wtm/ps/22/efd/may/2016 before the securities and … · mr. pravesh kumar karowliya, mr. rohit...

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WTM/PS/22/EFD/MAY/2016

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER

ORDER

Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999 In the matter of Swar Agrotech India Limited In respect of:

1. Swar Agrotech India Limited [CIN: U01403UP2012PLC048364], 2. Mr. Rajesh Awasthi [PAN: AGMPA1004E], 3. Mr. Pravesh Kumar Karowliya [PAN: ATSPK4627Q; DIN: 02104180], 4. Mr. Rohit Gupta [PAN: APBPG3984P] and 5. Mr. Shiv Kumar [PAN: BLGPK9508K]

___________________________________________________________________________

Date of Hearing: August 07, 2015 Appearances: Mr. Rohit Gupta appeared in-person For SEBI: Mr. Pradeep Kumar, Assistant General Manager and Mr. Ankit Bhansali,

Assistant General Manager Date of Hearing: November 17, 2015 Appearances: Mr. Maneesh Kumar, Chartered Accountant appeared for Mr. Rajesh

Awasthi For SEBI: Mr. Pradeep Kumar, Assistant General Manager and Mr. Abhiraj Arora,

Manager ___________________________________________________________________________ 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) conducted a

preliminary inquiry in the ‘investment scheme’ of one Swar Agrotech India Limited

(hereinafter referred to as ‘the Company’ or ‘Swar Agrotech’). Pursuant to the inquiry,

SEBI vide an ex-parte interim Order dated March 30, 2015 (hereinafter referred to as ‘the

interim order’), prima facie found that Swar Agrotech is engaged in fund mobilizing activities

from the public, which falls within the ambit of Collective Investment Scheme (hereinafter

referred to as ‘CIS’) as defined under Section 11AA of the Securities and Exchange Board

of India Act, 1992 (hereinafter referred to as ‘the SEBI Act’), without obtaining a

certificate of registration from SEBI as required under Section 12(1B) of the SEBI Act

and Regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999

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(hereinafter referred to as ‘the CIS Regulations’). The mobilization of funds by Swar

Agrotech through its schemes, was also prima facie found to be a fraudulent practice in

terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade

Practice Relating to Securities Market) Regulations, 2003 (hereinafter referred to as

‘PFUTP Regulations’).

2. The interim order was issued in order to protect the interest of investors, to ensure that the

Company and its directors do not collect further funds under its schemes and to safeguard

the assets/ acquired by Swar Agrotech and its directors from the funds of the investing

public. This Order directed Swar Agrotech and its directors, namely, Mr. Rajesh Awasthi,

Mr. Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv Kumar (hereinafter

collectively referred to as ‘noticees’):

“i. not to collect any fresh money from investors under its existing schemes; ii. not to launch any new schemes or plans or float any new companies to raise fresh moneys; iii. to immediately submit the full inventory of the assets including land obtained through money raised by Swar Agrotech; iv. not to dispose of or alienate any of the properties/assets obtained directly or indirectly through money raised by Swar Agrotech; v. not to divert any funds raised from public at large which are kept in bank account(s) and/or in the custody of Swar Agrotech; vi. to furnish all the information/details sought by SEBI within 15 days from the date of receipt of this order, including,

Details of amount mobilized till date,

Scheme wise list of investors and their contact numbers and addresses,

Details of investors repaid,

Details of charges, if any, created on its assets by the company,

Details of commission paid on amounts mobilized above,

Details of agents along with their addresses, etc., and

Audited Accounts for the last financial year.”

3. The aforesaid directions came into force with immediate effect and the noticees were

advised to file their reply within a period of twenty one (21) days from the date of receipt

of the interim order and also to indicate whether they wish to avail an opportunity of

personal hearing in the matter.

4. The interim order was forwarded to the Company and its directors vide letters dated April

13, 2015, which was duly delivered to all the noticees. Thereafter, an opportunity of

personal hearing was afforded to the Company and its directors on August 07, 2015 and

the same was communicated to the noticees vide SEBI letter dated July 24, 2015. On the

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date fixed, the noticee namely Mr. Rohit Gupta appeared and made oral submissions. He

also gave the written submissions dated August 07, 2015, which were taken on record.

Vide the said letter, he also provided the contact details of the Company and Mr. Rajesh

Awasthi, Mr. Shiv Kumar and Mr. Pravesh Kumar Karowliya. During the course of

personal hearing, Mr. Rohit Gupta was also granted liberty to submit the written

submissions, within a period of seven days, from the date of personal hearing. However,

till date no submissions have been filed by him.

5. As other noticees had failed to appear for the personal hearing, one further opportunity

of personal hearing was granted to the noticees on October 05, 2015. On the date fixed,

none of the noticees had turned up. In the meantime, one Mr. Manish Kumar, Chartered

Accountant while talking on the telephone on behalf of the Company and one of its

directors namely Mr. Rajesh Awasthi requested for an adjournment of the personal

hearing. In the interest of justice, another opportunity of personal hearing was granted on

November 17, 2015. On the date fixed, Mr. Manish Kumar, Chartered Accountant

appeared only for Mr. Rajesh Awasthi and made oral submissions. He also requested time

for submitting the written submissions. The request was considered and he was granted

liberty to file the written submissions, within a period of ten days, from the date of personal

hearing. However, till date no submissions have been filed by him.

6. The submissions of Mr. Rohit Gupta made vide letter dated August 07, 2015, in brief, are

as under:

a. He was director of the Company during the period of February 16, 2012 to September 14,

2013. Since September 14, 2013, he has no relation with the Company.

b. During February 16, 2012 to September 13, 2013, the Company had collected around ₹ 80

lakh and had also purchased three properties of around the same value.

c. Since September 14, 2013, the records of the Company are with Mr. Rajesh Awasthi, Mr.

Shiv Kumar and Mr. Pravesh Kumar Karowliya.

7. While proceeding further with the matter, I have considered the interim order, the reply of

Mr. Rohit Gupta and the material available on record. The interim order has alleged that

the plans/ schemes operated by the Company are in the nature of CIS and that the

Company was offering these schemes without obtaining the registration from SEBI, in

contravention of the provisions of Section 12(1B) of the SEBI Act and Regulation 3 of

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the CIS Regulations read with Section 11AA of the SEBI Act. The directors of Swar

Agrotech were also alleged to be responsible for the illegal conduct of the business of the

Company. The interim order has noted the features of the alleged scheme offered by the

Company. The following are the observations from the interim order:

“a. Swar Agrotech India Limited (CIN:U01403UP2012PLC048364) was incorporated on January 16, 2012 having its registered office at Shastri Chauraha, Near Hero Honda Showroom, Etawah - 206001 (UP). Mr. Rajesh Awasthi, Mr. Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv Kumar are the Directors of Swar Agrotech. b. The main objects of Swar Agrotech as per the MoA is "to purchase acquire, take on lease or in exchange or any other such lawful manner any area, land, building, structures and turn the same into account to develop the same, and dispose of or maintain the same and to build townships, markets, or such other building or conveniences thereon and to equip the same or any part thereof with all or any amenities or conveniences, such as drainage facilities, electric and to deal with the same in any manner.”

a. I note from the interim order that the Company had mainly two plans i.e. ‘Installment

Payment Plan’ and ‘One Time Payment Plan’. The sample of the plans offered by the

Company, as also noted in the interim order, is as under:

One Time Payment Plans

S.No. No. of Units

Installment

(₹ )

Expected return of Installment Accidental Risk Cover 75

Months 126

Months 180

Months 216

Months 240

Months

1 0.25 3,000 6,000 12,000 18,000 30,000 42,000 3,000

2 0.50 6,000 12,000 24,000 36,000 60,000 84,000 6,000

3 0.75 9,000 18,000 36,000 54,000 90,000 1,26,000 9,000

4 1.00 12,000 24,000 48,000 72,000 1,20,000 1,68,000 12,000

5 1.25 15,000 30,000 60,000 90,000 1,50,000 2,10,000 15,000

6 1.50 18,000 36,000 72,000 108,000 1,80,000 2,52,000 18,000

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S.No. No. of Units

Installment Amounts Total Installment

(₹ )

Estimated Realisable Value

Accidental Risk Cover Mly. Qly. Hly. Yly.

1 1.5 500 1,485 2,955 5,880 18,000 19,665 18,000

2 3.00 1,000 2,970 5,910 11,760 36,000 39,330 36,000

3 4.50 1,500 4,455 8,865 17,640 54,000 58,995 54,000

4 6.00 2,000 5,940 11,820 23,520 72,000 78,660 72,000

5 7.50 2,500 7,425 14,775 29,400 90,000 98,325 90,000

6 9.00 3,000 8,910 17,730 35,280 1,08,000 1,17,990 1,00,000

1 unit = 100 sq. ft.

b. Having considered the above, I proceed further and note that for subscribing to the plans

of the Company, a customer/ investor was required to submit an ‘Agreement’ (the same

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is also in the nature of application form). The relevant ‘terms and conditions’ as noted on

the ‘agreement’ are as under:

Under the schemes, the value of the plot will be ₹ 100 per sq.ft. Further, one unit has

been said to be equal to 100 sq.ft.

The Company provides the loan facility and accident benefit to its customers/

investors.

The plot is promised to be allotted to the customers, in case of ‘installment payment’

plan, within 120 days on receipt of 50% of the total payment. In installment payment

plan, the allotment happens after atleast 24 months. In ‘single installment’ plan, the plot

was promised to be allotted after 365 days.

The Company can allot the plot/ land as per its own discretion.

The customer will have the ownership of the plot; however during the tenure of the

agreement, the Company reserves the right over development and maintenance of the

land, plantation and sale proceeds of the crops.

The cost of the plot/ land includes the cost of the land and development expenses

(including cost of irrigation, fertilizers, pesticides and other maintenance expenses).

The customer will get the payment only after completing the tenure of the plan.

c. The other documents are the ‘Registration Certificate’ and ‘receipt’. These documents are

issued by the Company to its customers. I have perused the copy of the ‘registration

certificate’, the same reads as ‘… In response to your application, we are pleased to inform you that

you have been registered for the Plot(s) booked you as per details are hereunder. The terms of booking and

allotment shall be governed by the terms of Application, Agreement and also General Terms and

Conditions printed overleaf.’ The ‘registration certificate’ contains the space for registration

number, scheme code and term, plot unit and consideration, tenure of agreement, payment

mode, instalment amount, expiry date of agreement, estimated realisable value, the assured

realisable cost at the end of term, etc.

d. Another document is ‘Latter of Land Unit Allotment’. I have perused the sample ‘Latter

of Land Unit Allotment’ issued to one Mr. Santosh Kumar and note that the same contains

the following details, i.e.

Number of land units - 1 Area (Sq.ft.) - 125 Land unit(s) number - 1.00/ Hectares

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Khasra Gate No. - 753 Village - Sabdalpur-c Tehsil - Bharthna District - Etawah State - U.P.

The relevant clauses of the ‘Letter of Land Unit Allotment’ is as under:

“… SAIL reserves the right to change the location of this allotment, and allot you an alternate site at any other place. … You are required to immediately get in touch with the concerned Brach Manager/ Branch In-Charge to find out what these defect are, and remove them. In case of your failure to remove these defects, within 45 days of receipt of this Allotment Letter this allotment would stand cancelled, and it would not be possible for us to execute/ procure execution of sale deed for conveying the said Land Units(s) to you, and you alone shall be responsible for the consequential breach of the Agreement between us in that regard. The sale deed in respect of the Land Unit (s) allotted to you shall be executed and registered subject to condition mentioned in your letter for Land Registration. … This allotment and the subsequent conveyance of the aforesaid land to you shall remain subject to the ‘Rules’, contained in the Rule Book supplied to you, the ‘Terms and Conditions’, contained in the Agreement form signed by you … A sum of Rs. … paid by you to SAIL under Single Installment Scheme … Has now been appropriated by SAIL towards the cost which are to be met in procuring the said property and conveying it to you, developing the same, planting the required saplings, plants, trees, crops, etc. management fee and other ancillary and incidental expenses thereto.”

e. The next document is a brochure for agent, wherein the Company has represented that

as it works under the Department of Company Affairs, it is not registered with SEBI.

Following important clauses are noted therefrom:

The investor/ customer has the option to surrender the agreement.

On completion of the agreement, the investor/ customer has the option of either

retaining or selling the plot/ land. The Company provides for marketing services for

sale of the plot.

The Company retains the right to enter the plot/ land.

The Company had provision for joint sale deed. Customer does not get any claim over

the common facilities provided by the Company

8. My findings on the discussion of the documents of the Company are as under:

a. The allotment of the plot is solely at the discretion of the Company. No option was given

to the customer to specify the location/ details of the land in the agreement.

b. As per the agreement, the customer/ investor gets the payment after completion of the

tenure of the plan. The same suggest that the plan of the Company is a mere ‘investment’

scheme.

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c. The registration letter/ ‘latter of land unit allotment’ does not provide the exact location

of the land. The ‘latter of land unit allotment’ only provides the ‘Land Unit No.’, however,

no supporting map/ layout plan is attached to identify the land/ plot.

d. Development of plot was an integral part of the plan of the Company.

e. The value of the plots offered by the Company are same i.e. ₹ 100 per sq.ft. I note that

the value of each piece of land usually varies according to location, however, the schemes

operated by the Company suggests that the land was being sold as a homogeneous

commodity, at a fixed price.

f. Further, the cost of the plot had included the cost of land, development charges, other

inputs, saplings, plants, trees, etc.

g. The customer though stated to be an absolute owner of the land, the right of development

and maintenance is exclusively retained by the Company.

h. As per the details submitted by the Company, it had mobilised ₹ 94,79,362.

9. Now I proceed to deal with the characteristics of the impugned plans/ schemes floated

and carried on by the Company against the four conditions under Section 11AA(2) of the

SEBI Act as alleged in the interim order. For concluding whether a scheme is a CIS or not,

all the four conditions under Section 11AA(2) of the SEBI Act should be satisfied.

i. The first condition is that the contributions, or payments made by the investors, by whatever name

called, are pooled and utilized for the purposes of the scheme or arrangement. In this regard, I note

that:

- The Company accepts the contribution/ investments from the investors/ customers

for subscribing to one of its plans for the purchase of plot.

- Till the stage of ‘agreement’ and ‘registration certificate’, the Company does not

identify the land to be sold to the customers.

- The Company promises to allot the plot under the ‘one time payment’ plan after the

completion of 365 days from the date of making application. Under ‘installment

payment’ plan, the plot is promised to be allotted within 120 days on receipt of the

50% of the total payment.

- The Company does not identify the plot in the ‘registration certificate’. Though the

same provided for the ‘estimated realisable value at the end of term’, which was not

allotted till that time.

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- Further, the ‘Latter of Land Unit Allotment’ states that on allotment of land, the

payment made has been appropriated ‘towards the cost which are to be met in procuring the

said property’. The same suggests that even after issuing the ‘Latter of Land Unit

Allotment’, the Company is yet to purchase the land.

- Even if, it is assumed that the ‘Latter of Land Unit Allotment’ specified the details of

the land, then also in the absence of any layout plan/ map, it is difficult to identify the

exact location of the plot with the available details. Further, the Company reserves the

right to change the location of the plot allotted and to provide an alternate plot.

These facts show that the Company pools the investment made by the customers, with an

aim/ object of carrying out the overall plan/ scheme. From the same, it can be concluded

that the ‘contributions, or payments made by the investors, are pooled and utilised by the

Company for the purposes of the scheme or arrangement’, the scheme being to accept

contributions/ payments in the name of sale of plot/ land. Thus, satisfying the first

condition as stipulated in Section 11AA(2)(i) of the SEBI Act.

ii. The second condition is that the contributions or payments are made to such scheme or arrangement

by the investors with a view to receive profits, income, produce or property, whether movable or immovable

from such scheme or arrangement. The plans of the Company and registration certificate

provides for the ‘estimated realizable value’, which is higher than the invested amount.

The registration certificate also has space for ‘assured realisable cost at the end of term’.

The plans of the Company also provided for loan facility and the accident benefit to its

customers/ investors. From the same, it can be concluded that the investment/

contributions were made by the customers/ investors were with a view to earn profits.

Considering the same, it is concluded that the customers/ investors had made the

contribution/ payment to the Company with a view to earn profits/ income/ property/

return on the initial investments that may accrue to them as applicable, thus attracting the

second condition as stipulated in Section 11AA(2)(ii) of the SEBI Act.

iii. The third and fourth conditions under Section 11AA(2) of the SEBI Act are being

discussed together. The said conditions are that the property, contribution or investment forming

part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors and the

investors do not have day to day control over the management and operation of the scheme or arrangement.

In this regard, I note that the payments/ investments made by the customers/ investors

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is retained by the Company, who in turn manages these on behalf of the customers/

investors during the term of plans. Further, the customer investing with the Company is

required to give authority for the development of the plot in favour of the Company. The

clause that during the tenure of the agreement, the Company reserves the right over the

development and maintenance of the land, plantation and the sale proceeds of the crop,

hints that the plot was not managed by the customers, at any stage of the scheme. The

investor/ customer was given the right to inspect the plot and tender suggestions,

however, the Company has not produced anything to show as to how the investor/

customer will identify the plot. In view of the same, it can be concluded that the

investments of the customers/ investors were managed and utilized by the Company at its

discretion.

In view of the above, it can be concluded that the plans/ schemes of the Company satisfies

the third and fourth conditions under Section 11AA (2) of the SEBI Act also.

10. From the discussion above, it is evident that the Company solicits investments from its

customers in its scheme of purchase of plot. The scheme of the Company in taking monies

from its customers/ investors and promising them estimated value at the end of the

contract definitely fall within the ambit of Section 11AA of the SEBI Act. As all the four

conditions specified under Section 11AA(2) of the SEBI Act are satisfied in the present

facts of the case, the schemes/ plans promoted, launched, carried on and operated by the

Company are in the nature of CIS in terms of Section 11AA(1). While proceeding further,

I place my reliance on the observations of the Hon'ble Supreme Court, made in the matter

of PGF Limited & Ors. Vs. Union of India & Anrs. (Civil Appeal No. 6572 of 2004):

“42. … ... .. as per the agreement between the customer and the PGF Limited, it is the responsibility of the PGF Limited to carry out the developmental activity in the land and thereby the PGF Limited undertook to manage the scheme/arrangement on behalf of the customers. Having regard to the location of the lands sold in units to the customers, which are located in different states while the customers are stated to be from different parts of the country it is well-neigh possible for the customers to have day to day control over the management and operation of the scheme/arrangement. In these circumstances, the conclusion of the Division Bench in holding that the nature of activity of the PGF Limited under the guise of sale and development of agricultural land did fall under the definition of collective investment scheme under Section 2(ba) read along with Section 11AA of the SEBI Act was perfectly justified and hence, we do not find any flaw in the said conclusion. ... ....

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53. … therefore, hold that Section 11AA of the SEBI Act is constitutionally valid. We also hold that the activity of … the sale and development of agricultural land squarely falls within the definition of collective investment scheme under Section 2(ba) read along with Section 11AA (ii) of the SEBI Act ...”

