wtm/ps/46/wro/jun/2016 before the securities and … · facie observed that neesa technologies...
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WTM/PS/46/WRO/JUN/2016
BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA
CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under Sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 In respect of –
1. Neesa Technologies Limited [PAN: AABCG5430A],
2. Mr. Arvind Gupta [PAN: AERPG2839N; DIN: 00064391],
3. Mr. Yogesh Ghisumal Gemawat [PAN: ADVPG4051D; DIN: 02550021],
4. Mr. Girishchandra Mukundram Baluni [PAN: AAKPB5408R; DIN: 02745783],
5. Mr. Nimain Charan Biswal [PAN: ACRPB3767C; DIN: 03306090],
6. Mr. Sanjay Gupta [PAN: ABUPG5799B; DIN: 00006361],
7. Mr. Kamlendra Joshi [PAN: ABIPJ6029P; DIN: 05356425],
8. Mr. Manoj Singhal [PAN: ARFPS7604E; DIN: 01830419] and
9. Mr. Suresh Kumar [PAN: ADZPK2242A; DIN: 03155198].
________________________________________________________________________
Date of Hearings: November 26, 2015 Appearances: Mr. Nimain Charan Biswal appeared in-person along with Mr. Hemant K.
Mohanty, Advocate; Mr. Suresh Kumar appeared in-person. For SEBI: Dr. Anitha Anoop, General Manager; Mr. Anindya Kumar Das, Deputy
General Manager; Mr. Pradeep Kumar, Assistant General Manager and Mr. Prithwis Sarkar, Assistant General Manager.
Date of Hearings: January 11, 2016 Appearances: Mr. Shripat Pincha appeared as authorized representative of Mr. Manoj Singhal
and Mr. Yogesh Ghisumal Gemawat; Mr. Girishchandra Mukyndram Baluni and Mr. Kamlendra Joshi appeared in-person.
For SEBI: Dr. Anitha Anoop, General Manager; Mr. Anindya Kumar Das, Deputy
General Manager and Mr. Pradeep Kumar, Assistant General Manager.
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Date of Hearings: February 18, 2016 Appearances: Mr. Arvind Gupta appeared along with Mr. Akshay Pradeep Jadhav, Advocate.
Mr. Akshay Pradeep Jadhav, Advocate also appeared for Mr. Sanjay Gupta. For SEBI: Dr. Anitha Anoop, General Manager; Mr. Anindya Kumar Das, Deputy
General Manager and Mr. T. Vinay Rajneesh, Assistant General Manager. Date of Hearings: May 09, 2016 Appearances: None appeared. ________________________________________________________________________ 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), vide an ex-
parte interim order dated June 03, 2015 (hereinafter referred to as ‘interim order’), prima
facie observed that Neesa Technologies Limited (hereinafter referred to as the
‘Company’ or ‘NTL’) had engaged in fund mobilizing activity from the public, through
its offer and issue of Non-Convertible Debentures (hereinafter referred to as ‘NCDs’)
and violated the provisions of Sections 56, 60, 73 and 117C of the Companies Act,
1956 and the provisions of the SEBI (Issue and Listing of Debt Securities) Regulations,
2008 (hereinafter referred to as the ‘ILDS Regulations’).
2. In order to protect the interest of investors who had subscribed to such NCDs, to
protect the assets and to prevent further fund mobilization, SEBI vide the interim order,
issued the following directions:
“7. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act, hereby issue the following directions –
i. NTL (PAN: AABCG5430A) shall forthwith cease to mobilize funds from investors through the Offer of NCDs or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions;
ii. NTL and its present Directors, viz. Shri Arvind Gupta (PAN: AERPG2839N; DIN: 00064391), Shri Yogesh Ghisumal Gemawat (PAN: ADZPK2242A; DIN: 02550021), Shri Girishchandra Mukundram Baluni (PAN: AAKPB5408R; DIN: 02745783), Shri Sanjay Gupta (PAN: ABUPG5799B; DIN: 00006361), Shri Kamlendra Joshi (PAN: ABIPJ6029P; DIN: 05356425), Shri Manoj Singhal (PAN: ARFPS7604E; DIN: 01830419) and Shri Suresh Kumar (PAN: ADZPK2242A; DIN: 03155198), are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from
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the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders;
iii. The past Director of NTL, viz. Shri Nimain Charan Biswal (PAN: ACRPB3767C; DIN: 03306090), is prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders;
iv. NTL and its abovementioned past and present Directors, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions;
v. NTL shall provide a full inventory of all its assets and properties; vi. NTL's abovementioned past and present Directors shall provide a full inventory of all
their assets and properties; vii. NTL and its abovementioned present Directors shall not dispose of any of the properties
or alienate or encumber any of the assets owned/acquired by that company through the Offer of NCDs, without prior permission from SEBI;
viii. NTL and its abovementioned present Directors shall not divert any funds raised from public at large through the Offer of NCDs, which are kept in bank account(s) and/or in the custody of NTL;
ix. NTL and its abovementioned present Directors shall furnish complete and relevant information (as sought by SEBI letters dated November 6, 2014 and January 21, 2015), within 14 days from the date of receipt of this Order”.
3. The interim order also advised the Company and directors (collectively referred to as
‘noticees’) to show cause as to why suitable directions/prohibitions under Sections
11(1), 11(4), 11A and 11B of the SEBI Act including the following, should not be
taken/imposed against them:
i. Directing them jointly and severally to refund money collected through the Offer
of NCDs alongwith interest, if any, promised to investors therein;
ii. Directing them to not issue prospectus or any offer document or issue
advertisement for soliciting money from the public for the issue of securities, in
any manner whatsoever, either directly or indirectly, for an appropriate period;
iii. Directing them to refrain from accessing the securities market and prohibiting
them from buying, selling or otherwise dealing in securities for an appropriate
period.
4. The observations made in the interim order was on the basis of the material available
on record i.e., correspondences exchanged between SEBI and NTL; complaint and
additional documents received by SEBI and information obtained from the Ministry
of Corporate Affairs’ website i.e. MCA 21 Portal and IDBI Trusteeship Services
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Limited (ITSL). Vide the interim order, the noticees were advised to file their replies to
the interim order and also to indicate whether they desired any personal hearing in the
matter.
