WTM/SR/SEBI-ERO: PLO/158/08/2015. Case: In Re: Aryan Agro Projects India Limited and Ors. Vs. Securities and Exchange Board of India
| Case Number | WTM/SR/SEBI-ERO: PLO/158/08/2015 |
| Judges | S. Raman, Whole Time Member |
| Issue | Companies Act, 1956 - Sections 117B, 117B-117C, 117C, 2(36), 4A, 55A, 56, 56(1), 56(3), 60, 67, 67(1), 67(2), 67(3), 73, 73(1), 73(2), 73(3); Securities And Exchange Board Of India Act, 1992 - Sections 11, 11(1), 11(4), 11A, 11B, 12(1), 30; Securities Contracts Regulation Act, 1956 - Section 22 |
| Judgement Date | August 12, 2015 |
| Court | Securities and Exchange Board of India |
Order:
S. Raman, Whole Time Member
1. Securities and Exchange Board of India ("SEBI") received a complaint on September 15, 2014, alleging inter alia illegal mobilization of funds by Aryan Agro Projects India Limited ("AAPIL") through issuance of Non - Convertible Debentures ("NCDs")
2.1 Thereafter, SEBI vide letters dated October 29, 2014, sought inter alia the following information from AAPIL and its Directors at the relevant time i.e. Shri Vikash Jha, Shri Rakesh Raushan, Shri Birendra Thakur, Shri Manoj Chouhan, Shri Abadh Kumar Singh and Shri Shailesh Kumar Mishra, -
"i. Copy of audited Annual Accounts and Annual Returns of the company for last three years;
ii. Name, addresses, occupation and PAN of all the promoters/directors of the company;
iii. Names and details of the Key Managerial Personnel of the company;
iv. Nature of Business of the company;
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Other information in respect of issue of shares/debentures by the company, viz. -
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Copy of Prospectus/Red Herring Prospectus/Statement in lieu of Prospectus/Information Memorandum filed with Registrar of Companies ("ROC");
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Date of opening and closing of the subscription list;
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Details regarding the number of application forms circulated inviting subscription for shares/debentures;
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Details regarding the number of applications received;
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Details regarding date of allotment of shares/debentures alongwith name and address of allottees, etc.;
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Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment;
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Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of shares/debentures;
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Terms and conditions of the issue of shares/debentures;
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Details regarding application for listing of securities;
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Copies of Form 2 and Form 10 filed with the ROC;
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Details of debenture trustee, viz. name, address, Board resolution authorizing appointment, etc.
2.2 The letter sent to AAPIL was returned as undelivered. The letters sent to its Directors, viz. Shri Manoj Chouhan, Shri Birendra Thakur and Shri Shailesh Kumar Mishra, were delivered but no reply was received from them.
2.3.1 Subsequently, reminders dated November 13, 2014, were sent to AAPIL and its abovementioned Directors. The letters sent to AAPIL and its Directors, viz. Shri Birendra Thakur and Shri Manoj Chouhan, were returned as undelivered while letters sent to Shri Shailesh Kumar Mishra and Shri Rakesh Raushan, were delivered.
2.3.2 Shri Shailesh Kumar Mishra and Shri Vikash Jha, vide letters dated December 8, 2014 and December 12, 2014, respectively inter alia denied being Directors of AAPIL and expressed their inability to provide information.
2.3.3 No information has been received from AAPIL or any of its remaining Directors, till now.
2.4 Vide letter dated January 21, 2015, SEBI sought more information from the complainant who made the abovementioned complaint. Subsequently, on February 13, 2015, SEBI received from the complainant and another new person, copies of NCDs Certificates issued to various persons by AAPIL. Further copies of NCDs Certificates issued to various persons by AAPIL, were received at SEBI on June 12, 2015.
2.5 SEBI also received another complaint against AAPIL (copy of which was forwarded by Government of Bihar vide letters dated February 12, 2015 and June 8, 2015) regarding non-payment of maturity amount on investments.
3. The material available on record i.e. correspondence exchanged between SEBI and AAPIL's Directors, complaints received against AAPIL alongwith the documents contained therein and information obtained from the Ministry of Corporate Affairs' website i.e. MCA 21 Portal, have been perused. On examination of the same, it is observed that -
"i. AAPIL was incorporated on October 25, 2010, with the ROC, Kolkata with CIN as U45400WB2010PLC154241. Its Registered Office is at Metro Plaza, 2nd Floor, 4, H.L. Sarkar Road, Bansdroni, Kolkata-700070, West Bengal, India.
ii. The present Directors in AAPIL are Shri Vikash Jha, Shri Rakesh Raushan, Shri Birendra Thakur and Shri Manoj Chouhan.
iii. Shri Abadh Kumar Singh, Shri Sheonath Sahni, Shri Uttam Das, Shri Robin Ojha, Shri Anil Kumar Mishra and Shri Shailesh Kumar Mishra, who were earlier Directors in AAPIL, have since resigned.
iv. From the documents annexed with the complaints received against AAPIL and also from information obtained from the MCA21 Portal, it is observed that -
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AAPIL issued NCDs ("Offer of NCDs") during the Financial Years 2011-12 and 2012-13, details of which are provided below -
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AAPIL created a charge for an amount of ` 2.5 Crores and appointed Rising Star Life Care Solutions Private Limited as Debenture Trustee for the Offer of NCDs by that company."
4.1 In the context of the abovementioned details of the Offer of NCDs, the issue for determination in the instant matter is whether the mobilization of funds by AAPIL through the aforesaid, is in accordance with the provisions of the SEBI Act, 1992 ("SEBI Act") read with the SEBI (Issue and Listing of Debt Securities), Regulations, 2008 ("Debt Securities Regulations") and the Companies Act, 1956.
4.2 I note that the jurisdiction of SEBI over various provisions of the Companies Act in the case of public companies, whether listed or unlisted, when they issue and transfer securities, flows from the provisions of Section 55A of the Companies Act. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara India Real Estate Corporation Limited & Ors. v. SEBI (Civil Appeal No. 9813 of 2011) (Judgment dated August 31, 2012) (hereinafter referred to as the "Sahara Case"), had observed:
We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India.
4.3 In this regard-
"i. Reference is also made to Sections 67(1) and 67(3) of the Companies Act, 1956, which are reproduced as under:
67. Construction of reference to offering shares or debentures to the public, etc.
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) Any reference in this Act or in the articles of a company to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be...
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