Order in respect of Astha Green Energy Ventures India Limited and others.

WTM/RKA/SRO/HLO/3 /2016 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 read with regulation 107 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 in respect of: 1) Astha Green Energy Ventures India Limited 2) Mr. Keshav Reddy Mereddy 3) Mr. Arjun Reddy Mereddy 4) Mr. Jayanth Reddy Mereddy 5) Mr. Kunduru Raghuveer 6) Mr. K. Jayaveer 7) Mr. N. Ram Bhupal Reddy 8) Mr. N. Jayapal Reddy In the matter of issuance of equity shares by Astha Green Energy Ventures India Limited Appearances for the Noticees: 1) Mr. Ravi Kadam (Senior Advocate) 2) Mr. KRCV Seshachalam 3) Ms. Sabeena Mahadik 4) Mr. A. Rama Rao 5) Mr. Keshav Reddy 6) Mr. P. Lakshmi Narayan 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted a preliminary examination into the issuance of equity shares by Astha Green Energy Ventures India Ltd. (hereinafter referred to as “Astha” / “the company”) with a view to ascertain the possible violations of public issue norms stipulated under the Companies Act, 1956 and other applicable laws pertaining to SEBI (Disclosure and Investor Protection) Guidelines, 2000 (“DIP Guidelines”) and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR Regulations”). Pursuant to the examination, SEBI passed an interim order dated March 17, 2015 (hereinafter referred to as “interim order”) against Astha and its promoters/directors namely Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N.

Order in respect of Astha Green Energy Ventures India Limited and others.

Ram Bhupal Reddy and Mr. N. Jayapal Reddy (hereinafter collectively referred to as “the Noticees” and individually by their respective names) in view of the following: “As noted earlier the Company had made allotments to 214 persons on December 10, 2007 and to 89 persons on March 31, 2009. Further, the allotments of equity shares to 49, 45 and 43 investors on March 04, 2010, March 05, 2010 and March 06, 2010 respectively, indicates that the Company had issued equity shares to more than 49 persons in a series of transactions over three consecutive days in March 2010. As per the first proviso to Section 67(3) of the Companies Act, 1956, where the “offer” or “invitation to subscribe for shares or debentures” is made to fifty persons or more, then it has to be construed as a public offer. The offer and issue of equity shares by Astha on December 10, 2007, March 31, 2009, March 04, 2010, March 05, 2010 and March 06, 2010 was public offer of securities.”

2. By the interim order following interim directions were issued against the Noticees:

a. The Company, namely, Astha Green Energy Ventures India Limited and its promoters/ directors including Mr. Keshav Reddy Mereddy [PAN: AFYPM4987M], Mr. Arjun Reddy Mereddy [PAN: AJSPM0907B], Mr. Jayanth Reddy Mereddy [PAN: AIOPM1580B], Mr., Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy are restrained from mobilizing funds through the issue of equity shares or through any other form of securities, to the public and/ or invite subscription, in any manner whatsoever, either directly or indirectly till further directions.

b. Astha Green Energy Ventures India Limited and its promoters/ directors including Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders.

c. Astha Green Energy Ventures India Limited and its promoters/ directors including Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy shall not dispose of any of the properties or alienate the assets of the Company or dispose off any of their properties or alienate their assets.

d. Astha Green Energy Ventures India Limited and its promoters/ directors including Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy 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.

e. Astha Green Energy Ventures India Limited and its promoters/ directors including Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy are 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, till further directions.

f. Astha Green Energy Ventures India Limited and its promoter and directors including the above named persons shall co-operate with SEBI and shall furnish all the documents.

g. Astha Green Energy Ventures India Limited, 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.

3. Vide the interim order, the Noticees were also called upon to show cause as to why suitable directions / prohibitions, under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) read with the applicable provisions of ICDR Regulations, including the following, should not be taken/ imposed against them : a. directing them jointly and severally to refund the money collected through the issue of equity shares that are impugned in this Order, along with interest that is promised to the investors; b. directing them to not to issue prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, for an appropriate period; c. directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period; d. directing them and other companies in which their directors hold substantial or controlling interest, to not access the capital market for an appropriate period.

4. The Noticees filed their combined replies vide letters dated April 16, 2015, April 17, 2015 and June 1, 2015, inter-alia, submitting the following: a. The order which is in the nature of an ad-interim order, wrongly records firm and final findings vis-a-vis the Noticees in respect of the alleged violations concerning impugned allotments, which is contrary to the binding judgments of the Hon’ble Securities Appellate Tribunal (“SAT”) on the subject. Such an approach is by itself illegal and is a pointer to the outcome of the proceedings being pre-determined and a foregone conclusion. It is well settled that as a general rule, SEBI ought not to pass directions producing adverse consequences against an entity on an ex-parte basis, unless a grave and compelling urgency is shown to exist. The ex-parte order apart from stating that there is “extreme urgency” is silent on the nature of urgency and why the fundamental principle of a pre-decisional hearing was summarily dispensed with. b. On the principle of proportionality alone, any restriction must be confined to the funds raised by the impugned allotments only, which in any event have indisputably already been utilized by the company for legitimate business purpose more than 7 years ago.

To apply and extend the restraints to other funds raised by the company, and effectively stifle its continuing business obligations is wholly unsustainable and disproportionate. c. The only major allotment of shares out of the impugned allotments is the allotment made on December 10, 2007 to 214 allotees. The company had approached “Small is Beautiful” (SIB), a trust, for the purpose of seeking a loan to commission 8 electricity plant projects. SIB sanctioned a loan of ₹15 crore on the condition that the company would be required to acquire the share capital of all its subsidiary special purpose companies into one holding company, namely Astha. Accordingly, Astha acquired the shares of all the 129 shareholders of its erstwhile special purpose companies. All these 129 persons were in fact relatives/ friends of the promoters of Astha. Therefore, these 129 former shareholders of the company group along with 85 (129+85=214) additional relatives and close friends of the shareholders and promoters chose to invest in Astha. Subsequently, company made additional allotments of shares in order to raise funds towards new projects.

The funds raised through the allotments have been used for the implementation of power plant projects in the state of Himachal Pradesh. Taking into consideration the underlying intent of section 67(3) of the Companies Act, 1956, the offer of shares to kith and kin of a director or a promoter or an offer to a select and small circle of friends, promoters, relations and customers cannot be deemed to be an offer to the public. d. The Noticees also submitted that in the interest of the company and its SPV’s due to time constraints, Noticees would abide by the orders of SEBI and are ready to hold only 49 allotees (promoters, their relatives, friends and corporate bodies) out of 214 allotees and refund the money along with normal bank rate of interest to the remaining investors by selling one or two commissioned projects. The process of refunding the investment to the balance investors will be completed within 2 years from the date of SEBI’s order. e. The Noticees have also requested SEBI to grant the interim relief to the company on an urgent basis for the reason that the directions/restrictions contained in the order, inter-alia, restricting the company from utilizing the funds in its bank accounts, have caused untold hardships and have substantial debilitating effects on the business of company.

Noticees have also requested SEBI to take a lenient view in the matter, in view of the corrective steps taken by them. 5. An opportunity of personal hearing was given to the Noticees for July 30, 2015 when their authorized representatives appeared and made submissions on their behalf. Subsequent to the hearing, Noticees filed written submissions vide letter dated August 5, 2015, inter alia, submitting the following:

a) As on October 22, 2014, there were 249 shareholders, however, on subsequent reconciliation, certain changes were found in the shareholding pattern as under: i. There was repetition of 8 shareholders’ names in the list. ii. 9 transmissions took place during the month of December 2014, of which 5 transmissions were effected to existing shareholders, and 4 to new shareholders. iii. Further, a transfer took place from a shareholder to the other by way of gift during the month of December 2014. iv. As stated vide letter dated June 1, 2015, 141 shareholders and 28 shareholders had sold their shares to Tejassarnika Power Pvt. Ltd. and Ramsri Investments Pvt. Ltd., respectively. v. Further, 23 shareholders were transferred their shares by way of gift to their immediate family members in the month of June 2014. With this, company has brought down the number of shareholders to 43. b) The fact of acquisition of shares as stated in para 7(c) of the SEBI interim order dated March 17, 2015 is not disputed, however, it was done inadvertently and without the benefit of sound legal advice. The acquisition was in furtherance of benign corporate objective. c) Only the allotment made on December 10, 2007 may be a violation and rest of the allotments was made to less than 49 persons. Allotments made on March 31, 2009 were in separate tranches of 44 and 45 each. Hence these allotments were also within in the prescribed limit of 49.

d) As can be seen from the para 7(c) itself, the rest of the allotments were made to less than 49 persons over a period of three years, which cannot be termed as violation of the prescribed limit of 49. e) As regard the other allotments, the number of shareholders have been reduced to less than 49 even before the SEBI order was passed. f) As undertaken by it, Astha has ensured that the number of shareholders got reduced to 43 shareholders from 249. They have also enclosed the Bank statements of Ramsri Investments Pvt. Ltd. and Tejassarnika Power Pvt. Ltd., reflecting payment of consideration along with the covering letters of the said companies.

g) The outgoing shareholders, who had acquired the shares at ₹10 per share, have sold the shares to the acquiring shareholders at a rate of ₹27.50/-. The book value of shares as on March 31, 2014 was ₹27.36 and the shares were acquired by the acquiring shareholders at a price of ₹27.50. The price paid to the outgoing shareholders was at the rate of ₹27.50 per share, which constitutes more than 15% interest rate. h) The ex-parte Order was passed relying on Sahara case. However, there are fundamental distinctions between the two cases. For instance, the allotees to each of the Impugned allotments are identifiable and are relatives/ friends of the promoters of the company. i) The funds raised by the company through the impugned allotments were for a legitimate purpose and have been duly accounted for by the company in its books of accounts, and have not been diverted in any manner. The funds raised through the Impugned allotments have already been used towards business purposes of the company. j) The majority of the allotees of the impugned allotments have already exited the company as on date.

Resultantly, there can be no concern or necessity to require the company to provide or have listed the shares of the company in order to provide the allotees, a means to exit the company by selling / transferring their shares. k) As a consequence of the restraints imposed in the SEBI interim order, the commissioning of the projects undertaken by Astha will be substantially delayed, attracting significant penalties and potential cancellation of the underlying licenses by the Government of Himachal Pradesh. l) Restraints imposed by the ex-parte order had debilitating effects on the Noticees’ ability to continue to operate in the ordinary course of their business. The company presently owed dues to its work contractors, machinery contractors and tax payable to Government. If the company defaults in its obligations with its agreement with the Government of Himachal Pradesh as well as its loan agreements and Corporates Guarantees with IREDA, IREDA would be entitled to proceed against the projects as well as the company. m) The restraint imposed by SEBI effectively resulted in attachment of assets and funds entirely and distinct and unconnected with impugned allotments, and allotments to the tune of ₹237.71 Crore from IREDA, which were also subjected to the restraint of the order. n) The Noticees have made a prayer that In light of the remedial action already taken, ends of justice will be met if a regulatory warning is issued to them and the proceedings be dropped accordingly.

6. I have carefully considered the SCN, the replies / written submissions of the Noticees and other material available on record. 7. The Noticees have submitted that the interim order wrongly records firm and final findings vis-a-vis the Noticees in respect of the alleged violations concerning impugned allotments, which is contrary to the binding judgments of SAT on the subject. In this regard, I note that the interim order only contains prima facie findings which are based on the facts mentioned in the interim order itself. It is important to mention here that the Noticees in their submissions have not disputed the fact of allotment of shares (noted at paragraph 7(c) of the interim order) and have stated that the allotments were done inadvertently without the benefit of sound legal advice. The prima facie findings in the interim order are only based on the fact of these allotments. Further, as regards the Noticees’ submission that the interim order is silent as to why the fundamental principle of a pre-decisional hearing was not followed in this case, I find it important to mention that the interim order at paragraph 19 records that the Noticees raised money from the public by issuance of equity shares without complying with the applicable law and the interim order was necessary for protection of the interests of the investors and to ensure that public funds are not diverted and misappropriated. In view of the above, I do not find any merit in the submissions of the Noticees in this regard and reject the same. 8. For the purpose of dealing with other submissions of the Noticees in respect of the prima facie findings in the interim order, I find it important to mention that all the controversies with regard to questions such as whether an offer to 50 persons or more is a public issue, SEBI's jurisdiction in respect of issuance of securities, intention/obligation of the issuer to list such securities, etc. have been settled by the Hon'ble Supreme Court in its judgment and order dated August 31, 2012 in matter of Sahara India Real Estate Corporation Limited & Ors. Vs SEBI & Anr. -Civil

Appeal No. 9813 and 9833 of 2011 [(2013) 1 SCC 1] (hereinafter referred to as “the Sahara Order"). 9. I note that the Noticees have not disputed the fact of allotment of equity shares as mentioned in the interim order. The particulars of the allotments of equity shares made by Astha are as under:

S. No. Date of No. of No. of Value of Date of Board allotment allotees shares allotment (₹) resolution passed 1 10/12/2007 214 1,76,90,680 17,69,06,800 10/12/2007 2 31/03/2009 89 1,65,522 8,27,61,000 30/03/2009 3 04/03/2010 49 68,136 3,40,68,000 04/03/2010 4 05/03/2010 45 61,570 3,07,85,000 05/03/2010 5 06/03/2010 43 2,26,453 11,32,26,500 06/03/2010 Total 440 1,82,12,361 43,77,47,300

10. The Noticees have contended that only the allotment made on December 10, 2007 may be a violation and rest of the allotments were made to less than 49 persons. They have submitted that the allotments made on March 31, 2009 were in separate tranches of 44 and 45 each and the allotments made on Mach 4, 2010, March 5, 2010 and March 6, 2010 were also within the prescribed limit of 49. Even in respect of the allotment dated December 10, 2007, the Noticees have stated these allotees were the close relatives and friends of promoters of Astha. The Noticees have also sought to distinguish facts of the present case from that of the Sahara case on grounds of number of allotees, relationship of the allotees with the company, quantum of allotment, etc. In this regard, it is important to note that as held by the Hon'ble Supreme Court in Sahara Order, by virtue of the first proviso to section 67(3) of the Companies Act, 1956, the issuance of shares to more than 49 persons would become an offer to the public. It is also to be kept in mind that the first proviso was inserted in section 67(3) vide the Companies (Amendment) Act, 2000, with effect from December 13, 2000, in order to curb the companies from offering shares and debentures to a wider group of people by disguising it as “domestic concern”. In my view, the intention of the Legislature, as envisaged in the said Amendment Act is that any mobilization of funds from a group of investors, fifty or more in number, should be classified as a "public issue". This limit of 49 allotees cannot be breached or bypassed by making multiple allotments which individually may fall within the limit but cumulatively exceed 49 in number as was done by Astha on March 31, 2009 by making two allotments of 44 and 45. Similarly, Astha could not bypass the operation of the first proviso to section 67(3) of the Companies Act, 1956 by making consecutive allotments on Mach 4, 2010, March 5, 2010 and March 6, 2010. It is mandatory for every company to comply with the aforesaid proviso both in letter and spirit. As held by the Hon’ble Supreme Court in the Sahara

Order, once the number of allotees exceeds 49, it becomes irrelevant whether the allotees were friends, relatives or kith and kin as has been claimed by the Noticees in the present case. Accordingly, the provisions of section 67(3) and other applicable provisions of law apply to such issues of securities irrespective of the number of allotees, their relationship with the company and the quantum of allotment, etc. I, therefore, find that all the aforesaid allotments made by Astha i.e. the allotments made on December 10, 2007, March 31, 2009, Mach 4, 2010, March 5, 2010 and March 6, 2010 were “public issues”. In view of the above, I reject the contentions of the Noticees in this regard. 11. I note that since the issuance of equity shares by Astha on December 10, 2007, March 31, 2009, March 4, 2010, March 5, 2010 and March 6, 2010 were public issues, it ought to have complied with the applicable provisions of the Companies Act, 1956 and DIP Guidelines read with the corresponding provisions of the ICDR Regulations as found in the interim order. In the present case, there is no dispute as to the fact that Astha while making the aforesaid “public issues” has not complied with the provisions of section 60 read with sections 2(36), 56(1), 56(3), 60B and section 73 of the Companies Act, 1956 and clauses 2.1.1, 2.1.4, 2.1.5, 2.8, 4.1, 4.11, 4.14, 5.3.1, 5.3.3, 5.3.5, 5.3.6, 5.4, 5.6, 5.6A, 5.7, 5.8, 5.9, 5.10, 5.12.1, 6.0 to 6.15, 6.16 to 6.34, 8.3, 8.8.1 and 9 of the DIP Guidelines and regulation 4, 5, 6, 7, 25, 26, 36, 37, 46, 47, 57, 59 and 63 of the ICDR Regulations.

Since the requirements of these applicable provisions and the relevant observations of the Hon’ble Supreme Court in the Sahara Order have been clearly stipulated in the interim order, I do not deem it necessary to reiterate the same and burden this order with the same findings. 12. I note that Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy were the directors of Astha at the relevant point of time and authorised the issuance of shares. As found hereinabove, the issues of shares dated December 10, 2007, March 31, 2009, March 04, 2010, March 05, 2010 and March 06, 2010 were “public issues" and in respect thereof, the applicable provisions of the Companies Act and DIP Guidelines / ICDR Regulations were not complied by Astha. The board of directors of Astha at the time of the above mentioned issues of shares, being in control of the affairs of Astha, was under an obligation to ensure that the issues were in compliance with all the applicable provisions of the Companies Act, 1956, SEBI Regulations and other applicable laws.

In my view, the above named directors of Astha as on the date of the above mentioned issuances of shares are also "officers in default" as defined under section 5 of the Companies Act, 1956 read with section 2(60) of the Companies Act, 2013. I, therefore, find that Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy are also responsible for the acts and omissions of Astha in this case.

13. The Noticees have submitted that the number of shareholders has been reduced to 43 on account of several events including transmission, transfers by way of gifts, avoidance of repetitions of the names of shareholders and primarily due to the acquisition of shares of 141 shareholders and 28 shareholders by two acquiring shareholders namely, Tejassarnika Power Pvt. Ltd. and Ramsri Investments Pvt. Ltd., respectively. In view of such reduction in the number of shareholders, the Noticees have contended that they have taken corrective steps and have come within the permissible limit of 49. In this regard, it is pertinent to note that the allotment of equity shares by Astha forming the subject matter of these proceedings were public issues and were made without compliance with the aforesaid provisions of Companies Act, 1956, DIP Guidelines and ICDR Regulations. The consequence of the aforesaid non-compliance/violations is refund/repayment of subscription money to the allotees with interest as provided in clause 17 of DIP Guidelines / regulation 18 of ICDR Regulations read with section 73 and section 56 of the Companies Act, 1956. Reduction of the number of shareholders below 50 cannot rectify the violation of the provisions of law mentioned above.

As noted above, the consequence of the aforesaid non-compliance/violations is refund/repayment of subscription money to all the allotees with interest which cannot be ensured by purchase of shares of some of the public shareholders by two specific shareholders who themselves will continue to remain in the public category. In my view, the mandatory requirement of listing of securities under section 73 of the Companies Act, 1956 is intended at facilitating the trading of securities by the public and providing exit to them on the stock exchange platform. If the above contention of the Noticees is accepted, it would frustrate the very purpose / intent behind section 67(3) and 73 of the Companies Act, 1956. Considering the above, I reject the contentions of the Noticees in this regard. 14. With regard to liability to pay interest on the subscription money, I note that as per section 73 (2) of the Companies Act, 1956 read with section 40(3)(b) of the Companies Act, 2013, the company and every director of the company who is an officer in default is jointly and severally liable, to repay all the money with interest at prescribed rate.

In this regard, I further note that in terms of rule 4D of the Companies (Central Government's) General Rules and Forms, 1956 read with rule 3(c) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, the rate of interest prescribed in this regard is 15%. Accordingly, the Noticees are liable to pay interest to the subscribers at such statutory rate of interest and their request in this regard cannot be acceded to. 15. I note that in this case, the interim order cum show cause notice does not contain any charge regarding fraudulent fund raising by the Noticees or any fund mobilisation with mala fide intent so as to have any adverse impact on the integrity of the securities market. I have also considered the facts and circumstances brought on record by the Noticees, particularly the fact that the Astha is involved in various power generation / infrastructure projects licensed and approved by the Government of Himachal Pradesh. Considering the above, I am of the view that, in this case, restraining the disposal of any asset by the Noticees would be disproportionate. I further note that the Noticees have already undergone the restraint imposed by the interim order for more than 9 months.

Taking into account the aforesaid facts and circumstances, I find that the following directions would be commensurate with the violations found in this case. 16. In view of the foregoing, I, in exercise of the powers conferred under sections 11(1), 11(4), 11A and 11B read with section 19 of the Securities and Exchange Board of India Act, 1992 and regulation 107 read with regulation 111 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, hereby issue the following directions: (i) The Noticees i.e. Astha Green Energy Ventures India Limited [PAN: AABCJ6610P] and its promoters/directors namely, Mr. Keshav Reddy Mereddy [PAN: AFYPM4987M], Mr. Arjun Reddy Mereddy [PAN: AJSPM0907B], Mr. Jayanth Reddy Mereddy [PAN: AIOPM1580B], Mr. Kunduru Raghuveer [PAN: AHSPK6633J], Mr. K. Jayaveer [PAN: ANBPK6313Q], Mr. N. Ram Bhupal Reddy [PAN: AQUPR0042B] and Mr. N. Jayapal Reddy [PAN: ANBPN2644M] shall within a period of one year from the date of this order, jointly and severally refund ₹ 43,77,47,300 collected pursuant to the allotment of shares on December 10, 2007, March 31, 2009, March 04, 2010, March 05, 2010 and March 06, 2010 to allotees with interest at the rate of 15% per annum from the date of receipt of money till the date of such refund.

However, the Noticees shall ensure that not less than 50% of the refund/repayment directed above is made to the allottees in six months starting from the date of this order. A quarterly status report shall be submitted by the Noticees in this regard at the end of each quarter. (ii) Such refund shall be made only in cash through a Demand Draft or Pay Order. (iii) The Noticees shall issue a public notice in all editions of one English national daily and one vernacular daily with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within fifteen days of this order. (iv) Within seven days of completion of refund as directed hereinabove, the Noticees shall file a certificate of such completion with SEBI from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution. Such certificate shall be issued by the Chartered Accountants after verifying the relevant documents including bank accounts of the Noticees and satisfying themselves that the refund has actually been made.

For the purpose of this order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized so by the Institute of Chartered Accountants of India. (v) The Noticees are restrained from, directly or indirectly, accessing the capital market by issuing prospectus, any offer document or advertisement soliciting money from the public and are further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly, in whatsoever manner till the date of refund of money to the allottees, except for the purpose of compliance of this order. (vi) Mr. Keshav Reddy Mereddy, Mr. Arjun Reddy Mereddy, Mr. Jayanth Reddy Mereddy, Mr. Kunduru Raghuveer, Mr. K. Jayaveer, Mr. N. Ram Bhupal Reddy and Mr. N. Jayapal Reddy are also restrained from associating themselves, with any listed public company and any public company which intends to raise money from the public till the date of refund of money to the allotees. 17. The interim order cum show cause notice dated March 17, 2015 is disposed off accordingly. The above directions are without prejudice to the right of SEBI to take any other appropriate action for the violations found in this case or to initiate any action in case of failure to comply with the above directions, in accordance with the provisions of applicable laws including the proceedings under the provisions of section 28A of the SEBI Act.

18. The order shall come into force with immediate effect. A copy of the order shall be served on the Noticees to ensure compliance with the above directions. A copy of this Order shall also be forwarded to the recognised stock exchanges and depositories for information and necessary action.

Sd/-

DATE : January 1st, 2016 RAJEEV KUMAR AGARWAL PLACE : MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA