Securities and Exchange Board of India (SEBI): The Board comprising of Madhabi Puri Buch (Whole Time Member) passed the direction to the directors of the company, Kaizar Biswas, Mohammed Jiaur Rahaman, Ajijur Rahaman, Abu Sama Molla, Ashraful Hoque and Sariful Islam to pay the Equity Share amount of maturities of the schemes/policies/plans and shares/debentures/bonds issued by the Company to the public at large.
SEBI observed that Prayas Projects India Limited had engaged in fund mobilization activity from the public through its offer and issue of Secured Redeemable Non-Convertible Debentures which violated the provisions of the Companies Act, 1956, SEBI Act read with SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
In the instant matter where it was submitted by the director that the Equity shares were issued to the close relatives and family members and the number of members were less than 50, will not constitute the violation of Section 67(3) of the Companies Act. Reference was made to order dated April 28, 2017 of Securities Appellate Tribunal in Neesa Technologies Ltd. v. SEBI, 2017 SCC Online SAT 187 which lays down that “In terms of Section 67(3) of the Companies Act any issue to ‘50 persons or more’ is a public issue and all public issues have to comply with the provisions of Section 56 of Companies Act and ILDS Regulations. Accordingly, in the instant matter, the appellant has violated these provisions and their argument that they have issued the NCDs in multiple tranches and no tranche has exceeded 49 people has no meaning”.
The Tribunal made the Company and the then directors of the company to refund the money through Demand draft or Pay Order through the issuance of Equity Shares including the application money collected from investors during their respective period of directorship, till date, pending allotment of securities, if any, with an interest of 15% per annum, from the eighth day of collection of funds, to the investors till the date of actual payment. The certified report by the Chartered Accountants should be filed with the SEBI in 3 months from the date of order. The restriction is also imposed on the director to access the securities market or related activities for the 4 years from the date of the order. On non-compliance of the order, directors would be liable to refund in accordance with Section 28-A of the SEBI Act including such other provisions contained in securities laws.[Prayas Projects India Ltd., In re, 2019 SCC OnLine SEBI 39, Order dated 24-04-2019]