Order against directors of Bishal Agri–Bio Industries Limited

WTM/GM/IMD/65/2018–19 SECURITIES AND EXCHANGE BOARD OF INDIA INTERIM ORDER CUM SHOW CAUSE NOTICE UNDER SECTIONS 11(1), 11(4), 11A AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992, IN THE MATTER OF BISHAL AGRI–BIO INDUSTRIES LIMITED – NOTICEES DIN/CIN PAN DIRECTORS – 1. PRITI RANI CHOWDHURY 01717301 AGUPC5065H 2. AJOY PAUL 06707622 AMPPP5677D 3. KUNTAL BHATTACHARJEE 06584522 AQMPB2700Q 4. SUMANTA MODAK 06565449 AMHPM3794L 5. LITAN SAHA 06826108 CCQPS8194F 6. TAPAS KUMAR MONDAL 06828781 AUHPM9905D 7. SHASHI KANT DUBEY 06828777 AGUPD7570Q TO BE READ WITH THE SEBI ORDER NO. WTM/PS/37/IMD/ERO–RLO/MAY/2016 DATED MAY 16, 2016.

BACKGROUND –

1. Securities and Exchange Board of India (“SEBI”) received a complaint on September 8, 2014, against Bishal Agri–Bio Industries Limited (“Bishal Agri–Bio/Company”). Vide the aforesaid complaint, the complainant therein inter alia alleged illegal mobilization of funds by Bishal Agri–Bio.

2. SEBI had examined the records available on MCA21 Portal and noted that Bishal Agri– Bio had issued and allotted Redeemable Preference Shares. Details regarding the aforesaid as available on MCA21 Portal and other relevant material on record are reproduced as under –

A. ALLOTMENT DETAILS OF REDEEMABLE PREFERENCE SHARES – TABLE I – DETAILS OF REDEEMABLE PREFERENCE SHARES ISSUED FINANCIAL YEAR NO. OF ALLOTTEES VALUE OF ALLOTMENT (₹) 2011–12 284 3,00,00,000

Order in the matter of Bishal Agri–Bio Industries Limited

3. Since the aforementioned issue of securities by Bishal Agri–Bio during the Financial Year 2011–12 (issue and allotment of Redeemable Preference Shares) qualified as an offer made to the public in terms of Section 67(3) of the Companies Act, 1956 (“Companies Act”), Bishal Agri–Bio and its Directors were found to have violated the following provisions of law –

A. Section 56, Section 60 read with Section 2(36) and Section 73 of the Companies Act;

4. Accordingly, SEBI vide an Order dated May 16, 2016 (“Final Order”), inter alia directed Bishal Agri–Bio and its Directors – a. To jointly and severally refund the money collected by the Company through the issuance of Redeemable Preference Shares (which have been found to be issued in contravention of the public issue norms stipulated under the Companies Act and SEBI 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 the date when the repayments became due (in terms of Section 73(2) of the Companies Act) to the investors till the date of actual payment. b. 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 4 years from the date of completion of refunds to investors as directed above.

5. It is observed that prior to the Final Order, SEBI had issued an Ex Parte Interim Order on May 6, 2015 (“Interim Order”), against Bishal Agri–Bio and its Directors.

6. During the course of the quasi–judicial proceedings conducted prior to the passing of the Final Order, it was brought to the Notice of the then Whole Time Member (“WTM”) that certain entities who were/are Director(s) of Bishal Agri–Bio were in fact responsible for the offer and allotment of Redeemable Preference Shares. The list of such entities as extracted from the Final Order is shown below –

TABLE II NAME OF THE PERSON CAPACITY DIN PAN DATE OF DATE OF APPT. CESSATION 1. PRITI RANI CHOWDHURY DIRECTOR 01717301 AGUPC5065H 30.06.2008 18.02.2014 2. AJOY PAUL DIRECTOR 06707622 AMPPP5677D 9.10.2013 26.03.2014 3. KUNTAL BHATTACHARJEE DIRECTOR 06584522 AQMPB2700Q 10.02.2014 26.03.2014 4. SUMANTA MODAK DIRECTOR 06565449 AMHPM3794L 10.02.2014 26.03.2014 5. LITAN SAHA DIRECTOR 06826108 CCQPS8194F 18.02.2014 26.03.2014 6. TAPAS KUMAR MONDAL DIRECTOR 06828781 AUHPM9905D 24.03.2014 10.06.2014 7. SHASHI KANT DUBEY DIRECTOR 06828777 AGUPD7570Q 24.03.2014 10.06.2014

7. Accordingly, SEBI was directed by the WTM in the Final Order to examine the role of the aforementioned entities (who were not covered by the Interim Order) and initiate appropriate action against them, in accordance with law.

8. In this context, SEBI vide letters dated December 28, 2017, had sought inter alia the following information from the abovementioned entities at Table II – i. Copy of Audited Balance Sheet and Annual Returns of the company for the last 3 years. ii. Other Information in respect of issue of Shares/Debentures: a. Copy of Prospectus/Red Herring Prospectus/Statement in lieu of prospectus/Information Memorandum filed with RoC for issuance of Shares/Debentures. b. Date of opening and closing of the subscription list for the said Shares/Debentures. c. Details regarding the number of application forms circulated inviting subscription for Shares/Debentures and number of applications received. d. Details of allottees such as date of allotment, names of allottees, etc.

iii. Copies of the minutes of Board/committee meeting in which the resolution has been passed for raising such additional capital and also for allotment of Shares/Debentures. iv. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of Shares/Debentures. v. Terms and conditions of the issue of Shares/Debentures. vi. Whether the company has applied for listing of its securities with any of the Stock Exchanges. vii. Copies of Form 2 and Form 10 filed with the RoC. viii. Details of debenture trustee viz. name, address, board resolution authorizing their appointment, etc.

9. Details concerning the service of the above–mentioned letters dated December 28, 2017 including subsequent reminders, issued by SEBI and replies received thereto, etc. are provided as under –

TABLE III NAME LETTER STATUS (RETURNED/ DELIVERED)

1. PRITI RANI CHOWDHURY RETURNED UNDELIVERED WITH THE COMMENT “LEFT”. 2. AJOY PAUL DELIVERED. HOWEVER, NO REPLY RECEIVED. REMINDER LETTER DATED JANUARY 11, 2018 ISSUED. HOWEVER, NO REPLY RECEIVED. 3. KUNTAL BHATTACHARJEE RETURNED UNDELIVERED WITH THE COMMENT “LEFT FOR WITHOUT ADDRESS.” 4. SUMANTA MODAK RETURNED UNDELIVERED WITH THE COMMENT “ADDRESSEE CANNOT BE LOCATED”. 5. LITAN SAHA RETURNED UNDELIVERED WITH THE COMMENT “LEFT”. REMINDER LETTER DATED JANUARY 29, 2018 ISSUED TO HIS ALTERNATE ADDRESS. HOWEVER, IT WAS RETURNED UNDELIVERED WITH THE COMMENT “LEFT WITHOUT ADDRESS”. 6. TAPAS KUMAR MONDAL RETURNED UNDELIVERED WITH THE COMMENT “INSUFFICIENT ADDRESS”. 7. SHASHI KANT DUBEY DELIVERED. HOWEVER, NO REPLY RECEIVED. REMINDER LETTER DATED JANUARY 11, 2018 ISSUED. RETURNED UNDELIVERED WITH THE COMMENT “LEFT FOR WITHOUT ADDRESS.”

10. I note that the person at serial no. 1 of Table II was the Directors of Bishal Agri–Bio during the period of money mobilization by the Company. The person at serial nos. 2–7 of Table II were Directors of Bishal Agri–Bio, post the fund–mobilization by the Company. Upon a consideration of paragraph 3 of this Order, I find that the aforementioned entities are responsible for the offer and allotment of Redeemable Preference Shares made by Bishal Agri–Bio in violation of the Public Issue requirements. I also find that the entity at sr. no. 1 of Table II is liable for refund of money to investors to whom such offer and allotment of Redeemable Preference Shares was made by Bishal Agri–Bio. In the light of the aforesaid, I find this to be a fit case to pass interim directions against the aforesaid Director of Bishal Agri–Bio.

DIRECTIONS –

11. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4) and 11B of the SEBI Act hereby issue, with immediate effect, the following directions – i. The Directors of Bishal Agri–Bio, viz. Priti Rani Chowdhury, Ajoy Paul, Kuntal Bhattacharjee, Sumanta Modak, Litan Saha, Tapas Kumar Mondal and Shashi Kant Dubey, shall not access the securities market or buy, sell or otherwise deal in the securities market, either directly or indirectly, or associate themselves with any listed company or company intending to raise money from the public; ii. Priti Rani Chowdhury shall neither dispose of, alienate or encumber any of her assets nor divert any funds raised from public through the offer and allotment of Redeemable Preference Shares; iii. The abovenamed Directors of Bishal Agri–Bio shall co-operate with SEBI and shall furnish all information/documents in connection with the offer and allotment of Redeemable Preference Shares sought vide letter dated December 28, 2017.

12. The findings at paragraphs 3 and 10 of this Order are made on the basis of the information obtained from MCA21 Portal and other relevant material on record by SEBI, which form the basis of the Final Order dated May 16, 2016. The Directors of Bishal Agri–Bio, viz. Priti Rani Chowdhury, Ajoy Paul, Kuntal Bhattacharjee, Sumanta Modak, Litan Saha, Tapas Kumar Mondal and Shashi Kant Dubey, (referred to as “Noticee”) are hereby called upon to show cause as to why suitable directions/prohibitions under Sections 11, 11(4), and 11B of the SEBI Act should not be issued/imposed, including the following directions, viz. – i. To jointly and severally refund the money collected through the offer and allotment of Redeemable Preference Shares, with an interest of 15% per annum (the interest being calculated from the date when the repayments became due in terms of Section 73(2)

of the Companies Act till the date of actual payment), supported by a Certificate of two independent Chartered Accountants to the satisfaction of SEBI (to be submitted to SEBI within 7 days of completion of the refund); and ii. To be restrained/prohibited from accessing the securities market and buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly, for a period of four years from the date of effecting the refund as directed above read with the Final Order dated May 16, 2016.

13. The Noticees may, within 21 days from the date of receipt of this Interim Order–cum–Show Cause Notice, file their respective replies. Priti Rani Chowdhury is directed to furnish an inventory of her assets in her reply. In the event the Noticees intend to avail an opportunity of personal hearing, they may do so by seeking a confirmation in writing from SEBI for the same within 90 days from the date of receipt of this Order. In the event of the respective Noticees failing to file replies or requesting for an opportunity of personal hearing within the said 90 days, the findings at paragraph 10 of this Order shall become final and absolute against the respective Noticees automatically, without any further orders. Consequently, the Noticees shall automatically be bound by the directions contained in paragraphs 11 and 12, as applicable.

14. The Noticees shall comply with the aforesaid directions within a period of 90 days from the date this Order becoming final, failing which SEBI may initiate appropriate enforcement action under SEBI Act including Recovery proceedings, Adjudication or Prosecution in addition to making a suitable reference to State Government/Local Police.

15. This Order is without prejudice to any other action that SEBI may initiate under securities laws, as deemed appropriate.

16. Copy of this Order shall be forwarded to the recognized stock exchanges and depositories for information and necessary action. A copy of this Order may also be forwarded to MCA/concerned RoC for their information and necessary action with respect to the directions imposed on the abovenamed Directors of Bishal Agri–Bio.

Place: Mumbai G. MAHALINGAM Date: October 10, 2018 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA