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

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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

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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

WTM/PS/46/WRO/JUN/2016 BEFORE THE SECURITIES AND … · facie observed that Neesa Technologies...

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