Therefore, having concluded that the activities of the Company are CIS, in terms of

Section 11AA of the SEBI Act, I proceed further with the matter.

11. Section 12(1B) of the SEBI Act mandates that no person, shall sponsor or cause to be

sponsored or carry on or caused to be carried on any CIS unless it obtains a certificate of

registration from SEBI in accordance with the CIS Regulations. The Company has clearly

failed to do so. Regulation 3 of the CIS Regulations provides that no person other than a

Collective Investment Management Company which has obtained a certificate under the

said regulations shall carry on or sponsor or launch a 'CIS'. A person can launch or sponsor

or cause to sponsor a CIS only if it is registered with SEBI as a Collective Investment

Management Company. Therefore, the launching/ floating/ sponsoring/ causing to

sponsor any ‘collective investment scheme’ by any ‘person’ without obtaining the

certificate of registration in terms of the provisions of the CIS Regulations is in

contravention of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations.

12. Further, in terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair

Trade Practices Relating to Securities Market) Regulations, 2003, dealing in securities shall

be deemed to be a fraudulent or an unfair trade practice if it involves fraud and includes

illegal mobilization of funds by sponsoring or causing to be sponsored or carrying on or

causing to be carried on any CIS by any person. This provision in the above Regulations

has been brought into effect from September 06, 2013. Accordingly, it could be held that

by mobilizing public funds through CIS without obtaining registration from SEBI as

required under Section 12(1B) of the SEBI Act read with Regulation 3 of the CIS

Regulations, the Company has contravened the above said provision.

13. Liability of the Directors: I note that the interim order was issued against the Company

and its directors namely Mr. Rajesh Awasthi, Mr. Pravesh Kumar Karowliya, Mr. Rohit

Gupta and Mr. Shiv Kumar. The details of the appointment and resignations of the

directors of the Company are as under:

Name Date of Appointment Date of Cessation

Mr. Rajesh Awasthi 16/01/2012 Continuing as director

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Mr. Pravesh Kumar Karowliya 16/09/2013 Continuing as director

Mr. Rohit Gupta 16/01/2012 14/09/2013

Mr. Shiv Kumar 16/01/2012 Continuing as director

It is noted that Mr. Rajesh Awasthi, Mr. Pravesh Kumar Karowliya and Mr. Shiv Kumar

are the present director of the Company.

It is noted that the noticees namely Mr. Rohit Gupta had resigned from the Company on

September 14, 2013. I note that such resignation does not absolve him from the charges

levelled in the interim order, in the light of the incorporation of the Company on January

16, 2012 and commencement of the schemes in the period during which he was the

director of the Company. Therefore, I have no hesitation in holding that the Company

and its directors namely Mr. Rajesh Awasthi, Mr. Pravesh Kumar Karowliya, Mr. Rohit

Gupta and Mr. Shiv Kumar were engaged in the illegal fund mobilising activity by floating/

sponsoring/ launching, unregistered/ unauthorised CIS, as defined in the Section 11AA

of the SEBI Act. In view of the above findings and observations made in this Order and

the violations committed by the Company, it becomes necessary for SEBI to issue

appropriate directions in order to protect the interest of investors and also to secure the

interest of the securities market.

14. In view of the observations made in this Order, I, in exercise of the powers conferred

upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 and

Sections 11(1), 11B and 11(4) thereof and Regulation 65 of the SEBI (Collective

Investment Schemes) Regulations, 1999, hereby issue the following directions:

a. Swar Agrotech India Limited [CIN: U01403UP2012PLC048364], Mr. Rajesh

Awasthi [PAN: AGMPA1004E], Mr. Pravesh Kumar Karowliya [DIN: 02104180],

Mr. Rohit Gupta [PAN: APBPG3984P] and Mr. Shiv Kumar [PAN: BLGPK9508K]

shall abstain from collecting any money from the investors or launch or carry out any

Collective Investment Schemes including the scheme which have been identified as a

Collective Investment Scheme in this Order.

b. Swar Agrotech India Limited and its directors namley Mr. Rajesh Awasthi, Mr.

