sebi:WTM/SR/WRO/ILO/54/03/2015
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Prima facie held Offer of NCDs was an illegal public issue; SCLL and its directors restrained from mobilizing fresh funds, accessing securities market and disposing assets, directed to provide asset inventory and information, debenture trustee prohibited from acting, and all called to show cause within 21 days why refund with interest and further prohibitions under Sections 11, 11A, 11B SEBI Act 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. 67(1)
- s. 67(2)
- s. 73(1)
- s. 2(36)
- s. 60
- s. 73(2)
- s. 56(1)
- s. 117C
- s. 56(3)
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
- SCL Steel Corporation Limited
- Shri Joydeb Biswas
- Shri Avijit Chakraborty
- Shri Prasanta Chatterjee
- Shri Manas Kumar Dan
- Shri Satya Ranjan Chaudhari
- Smt. Swapna Chaudhuri
- Shri Chatta Ranjan Chaudhuri
- SCL Debenture Trust (represented by its Trustee, viz. Shri Amal Kumar Chatterjee)
Holding
SCLL's issue of Secured Non-Convertible Redeemable Debentures to 10,945 investors raising approximately Rs.10.77 crores was prima facie a public issue camouflaged as private placement, violating the Companies Act, 1956 and Debt Securities Regulations; interim restraints and show-cause directions for refund were issued.
Full text
Page 2 of 19 vii. Name, address of each investor, date of receipt of payment, amount received for issuance of debentures and date of allotment; viii. Details of properties acquired from the money raised from the said debenture issue; ix. Address of all its branches operating in India; x. Details of any broker employed for said issue including name and amount of brokerage paid; xi. Certified copy of audited financial statement for all the financial years during which funds were raised till 2012-13. Trial Balance for 2013-14 (from April 2013 till date of submission of information); xii. Copy of Income Tax Return filed for the years referred above; xiii. Details of the regulatory approvals obtained, if any, for said debenture issue; xiv. Details of other fund raising from public in form of debentures/ or other manner (if any) by the company or its group/associates company. xv. Details of any action initiated/ taken by any other authority (including any court
Page 3 of 19 ii. Copies of Extracts of Minutes of the Meeting of the Board of Directors and of the Extraordinary General Meeting iii. Copy of Form 10 (particulars for registration of charges for debentures) iv. Copy of Annual Report for the year 2012-13; v. Copy of Income Tax Return filed for the assessment year 2013-14 vi. Copy of Certificate of Registration of Mortgage/Charge
Page 4 of 19 2.8 In view of receipt of only partial information from SCLL, investigation was initiated by SEBI. SCLL and its Directors were issued summons dated September 15, 2014 to submit the information/documents sought by SEBI. SCLL vide letters dated September 25, 2014 and October 20, 2014 sought repeated adjournments for submission of documents. It is pertinent to mention here that the prima facie findings of the inquiry inter alia indicate that SCLL is engaged in fund mobilising activity from the public through issuance of debentures to more than the prescribed limit of forty nine persons.
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Source: SecMarx — sebi:WTM/SR/WRO/ILO/54/03/2015. 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.