5. Mr. Yogesh G. Gemawat, Mr. Nimain Charan Biswal, Mr. Kamlendra Joshi and
Mr. Girish Baluni vide respective letters dated June 05, 2015, June 14, 2015, June 22,
2015 and June 24, 2015, replied to the interim order. Another noticee namely Mr.
Suresh Kumar, vide an e-mail dated July 03, 2015, replied to the interim order and
stated that he had resigned from Neesa group of companies as an employee as well as
director in September 2012.
The Company, vide letter dated June 12, 2015, requested for further time of four
weeks for filing its reply.
6. Thereafter, the noticees were afforded an opportunity of personal hearing on
November 26, 2015 and the schedule was communicated vide SEBI letters dated
November 04, 2015. The Company, vide e-mail dated November 24, 2015, forwarded
a request for adjournment on the ground that Sanjay Gupta is in judicial custody and
is trying to get bail in order to present himself before SEBI. The Company vide
another letter dated November 24, 2015, stated that Sanjay Gupta would not be able
to attend the hearing as he did not receive the permission from the Hon’ble Court.
The Company also submitted that RoC treated the NCDs as deposits and therefore
the SCN issued by SEBI does not hold valid and the matter would lie with RoC/ CLB.
It was also submitted that the NCDs of approx. ̀ 5 crore was raised after due corporate
process and that it was getting the rating done by reputed agency and IDBI Trustees
was engaged as the Trustee. The Company also intended to redeem/ repay the NCDs
in due course. The Company also requested for a personal hearing for Sanjay Gupta.
Another noticee namely Mr. Kamlendra Joshi vide his letter dated November 16, 2015,
requested SEBI to reschedule the personal hearing to January, 2016.
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7. On the date fixed for personal hearing i.e. November 26, 2015, the noticees namely
Mr. Nimain Charan Biswal appeared along with Mr. Hemant K. Mohanty, Advocate
and made oral submissions. They also submitted certain additional documents along
with a sequence of events, which were taken on record. Mr. Nimain Charan Biswal
was also granted fifteen days’ time for filing the written submissions. On the scheduled
date, Mr. Suresh Kumar also appeared for the personal hearing and made the written
submissions. He also made oral submissions.
Considering the requests of the Company and Mr. Kamlendra Joshi and the absence
of Mr. Manoj Kumar Singhal, Mr. Yogesh Ghisumal Gemawat and Mr. Girishchandra
Mukundram Baluni, one more opportunity of personal hearing was granted in the
matter on January 11, 2016. On January 11, 2016, Mr. Girishchandra Mukundram
Baluni and Mr. Kamlendra Joshi appeared for the personal hearing and filed the
written submissions, which were taken on record. One Mr. Shripat Pincha, Chartered
Accountant also appeared on the date fixed for the noticees namely Mr. Yogesh
Ghisumal Gemawat and Mr. Manoj Singhal and filed written submissions on their
behalf.
In the meantime, the Company vide its letter dated January 09, 2016, requested to
afford opportunity of personal hearing to Sanjay Gupta and Arvind Gupta at a future
date after two months. The Company reiterated that issuance of NCDs was done
following professional advice of various reputed agencies like IDBI Trustees,
Brickworks Ratings and according to the extant provision of law and rules. These
NCDs were treated as ‘deposits’ by the RoC and that to bring them under the umbrella
of SEBI Act would not be appropriate. The Company fully utilized the funds to the
tune of `5.96 crore in creating the intended assets. The envisaged security cover for
the funds raised continues to be available. The Company is making efforts in servicing
(though in a limited manner) the obligations towards the investors. Vide another letter
received by SEBI on January 13, 2016, Mr. Arvind Gupta submitted that he is not a
full time director of the Company and not looking after its day to day affairs. Vide this
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letter, he also expressed his inability to attend the personal hearing on January 11, 2016,
on the ground that the doctor had advised him bed rest.
8. Considering the requests, one last and final opportunity of personal hearing was
granted to the Company, Mr. Sanjay Gupta and Mr. Arvind Gupta on February 18,
2016. The Company acknowledged the receipt of this notice for hearing. The notice
was also pasted at the premises of Sanjay Gupta and Arvind Gupta on January 19,
2016. On the date fixed Arvind Gupta and Sanjay Gupta were represented by their
Advocate. Mr. Arvind Gupta was also present. Written submissions of Sanjay Gupta
was filed. The Advocate requested for adjournment of the hearing on the ground that
Sanjay Gupta was in judicial custody. The request for adjournment was rejected in
view of the adequate opportunities already afforded in the matter. However, the
noticees were granted liberty to file written submissions within a period of three weeks.
The personal hearing in the matter was accordingly concluded.
9. Thereafter, one Mr. K.C. Raval, Advocate while writing on behalf of Mr. Sanjay Gupta
vide his letter dated April 12, 2016, intimated that Sanjay Gupta is now on regular bail
and desires to avail an opportunity of personal hearing. In the said letter, it was also
stated that the intimation of personal hearing be given well in advance so as to enable
him to seek prior permission from the Hon’ble High Court of Gujarat and District &
Sessions Court. In the interest of justice, last opportunity of personal hearing was
granted to Mr. Sanjay Gupta on May 04, 2016. However, the same was rescheduled to
May 09, 2016, due to certain administrative exigencies. On the date fixed, the noticee
namely Sanjay Gupta remained absent.
Later on May 12, 2016, SEBI received a letter from the advocate of Mr. Sanjay Gupta
dated May 07, 2016, stating therein that Mr. Sanjay Gupta had filed an application in
the Hon’ble High Court of Gujarat for seeking permission to travel to Mumbai to
attend to personal hearing but the matter could not be heard and no order has been
passed by the Hon’ble High Court. It was further stated that Hon’ble Court will now
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be observing summer vacations and the personal hearing may be rescheduled in the
third week of June 2016.
I have considered the request of Mr. Sanjay Gupta and note that reasonable
opportunities of personal hearing have already been granted to him to make
submissions. Further, in the personal hearing held on February 18, 2016, an advocate
had also made submissions on his behalf. There are written submissions filed on his
behalf, which are being appropriately dealt with in the order. Considering that
reasonable opportunities have already been afforded to him for making submissions
in the matter, I am inclined to proceed further with the matter, on the basis of the
material available on record including his written submissions. Granting further
opportunities for the personal hearing will only delay the proceedings.
