Order in respect of Tresty Securities Limited

WTM/PS/155/IMD/ERO-BLO/FEB/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under sections 11(1), 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 and the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 In respect of – 1. Tresty Securities Limited (CIN: U67120OR2012PLC014761; PAN : AAECT0908R), its Directors, 2. Mr. Dayanidhi Mohapatra (PAN:AOYPM2969Q,DIN:05150135), 3. Mr. Hari Arjuna Panda (PAN:ARLPP5727B,DIN:05237893), 4. Mr.Tarapada Giri (PAN:AHVPG4066A, DIN:06366970), 5. Mr.Ashok Kumar Rout (PAN:AVPPR5796L, DIN:06553757), 6. Mr.Biswajit Roul (PAN:AQHPR2449D, DIN:06571832), 7. Mr.Gouranga Charan Sahoo (PAN:CDTPS1044L, DIN:06571836)

and its promoters, 8. Mr.Rasmiranjan Mohapatra (PAN:ALRPM3616J, DIN:05150143), 9. Mr.Apurba Ranjan Behera (PAN:AJPPB2660M, DIN:05150130), 10. Mr.Manoranjan Pahi (PAN :APOPP3117N, DIN:05150140), 11. Mr.Amit Kumar Gupta (PAN:AMLPG2674F, DIN:05150126), 12. Mr.Sisir Kumar Padhi (PAN:BTDPP9403M, DIN:05150147) and 13. Mr.Sudhansu Sekhar Barik (PAN:AJWPB9126D, DIN:05150151).

Date of hearing: June 26, 2015 Appearance: Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera, Mr. Amit Kumar Gupta and Mr. Rasmiranjan Mohapatra appeared in person. No appearance by other noticees. For SEBI: Mr. Binod Kumar Sharma, Assistant General Manager and Mr. N. Murugan, Assistant General Manager

Date of hearing: September 03, 2015 No appearance by noticee, Mr. Goranga Charan.

1. Securities and Exchange Board of India (“SEBI”), vide an ex-parte interim order dated March 20, 2015 (“the interim order”) prima facie observed that the company, Tresty Securities Limited (“the Company” or “TSL”) is engaged in fund mobilization activity from the public through its offer and issuance of Redeemable Preference Shares (”RPS”) and violated sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the provisions of the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 (“RPS Regulations”). In order to protect the interest of investors and to prevent the Company and its promoters and directors, from continuing to mobilize public funds in contravention of law, SEBI issued the following directions: “20. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11(1), 11(4), 11A and 11B of the SEBI Act read with the Issue and Listing of Non–Convertible Redeemable Preference Shares Regulations, hereby issue the following directions– i. TSL shall forthwith cease to mobilize any fresh funds from investors through the offer of RPS or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii.

TSL; its Directors, viz. Shri Dayanidhi Mohapatra (PAN:AOYPM2969Q, DIN:05150135), Shri Hari Arjuna Panda (PAN:ARLPP5727B, DIN:05237893), Shri Tarapada Giri (PAN:AHVPG4066A, DIN:06366970), Shri Ashok Kumar Rout (PAN:AVPPR5796L, DIN:06553757), Shri Biswajit Roul (PAN:AQHPR2449D, DIN:06571832), Shri Gouranga Charan Sahoo (PAN:CDTPS1044L, DIN:06571836) and its promoters viz. Shri Rasmiranjan Mohapatra (PAN:ALRPM3616J, DIN:05150143), Shri Apurba Ranjan Behera (PAN:AJPPB2660M, DIN:05150130), Shri Manoranjan Pahi (PAN :APOPP3117N, DIN:05150140), Shri Amit Kumar Gupta (PAN:AMLPG2674F, DIN:05150126), Shri Sisir Kumar Padhi (PAN:BTDPP9403M, DIN:05150147) and Shri Sudhansu Sekhar Barik (PAN:AJWPB9126D, DIN:05150151) 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; iii. TSL, its abovementioned Directors and Promoters are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; iv.

TSL shall provide a full inventory of all its assets and properties; v. TSL 's abovementioned Directors and Promoters shall provide a full inventory of all their assets and properties; vi. TSL, its abovementioned Directors and 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 RPS, without prior permission from SEBI; vii. TSL, its abovementioned Directors and Promoters shall not divert any funds raised from public at large through the offer of RPS, which are kept in bank account(s) and/or in the custody of TSL; viii. TSL, its abovementioned Directors and Promoters shall furnish complete and relevant information within 21 days from the date of receipt of this Order.

21. The above directions shall take effect immediately and shall be in force until further orders”.

The interim order advised the Company, its directors and promoters to show cause as to why suitable directions/prohibitions under sections 11(1), 11(4), 11A and 11B of the SEBI Act including the following, should not be taken/imposed against them i. Directing them jointly and severally to refund money collected through the Offer of Redeemable Preference Shares along with interest, if any, promised to investors therein;

ii. Directing them to not 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;

iii. Directions restraining them from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period.

2. The interim order came into force with immediate effect. The noticees (Company and its promoters and directors mentioned in the directions above) were afforded opportunity to file their response and were advised to indicate whether they wish to avail an opportunity of personal hearing in the matter.

3. The Company (through its Managing Director, Dayanidhi Mohapatra), vide letter dated April 10, 2015, while acknowledging the receipt of the interim order stated that the information (to be submitted as per the directions in the interim order) was available with one of the directors and requested for time of three weeks for submitting the same.

4. Noticee, Mr. Apurba Ranjan Behera, vide an undated letter (received on April 10, 2015) submitted that he joined (date not mentioned) as a director in the Company and resigned on April 29, 2013 for personal reasons. He further submitted that there was no business in the Company during his tenure as director and that the same could be verified from the Company. He further submitted that during his tenure, he was not involved in the business of the Company and requested to drop the proceedings initiated against him. He enclosed copies of Form-32 (which mentions that he ceased to be the director w.e.f April 29, 2013), his resignation letter (which was accepted on April 29, 2013) and his undated ‘consent letter’ to act as director.

5. Noticee, Mr. Rasmiranjan Mohapatra, vide letter dated April 17, 2015 submitted that he joined as a director on January 04, 2012 and resigned on February 05, 2013. He too made submissions similar to those of Mr. Apurba Ranjan Behera. He enclosed copies of his resignation letter dated February 05, 2013, Form-32 (which mentioned that he resigned on February 05, 2013) and another document (Companies/LLPs in which a person is/was a director/designated partner) from MCA, which corroborated the submission regarding his date of joining and resignation.

6. Noticee, Mr. Ashok Kumar Rout, vide letter dated April 17, 2015, made similar submissions as that of Mr. Apurba Ranjan Behera. He stated that he resigned on June 21, 2013. He enclosed copy of his resignation dated May 30, 2013, which was accepted on June 21, 2013.

7. Noticee, Amit Kumar Gupta, vide letter dated April 14, 2015, submitted that he joined the Company as a promoter on the compulsion of the Company’s CMD, Mr. Dayanidhi Mohapatra, and had resigned from such post very soon. He neither had any knowledge of issue of shares by the Company nor had any involvement in the business of the Company. He too requested SEBI to drop the proceedings.

8. The noticees were afforded an opportunity of personal hearing on June 26, 2015. The schedule of the hearing was informed to the noticees vide SEBI letters dated May 15, 2015. As the letters in respect of noticees, Mr. Gouranga Charan Sahoo, Mr. Ashok Kumar Rout, Mr. Tarapada Giri, Mr. Hari Arjuna Panda, Mr. Sudhansu Sekhar Barik, Mr. Sisir Kumar Padhy and the Company, returned undelivered, SEBI had uploaded such notices in the SEBI website. Further, SEBI made a public notice in newspapers [on June 21, 2015 in The Times of India (West Bengal Edition) and in a vernacular newspaper and on June 25, 2015 in The Times of India (Bhubaneswar Edition)], informing all the noticees regarding the proceedings and the personal hearing fixed on June 26, 2015.

9. On June 26, 2015, noticees Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera, Mr. Amit Kumar Gupta, Mr. Rasmiranjan Mohapatra appeared and made submissions. The following is the record of proceedings of the said personal hearing:

1. “Shri Manoranjan Pahi, Shri Apurba Ranjan Behera, Shri Amit Kumar Gupta, Shri Rasmiranjan Mohapatra appeared on their behalf and made submissions. 2. Shri Manoranjan Pahi submitted that on request by Shri Dayanidhi Mohapatra, he became promoter in Tresty Securities Limited only for name sake and for the purpose of records. He submitted that he has resigned as promoter and enclosed the copy of his resignation and its acknowledgement by the Company. 3. Shri Rasmiranjan Mohapatra submitted that he was appointed as "Territory Sales in-charge" by the Company on September 30, 2013 and thereafter he was required to sign papers for formation of company by Shri Dayanidhi Mohapatra. Subsequently he came to know that he was director of the company. He submitted that he has resigned as director and handed over the resignation letter to Shri Dayanidhi Mohapatra on August 21, 2012 thereafter notarised resignation letter was sent to the company on September 26, 2012. 4. Shri Apurba Ranjan Behera, Shri Amit Kumar Gupta also submitted that signatures were taken from them for formation of the company. They submitted that they were only promoters of the company. 5. No appearance was made by other entities”.

10. Manoranjan Pahi submitted an undated letter wherein he stated that he agreed to become a promoter after being persuaded by Mr. Dayanidhi Mohapatra. He had resigned after he joined a bank in June 2012 as a probationary officer. He is not in contact with Mr. Mohapatra after the same. He further submitted that he did not transact for a single rupee for and on behalf of the company nor has he influenced anyone to be associated with the company. He is shocked to know that his name has not been removed from the Company and requested SEBI to discharge him from the proceedings.

11. Thereafter, vide letter dated August 05, 2015, noticee, Mr. Gourangi Sahoo, through his Advocate, Mr. Basanta Khilar, requested for another date of hearing on the ground that on June 26, 2015, there was a ‘bandh’ in Odisha and therefore he was not able to attend the hearing. This request was considered and the said noticee was afforded another opportunity on September 03, 2015. However, there was no appearance by the noticee. Despite sufficient opportunities, the other noticees failed to make their submissions. I therefore proceed to decide the case on merits.

12. I have considered the interim order, the submissions made by the concerned noticees, the material submitted by them and the other material available on record. The interim order has alleged that the Company made a public issue of RPS without complying with the requirements under the Companies Act, 1956 read with the Companies Act, 2013 and the RPS Regulations. In this regard, I note that the interim order has alleged, based on the copies of Brochure and Application Forms, that the Company made offer of RPS with face value of Rs.10/- each, as per the following terms and conditions: PLAN A B C D E Issue Price Minimum 100 1000/- 1000/- 1000/- 1000/- 1000/- Redeemable Preference Shares Redemption Period 3 Years 4.6 Years 6.6 Years 10 Years 12 Years Redemption Premium 750/- 1,000/- 2,000/- 5,000/- 9,000/- Redemption Amount 1,750/- 2,000/- 3,000/- 6,000/- 10,000/-

From the copies of certificates of RPS provided by the complainants to SEBI, the interim order alleged that the Company has allotted RPS during FY 2012-13 and 2013-14 to at least 65 allottees. The details of the same are as follows:

Financial No. of No. of RPS Face Value Amount Mobilised Year Allottees Allotted per RPS (in Rs.) (in Rs.) 2012-13 54 120250 10 12,02,500 2013-14 11 24100 10 2,41,000 Total 65 1,44,350 10 14,43,500

13. To ascertain whether an issue of securities is a 'public issue' or done on 'private placement', a reference to section 67(3) of the Companies Act, 1956 needs to be made: 67. (1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner. (2) ... (3) No offer or invitation shall be treated as made to the public by virtue of sub-section (1) or sub-section (2), as the case may be, if the offer or invitation can properly be regarded, in all the circumstances- (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation … Provided that nothing contained in this sub-section shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more: Provided further that nothing contained in the first proviso shall apply to non-banking financial companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956).

In terms of section 67(3), as amended by the Companies (Amendment) Act, 2000, with effect from December 13, 2000, no offer or invitation shall be treated as made to the public by virtue of sub-sections (1) or (2), as the case may be, if the offer or invitation can properly be regarded, in all circumstances – (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation. More importantly, in terms of the first proviso to the aforesaid section, the provisions of section 67(3) shall not apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. Therefore, the number of subscribers becomes relevant to judge whether an issue of shares are for public or on a private placement basis, in the light of the above said provision. Therefore, if an offer of securities are made to fifty or more persons, it would be deemed to be a public issue.

Non-Banking Financial Companies (NBFCs) and Public Financial Institutions (PFIs) are exempted only from the first proviso to section 67(3). Therefore, NBFC or PFI do not have any restriction on the number of allottees as imposed on a company which is not an NBFC or PFI. However, such companies also need to prove that its offer falls either under clause (a) or (b) of section 67(3) to claim such issuance to be a private placement. The Company is not an NBFC or PFI.

14. In the present case, based on the copies of the share certificates pertaining to issue of RPS from complainants, the Company has allotted RPS to atleast 65 allottees during FY 2012-13 and 2013- 14 and mobilized Rs.14,43,500/-. The Company has not provided information as directed in the interim order. Though, the Company (through its Managing Director, Dayanidhi Mohapatra), requested for time to submit the details, it has not done so till date. The Company has also not filed reply to the interim order. The Company is also not an NBFC or PFI. As the Company made offer and allotted RPS to more than 49 persons, it has definitely made a public issue of RPS, in terms of the first proviso to section 67(3) of the Companies Act, 1956. In this regard, I refer and rely on the following observations made by the Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited & Others vs. SEBI and another (Civil Appeal Nos. 9813 and 9833 of 2011; decided on August 31, 2012) ("the Sahara case")- "Section 67(1) deals with the offer of shares and debentures to the public and Section 67(2) deals with invitation to the public to subscribe for shares and debentures and how those expressions are to be understood, when reference is made to the Act or in the articles of a company. The emphasis in Section 67(1) and (2) is on the “section of the public”. Section 67(3) states that no offer or invitation shall be treated as made to the public, by virtue of subsections (1) and (2), that is to any section of the public, if the offer or invitation is not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation or otherwise as being a domestic concern of the persons making and receiving the offer or invitations. Section 67(3) is, therefore, an exception to Sections 67(1) and (2). If the circumstances mentioned in clauses (1) and (b) of Section 67(3) are satisfied, then the offer/invitation would not be treated as being made to the public.

The first proviso to Section 67(3) was inserted by the Companies (Amendment) Act, 2000 w.e.f. 13.12.2000, which clearly indicates, nothing contained in Sub-section (3) of Section 67 shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. … Resultantly, if an offer of securities is made to fifty or more persons, it would be deemed to be a public issue, even if it is of domestic concern or proved that the shares or debentures are not available for subscription or purchase by persons other than those received the offer or invitation. … I may, therefore, indicate, subject to what has been stated above, in India that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. …"

15. By making a public issue of RPSs, the Company was mandated to comply with all the legal provisions that govern and regulate public issue of such securities, including the Companies Act, 1956 and the SEBI Act and regulations. In this regard, I note that in terms of section 55A of the Companies Act, 1956, SEBI shall administer various provisions (as mentioned therein) of the said Act with respect to issue and transfer of securities by listed companies, companies that intend to list and also those companies that are required to list its securities while making offer and issue of securities to the public. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara Case, had observed that: "We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India." " SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange".

Under section 11A of the SEBI Act, SEBI is also empowered to regulate, by regulations/general or special orders, the matters pertaining to issue of capital, transfer of securities and matters related thereto. Accordingly, the Company, having made a public offer and issue of securities, as observed above, is under the jurisdiction of SEBI.

16. The interim order has alleged that the Company failed to comply with sections 56, 60 and 73 of the Companies Act, 1956 and the RPS Regulations. In this regard, I observe the following: a. In terms of section 56(1) of the Companies Act, 1956, every prospectus issued by or on behalf of a company, shall state the matters specified in Part I and set out the reports specified in Part II of Schedule II of that Act. Further, as per section 56(3) of the Companies Act, 1956, no one shall issue any form of application for shares in a company, unless the form is accompanied by abridged prospectus, contain disclosures as specified. Section 2(36) of the Companies Act read with section 60 thereof, mandates a company to register its 'prospectus' with the RoC, before making a public offer/ issuing the 'prospectus'. There is no Prospectus produced by the Company with respect to its offer of RPS. Accordingly, I find that the Company has failed to comply with sections 56 and 60.

b. By making a public issue of RPS, as discussed above, the Company had to compulsorily list such securities in compliance with section 73(1) of the Companies Act, 1956. A Company making a public issue of securities cannot choose whether to list its securities or not as listing is a mandatory requirement under law. As per section 73(1) Companies Act, 1956, a company is required to make an application to one or more recognized stock exchanges for permission for the shares or debentures to be offered to be dealt with in the stock exchange. Further, there is no material to say that the Company has filed an application with a recognized stock exchange to enable the RPSs to be dealt with in such stock exchange. Therefore, the Company has failed to comply with this requirement.

c. Section 73(2) states that "Where the permission has not been applied under subsection (1) or such permission having been applied for, has not been granted as aforesaid, the company shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the company becomes liable to repay it, the company and every director of the company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at such rate, not less than four per cent and not more than fifteen per cent, as may be prescribed, having regard to the length of the period of delay in making the repayment of such money".

As the Company failed to make an application for listing such securities, the Company had to forthwith repay such money collected from investors. If such repayments are not made within 8 days after the Company becomes liable to repay, the Company and every director is liable to repay with interest at such rate. The liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would continue till repayments are made. There is no record to suggest that the Company made the refunds as per law. The Hon'ble Supreme Court of India in the Sahara case has examined section 73 and made the following observations: "Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to refund the amount collected from the public with interest is also mandatory as per Section 73(2) of the Act. Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons."

d. Section 73(3) states that - All moneys received as aforesaid shall be kept in a separate bank account maintained with a Scheduled Bank [until the permission has been granted, or where an appeal has been preferred against the refusal to grant such. permission, until the disposal of the appeal, and the money standing in such separate account shall, where the permission has not been applied for as aforesaid or has not been granted, be repaid within the time and in the manner specified in sub-section (2)]; and if default is made in complying with this sub-section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to fifty thousand rupees.”

. As found above, the Company had not applied and obtained listing permission. The Company is therefore in non-compliance with this provision also.

e. The mobilization was done during FY 2012-13 and 2013-14. The amounts mobilized through the issue of securities have not been refunded within the time period as mandated under law. It would therefore be appropriate to levy an interest @ 15% p.a. as provided for under section 73(2) of the Companies Act, 1956 read with rule 4D (which prescribes that the rates of interest, for the purposes of sub-sections (2) and (2A) of section 73, shall be 15 per cent per annum) of the Companies (Central Government’s) General Rules and Forms, 1956, on the amounts raised by the Company through its offer and issuance of RPS in 2012-3 and 2013-14, including Rs.14,43,500/- (as alleged in the interim order) due to be repaid by the Company. As stated above, the liability of the Company to refund the public funds collected through offer and allotment of the impugned RPSs is continuing and such liability would cease only if the repayments are made in accordance with the relevant provisions of law.

f. The Company having made a public offer of RPS was also supposed to comply with the following provisions of the RPS Regulations framed by SEBI in exercise of powers under the SEBI Act, 1992. This regulation governs non-convertible redeemable preference shares.

i. Regulation 4(2)(a) and 16(1) – the Company has not made applications to recognized stock exchange for listing of preference shares. ii. Regulation 4(2)(b)- the Company failed to obtain in-principle approval for listing of its preference shares on recognized stock exchanges. iii. Regulation 4(2)(c)- the Company failed to obtain credit rating from at least one credit rating agency registered with SEBI. iv. Regulation 4(2)(d)- the Company failed to enter into an arrangement with a depository registered with SEBI. v. Regulation 4(2)(e) – Minimum tenure vi. Regulation 4(3)- the Company has not created capital redemption reserve in accordance with the provisions of the Companies Act, 1956.

vii. Regulation 4(5)- the Company failed to appoint one or more merchant bankers registered with SEBI. viii. Regulation 5(1) - The offer document does not contain all material disclosure, which are necessary for subscribers of preference shares to take an informed investment decision. ix. Regulation 6(1), 6(2), 6(3) and 7- the Company made public issue of preference shares despite its offer document not being filed with designated stock exchange. The said offer document has not been posted on the website of stock exchange. x. Regulation 6(6) - The copy of draft and final offer document has not been forwarded to SEBI. xi. Regulation 8(1)- No advertisement has been made in national daily on or before the issue opening date. xii. Regulation 9(1)- the Company has not issued an abridged prospectus with its application form. xiii. Regulation 13(1), 13(2)- the Company has not complied with minimum subscription requirement and refund of application money in respect of issue of preference shares. xiv. Regulation 14- the Company has not appointed an underwriter registered with SEBI. xv. Regulation 15 - the Company has made misstatements by omitting disclosure of material facts and had given false / misleading statement in the advertising brochure cum application form that the issue is privately placed. xvi. Regulation 16 – Mandatory Listing xvii. Regulation 22 – Obligations of the Issuer, etc.

g. In view of the above, I hereby find that the Company has not complied with the provisions of sections 56, 60 and 73 of the Companies Act, 1956 read with the Companies Act, 2013 and the above said provisions of the RPS Regulations.

17. The interim order has been issued against the following directors and promoters of the Company: (a) Directors - (i) Mr. Dayanidhi Mohapatra (ii) Mr. Hari Arjuna Panda (iii) Mr.Tarapada Giri (iv) Mr.Ashok Kumar Rout (v) Mr.Biswajit Roul (vi) Mr.Gouranga Charan Sahoo (b) Promoters - (i) Mr.Rasmiranjan Mohapatra (ii) Mr.Apurba Ranjan Behera (iii) Mr.Manoranjan Pahi (iv) Mr.Amit Kumar Gupta (v) Mr.Sisir Kumar Padhi and (vi) Mr.Sudhansu Sekhar Barik.

Regarding the liability of the directors, I observe the following: (a) From the information available in the MCA portal, as reproduced below, I note that the said persons continue as directors:

Date of DIN/DPIN/PAN Full Name Present residential address Designation Appointment DAYANIDHI APARTIBINDHA, BHADRAK, Managing 05150135 04/01/2012 MOHAPATRA BHADRAK, 756100, Orissa, INDIA director HARI AT/PO-BADABARICHI KAYAN, Additional 05237893 ARJUNA RANDIA HAT, KADABARANG, 20/03/2012 director PANDA BHADRAK, 756100, Orissa, INDIA KULBERIYA, CONTAI, TARAPADA 06366970 MIDNAPUR, 721443, West Bengal, Director 11/04/2013 GIRI INDIA ASHOK ERAM, BHADRAK, BHADRAK, 06553757 KUMAR Director 29/04/2013 756100, Orissa, INDIA ROUT MAUJA, PAKURSHENI, J.L. NO- BISWAJIT 525, PASCHIM MEDINIPUR, 06571832 Director 11/04/2013 ROUL NARAYANGARH, 721437, West Bengal, INDIA GOURANGA PADANA, BARTTANA, 06571836 CHARAN KHAIRA, BALASORE, 756033, Director 11/04/2013 SAHOO Orissa, INDIA (b) The above persons were in the board of the Company during the offer and allotment of RPS during FY 2012-13 and 2013-14. Though Mr. Ashok Kumar Rout submitted that he resigned on June 21, 2013, he has not filed any evidence (Form-32) except for his resignation letter. As mentioned above, as per information in MCA portal, he still continues to be a director in the Company. Mr. Gourangi Sahoo, neither appeared in the hearing scheduled on September 03, 2015 nor submitted any reply.

(c) Section 56(1) and 56(3) read with section 56(4) imposes the liability for the compliance of the said provisions, on the company, every director, and other persons responsible for the issuance of the prospectus. The liability for non-compliance of section 60 of the Companies Act is on the Company, and every person who is a party to the non-compliance of issuing the prospectus as per the said section.

(d) The liability of the company and directors to repay under section 73(2) of the Companies Act, 1956 and section 27 of the SEBI Act, is a continuing liability and the same continues till all the repayments are made. Such liability is a joint and several liability on them. Therefore, the directors (irrespective of whether they continue or resign) who were present during the period when the Company made the offer and allotted RPSs shall be liable for violation of sections 56, 60 and 73 of the Companies Act, including the default in making refunds as mandated therein. As the liability to make repayments under sections 73(2) of the Companies Act read with section 27 of the SEBI Act is a continuing liability, the persons who join the Company’s Board pursuant to the offer and allotment of RPSs shall also be liable if the Company and the concerned directors have failed to make refunds as mandated under law.

(e) Further, the Company and the above directors shall also be liable for default committed in not complying with the RPS Regulations.

(f) Therefore, Mr. Dayanidhi Mohapatra, Mr. Hari Arjuna Panda, Mr.Tarapada Giri, Mr.Ashok Kumar Rout, Mr.Biswajit Roul and Mr.Gouranga Charan Sahoo shall therefore be liable, as directors of the Company, for the violation of sections 56, 60 and 73 of the Companies Act, 1956 as found in this Order and would also be liable to make refunds in terms of section 73(2) of the Companies Act read with section 27 of the SEBI Act, as ordered herein.

Regarding the promoters, I observe the following: (a) As per the RPS Regulations, a promoter is a person, who is in control of the issuer (i.e. the Company), is instrumental in formulation of a plan pursuant to which specified securities are offered to the public and named as such in the offer document.

(b) As per the MoA and AoA dated December 23, 2011, Rasmiranjan Mohapatra, Mr. Dayanidhi Mohapatra, Manoranjan Pahi, Apurba Ranjan Behera, Amit Kumar Gupta, Sisir Kumar Padhi and Sudhansu Sekhar Barik are the initial subscribers/promoters of the Company. In view of the same, these persons can be said to be instrumental in the formulation of the plan to make the offer and issue of RPS. In view of violations committed in the offer and issuance of RPS, I find the above promoters also to be liable for the violations and for regulatory action. Regulation 25(1)(d) of the RPS Regulations mentions the directions that SEBI could issue against the promoters.

(c) In addition to being promoters, Apurba Ranjan Behera and Rasmiranjan Mohapatra were the former directors of the Company. Apurba Ranjan Behera submitted that he resigned on April 29, 2013 and Rasmiranjan Mohapatra submitted that he joined on January 04, 2012 and resigned on February 05, 2013. As they were the directors during the period when the Company made its offer and allotted RPS, they shall be liable for the violations in the light of the observations made above. Dayanidhi Mohapatra is already made liable as a director.

(d) Amit Kumar Gupta has submitted that he joined as a promoter on the compulsion of Dayanidhi Mohapatra and resigned from the post. He submitted that he was not involved in the business of the Company and had no knowledge of the issue of shares. However, being a promoter of the Company, he cannot plead ignorance. Further, a promoter is not a post from which he could have resigned.

18. 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(1), 11(4), 11A and 11B thereof and regulation 25 of the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013, hereby issue the following directions:

(a) Tresty Securities Limited, its directors – Mr. Dayanidhi Mohapatra (also a promoter), Mr. Hari Arjuna Panda, Mr.Tarapada Giri, Mr.Ashok Kumar Rout, Mr.Biswajit Roul and Mr.Gouranga Charan Sahoo and its promoters – Mr. Rasmiranjan Mohapatra (former director), Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera, Mr. Amit Kumar Gupta, Mr. Sisir Kumar Padhi and Mr. Sudhansu Sekhar Barik, jointly and severally, shall forthwith 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, 1956 and the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013), 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, 1956) to the investors till the date of actual payment.

(b) The repayments to investors shall be effected only in cash through Bank Demand Draft or Pay Order.

(c) The Company/its present management are permitted to sell the assets of the Company only for the sole purpose of making the refunds as directed above and deposit the proceeds in an Escrow Account opened with a nationalised Bank.

(d) Tresty Securities Limited, its directors – Mr. Dayanidhi Mohapatra (also a promoter), Mr. Hari Arjuna Panda, Mr.Tarapada Giri, Mr.Ashok Kumar Rout, Mr.Biswajit Roul and Mr.Gouranga Charan Sahoo and its promoters – Mr. Rasmiranjan Mohapatra (former director), Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera (former director), Mr. Amit Kumar Gupta, Mr. Sisir Kumar Padhi and Mr. Sudhansu Sekhar Barik, shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local 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 coming into effect.

(e) After completing the aforesaid repayments, the Company shall file a certificate of such completion with SEBI, within a period of three months from the date of this Order, from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution. 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 ("ICAI").

(f) Tresty Securities Limited, its directors – Mr. Dayanidhi Mohapatra (also a promoter), Mr. Hari Arjuna Panda, Mr.Tarapada Giri, Mr.Ashok Kumar Rout, Mr.Biswajit Roul and Mr.Gouranga Charan Sahoo and its promoters – Mr. Rasmiranjan Mohapatra (former director), Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera (former director), Mr. Amit Kumar Gupta, Mr. Sisir Kumar Padhi and Mr. Sudhansu Sekhar Barik 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.

(g) In case of failure of Tresty Securities Limited, its directors – Mr. Dayanidhi Mohapatra (also a promoter), Mr. Hari Arjuna Panda, Mr.Tarapada Giri, Mr.Ashok Kumar Rout, Mr.Biswajit Roul and Mr.Gouranga Charan Sahoo and its promoters – Mr. Rasmiranjan Mohapatra (former director), Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera, Mr. Amit Kumar Gupta, Mr. Sisir Kumar Padhi and Mr. Sudhansu Sekhar Barik in complying with the aforesaid directions, SEBI, on the expiry of the three months period from the date of this order, - a) shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. b) may initiate appropriate action against the Company, its promoters/ directors and the persons/ officers who are in default, including adjudication proceedings against them, in accordance with law.

c) would make a reference to the State Government/ Local Police to register a civil/ criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. e) would also make a reference to the Ministry of Corporate Affairs to flag the names of notice directors in its database so that information may be perused by RoC or any other regulatory authority.

(h) Tresty Securities Limited is directed 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.

(i) Mr. Dayanidhi Mohapatra (also a promoter), Mr. Hari Arjuna Panda, Mr.Tarapada Giri, Mr.Ashok Kumar Rout, Mr.Biswajit Roul and Mr.Gouranga Charan Sahoo, Mr. Rasmiranjan Mohapatra (former director), Mr. Manoranjan Pahi, Mr. Apurba Ranjan Behera (former director), Mr. Amit Kumar Gupta, Mr. Sisir Kumar Padhi and Mr. Sudhansu Sekhar Barik are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, with immediate effect. They are also restrained from issuing prospectus, offer document or advertisement soliciting money from the public and associating themselves with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI. The above directions shall come into force with immediate effect and shall continue to be in force from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors, as directed above.

(j) The above directions shall come into force with immediate effect.

19. This Order is without prejudice to any action, including adjudication and prosecution proceedings that might be taken by SEBI in respect of the above violations committed by the Company, its promoters, directors including former directors and other key persons.

20. Copy of this Order shall be forwarded to the recognised stock exchanges and depositories for information and necessary action.

21. A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs/concerned Registrar of Companies, for their information and necessary action with respect to the directions/restraint imposed above against the Company and the individuals.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date: February 16th, 2016 Place: Mumbai