Banking: Cash Deposit Machines To Isolate Fake Currency Notes
The Reserve Bank of India (RBI) has said that cash deposit machines (CDMs) cannot return fake currency notes but have to isolate them and create an audit trail to the depositor. CDMs are similar to ATMs (automated teller machines). Unlike ATMs, which accept envelope deposits, CDMs can count the notes, verify their denomination, quality and authenticity and do everything that a branch employee can do.
 

User

SEBI bars Sukhchain Hire Purchase from mobilising funds through NCDs
SEBI has restrained the company and its 10 promoters, directors from any further fund mobilising activity and from accessing the securities market 
 
Market regulator Securities and Exchange Board of India (SEBI) directed Sukhchain Hire Purchase Ltd, not to mobilise funds from investors. Further, the company and its directors are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, either directly or indirectly. The company and its directors are also restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly.
 
Sukhchain Hire Purchase was engaged in fund mobilising activity through issue of NCDs to more than 49 persons without complying with the relevant provisions of the Companies Act, 1956, read with SEBI (Issue and Listing of Debt Securities) Regulations, 2008, according to the SEBI Order.
SEBI had received a communication dated 12 December 2012, from Ministry of Finance forwarding a complaint regarding illegal raising of funds through the issuance of debentures by some companies including Sukhchain Hire Purchase. 
 
SEBI also received a communication dated 29 October 2013 from Registrar of Companies (RoC), Gwalior stating that Sukhchain has issued secured debentures 10 times to more than 50 subscribers collectively on private placement basis.
 
SEBI on seeking information found out that Sukhchain was incorporated on 15 May 1995 with the ROC, Gwalior with CIN No. as U65921MP1995PLC024674. The company has its Registered Office situated at Plot No.78, 1st Floor, VM Arcade, M.P. Nagar, Zone-II, Bhopal, Madhya Pradesh-462011. The Directors of the company are Malwinderwant Singh, Sukhraj Bahadur Singh, Vijay Laxmi Kathait, Jitendra Singh Gurjar, Guriqbal Singh Bhullar, Harpreet Singh, Harjit Kaur Bhullar, Abhay Shukla, Vishwanathan Iyer and Akshay Tiwari. The name of debenture trustee is Hemant Sahu having address at H No. 105-A, Ravidas colony, JK Road, Bhopal, Madhya Pradesh-462011.
 
Based on its investigation, SEBI found that Sukhchain is not exempted from the applicability of section 67(3) of the Companies Act, 1956 and the issuance of the NCDs by Sukhchain is prima facie a public issue in terms of the provisions of Section 67(3) of the Companies Act, 1956. SEBI hence observed, “From the abovementioned, it will follow that since the Offer of NCDs is a public issue of securities, such securities shall also have to be listed on a recognised stock exchange, as mandated under Section 73 of the Companies Act, 1956. In this regard, reference is made to Sections 73 of the Companies Act, 1956, of which sub-Sections (1), (2) and (3) are relevant.”
SEBI also pointed out that there was no debenture redemption reserve. The SEBI Order says, “Further, under Section 117C of the aforesaid Act, 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 evidence on record that indicates creation of debenture redemption reserve by Sukhchain. Hence, Sukhchain has not complied with the provisions of Sections 117C of the Companies Act, 1956.”
 
Based on these findings, the SEBI has restrained the company and its promoters from any further fund mobilising activity and from accessing the securities market. Further, the company and its promoters 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.
 
The SEBI Order has been strict with the debenture trustee as well. The Order says, “The Debenture Trustee, Hemant Sahu, is prohibited from continuing with his present assignment as a debenture trustee in respect of the Offer of NCDs of Sukhchain and also from taking up any new assignment or involvement in any new issue of debentures, etc. in a similar capacity.”
In its concluding remarks, the SEBI Order says, “This Order is without prejudice to the right of SEBI to take any other action that may be initiated against Sukhchain and its Directors; its Debenture Trustee, viz. Hemant Sahu, in accordance with law.”
 

User

SEBI prohibits Shah Group of Builders from issuing share prospectus
The market regulator also barred, promoters and directors of Shah Group Builders from accessing the securities market and further prohibited them from buying, selling or otherwise dealing in securities
 
Market regulator Securities and Exchange Board of India (SEBI) has prohibited Shah Group Builders, its directors and promoters from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities.
 
Shah Group Builders was engaged in fund mobilising activity through issue of equity shares to more than 49 persons without complying with the provisions of the Companies Act, 1956, according to the SEBI Order. The company, its directors and promoters have also been restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities in any manner whatsoever, either directly or indirectly.
 
SEBI had received an investor complaint on 4 October 2013, against Shah Group Builders Limited alleging that:
a. the company has raised money through issue of shares with a promise to list the shares through IPO;
b. the company had defaulted in payment of agreed interest and has not refunded the principal amount;
c. the company has failed to call any shareholders' meeting or AGM (Annual General Meeting).
 
Shah Group Builders presently has 1,117 equity shareholders, who have contributed Rs8.92 crore. The equity shares have been issued from time to time at different prices. The face value of equity shares is Re1 each. The present equity share capital of the company is Rs5.89 crore.
 
The directors and promoters of the company are Nalin V Shah, Nirav N Shah and Neelam N Shah.
 
SEBI, based on its investigation observed, “By issuing equity shares to more than 49 persons, the Company had to compulsorily list such securities in compliance with Section 73 of the Companies Act, 1956, in order to ensure that the subscribers to the shares have a facility to approach a stock exchange for having their holdings converted into cash whenever they desire. The same also provides liquidity and exit opportunity to the investors. As per Section 73(1) and (2) of the Companies Act, 1956, a company is required to make an application to one or more recognised stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange and if permission has not been applied for or not granted, the company is required to forthwith repay with interest all moneys received from the applicants. From the material available on record, Shah Group Builders does not appear to have done so and thus, contravened the said provisions.”
 
SEBI, after prohibiting the company from approaching the securities market and from issuing prospectus/ offer document for equity shares, continued in its Order to restrain the promoters on their use of money collected: “Shah Group Builders and its promoters and directors shall not dispose off any of the properties or alienate the assets of the company or dispose off any of their properties or alienate their assets.  Shah Group Builders Limited and its promoters and directors shall not divert any funds raised from public at large through the issuance of the impugned equity shares, kept in its bank accounts and/or in the custody of the company without prior permission of SEBI until further orders.”
 
SEBI further instructed, “Shah Group Builders, its promoters and directors 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. These directions shall come into force with immediate effect.”
 
In its concluding remarks, SEBI said, “This Order is without prejudice to the right of SEBI to take any other action including prosecution proceedings under Section 24 of the SEBI Act and Section 621 of the Companies Act, 1956 read with the relevant provisions of the Companies Act, 2013 and adjudication proceedings under the SEBI Act, against Shah Group Builders Limited and its promoters and directors.”

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)