10. The submissions of the noticees in brief are as under:
a. The Company vide letter dated December 08, 2015 filed its reply inter alia stating the
following:
- The promoters, directors and managing directors of the Company as well as the
group were unavailable under circumstances beyond their control and therefore
the reply should be treated as a preliminary reply.
- The Company has issued NCDs under the trusteeship of reputed trustee namely
IDBI Trustees. Company has no wilful intention to defraud.
- The RoC is considering the question of NCDs as deposits and several
correspondence were made in this regard.
- RoC has asked the Company to meet compliance treating them as deposits.
- The Company never intended to make any public issue and NCDs were issued
under various series though the total number of investors may be more than 300,
Company issued it through few agents by way of private placement which would
be less than ‘49 in nos only per series’.
- Company has created assets out of the NCD amount raised for a News channel,
the assets still exits.
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- The Company also submitted that the group fell into acute financial crisis during
the period of launch of the news channel.
- The same forced the two major companies of the Group operating into hospitality
and steel sector to knock the CDR door.
- Income Tax department was creating pressure on the Company by attaching the
bank account of the Company from time to time and also writing to the debtors
of the Company for directly paying to the Department against its dues. The
Company has filed an appeal in the matter. The Company requested SEBI to make
the IT department a party in the proceedings.
- The Company continued to service the interest to NCD investors with whatever
net cash flow available even under the present situation.
b. Mr. Sanjay Gupta through his advocate Mr. K.C. Raval vide letters dated March 08,
2016, March 16, 2016 and May 07, 2016, submitted as under:
- The Company is the IT arm of the Neesa group and is into software development,
networking, operating state of the art data center tire III called ‘DAT First’.
- The Company had issued NCDs under the trusteeship of IDBI trustees and along
with rating from a rating agency. These details show that the NCDs were issued
through private placement and cannot fall within the ambit of public issue.
- RoC is considering the NCD in question as deposit and it has made several
communications with the Company in this regard seeking information considering
it as deposit and asked the Company to make compliance.
- The Company had never intended to make any public issue and NCDs were issued
under various series though the total number of investors may be more than 300,
Company issued it through few agents by way of private placement which would
be less than ‘49 in nos. only per series’.
- The Company has created assets out of the NCD investment which was raised for
a news channel, the assets still exist in its books and at ground.
- Unfortunately, overall group during the period of launch of news channel business
fell into acute financial crisis. Group’s two major companies operating into
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hospitality and steel sector suffering downward business cycle affected by the
industry fell down recording heavy losses. The same affected operation of news
channel business adversely.
- As the Company was in requirement of working capital of News channel business
and it has tried to manage working capital upto some extent and tried to run the
business on its own even at the cost of other business of the Company and also
borrowing some money from other companies promoted by same promoters but
in the absence of long term working capital deficiency, the business suffered
acutely.
- At the same time Income Tax department started taking its action against the
Company denting its cash flow attaching its bank accounts and writing to debtors,
etc., which affected the business of the Company.
- Inspite of these, the Company kept the assets and other operation intact to the
extent possible. The Company has kept priority to service its investors post its
operational expenses and keep on servicing its investor’s interest though with
some delay. The Company has made a MoU with the group of NCD investors for
making the payments though with some delay. The Company is in constant contact
with NCD investors.
- The Company has made efforts for strategic tie ups as well as sell off of particularly
for the News channel business; however it has not received any positive proposal
from any investor compatible to market value and which can fulfill the liability
outstanding of the NCD investors as well as fulfill the statutory liability/ creditors.
However, at the same time, the Income Tax department has put an embargo on
sale of any assets of the Company without its permission.
- Payments have been made to the NCD investors to the extent possible during the
financial crunch. Such facts prove the bonafide intentions of the Company and its
promoter/ directors.
- There was no invitation to the public in general to subscribe for NCDs. The offer
of NCDs was made to the select individuals through brokers and no invitation,
advertisement, prospectus or other means were applied inviting public in general
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to invest in NCDs. The number of NCD holders in any given series did not exceed
50 or more person in any series.
- Section 42 of the Companies Act, 2013 and rules made thereunder relating to
private placement provides for private placement to not more than 200 persons in
aggregate in a financial year. Considering the same, the Company is not in violation
of any Company Law rules and regulations.
- RoC has treated the issue as ‘deposits’ and accordingly the same was mentioned in
correspondence of RoC. The Company requested SEBI to first let RoC/ Ministry
of Corporate Affairs/ CLB decide the issue of nature of NCDs before SEBI
proceeds to assume jurisdiction in the matter.
- During the period of private placement, Sanjay Gupta was not on the Board of the
Company. The financial affairs of the Company were being looked after by Mr.
Yogesh Gemavat, Director and other Board members were involved in taking
collective corporate action.
- Sanjay Gupta had joined the Company as an additional director of the Company
on July 12, 2013 and had resigned from the additional directorship on November
08, 2013. The Non-Convertible debentures were mainly issued between the
periods of April 2013 to July 2013 to the extent of 88%.
c. Mr. Nimain Charan Biswal, vide his letters dated June 14, 2015, November 27, 2015,
January 20, 2016, inter alia submitted the following:
- He had joined Neesa group as he was unemployed at that time. He was appointed
as a director on November 07, 2013 and resigned on March 06, 2014. He was not
an officer or director in the Company when the entire process of NCD issue took
place and therefore not liable for the violations.
- NTL had concluded the issue related activities by August 22, 2013. The entire
process was completed two and a half months before his appointment in the
Company. He did not have any relation with the Company during the issue
process.
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- He is not a promoter or shareholder, nor does he have direct or indirect ownership
of the Company.
- He joined Neesa Venture Holdings Limited as the company was looking for a
person in the senior management position. After his acceptance of the offer, he
was approached and inducted as a director in NTL. He had no role in the activities
of NTL as the same were looked after by other executives. He did not have any
involvement in the day to day affairs of the Company including in its financial
matters.
- After 25 days of joining office as a director, the management had asked him to
move to Mumbai to take care of the marketing efforts of the Neesa group. After
moving out of Ahmedabad, he had no occasion to go back to the Company’s office
again. Hence, he was not instrumental in the process of payment of interest on
NCDs and cannot be made liable for payment of interest.
- During his tenure in the Company, there was no board meeting held with his
knowledge. He had no scope or privilege to attend the same even if it was held as
he was not informed.
- He was also not paid salary during his tenure as a director. His directorship with
NTL was only incidental as he had joined Neesa group in order to earn for a living.
- By operation and effect of Section 74(1)(b) of the Companies Act, 2013 interest
payment on NCD and any payment related to NCDs were due on or after
November 07, 2014 (as there were no dues during his tenure – considering one
year from the date of his appointment), which was after his resignation. He is
therefore not liable as he was not a director when the due date came.
- The noticee therefore requested SEBI to discharge him from the proceedings.
- The noticee along with the submissions had enclosed the copies of his letter dated
November 10, 2014, resignation letter dated March 06, 2014 and e-mail intimation
dated March 16, 2014, regarding resignation to RoC, Form No. DIR-11 (notice of
resignation of a director to the Registrar) and offer letter dated October 26, 2013
from Neesa Venture Holdings Limited.
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d. Mr. Suresh Kumar vide his email dated July 03, 2015 and his letter dated
November 26, 2011 submitted as under:
- He had resigned from Neesa group of companies as an employee as well as director
in September 2012. He referred to his e-mail dated September 23, 2012, sent to
Sanjay Gupta and Secretarial Manager of NTL regarding his resignation.
- His directorship in the Company ended on November 02, 2012. After leaving
Neesa group he has joined another company.
- Since then he had not attended any board meeting or concurred with any of the
decisions including placement of NCDs in the market.
- He has no idea or connection w.r.t the collection by NTL from the public through
private placement and requested SEBI to clear his name from the matter.
e. Girish Baluni vide his letter dated June 24, 2015 and January 19, 2016 submitted
as under:
- He did not reply to SEBI as he was not an authorized person/ executive director/
whole time director of the Company and has no control over the day to day
management and affairs of the Company or in any manner responsible for the
finance of the Company.
- He is not a promoter or shareholder in the Company or in any of the group
companies. He was a ‘non-active, non-operational, non-executive, independent
director’ in the Company and have not taken any decision or acted for obtaining
NCD or FD from the public on behalf of the Company.
- As the Company had replied, the matter was between SEBI and the Company and
the noticee has no role as he does not have access to the information and
documents.
- He neither took any money nor did he purchase anything from the Company’s
funds. He never signed any cheque or collected cash on behalf of the Company.
- He had joined Neesa Venture Holdings Limited as a director, on July 29, 2011 and
resigned on April 29, 2012 and joined another company outside the group from
May 01, 2012. He has resigned from all Neesa group companies on May 27, 2015.
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- In view of his submissions, he requested SEBI to absolve him of all liabilities;
defreeze his demat account and his wife’s. Liquidation of shares in both the
accounts be allowed to meet the expenses of medical treatment as both are not
well and they do not have any medical insurance.
f. Kamlendra Joshi, vide his letter dated June 22, 2015 submitted the following:
- He was an employee with Neesa Venture Holdings Limited and was appointed as
a director of NTL on August 06, 2012 and resigned w.e.f. July 15, 2013. He had
resigned from the Company way back in July 2013 and therefore cannot be said to
be a present director.
- He showed his unwillingness to be in the board since September 2012 and was
following up with the Company for his resignation. He was allowed to resign in
July 2013 as the Company required persons to comply with statutory requirements.
- Neesa group is a heavy borrower from financial market tending towards
imbalanced ratios and therefore did not intend to give his consent to be in the
board of the company.
- He did not participate in the affairs of the Company.
- During his brief tenure, he did not draw any directorial remuneration in cash or
kind. It is a hidden and unwritten policy of Neesa group that executives/employees
of group companies were made directors in the companies as per the requirement
of the management. The control of the company was vested with Sanjay Gupta
and his team. This person was supposed to be Neesa group head and promoter of
Neesa group companies. Every borrowing or financial decision was taken only by
Sanjay Gupta. Therefore, it would be a mistake if SEBI finds any other director
liable.
- He never participated or consented to any resolution for acceptance of debentures
or other connected matters. He did not even attend board meetings and no board
agenda was circulated to him.
- He never had cheque drawing powers. He never played any role in the day to day
operations of Company.
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- The noticee refereed to the MCA Master Circular no. 01/2011 dated July 29, 2011
and stated that no director should be held liable for any act of omission or
commission by the company or by any officer of the company which constitute a
breach or violation of any provision of the Companies Act, 1956 and which
occurred without his knowledge attributable through Board process and without
his consent or connivance or where he has acted diligently in the board process.
He also stated that mere holding of office as director is not sufficient for fastening
vicarious liability. The noticee contended that he does not have knowledge nor did
he connive on any matter relating to the alleged violation and therefore the
proceeding should be withdrawn against him.
- The noticee referred to the observations made by the Hon’ble Supreme Court in
the matter of National Small Industries Corporation Limited (dealing with criminal
liability) and contended that as he was never incharge of day to day affairs and did
not participate in the board meetings, cannot be held liable for violations.
i. He referred to SMS Pharmaceuticals Limited Vs. Nita Bhalla and stated that
for a person to be vicariously liable, there should be a strict satisfaction of the
conditions for fastening such liability.
ii. He submitted that SEBI did not ask his explanation on the matter before the
interim order was passed.
iii. There was no urgency as the complaint was received on 15.09.2014 and the
interim order was passed on 03.06.2015.
iv. He was not provided with the copies of the documents referred to in the
interim order and stated that principles of natural justice was not met.
v. In view of his submissions, this noticee requested SEBI to discharge him from
proceedings. He also stated that if SEBI was willing to pursue further, the reply
should be treated as a preliminary reply and would make a demand for personal
hearing.
g. Yogesh G. Gemawat, vide letter dated June 05, 2015 stated that:
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- He was employed with the Neesa group and was appointed a director on April
01, 2013 in NTL and had resigned on May 15, 2014.
- Pursuant to the resignation, he had sent the resignation letter to the Company and
filed necessary e-Form DIR-11 with the RoC through MCA portal.
- Sanjay Gupta is the owner and key promoter of all Neesa group of companies
including NTL and this noticee does not have information as desired by SEBI.
- He had no knowledge regarding the mobilization of funds and requested SEBI to
remove his name from the proceedings.
11. I have considered the interim order, the submissions made by the respective noticees,
material submitted by them and other material available on record. The allegation in
the interim order is that the Company made a ‘public issue’ of NCDs without
complying with the norms that regulate such public issues, viz., Sections 56, 60, 73 and
117C of the Companies Act, 1956 and the ILDS Regulations. In this regard, the
following observations made in the interim order is relevant:
3. “The material available on record i.e. correspondences exchanged between SEBI and NTL;
abovementioned complaint and additional documents received by SEBI and information obtained from the Ministry of Corporate Affairs' website i.e. MCA 21 Portal and ITSL, have been perused. On an examination of the same, it is observed that – i. NTL was incorporated on March 16, 2000, with the ROC, Ahmedabad with CIN as
U72200GJ2000PLC037577. Its Registered Office is at: 9th Floor, Cambay Grand, Behind PERD Centre, Near Sola Over Bridge, Thaltej, Ahmedabad–380054, Gujarat, India.
ii. The present Directors in NTL are Shri Arvind Kumar Jagannath Prasad Gupta, Shri Yogesh Ghisumal Gemawat, Shri Girishchandra Mukundram Baluni, Shri Sanjay Gupta, Shri Kamlendra Joshi, Shri Manoj Singhal and Shri Suresh Kumar.
iii. Shri Nimain Charan Biswal, who was earlier a Director in NTL, has since resigned. iv. From the material available on record, it is noted that NTL admittedly issued NCDs ("Offer
of NCDs"), details of which are provided below –
Year Type of Security Amount Raised (` in Crores)
Number of Allottees
2013 – 14 Non – Convertible Debentures 5.96 341
……..”
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12. In order to ascertain whether an issue is a public issue or not, reference needs to be
made to section 67(3) of the Companies Act. This provision, as amended by the
Companies (Amendment) Act, 2000, with effect from December 13, 2000, states that no offer
or invitation shall be treated as made to the public by virtue of sub-sections (1) or (2),
as the case may be, if the offer or invitation can properly be regarded, in all
circumstances – (a) as not being calculated to result, directly or indirectly, in the shares
or debentures becoming available for subscription or purchase by persons other than
those receiving the offer or invitation ; or (b) otherwise as being a domestic concern
of the persons making and receiving the offer or invitation. More importantly, in
terms of the first proviso to the aforesaid section, the provisions of section 67(3) shall
not apply in a case where the offer or invitation to subscribe for shares or
debentures is made to fifty persons or more. Therefore, the number of subscribers
becomes relevant to judge whether an issue of shares are for public or on a private
placement basis, in the light of the above said provision. Therefore, if an offer of
securities are made to fifty or more persons, it would be deemed to be a public issue.
NBFCs or PFIs are exempted only from the first proviso to section 67(3). Therefore,
NBFC or PFI do not have any restriction on the number of allottees as imposed on a
company which is not an NBFC or PFI. However, such companies also need to prove
that its offer falls either under clause (a) or (b) of section 67(3) to claim such issuance
to be a private placement.
13. In the present matter, the Company had offered and allotted NCDs to 341 persons
during the financial year 2013-2014 and mobilized `5.96 crore. Considering the
number of persons to whom the NCDs were offered and issued, I conclude that the
Company made a public issue of NCDs during the relevant period, in terms of the
first proviso to section 67(3) of the Companies Act, 1956.
14. The Company had contended that the NCDs were treated as ‘deposits’ by RoC and
therefore SEBI would not have jurisdiction in the matter. In this regard, I note that
the Company vide letter dated November 05, 2014, had admitted issuing Non-
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Convertible Debentures. Further, the RoC notice dated July 07, 2015 has also
mentioned about the NCDs for `5.96 crore. The allegation of the RoC inter alia is that
the Company failed to pay the interest on such NCDs or pay back the money collected
under such NCDs in violation of Section 74 (1) and (2) of the Companies Act, 2013.
Section 67(3) is in respect of “shares” and “debentures”. In view of the same, the
Company having admittedly issued debentures in a public issue is under the
jurisdiction of SEBI. In view of the above reasons, I find the above argument of SEBI
to be without merit.
15. In terms of section 55A of the Companies Act, 1956, SEBI shall administer various
provisions (as mentioned therein) of the said Act with respect to issue and transfer of
securities by listed companies, companies that intend to list and also those companies
that are required to list its securities while making offer and issue of securities to the
public. While examining the scope of Section 55A of the Companies Act, 1956, the
Hon'ble Supreme Court of India in Sahara Case, had observed that:
“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." " SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange.”
16. Under Section 11A of the SEBI Act, SEBI is also empowered to regulate, by
regulations/ general or special orders, the matters pertaining to issue of capital, transfer
of securities and matters related thereto. Accordingly, the Company, having made a
public offer and issue of securities, as observed above, is under the jurisdiction of
SEBI. By making a public issue of NCDs, the Company was mandated to comply with
all the legal provisions that govern and regulate public issue of such securities,
including the Companies Act, 1956 and the SEBI Act and regulations. In this context,
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I refer and rely on the below mentioned observation made by the Hon'ble Supreme
Court of India in the matter of Sahara India Real Estate Corporation Limited & Ors. Vs.
SEBI (Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the 'Sahara
Case'):
... ... that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. …".
17. Accordingly, Sections 56, 60 and 73 of the Companies Act, 1956 are required to be
complied with by a company making a public issue of securities. In addition to the
above, the Company was mandated to comply with 117C of the Companies Act, 1956
and the provisions of the ILDS Regulations in respect of its public offer and issuance
of NCDs. These provisions have allegedly not been adhered to by the Company. I
observe the following in respect of the alleged violations:
18. In terms of Section 56(1) of the Companies Act, 1956, every prospectus issued by or
on behalf of a company, shall state the matters specified in Part I and set out the
reports specified in Part II of Schedule II of that Act. Further, as per Section 56(3) of
the Companies Act, 1956, no one shall issue any form of application for shares in a
company, unless the form is accompanied by abridged prospectus, contain disclosures
as specified. Section 2(36) of the Companies Act read with Section 60 thereof,
mandates a company to register its 'prospectus' with the RoC, before making a public
offer/ issuing the 'prospectus'. There is no record to suggest that the Company has
complied with the above provisions. Accordingly, I hold that the Company has not
adhered with the provisions of Sections 56 and 60 of the Companies Act, 1956 in
respect of its offer and issue of NCDs.