Pravesh Kumar Karowliya and Mr. Shiv Kumar shall wind up the existing Collective

Investment Schemes and refund through ‘Bank Demand Draft’ or ‘Pay Order’, the money

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collected by the said company under the schemes with returns which are due to its

investors as per the terms of offer within a period of three months from the date of this

Order and thereafter within a period of fifteen days, submit a winding up and repayment

report to SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations,

1999, including the trail of funds claimed to be refunded, bank account statements

indicating refund to the investors and receipt from the investors acknowledging such

refunds.

c. Swar Agrotech India Limited and its directors namley Mr. Rajesh Awasthi, Mr.

Pravesh Kumar Karowliya and Mr. Shiv Kumar are permitted to sell the assets of the

Company only for the sole purpose of making refunds as directed above and deposit the

proceeds in an Escrow Account opened with a nationalised Bank.

d. After completing the aforesaid repayments in terms of sub-paragraph (b) above, the

Company shall file a certificate of such completion with SEBI, within a period of 15 days,

from two independent peer reviewed Chartered Accountants who are in the panel of any

public authority or public institution. For the purpose of this Order, a peer reviewed

Chartered Accountant shall mean a Chartered Accountant, who has been categorized so

by the Institute of Chartered Accountants of India (‘ICAI’).

e. Swar Agrotech India Limited and its directors namley Mr. Rajesh Awasthi, Mr.

Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv Kumar are also directed to

immediately provide a complete and detailed inventory of all their assets and properties

and details of all their bank accounts, demat accounts and holdings of shares/ securities,

if held in physical form.

f. Swar Agrotech India Limited and its directors namley Mr. Rajesh Awasthi, Mr.

Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv Kumar are restrained from

accessing the securities market and are prohibited from buying, selling or otherwise dealing

in securities market for a period of four (4) years.

g. In the event of failure by Swar Agrotech India Limited and its directors namley Mr.

Rajesh Awasthi, Mr. Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv

Kumar to comply with the above directions, the following actions shall follow:

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- Swar Agrotech India Limited and its directors (past and present) namley Mr.

Rajesh Awasthi, Mr. Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv

Kumar shall remain restrained from accessing the securities market and would further

be prohibited from buying, selling or otherwise dealing in securities, even after the period

of four (4) years of restraint imposed in sub-paragraph (f) above, till all the Collective

Investment Schemes of Swar Agrotech India Limited are wound up and all the monies

mobilized through such schemes are refunded to its investors with returns which are due

to them.

- SEBI would make a reference to the State Government/ Local Police to register a civil/

criminal case against Swar Agrotech India Limited, its promoters, directors and its

managers/ persons in-charge of the business and its schemes, for offences of fraud,

cheating, criminal breach of trust and misappropriation of public funds; and

- SEBI would make a reference to the Ministry of Corporate Affairs, to initiate appropriate

action as deemed fit against the Company, Swar Agrotech India Limited.

- SEBI would also make a reference to the Ministry of Corporate Affairs to restrain the

abovementioned noticee directors from being directors in other companies.

- SEBI shall initiate attachment and recovery proceedings under the SEBI Act and rules

and regulations framed thereunder.

15. This order shall come into force with immediate effect.

16. This Order shall be without prejudice to the right of SEBI to initiate prosecution

proceedings under Section 24 and adjudication proceedings under Chapter VIA of the

Securities and Exchange Board of India Act, 1992 against Swar Agrotech India Limited,

including other persons who are in default, for the violations as found in this Order.

17. Copy of this Order shall be forwarded to the stock exchanges and depositories for

necessary action.

DATE : May 06, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

wtm/ps/22/efd/may/2016 before the securities and … · mr. pravesh kumar karowliya, mr. rohit...

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