. 73(2)
• s. 67(1)
• s. 56(1)
• s. 117C
• s. 56(3)
• s. 67(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

• RBX (CIN: U70101MP2012PLC028828)
• Mr. Kishore Rai (DIN:05120168)
• Mr. Arjun Singh (DIN:06874021)
• Mr. Shankar Singh (DIN:06874305)
• Mr. Raghuveer Singh Sisodiya (DIN:03565848, PAN:BXHPS2674H)
• Mr. Hari Rathore Singh (DIN:05130181)

Holding

SEBI held that RBX's offer of debentures to 10,688 investors was prima facie a public issue of securities under Section 67(3) of the Companies Act, 1956, and that RBX prima facie violated the Companies Act, 1956 and the Debt Securities Regulations by not listing, not filing a prospectus, not appointing a debenture trustee, and not creating a debenture redemption reserve. SEBI issued interim directions restraining RBX and its directors from further fund mobilization and issued a show cause notice for potential refund directions.

Full text

g. Details of the scheme wise amount mobilized by the company till date alongwith the number of investors under the schemes. h. Names and addresses of all the investors in the scheme. i. List of all branches of the company with their addresses. j. Certified copy of audited financial statements for the FY 2012-13. k. Copy of Income Tax return filed by the company for FY 2012-13. l. Details of any other similar scheme(s), if any, floated by RBX or group/associate company or companies in which Directors of RBX are also Directors. The letter addressed to the company was returned undelivered by postal authorities with remarks “Left”. No reply was received from directors of the company to the letters sent to them. Meanwhile, it was observed from the website of the company and the brochure of the company provided by complainant that the company has an office at 308, Siddhi Vinayak Trade Centre, Near Sahid Park, Freeganj, Ujjain, Madhya Pradesh– 456006. Thereafter, SEBI sent letters dated July 17, 2014 to the company at both the addresses available on record. Letters dated July 17, 2014 were also sent to directors of the company. The aforesaid letters addressed to the company were also returned undelivered by postal authorities with remarks “Left”.

letters dated August 20, 2014 to the company and its directors. However, SEBI did not receive any reply from them. 4. Further, from the website of the company, it was observed that the company has an account in Axis Bank. SEBI vide letter dated August 25, 2014 sought information from Axis Bank, Ujjain Branch about the bank account details of the company. Axis bank vide their letter dated September 03, 2014 provided bank statement of the company from August 23, 2012 to September 03, 2014. Cash deposits of various amounts were observed to have been made in the said bank account during this period.

operational during physical visit by SEBI official. However, the said letters sent to company were returned undelivered by postal authorities with remark “Left”.

Source: SecMarx — sebi:WTM/SR/WRO/ILO/101/05/2015. 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.