Order against Prakash Fortan Softech Limited and its Directors

1. Prakash Fortan Softech Limited (hereinafter referred to as the Company) is a company incorporated under the Companies Act, 1956 and having its registered office at 60-61, Anand Apartment, Anupnagar, Indore, Madhya Pradesh. The directors of the Company are Mr. P. C. Jain, Mr. Rajesh Jain and Mr. Rakesh Jain. The Securities and Exchange Board of India (hereinafter referred to as SEBI) received several complaints against the Company from the investors. As on September 24, 2008, a total of hundred and twenty four investor grievances were pending unresolved by the Company. The investor complaints received against the Company were forwarded to it for redressal. Periodical reminders were also sent to the Company for resolving such pending complaints. The complaints and reminders sent to the Company were returned undelivered.

2. Thereafter, SEBI, vide letter dated September 25, 2008 (sent to the registered office of the Company and also to another address of the Company at 130-131 Sector 1, Indl. Area Pithampur, Dist Dhar, Madhya Pradesh 454775), advised the Company to resolve all the grievances within thirty days from the date of receipt of the said letter and to submit a status report. In the said letter, SEBI made a reference to Sections 15C and 24 of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act). The said letter, sent to the company by registered post, was returned undelivered. Thereafter, a public notice was also given on January 23, 2009 in the website of SEBI (www.sebi.gov.in) advising the Company to resolve the pending investor grievances and to submit the Action Taken Report. Despite such steps, SEBI had not received any response from the Company or its directors.

3. In view of the above, a show cause notice dated November 6, 2009 was issued by SEBI under Sections 11(4)(b) and 11B of the SEBI Act requiring the Company to show cause as to why it should not be restrained from accessing the securities market and prohibit it from dealing in securities till such time the pending investor grievances against it are resolved. The said notice was sent to the Company at its registered office address and also to its address at 130-131 Sector 1, Indl Area Pithampur, Dist Dhar, Madhya Pradesh-454775. Similar notices dated November 11, 2009 were also sent to directors, Mr. P C Jain, Mr. Rajesh Jain and Mr. Rakesh Jain. The aforesaid notices sent to the Company and its directors returned undelivered. Thereafter, an opportunity of personal hearing was granted by SEBI to the Company and its aforesaid directors, on August 5, 2010. As the show cause notices issued to the Company and its directors were returned undelivered from the last known address, a paper publication was made by SEBI on June 13, 2010, in respect of the said show cause notice and hearing in various newspapers having nationwide and statewide circulation including ‘Sandesh’ (Rajkot Edition) and ‘Gujarat Samachar’ (Vadodara Edition). Despite taking all possible measures, neither the Company nor the aforesaid directors attended the said hearing scheduled on August 5, 2010.

4. I have considered the facts of the matter and the material available on record. The number of investor complaints pending against the Company, as per the letter of SEBI dated September 25, 2008 was one hundred and twenty four complaints. I note that sufficient opportunities have been provided to the Company and its directors to redress the pending investor grievances by SEBI, as stated above in this Order. However, the Company not only failed to resolve the pending investor grievances but also failed to give any response on the action taken by it, if any, in resolving the complaints. The Action Taken Report was also not submitted by the Company. The protection of the investors in the securities market is one of the paramount duties of SEBI and the present case involves a listed company that not only failed to redress the investors’ grievances but also failed to respond to the letters/show cause notice issued by SEBI. None of the existing directors of the Company also responded to the letters/show cause notice issued by SEBI. Therefore, it would be against the interests of the investors to permit such a company and its directors to access or deal in the securities market. In view of the above, I find it appropriate to issue necessary direction against the Company and its aforesaid directors who are in charge and responsible for the affairs of the company for their failure to redress the grievances of the investors.

5. In view of the foregoing, 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(4) and 11B thereof, hereby restrain Prakash Fortan Softech Limited and its directors, Mr. P. C. Jain, Mr. Rajesh Jain (Permanent Account Number-ABAPJ 2869 B) and Mr. Rakesh Jain from accessing the securities market and prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, till all the pending investor grievances against the aforesaid company are resolved and the same is reported to and confirmed by the Securities and Exchange Board of India.

6. This Order shall come into force with immediate effect.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA PLACE: MUMBAI DATE: DECEMBER 13, 2010