19. By making a public issue of NCDs, the Company had to compulsorily list such
securities in compliance with Section 73(1) of the Companies Act, 1956. A Company
making a public issue of securities cannot choose whether to list its securities or not
as listing is a mandatory requirement under law. As per Section 73(1) Companies Act,
1956, a company is required to make an application to one or more recognized stock
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exchanges for permission for the shares or debentures to be offered to be dealt with
in the stock exchange. Further, there is no material to say that the Company has filed
an application with a recognized stock exchange to enable the securities to be dealt
with in such stock exchange. Therefore, the Company has failed to comply with this
requirement.
Section 73(2) states that “Where the permission has not been applied under subsection (1) or such
permission having been applied for, has not been granted as aforesaid, the company shall forthwith
repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any
such money is not repaid within eight days after the company becomes liable to repay it, the company
and every director of the company who is an officer in default shall, on and from the expiry of the eighth
day, be jointly and severally liable to repay that money with interest at such rate, not less than four
per cent and not more than fifteen per cent, as may be prescribed, having regard to the length of the
period of delay in making the repayment of such money.”
20. As the Company failed to make an application for listing of such securities, the
Company had to forthwith repay such money collected from investors under NCDs.
If such repayments are not made within 8 days after the Company becomes liable to
repay, the Company and every director is liable to repay with interest at such rate. The
liability of the Company to refund the public funds collected through offer and
allotment of the impugned securities is continuing and such liability would continue
till repayments are made. There is no record to suggest that the Company made the
refunds as per law. The Hon'ble Supreme Court of India in the Sahara case has
examined section 73 and made the following observations:
“Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to refund the amount collected from
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the public with interest is also mandatory as per Section 73(2) of the Act. Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons.”
As the amounts mobilized through the issue of NCDs have not been refunded within
the time period as mandated under law, it would therefore be appropriate to levy an
interest @ 15% p.a. as provided for under the above section read with rule 4D (which
prescribes that the rates of interest, for the purposes of sub-sections (2) and (2A) of section 73, shall
be 15 per cent per annum) of the Companies (Central Government’s) General Rules and
Forms, 1956 on the amounts mobilized by the Company through its offer and issue
of NCDs, from the date when the same was liable to be repaid till the date of actual
payment to the investors.
Section 117C stipulates that, where a company issues debentures, it shall create a
debenture redemption reserve for the redemption of such debentures, to which
adequate amounts shall be credited, from out of its profits every year until such
debentures are redeemed. There is no record to suggest that the Company had created
a debenture redemption reserve and has therefore violated Section 117C of the
Companies Act, 1956.
21. As NCDs are ‘debt securities’ in terms of the ILDS Regulations, the Company was
also mandated to comply with the provisions of the ILDS Regulations in respect of its
public issue of NCDs. However, the Company failed to comply with the following
provisions of the ILDS Regulations.
i. Regulation 4(2)(a) – Application for listing of debt securities
ii. Regulation 4(2)(b) – In-principle approval for listing of debt securities
iii. Regulation 4(2)(c) – Credit rating has been obtained
iv. Regulation 4(2)(d) – Dematerialization of debt securities
v. Regulation 4(4) – Appointment of Debenture Trustee
vi. Regulation 5(2)(b) – Disclosure requirements in the Offer Document
vii. Regulation 6 – Filing of draft Offer Document
viii. Regulation 7 – Mode of disclosure of Offer Document
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ix. Regulation 8 – Advertisements for Public Issues
x. Regulation 9 – Abridged Prospectus and application forms
xi. Regulation 12 – Minimum subscription
xii. Regulation 14 – Prohibition of mis-statements in the Offer Document
xiii. Regulation 15 – Trust Deed
xiv. Regulation 16 – Debenture Redemption Reserve
xv. Regulation 17 – Creation of security
xvi. Regulation 19 – Mandatory Listing
xvii. Regulation 26 – Obligations of the Issuer, etc.
22. From the foregoing, I conclude that the Company failed to comply with the provisions
of Sections 56, 60, 73 and 117C of the Companies Act, 1956 in respect of its offer and
issuance of NCDs and the aforesaid provisions of the ILDS Regulations and therefore
liable for suitable action under the Companies Act, 1956, the SEBI Act and the ILDS
Regulations including action for default under section 73(2) of the Companies Act,
1956.
23. Liability of Directors: The interim order has issued certain directions on the present
and past directors of the Company. The details regarding their appointment and
resignation are mentioned below:
Name of director Date of appointment Date of resignation
Mr. Arvind Gupta 18/01/2013 Continuing as director Mr. Suresh Kumar 01/01/2011 02/11/2012
Mr. Manoj Singhal 18/01/2013 15/07/2013
Mr. Kamlendra Joshi 06/08/2012 15/07/2013
Mr. Sanjay Gupta 07/10/2009 08/11/2013
Mr. Nimain Charan Biswal 07/11/2013 Continuing as director Mr. Girishchandra Mukundram Baluni
12/09/2011 01/12/2012
21/01/2014 Continuing as director Mr. Yogesh Ghisumal Gemawat 01/04/2013 15/05/2014
Regarding the responsibility and liability of the above noted persons, I make the
following observations:
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a. In terms of Section 291 of the Companies Act, 1956, the board of directors of a
company shall be entitled to exercise all such powers and do all such acts and things
as the company is authorized to exercise and do. Therefore, the board of directors
being responsible for the conduct of the business of a company are liable for any non-
compliance of law and such liability shall be upon the individual directors also. With
respect to the culpability of a director for breach of law by a company, I refer to and
rely on the following observations made by the Hon’ble High Court of Madras in
Madhavan Nambiar Vs Registrar Of Companies (2002 108 Comp Cas 1 Mad):
“13. It may be that the petitioner may not be a whole-time director, but that does not mean he is exonerated of the statutory obligations which are imposed under the Act and the rules and he cannot contend that he is an ex officio director and, therefore, he cannot be held responsible. There is substance in the contention advanced by Mr. Sridhar, learned counsel since the petitioner a member of the Indian Administrative Service and in the cadre of Secretary to Government when appointed as a director on the orders of the Government to a Government company or a joint venture company, he is expected not only to discharge his usual functions, but also take such diligent care as a director of the company as it is expected of him not only to take care of the interest of the Government, but also to see that the company complies with the provisions of the Companies Act and the rules framed thereunder. Therefore, the second contention that the petitioner cannot be proceeded against at all as he is only a nominee or appointed director by the State Government, cannot be sustained in law. A director either full time or part time, either elected or appointed or nominated is bound to discharge the functions of a director and should have taken all the diligent steps and taken care in the affairs of the company. 14. In the matter of proceedings for negligence, default, breach of duty, misfeasance or breach of trust or violation of the statutory provisions of the Act and the rules, there is no difference or distinction between the whole-time or part time director or nominated or co-opted director and the liability for such acts or commission or omission is equal. So also the treatment for such violations as stipulated in the Companies Act, 1956. 15. Section 5 of the Companies Act defines the expression "officer who is in default". The expression means either (a) the managing director or managing directors ; (b) the whole-time director or whole-time directors ; (c) the manager ; (d) the secretary ; (e) any person in accordance with whose directions or instructions the board of directors of the company is accustomed to act; (f) any person charged by the board with the responsibility of complying with that provision ; (g) any director or directors who may be specified by the board in this behalf or where no director is so specified, all the directors. 16. Section 29 of the Companies Act provides the general power of the board and …………... Therefore it follows there cannot be a blanket direction or a blanket indemnity in favour of the petitioner or other directors who have been nominated by the Government
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either ex officio or otherwise. Hence the second point deserves to be answered against the petitioner. 17. As regards the first contention, it is contended by Mr. Arvind P. Datar, learned senior counsel appearing for the petitioner that the company or its board had resolved that Thiagaraj S. Chettiar shall be the director in charge of the company of all its day-to-day affairs and, therefore, the petitioner, an ex officio chairman and director, cannot be expected to attend to the affairs on a day-to-day basis. This contention though attractive cannot be sustained as a whole. There may be a delegation, but ultimately it comes before the board and it is the board and the general body of the company which are responsible.”
A person cannot assume the role of a director in a company in a casual manner. The
position of a ‘director’ in a public company/listed company comes along with
responsibilities and compliances under law associated with such position, which have
to be fulfilled by such director or face the consequences for any violation or default
thereof.
b. In this Order, the Company is found to have contravened the provisions of sections
56, 60, 73 and 117C of the Companies Act, 1956 and the ILDS Regulations in respect
of its offer and issuance of NCDs.
c. Section 56(1) and 56(3) read with Section 56(4) imposes the liability for the compliance
of the said provisions, on the company, every director, and other persons responsible
for the issuance of the prospectus. The liability for non-compliance of section 60 of
the Companies Act is on the Company, and every person who is a party to the non-
compliance of issuing the prospectus as per the said section. Further, the directors of
a company would also be responsible for complying with Sections 117C of the
Companies Act, 1956 and the provisions of the ILDS Regulations.
d. The liability of the company and directors to repay under Section 73(2) of the
Companies Act, 1956 and Section 27 of the SEBI Act, is a continuing liability and the
same continues till all the repayments are made. Therefore, the directors (irrespective of
whether they continue or resign) who were present during the period when the Company
made the offer and allotted NCDs shall be liable for violation of Sections 56, 60 and
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73 of the Companies Act, including the default in making refunds as mandated therein.
As the liability to make repayments under Sections 73(2) of the Companies Act read
with Section 27 of the SEBI Act is a continuing liability, the persons who join the
Company’s Board pursuant to the offer and allotment of NCDs shall also be liable if
the Company and the concerned directors have failed to make refunds as mandated
under law.
e. In view of the above observations, the submissions made by the directors (past and
present) that they were not involved in the affairs of the Company or has resigned
from the Company do not absolve them of their liability.
From the table above, it is noted that Mr. Arvind Gupta, Mr. Yogesh Ghisumal
Gemawat, Mr. Girishchandra Mukundram Baluni, Mr. Nimain Charan Biswal, Mr.
Sanjay Gupta, Mr. Kamlendra Joshi and Mr. Manoj Singhal were the directors of the
Company at the time of impugned issues and allotment of NCDs and were responsible
for the affairs of the Company at the relevant point of time. Mr. Arvind Gupta, Mr.
Nimain Charan Biswal and Mr. Girishchandra Mukundram are the present directors
of the Company.
- Mr. Sanjay Gupta has argued that during the period of issue of NCDs, he was not on
the board of the Company and the financial affairs of the Company were looked after
by Mr. Yogesh Ghisumal Gemawat and other Board members. Mr. Nimain Charan
Biswal has argued that there were no board meeting held with his knowledge and he
was not paid salary during his tenure as a director. Mr. Kamlendra Joshi also submitted
that he did not participate in the affairs of the Company and had not consented to any
resolution for acceptance of debentures or other connected matters. The submissions
made by these persons are of no help in the light of the discussed order of Hon’ble
High Court of Madras in the matter of Madhavan Nambiar Vs. Registrar of Companies
(supra).
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- Mr. Girish Makundram Baluni has submitted that he was a ‘non active, non-
operational, non-executive, independent director’ in the Company and have not taken
any decision for issue of NCDs. He also submitted that he has resigned from all Neesa
group companies on May 27, 2015. As per the details perused at ‘MCA -21’ portal, he
is still being shown as one of the present directors of the Company.
- Mr. Yogesh Ghisumal Gemawat in his submissions has argued that he was employed
with the Neesa group and was appointed a director on April 01, 2013, in the Company
and he had resigned on May 15, 2014. The Company vide its letter dated March 09,
2016, submitted that the resignation filed by Mr. Yogesh Ghisumal Gemawat was
through the fake digital signature of Mr. Arvind Kumar Gupta and his resignation was
not approved by the Board of the Directors of the Company. It has also been said by
the Company that the said digital signature has been revoked after getting the
information and a police complaint regarding the same has been filed by the Company
on March 05, 2016. I have considered the submissions of Mr. Yogesh Ghisumal
Gemawat and the Company, it is not in dispute that Mr. Yogesh Ghisumal Gemawat
was on the board of Company at the time of offer of NCDs.
Taking note of the reasons and observations above, it can be concluded that the
directors namely Mr. Arvind Gupta, Mr. Yogesh Ghisumal Gemawat, Mr.
Girishchandra Mukundram Baluni, Mr. Nimain Charan Biswal, Mr. Sanjay Gupta, Mr.
Kamlendra Joshi and Mr. Manoj Singhal are responsible for the violations committed
by the Company and liable, jointly and severally, for making refunds along with interest
to the investors as mandated under Section 73(2) of the Companies Act, 1956 read
with Section 27 of the SEBI Act.
f. From the table above, it is noted that Mr. Suresh Kumar had resigned from the
Company on November 02, 2012 i.e. prior to the financial year 2013-14. In the absence
of any other material to show the involvement of Mr. Suresh Kumar in the offer and
allotment of NCDs, I am inclined to give the benefit of doubt to him. In view of the
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same, the interim directions against him is liable to be revoked and he be discharged
from the present proceedings.
24. At this stage, I note that the Company and its directors namely Arvind Gupta,
Yogesh Ghisumal Gemawat, Girishchandra Mukundram Baluni, Nimain
Charan Biswal, Sanjay Gupta, Kamlendra Joshi, Manoj Singhal and Suresh
Kumar were required to provide full inventory of the assets and properties within 21
days from the date of receipt of the interim order. However, no such details have been
filed till date.
25. In view of the discussion above, appropriate action in accordance with law needs to
be initiated against the Company and the directors/ promoters in charge of the affairs
of the Company, during the relevant period.
26. For the above reasons, I, in exercise of the powers conferred upon me under section
19 of the Securities and Exchange Board of India Act, 1992 read with sections 11(1),
11(4), 11A and 11B thereof and regulation 28 of the SEBI (Issue and Listing of Debt
Securities) Regulation, 2008 hereby issue the following directions:
a. Neesa Technologies Limited [PAN: AABCG5430A], Mr. Arvind Gupta [PAN:
AERPG2839N; DIN: 00064391], Mr. Yogesh Ghisumal Gemawat [PAN:
ADVPG4051D; DIN: 02550021], Mr. Girishchandra Mukundram Baluni [PAN:
AAKPB5408R; DIN: 02745783], Mr. Nimain Charan Biswal [PAN:
ACRPB3767C; DIN: 03306090], Mr. Sanjay Gupta [PAN: ABUPG5799B; DIN:
00006361], Mr. Kamlendra Joshi [PAN: ABIPJ6029P; DIN: 05356425] and Mr.
Manoj Singhal [PAN: ARFPS7604E; DIN: 01830419], jointly and severally, shall
forthwith refund the money collected by the Company through the issuance of Non-
Convertible Debentures (which have been found to be issued in contravention of the public issue
norms stipulated under the Companies Act, 1956 and the ILDS Regulations), to the investors
including the money collected from investors, till date, pending allotment of securities,
if any, with an interest of 15% per annum compounded at half yearly intervals, from
Page 27 of 29
the date when the repayments became due (in terms of Section 73(2) of the Companies Act,
1956) to the investors till the date of actual payment.
b. The repayments to investors shall be effected only in cash through Bank Demand
Draft or Pay Order.
c. The Company/its present management are permitted to sell the assets of the Company
only for the sole purpose of making the refunds as directed above and deposit the
proceeds in an Escrow Account opened with a nationalised Bank.
d. The Company and others named above shall issue public notice, in all editions of two
National Dailies (one English and one Hindi) and in one local daily with wide
circulation, detailing the modalities for refund, including details of contact persons
including names, addresses and contact details, within fifteen days of this Order
coming into effect.
e. After completing the aforesaid repayments, the Company shall file a certificate of such
completion with SEBI, within a period of three months from the date of this Order,
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").
f. Neesa Technologies Limited, Arvind Gupta, Yogesh Ghisumal Gemawat,
Girishchandra Mukundram Baluni, Nimain Charan Biswal, Sanjay Gupta,
Kamlendra Joshi and Manoj Singhal are also directed to provide a full 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.
g. In case of failure of the company, Neesa Technologies Limited, Arvind Gupta,
Yogesh Ghisumal Gemawat, Girishchandra Mukundram Baluni, Nimain
Charan Biswal, Sanjay Gupta, Kamlendra Joshi and Manoj Singhal, in complying
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with the aforesaid directions, SEBI, on the expiry of the three months period from the
date of this order, -
a) shall recover such amounts in accordance with section 28A of the SEBI Act including
such other provisions contained in securities laws.
b) may initiate appropriate action against the Company, its promoters/ directors and the
persons/ officers who are in default, including adjudication proceedings against them,
in accordance with law.
c) would make a reference to the State Government/ Local Police to register a civil/
criminal case against the Company, 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
d) would also make a reference to the Ministry of Corporate Affairs to initiate appropriate
action as deemed fit.
e) would also make a reference to the Ministry of Corporate Affairs to flag the names of
noticee directors in its database so that information may be perused by RoC or any
other regulatory authority.
h. Neesa Technologies Limited is directed not to, directly or indirectly, access the
capital market by issuing prospectus, offer document or advertisement soliciting
money from the public and are further restrained and prohibited from buying, selling
or otherwise dealing in the securities market, directly or indirectly in whatsoever
manner, from the date of this Order till the expiry of four (4) years from the date of
completion of refunds to investors as directed above.
i. Arvind Gupta, Yogesh Ghisumal Gemawat, Girishchandra Mukundram
Baluni, Nimain Charan Biswal, Sanjay Gupta, Kamlendra Joshi and Manoj
Singhal are restrained from accessing the securities market and further prohibited
from buying, selling or otherwise dealing in the securities market, directly or indirectly
in whatsoever manner, with immediate effect. They are also restrained from issuing
prospectus, offer document or advertisement soliciting money from the public and
associating themselves with any listed public company and any public company which
Page 29 of 29
intends to raise money from the public, or any intermediary registered with SEBI. The
above directions shall come into force with immediate effect and shall continue to be
in force from the date of this Order till the expiry of four (4) years from the date of
completion of refunds to investors, as directed above.
j. For the reasons stated above in this Order, the directions imposed on Mr. Suresh
Kumar [PAN: ADZPK2242A; DIN: 03155198], vide the interim order dated June 03,
2015, are revoked and the proceedings against these is disposed of.
k. The above directions shall come into force with immediate effect.
27. This Order is without prejudice to any action, including adjudication and prosecution
proceedings that might be taken by SEBI in respect of the above violations committed
by the Company, its promoters, directors including former directors and other key
persons.
28. Copy of this Order shall be forwarded to the recognised stock exchanges and
depositories for information and necessary action.
29. A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs/
concerned Registrar of Companies, for their information and necessary action with
respect to the directions/ restraint imposed above against the Company and the
individuals.
DATE : June 02, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA