Sandhya Projects, Directors Asked To Refund with 15% Interest Money Collected through Redeemable Preference Shares
Moneylife Digital Team 28 February 2024
Market regulator Securities and Exchange Board of India (SEBI) has ordered Sandhya Projects Ltd (SPL) and the company directors Rajib Kumar Saha, Dilip Saha and Subindu Pramanik (noticees) to jointly and severally refund money collected through the issuance of redeemable preference shares (RPS) in FY11-12. While barring all four from markets for one year, SEBI also directed them to refund application money collected from investors pending allotment of securities, if any, with an interest of 15%pa (per annum).
 
In an order, G Ramar, chief general manager (CGM) of SEBI, says, “...the natural consequence of not adhering to the norms governing the issue of securities to the public and making repayments as directed under Section 73(2) of the Companies Act, 1956, is to direct Sandhya Projects and its directors, Rajib Kumar Saha, Dilip Saha and Subindu Pramanik to refund the monies collected, with interest to such investors.”
 
"...as per Section 5(g) of the Act, all the three directors of SPL, as officers in default, are liable to make refund, jointly and severally, along with interest at the rate of 15 % per annum, under section 73(2) of the Act for the non-compliance of the provisions. Since, the liability of the company to repay under section 73(2) is continuing and such liability continues till all the repayments are made, the above said directors are co-extensively responsible along with the Company for making refunds along with interest under section 73(2) of the Act read with Rule 4D of the Companies (Central Government's) General Rules and Forms and section 27(2) of the SEBI Act," SEBI says.
 
SEBI received complaints against SPL, alleging non-receipt of amounts due to the investors in respect of issue of RPS and undertook an enquiry to ascertain as to whether SPL had made any public issue of securities without complying with the provisions of the Companies Act and the SEBI Act. 
 
SEBI investigation shows that SPL issued RPS to 221 persons in FY11-2012 raising Rs20.58 lakh.
 
 
The market regulator mentioned that no records have been submitted that SPL had made an application seeking listing permission from stock exchange or refunded the amounts on account of such failure. 
 
“Therefore, I find that SPL has contravened the said provisions. Further, SPL has not provided any records to show that the amount collected by it is kept in a separate bank account.  Therefore, I find that SPL has also not complied with the provisions of section 73(3) which mandates that the amounts received from investors shall be kept in a separate bank account. Therefore, I find that section 73(2) of the Companies Act has not been complied with,” Mr Ramar says in the order.
 
SEBI also observed that SPL had launched RPS (fixed return) and MRS (monthly return) schemes. 
 
SPL had issued redeemable preference shares to more than 49 persons in FY11-12. The Companies Act 2013 revised this limit upwards to 200 persons in a financial year. However, since the allotments were made before this limit of 200 came into effect, the limit of 50 persons as per Companies Act is applicable in the instant case.
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