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WTM/SR/ERO/65/09/2014

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI
CORAM: S. RAMAN, WHOLE TIME MEMBER

ORDER

U!"# S"$%&'( 11, 11)4*, 11A +! 11B ', %-" S"$.#&%&"( +! E/$-+0" B'+#! ', I!&+ A$%,
1992, & %-" 1+%%"# ', T'#(+ A0#' 2#'3"$%( L&1&%"! )2AN: AACCT9099F* +! &%(
D&#"$%'#(, 4&5. S-#& A#.6 7.1+# D"8 )DIN: 01595110: 2AN: AFS2D04;2<*, S-#& A#.
M+3& )DIN: 01591656: 2AN: ALT2M226=M*, S-#& A(-&(- 7.1+# D"8 )DIN: 01960;55:
2AN: AHE2D9514D*, S-#& R+3&% C-+!#+ 2+%-+> )DIN: 06512666: 2AN:
ANE2291192*, S-#& 2#+ G'?&! D"?+%- )DIN: 06512;00: 2AN: AGS2D4=19B*,
N&"@-'.(+.' A0+1& )DIN: 051=;=11: 2AN: AOR2A2602M* +! S-#& D&6+>+# M"!!+
)DIN: 06512;59: 2AN: AH<2M9=12M*.


1. Securities and Exchange Board of India ("SEBI") received two references dated May 8,
!1" and May #, !1" res$ective%y, fro& the 'ffice of the (irector) Bureau of
Investigation (E. '.), *ssa&) Sri&anta$ur + ,uwahati, a%%eging &o-i%i.ation of funds
through the issue of $reference shares -y /orsa *gro 0ro1ects 2i&ited ("TA2L").

.1 SEBI vide %etter dated 3u%y "!, !1", advised /*02 to furnish inter alia the fo%%owing
infor&ation within 14 days fro& the date of recei$t of the aforesaid %etter, vi.. +

i. 5o$y of 0ros$ectus67ed 8erring 0ros$ectus6State&ent in %ieu of
0ros$ectus6Infor&ation Me&orandu& fi%ed with 7'5 for issuance of
shares6de-entures.
ii. 5o$y of the Me&orandu& and *rtic%es of *ssociation of the co&$any9
iii. *udited Ba%ance Sheet and 0rofit : 2oss *ccount of the co&$any for the %ast " years9
iv. ;a&e, addresses and occu$ation of a%% the $ro&oters6directors of the co&$any9
v. ;a&es and detai%s of the <ey Manageria% 0ersonne% of the co&$any9
vi. 'ther infor&ation in res$ect of every series of shares6de-entures issued -y the
co&$any, vi.. +
a. (ate of o$ening and c%osing of the su-scri$tion %ist9
-. (etai%s regarding the nu&-er of a$$%ication for&s circu%ated inviting
su-scri$tion9
c. (etai%s regarding the nu&-er of a$$%ications received9
d. (etai%s regarding the nu&-er of a%%ottees and %ist of such a%%ottees9
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e. ;u&-er of shares6de-entures a%%otted and va%ue of such a%%ot&ent against each
a%%ottee=s na&e.
f. (etai%s regarding su-scri$tion a&ount raised9
g. (ate of a%%ot&ent of share6de-enture certificates9
h. 5o$ies of the &inutes of Board65o&&ittee &eeting in which the reso%ution has
-een $assed for a%%ot&ent9
i. (ate of dis$atch of shares6de-entures9
1. (etai%s of the tota% nu&-er of a$$%icants for each of /*02=s sche&e -esides the
%ist of fina% a%%ottees9
>. 5o$ies of a$$%ication for&s, $a&$h%ets, advertise&ents and other $ro&otiona%
&ateria% circu%ated for issuance of shares6de-entures.
%. /er&s and conditions of the issue of shares6de-entures.

. /hereafter, vide %etter dated (ece&-er ?, !1" (addressed to /*02) and %etters each
dated 3anuary "!, !1@ (addressed to the (irectors of /*02), SEBI once again sought
the infor&ation sought vide its ear%ier %etter dated 3u%y "!, !1".

." 8owever, as on date, neither /*02 nor its (irectors have su-&itted the infor&ation
sought vide the a-ove&entioned %etters, to SEBI.

". /he &ateria% avai%a-%e on record i.e. infor&ation o-tained fro& the Ministry of
5or$orate *ffairs= we-site i.e. 'MCA 21 Portal' a%ongwith docu&ents annexed with the
a-ove&entioned references dated May 8, !1" and May #, !1", have -een $erused. 'n
an exa&ination of the sa&e, it is o-served that +

i. /*02 was incor$orated on March A, !!8, with the 7'5, <o%>ata, with 5I; ;o. as
B!!!1CB!!A025118?!A. /*02 has its 'ffice at <a&eshwari 7oad, Cest
<hagra Bari, 5ooch Behar, <o%>ata+A"?1!1, Cest Benga%, India.

ii. /he (irectors in /*02 are Shri *ru$ <u&ar (ey, Shri *run Ma1i, Shri *shish
<u&ar (ey, Shri 7an1it 5handra 0atha>, Shri 0ran ,o-ind (e-nath, ;ie%housanuo
*nga&i and Shri (i$an>ar Medda.

iii. Dor& (Dor& for 7eturn of *%%ot&ent + fi%ed -y /*02 with the 7'5 in
accordance with the $rovisions of the 5o&$anies *ct, 1#4?), revea%ed that the
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co&$any issued and a%%otted Preference Shares ("O,,"# ', 2#","#"$" S-+#"("), detai%s
of which are $rovided -e%ow A


iv. Dro& the Ba%ance Sheet for the Dinancia% Eears !!#+1!, !1!+11 and !11+1, it is
o-served that /*02 co%%ected a tota% of 1.@ 5rores towards share a$$%ication
&oney.

@.1 /he issue for deter&ination in the instant &atter is whether the &o-i%i.ation of funds -y
/*02 through the Offer of Preference Shares, is in accordance with the $rovisions of the
SEBI *ct, 1## ("SEBI A$%")9 the 5o&$anies *ct, 1#4? read with the 5o&$anies *ct,
!1"9 the SEBI ((isc%osure and Investor 0rotection) ,uide%ines, !!! ("DI2
G.&!"@&"(") read with the SEBI (Issue of 5a$ita% and (isc%osure 7eFuire&ents)
7egu%ations, !!# ("ICDR R"0.@+%&'(") +

@. I note that the 1urisdiction of SEBI over various $rovisions of the 5o&$anies *ct in the
case of $u-%ic co&$anies, whether %isted or un%isted, when they issue and transfer
securities, f%ows fro& the $rovisions of Section 44* of the 5o&$anies *ct. Chi%e
exa&ining the sco$e of Section 44* of the 5o&$anies *ct, 1#4?, the 8on=-%e Su$re&e
5ourt of India in S+-+#+ I!&+ R"+@ E(%+%" C'#6'#+%&' L&1&%"! B O#(. 4(. SEBI
)C&4&@ A66"+@ '. 991= ', 2011* )<.!01"% !+%"! A.0.(% =1, 2012* (hereinafter
referred to as the "S+-+#+ C+(""), had o-served that)

"We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section A of
the Companies Act, so far as the! relate to issue and transfer of securities and non"pa!ment of dividend is
C"+# T86" ',
S"$.#&%8
D+%" ',
A@@'%1"%
N'. ',
("$.#&%&"(
N'. ', 6"#('( %'
D-'1 6#","#"$"
(-+#"( D"#" +@@'%%"!
T'%+@ A1'.%
) & C#'#"(*
A66#'/&1+%"
!!8 + !#


5u&u%ative
0reference
Shares of 1!


A.!?.!!8

@A"4 1!# !.!@
".1!.!!8 @?#4! #4 !.!@
!11 + 1


5u&u%ative
0reference
Shares of 1!


!4.!@.!11

!1##! "84 !.1
TOTAL 2961;5 599 0.29
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concerned, S#$% has the po&er to administer in the case of listed pu'lic companies and in the case of
those pu'lic companies &hich intend to get their securities listed on a recogni(ed stoc) e*change in %ndia+"

@." In this regard +

i. 7eference is a%so &ade to Sections ?A(1) and ?A(") of the 5o&$anies *ct, 1#4?,
which are re$roduced as under)

",-+ .1/ An! reference in this Act or in the articles of a compan! to offering shares or de'entures to
the pu'lic shall, su'0ect to an! provision to the contrar! contained in this Act and su'0ect also to the
provisions of su'"sections .1/ and .2/, 'e construed as including a reference to offering them to an!
section of the pu'lic, &hether selected as mem'ers or de'enture holders of the compan! concerned or
as clients of the person issuing the prospectus or in an! other manner+
.2/ +++
.1/ 3o offer or invitation shall 'e treated as made to the pu'lic '! virtue of su'" section .1/ or su'"
section .2/, as the case ma! 'e, if the offer or invitation can properl! 'e regarded, in all the
circumstances"
.a/ as not 'eing calculated to result, directl! or indirectl!, in the shares or de'entures 'ecoming
availa'le for su'scription or purchase '! persons other than those receiving the offer or invitation4 or
.'/ other&ise as 'eing a domestic concern of the persons ma)ing and receiving the offer or invitation
5
2#'4&!"! that nothing contained in this su'"section shall appl! in a case &here the offer or
invitation to su'scri'e for shares or de'entures is made to fift! persons or more6
2#'4&!"! ,.#%-"# that nothing contained in the first proviso shall appl! to non"'an)ing financial
companies or pu'lic financial institutions specified in section 2A of the Companies Act, 17, .1 of
17,/+8

ii. Chi%e exa&ining the sco$e of Section ?A of the 5o&$anies *ct, 1#4?, the 8on=-%e
Su$re&e 5ourt of India in the Sahara Case o-served that)

"Section ,-.1/ deals &ith the offer of shares and de'entures to the pu'lic and Section ,-.2/ deals
&ith invitation to the pu'lic to su'scri'e for shares and de'entures and ho& those e*pressions are to
'e understood, &hen reference is made to the Act or in the articles of a compan!+ 9he emphasis in
Section ,-.1/ and .2/ is on the :section of the pu'lic8+ Section ,-.1/ states that no offer or
invitation shall 'e treated as made to the pu'lic, '! virtue of su'sections .1/ and .2/, that is to an!
section of the pu'lic, if the offer or invitation is not 'eing calculated to result, directl! or indirectl!, in
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the shares or de'entures 'ecoming availa'le for su'scription or purchase '! persons other than those
receiving the offer or invitation or other&ise as 'eing a domestic concern of the persons ma)ing and
receiving the offer or invitations+ Section ,-.1/ is, therefore, an e*ception to Sections ,-.1/ and .2/+
%f the circumstances mentioned in clauses .1/ and .'/ of Section ,-.1/ are satisfied, then the
offer;invitation &ould not 'e treated as 'eing made to the pu'lic+
9he first proviso to Section ,-.1/ &as inserted '! the Companies .Amendment/ Act, 2<<< &+e+f+
11+12+2<<<, &hich clearl! indicates, nothing contained in Su'"section .1/ of Section ,- shall appl!
in a case &here the offer or invitation to su'scri'e for shares or de'entures is made to fift! persons or
more+ 5
=esultantl!, if an offer of securities is made to fift! or more persons, it &ould 'e deemed to 'e a
pu'lic issue, even if it is of domestic concern or proved that the shares or de'entures are not availa'le
for su'scription or purchase '! persons other than those received the offer or invitation+ 5
% ma!, therefore, indicate, su'0ect to &hat has 'een stated a'ove, in %ndia that an! share or
de'enture issue 'e!ond fort! nine persons, &ould 'e a pu'lic issue attracting all the relevant
provisions of the S#$% Act, regulations framed thereunder, the Companies Act, pertaining to the
pu'lic issue+ 5"

i. In the instant &atter, for ascertaining whether the Offer of Preference Shares are $u-%ic
issues or issues on $rivate $%ace&ent -asis in accordance with Section ?A of the
5o&$anies *ct, 1#4?, the nu&-er of su-scri-ers is of ut&ost i&$ortance.

+. Bnder the Offer of Preference Shares, it is o-served that /*02 issued and a%%otted
$reference shares to a tota% of 48# individua%s6investors and &o-i%i.ed an a&ount
of a$$roxi&ate%y 1.4" 5rores G<+27 Crores .amount mo'ili(ed under the Offer of
Preference Shares/ plus 1+22 Crores .share application mone!/H during the Dinancia% Eears
!!8+!#, !!#+1!, !1!+11 and !11+1. /hese facts when viewed in %ight of
/*02=s refusa% to su-&it infor&ation to SEBI prima facie indicate that the Offer of
Preference Shares was a $u-%ic issue of securities under the first $roviso to Section
?A(") of the 5o&$anies *ct, 1#4?, which has -een e%ucidated -y the 8on=-%e
Su$re&e 5ourt of India in the Sahara Case. In this regard, it is $ertinent to note
that -y virtue of Section 44* of the 5o&$anies *ct, Section ?A of that *ct, so far
as it re%ates to issue and transfer of securities, sha%% a%so -e ad&inistered -y SEBI.

@.@ I note that +

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i. Dro& the a-ove&entioned, it wi%% fo%%ow that since the Offer of Preference Shares were
$u-%ic issues of securities, such securities sha%% a%so have to -e %isted on a recogni.ed
stoc> exchange, as &andated under Section A" of the 5o&$anies *ct, 1#4?. In this
regard, reference is &ade to Sections A" of the 5o&$anies *ct, 1#4?, of which su-I
Sections (1), () and (") are re%evant for the instant case, which is re$roduced as
under)

"-1+ .1/ #ver! compan! intending to offer shares or de'entures to the pu'lic for su'scription '! the
issue of a prospectus shall, 'efore such issue, ma)e an application to one or more recognised stoc)
e*changes for permission for the shares or de'entures intending to 'e so offered to 'e dealt &ith in the
stoc) e*change or each such stoc) e*change+
.1A/ 5
.2/ Where the permission has not 'een applied under su'section .1/ or such permission having 'een
applied for, has not 'een granted as aforesaid, the compan! shall forth&ith repa! &ithout interest all
mone!s received from applicants in pursuance of the prospectus, and, if an! such mone! is not repaid
&ithin eight da!s after the compan! 'ecomes lia'le to repa! it, the compan! and ever! director of the
compan! &ho is an officer in default shall, on and from the e*pir! of the eighth da!, 'e 0ointl! and
severall! lia'le to repa! that mone! &ith interest at such rate, not less than four per cent and not
more than fifteen per cent, as ma! 'e prescri'ed, having regard to the length of the period of dela! in
ma)ing the repa!ment of such mone!+
.1/ All mone!s received as aforesaid shall 'e )ept in a separate 'an) account maintained &ith a
Scheduled $an) 1 >until the permission has 'een granted, or &here an appeal has 'een preferred
against the refusal to grant such+ permission, until the disposal of the appeal, and the mone!
standing in such separate account shall, &here the permission has not 'een applied for as aforesaid
or has not 'een granted, 'e repaid &ithin the time and in the manner specified in su'" section .2/?4
and if default is made in compl!ing &ith this su'" section, the compan!, and ever! officer of the
compan! &ho is in default, shall 'e punisha'le &ith fine &hich ma! e*tend to five thousand rupees+8

ii. In the Sahara Case, the 8on=-%e Su$re&e 5ourt of India a%so exa&ined Section A" of
the 5o&$anies *ct, 1#4?, wherein it o-served that +

"Section -1.1/ of the Act casts an o'ligation on ever! compan! intending to offer shares or
de'entures to the pu'lic to appl! on a stoc) e*change for listing of its securities+ Such companies
have no option or choice 'ut to list their securities on a recogni(ed stoc) e*change, once the! invite
su'scription from over fort! nine investors from the pu'lic+ %f an unlisted compan! e*presses its
intention, '! conduct or other&ise, to offer its securities to the pu'lic '! the issue of a prospectus, the
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legal o'ligation to ma)e an application on a recogni(ed stoc) e*change for listing starts+ Su'"section
.1A/ of Section -1 gives indication of &hat are the particulars to 'e stated in such a prospectus+
9he conse@uences of not appl!ing for the permission under su'"section .1/ of Section -1 or not
granting of permission is clearl! stipulated in su'"section .1/ of Section -1+ O'ligation to refund the
amount collected from the pu'lic &ith interest is also mandator! as per Section -1.2/ of the Act+
Aisting is, therefore, a legal responsi'ilit! of the compan! &hich offers securities to the pu'lic,
provided offers are made to more than < persons+"

iii. In the facts of the instant case, since the Offer of Preference Shares were &ade to fifty
$ersons or &ore -y /*02, the sa&e wi%% attract the reFuire&ent of co&$u%sory
%isting -efore a recogni.ed stoc> exchange in ter&s of Section A"(1) of the
5o&$anies *ct, 1#4?. It therefore prima facie a$$ears that /*02 has vio%ated the
$rovisions of Section A"(1) of the 5o&$anies *ct, 1#4?, since it has fai%ed to ensure
%isting with a recognised stoc> exchange of the securities issued under the Offer of
Preference Shares were $u-%ic issues of securities.

iv. *s $er Section A"() of the 5o&$anies *ct, 1#4?, the o-%igation to refund the
a&ount with interest that was co%%ected fro& investors under the Offer of Preference
Shares, is &andatory on /*02. Dro& the Ba%ance Sheet for the Dinancia% Eears
!!#+1!, !1!+11 and !11+1, it is o-served that /*02 co%%ected a tota% of 1.@
5rores towards share a$$%ication &oney. In this regard, there is no evidence on
record to indicate whether or not /*02 has refunded the a&ount with interest to
the investors under the Offer of Preference Shares, as $er the aforesaid Section. In view
of the sa&e, I find that prima facie, /*02 has not co&$%ied with the $rovisions of
Section A"() of the 5o&$anies *ct, 1#4?.

v. Section A"(") of 5o&$anies *ct, 1#4?, says that a%% &oneys received sha%% -e >e$t in
a se$arate -an> account &aintained with a Schedu%ed Ban> and if defau%t is &ade in
co&$%ying with this su-ISection, the co&$any, and every officer of the co&$any
who is in defau%t, sha%% -e $unisha-%e with fine which &ay extend to five thousand
ru$ees. In the instant case, there is no evidence on record to indicate whether or not
funds received fro& the investors under the Offer of Preference Shares were >e$t in
se$arate -an> account -y /*02. In view of the sa&e, I find that prima facie, /*02
has not co&$%ied with the $rovisions of Section A"(") of 5o&$anies *ct, 1#4?.

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@.4 Bnder Section ("?) read with Section ?! of the 5o&$anies *ct, 1#4?, a co&$any needs
to register its $ros$ectus with the 7'5, -efore &a>ing a $u-%ic offer or issuing the
$ros$ectus. *s $er the aforesaid Section ("?), :prospectus8 &eans any docu&ent
descri-ed or issued as a $ros$ectus and inc%udes any notice, circu%ar, advertise&ent or
other docu&ent inviting de$osits fro& the $u-%ic or inviting offers fro& the $u-%ic for
the su-scri$tion or $urchase of any shares in, or de-entures of, a -ody cor$orate. *s
&entioned a-ove, since the Offer of Preference Shares were &ade to fifty $ersons or &ore, it
has to -e construed as a $u-%ic offer. 8aving &ade a $u-%ic offer, /*02 was reFuired to
register a $ros$ectus with the 7'5 under Section ?! of the 5o&$anies *ct, 1#4?. Based
on the &ateria% avai%a-%e on record, I find that prima facie, /*02 has not co&$%ied with
the $rovisions of Section ?! of 5o&$anies *ct, 1#4?.

@.? Bnder Section 4?(1) of the 5o&$anies *ct, 1#4?, every $ros$ectus issued -y or on
-eha%f of a co&$any, sha%% state the &atters s$ecified in 0art I and set out the re$orts
s$ecified in 0art II of Schedu%e II of that *ct. Durther, as $er Section 4?(") of the
5o&$anies *ct, 1#4?, no one sha%% issue any for& of a$$%ication for shares in or
de-entures of a co&$any, un%ess the for& is acco&$anied -y a-ridged $ros$ectus,
contain disc%osures as s$ecified. Based on the &ateria% avai%a-%e on record, I find that
/*02 has not co&$%ied with the $rovisions of Section 4?(1) and 4?(") of the 5o&$anies
*ct, 1#4? and therefore, has prima facie vio%ated the aforesaid $rovisions.

@.A *s $er Section @?4(1) of the 5o&$anies *ct, !1", the 5o&$anies *ct, 1#4?, "shall stand
repealed". 8owever, Section @?4()(i) of the 5o&$anies *ct, !1", $rovides that)

".2/3ot&ithstanding the repeal under su'"section .1/ of the repealed enactments,B
.a/ an!thing done or an! action ta)en or purported to have 'een done or ta)en, including an! rule,
notification, inspection, order or notice made or issued or an! appointment or declaration made or an!
operation underta)en or an! direction given or an! proceeding ta)en or an! penalt!, punishment,
forfeiture or fine imposed under the repealed enactments shall, insofar as it is not inconsistent &ith the
provisions of this Act, 'e deemed to have 'een done or ta)en under the corresponding provisions of this
Act4"

@.8 I a%so note that SEBI fra&ed the (I0 ,uide%ines, in exercise of the $owers conferred
under the SEBI *ct. In the words of the 8on=-%e Su$re&e 5ourt in the Sahara Case,
"C%P Duidelines had statutor! force since the! &ere framed '! S#$% in e*ercise of its po&ers conferred
on it under Sections 11 and 11A of the S#$% Act+ Po&ers have 'een conferred on S#$% to protect the
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interests of the investors in securities and regulate the issue of prospectus, offer documents or advertisement
soliciting mone! through the issue of prospectus+ Section 11 of the Act, it ma! 'e noted has 'een
incorporated, evidentl! to protect the interests of investors &hose securities are legall! re@uired to 'e listed+
C%P Duidelines &ere implemented '! S#$% &ith regard to the listed and unlisted companies, &hich
made pu'lic offer, until it &as replaced '! %CC= 2<<7"+ In this regard, I o-serve prima facie that
the 5o&$any has not co&$%ied with the fo%%owing c%auses of the (I0 ,uide%ines for the
Offer of Preference Shares)

a. 5%ause .1.1. + (Eiling of offer document)
-. 5%ause .1.@ + (Application for listing)
c. 5%ause .1.4 + (%ssue of securities in demateriali(ed form),
d. 5%ause .8 + (Means of finance),
e. 5%ause @.1 + (Promoters contri'ution in a pu'lic issue '! unlisted companies),
f. 5%ause @.11 + (Aoc)"in of minimum specified promoters contri'ution in pu'lic issues),
g. 5%ause @.1@ + (Aoc)"%n of pre"issue share capital of an unlisted compan!)
h. 5%ause 4.".1 + (Memorandum of understanding),
i. 5%ause 4."." + (Cue Ciligence Certificate)
1. 5%ause 4.".4 + (Fnderta)ing),
>. 5%ause 4.".? + (Aist Of Promoters Droup And Other Cetails),
%. 5%ause 4.@ + .Appointment of intermediaries/
&. 5%ause 4.? + (Offer document to 'e made pu'lic)
n. 5%ause 4.?* + (Pre"issue Advertisement)
o. 5%ause 4.A + .Cespatch of issue material/
$. 5%ause 4.8 + .3o complaints certificate/
F. 5%ause 4.# + .Mandator! collection centres inc%uding Clause +7+1 (Minimum num'er of
collection centres)
r+ 5%ause 4.1! + .Authorised Collection Agents/
s. 5%ause 4.1.1 + (Appointment of compliance officer)
t. 5%ause 4.1" + .A'ridged prospectus/
u. 5%ause ?.! + .Contents of offer documents/
v. 5%ause 8." + (=ule 17.2/.'/ of SC.=/ =ules, 17-)
w. 5%ause 8.8.1 + (Opening G closing date of su'scription of securities)
x. 5%ause # + .Duidelines on advertisements '! %ssuer Compan!/
y. 5%ause 1!.1 + (=e@uirement of credit rating/
.. 5%ause 1!.4 + (=edemption)

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@.# *s $er 7egu%ation 111(1) of the I5(7 7egu%ations, the (I0 ,uide%ines, "shall stand
rescinded". 8owever, 7egu%ation 111() of the I5(7 7egu%ations, $rovides that)

".2/3ot&ithstanding the repeal under su'"section .1/ of the repealed enactments,B
.a/ an!thing done or an! action ta)en or purported to have 'een done or ta)en including o'servation
made in respect of an! draft offer document, an! en@uir! or investigation commenced or sho& cause notice
issued in respect of the said Duidelines shall 'e deemed to have 'een done or ta)en under the
corresponding provisions of these regulations4
.'/ an! offer document, &hether draft or other&ise, filed or application made to the $oard under the said
Duidelines and pending 'efore it shall 'e deemed to have 'een filed or made under the corresponding
provisions of these regulations+"

@.1! /he fo%%owing fact &ay a%so -e noted +

i. Dro& the infor&ation avai%a-%e on the 'MCA 21 Portal', it is o-served that /*02 has
not fi%ed its Ba%ance Sheet for the Dinancia% Eear !1+1".

@.11 B$on a consideration of the afore&entioned $aragra$hs, I a& of the view that prima facie,
/*02 is engaged in fund &o-i%ising activity fro& the $u-%ic, through the Offer of Preference
Shares and as a resu%t of the aforesaid activity has vio%ated the afore&entioned $rovisions
of the 5o&$anies *ct, 1#4? (Section 4?, Section ?! read with Section ("?), Section A")
read with Section @?4 of the 5o&$anies *ct, !1"9 the (I0 ,uide%ines read with I5(7
7egu%ations.

4. SEBI has a statutory duty to $rotect the interests of investors in securities and $ro&ote
the deve%o$&ent of, and to regu%ate, the securities &ar>et. Section 11 of the SEBI *ct
has e&$owered it to ta>e such &easures as it thin>s fit for fu%fi%%ing its %egis%ative
&andate. Durther, as $er the $rovisions of Section 44* of the 5o&$anies *ct, 1#4? read
with Section @?4 of the 5o&$anies *ct, !1", ad&inistrative authority on the su-1ects
re%ating to $u-%ic issue of securities is exc%usive%y with SEBI. Dor this $ur$ose, SEBI can
exercise its 1urisdiction under Sections 11(1), 11*, 11B and 11(@) of the SEBI *ct read
with Section 44* of the 5o&$anies *ct, 1#4? and Section @?4 of the 5o&$anies *ct,
!1", over co&$anies who issue Preference Shares to fifty $ersons or &ore, -ut do not
co&$%y with the a$$%ica-%e $rovisions of the aforesaid 5o&$anies *cts, the (I0
,uide%ines read with I5(7 7egu%ations (as &entioned in $aragra$hs @.1+@.11 a-ove).
Ste$s therefore, have to -e ta>en in the instant &atter to ensure on%y %egiti&ate fund
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Page 11 of 12

raising activities are carried on -y /*02 and no investors are defrauded. In %ight of the
sa&e and in view of the fai%ure on the $art of /*02 to furnish necessary infor&ation
sought -y SEBI, I find there is no other a%ternative -ut to ta>e recourse through an
interi& action against /*02 and its (irectors, for $reventing that co&$any fro& further
carrying on with its fund &o-i%ising activity under the Offer of Preference Shares.

?. In view of the foregoing, I, in exercise of the $owers conferred u$on &e under Sections
11, 11(@), 11* and 11B of the SEBI *ct9 the (I0 ,uide%ines read with the I5(7
7egu%ations, here-y issue the fo%%owing directions +

i. /*02 (0*;) **55/#!##D) sha%% not &o-i%i.e funds fro& investors through the
Offer of Preference Shares or through the issuance of eFuity shares or any other
securities, to the $u-%ic and6or invite su-scri$tion, in any &anner whatsoever, either
direct%y or indirect%y ti%% further directions9
ii. /*02 and its (irectors, vi.. Shri *ru$ <u&ar (ey ((I;) !148411!9 0*;)
*DS0(!@A3), Shri *run Ma1i ((I;) !14#1?4?9 0*;) *2/0M?"M), Shri *shish
<u&ar (ey ((I;) !1#?!A449 0*;) *8E0(841@(), Shri 7an1it 5handra 0atha>
((I;) !?41???9 0*;) *;E0081180), Shri 0ran ,o-ind (e-nath ((I;)
!?41A!!9 0*;) *,S0(@"1#B), ;ie%housanuo *nga&i ((I;) !41"A"119 0*;)
*'70*?!M) and Shri (i$an>ar Medda ((I;) !?41A4#9 0*;) *830M8"1M),
are $rohi-ited fro& issuing $ros$ectus or any offer docu&ent or issue advertise&ent
for so%iciting &oney fro& the $u-%ic for the issue of securities, in any &anner
whatsoever, either direct%y or indirect%y, ti%% further orders9
iii. /*02 and its a-ove&entioned (irectors, are restrained fro& accessing the securities
&ar>et and further $rohi-ited fro& -uying, se%%ing or otherwise dea%ing in the
securities &ar>et, either direct%y or indirect%y, ti%% further directions9
iv. /*02 sha%% $rovide a fu%% inventory of a%% its assets and $ro$erties9
v. /*02=s a-ove&entioned (irectors sha%% $rovide a fu%% inventory of a%% their assets
and $ro$erties9
vi. /*02 and its a-ove&entioned (irectors sha%% not dis$ose of any of the $ro$erties
or a%ienate or encu&-er any of the assets owned6acFuired -y that co&$any through
the Offer of Preference Shares, without $rior $er&ission fro& SEBI9
vii. /*02 and its a-ove&entioned (irectors sha%% not divert any funds raised fro&
$u-%ic at %arge through the Offer of Preference Shares, which are >e$t in -an> account(s)
and6or in the custody of /*029
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Page 12 of 12

viii. /*02 sha%% furnish co&$%ete and re%evant infor&ation (as sought -y SEBI %etters
dated 3u%y "!, !1"9 (ece&-er ?, !1" and 3anuary "!, !1@), within 1 days fro&
the date of recei$t of this 'rder.

A. /he a-ove directions sha%% ta>e effect i&&ediate%y and sha%% -e in force unti% further
orders.

8. /he prima facie o-servations contained in this 'rder are &ade on the -asis of the &ateria%
avai%a-%e on record i.e. infor&ation o-tained fro& the Ministry of 5or$orate *ffairs=
we-site i.e. 'MCA 21 Portal' a%ongwith docu&ents annexed with the a-ove&entioned
references dated May 8, !1" and May #, !1"+ In this context, /*02 and its
a-ove&entioned (irectors &ay, within 1 days fro& the date of recei$t of this 'rder,
fi%e their re$%y, if any, to this 'rder and &ay a%so indicate whether they desire to avai%
the&se%ves an o$$ortunity of $ersona% hearing on a date and ti&e to -e fixed on a
s$ecific reFuest &ade in that regard.

#. /his 'rder is without $re1udice to the right of SEBI to ta>e any other action that &ay -e
initiated against /*02 and its a-ove&entioned (irectors, in accordance with %aw.




2@+$": M.1?+& S. RAMAN
D+%": S"6%"1?"# 12, 2014 WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA


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