Order in the matter AM Fund Managers

Under sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992, in the matter of AM Fund Managers Limited (CIN No. U67120OR2010PLC011758; PAN: AAICA3154C) and its Directors, viz. Shri Ashok Kumar Behera (PAN:AKZPB1537E; DIN:02973583), Shri Aswini Kumar Barik (PAN:ASPPB7876G; DIN:05240917), Shri Satyabrata Sinha (PAN:BNRPS9656K; DIN:06364745), Shri Umesh Ch Samantasinghar (PAN:BYEPS0791M; DIN:06364749), Shri Suvash Chandra Behera (PAN: AKXPB6749E; DIN:02973562), Shri Dipak Kumar Behera (PAN:AIZPB1052E; DIN:02973546); and its Promoters Shri Bibekananda Behera (PAN:ANEPB7430Q), Shri Saswat Sahoo (PAN:BAYPS1071C), Shri Satrunjaya Sahoo (PAN:CAAPS0538M) and Shri Kailash Chandra Nayak.

1.1 AM Fund Managers Limited (hereinafter referred to as 'AMF' or 'the company') having its registered office at BB Complex, Plot No-413/2297 Aiginia, Near Trinath Temple, Bhubaneswar – 751019, was incorporated on March 19, 2010, with RoC, Orissa, with CIN No. U67120OR2010PLC011758. 1.2 On receipt of complaints dated November 03, 2014 and November 10, 2014 from investors alleging non-payment of their invested money by AMF and subsequent enquiry by SEBI, it was observed that AMF had issued Redeemable Preference Shares, to 222 investors in the Financial Years 2009-10 and 2010-11 ("hereafter referred to as RPS") and collected an amount of Rs.1,21,35,000.

2.1 Since the above said issuance of RPS was found prima facie in violation of respective provisions of the SEBI Act, 1992 ("SEBI Act"), the Companies Act, 1956, SEBI passed an interim order dated February 20, 2015 (hereinafter referred to as interim order) and issued directions mentioned therein against AMF and its directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; and its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak. 2.2 Prima facie findings/allegations: In the said interim order, the following prima facie findings/allegation were recorded. AMF has made an offer of RPS and collected money to the extent of Rs. 1,21,35,000, by issuing preference shares, from the public, as shown in the following Table. Table 1 S.No. Year Date of Number Number of Amount Allotment of RPS raised Allottees allotted (in Rs.) 1 2009-10 31-03-2010 68 297500 2975000 Total 68 297500 2975000 2 30-04-2010 32 165000 1650000 3 31-05-2010 34 148500 1485000 2010-11 4 30-06-2010 10 96000 960000 5 30-07-2010 19 113500 1135000 6 30-08-2010 19 230500 2305000 7 30-09-2010 21 104500 1045000 8 30-10-2010 19 58000 580000 Total 154 9,16,000 91,60,00 0 Grand Total 222 12,13,50 1,21,35,00 0 0 2.3 The Offer of RPS was a deemed public issue of securities under the first proviso to Section 67(3) of the Companies Act, 1956, However, the resultant requirement under Section 56(1), 56(3),Section 60, Sections 73(1), (2) and (3) of the Companies Act, were not complied with by AMF.

2.4 In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated February 20, 2015 with immediate effect. i. AMF shall not 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. AMF and its Directors, viz. Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo ,Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, 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. AMF, 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.

AMF shall provide a full inventory of all its assets and properties; v. AMF 's abovementioned Directors and Promoters shall provide a full inventory of all their assets and properties; vi. AMF, 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. AMF, 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 AMF;

viii. AMF, its abovementioned Directors and Promoters shall furnish complete and relevant information within 21 days from the date of receipt of this Order 3.1 Vide the said interim order, AMF and its abovementioned Directors/Promoters were given opportunities to file their replies, within 21 days from the date of receipt of the said interim Order. The order further stated that the concerned persons may also indicate whether they desired to avail themselves the opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard. 4.1 Service of interim order: The copy of the said interim order was sent to the above mentioned entities by letter dated February 20, 2015 through registered post acknowledgement due. While letter to Shri Satrunjaya Sahoo, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar and Shri Saswat Sahoo were delivered, letters to AMF and other Directors/Promoters of the company viz. Shri Ashok Kumar Behera, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera and Shri Bibekananda Behera returned undelivered and letter to Shri Kailash Chandra Nayak had neither been returned undelivered nor acknowledgement had been received.

4.2 Subsequently, vide letter dated May 15, 2015 all the persons against whom the above said interim order was passed, were intimated that they shall be given an opportunity of personal hearing on June 26, 2015. While letter to Shri Satrunjaya Sahoo, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Kailash Chandra Nayak and Shri Saswat Sahoo were delivered, letters to AMF and other Directors/Promoters of the company viz. Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera and Shri Bibekananda Behera returned undelivered. 4.3 Thereafter, vide notification dated June 21, 2015, published in newspaper The Times of India (West Bengal Edition), notification dated June 21, 2015 published in local vernacular newspaper of West Bengal, Anandabazar Patrika, notification dated June 21, 2015 published in local vernacular newspaper of Odisha, The Samaja and notification dated June 25, 2015 published in newspaper, The Times of India (Bhubaneswar Edition), AMF and its abovementioned Directors were notified by SEBI that they will be given the final opportunity of being heard on June 26, 2015 at the time and the venue mentioned therein.

5.1 Hearing and submissions: AMF, its directors and promoters did not avail the opportunity of hearing granted on June 26, 2015. No submissions were made either by the Company or by the directors. 6.1 I have considered the allegations, and material on record. On perusal of the same the following issues arise for consideration. Each question is dealt with separately under different headings. 1. Whether the company came out with the Offer of RPS ? 2. If so, whether the said issues are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1), (2) and (3), the Companies Act,1956? 3. If the findings on question No.2 are found in the affirmative, who are liable for the violation committed? 7.1 Whether the company came out with the Offer of RPS?: I have perused the interim order dated February 20, 2015 for the allegation of Offer of RPS. The company, its directors and promoters have not disputed the said issuance by way of any oral or written representations. 7.2 I have also perused the documents/ information obtained from the 'MCA 21 Portal'. The perusal of Form 2 filed in respect of the allotments dated March 31, 2010, April 30, 2010, May 31, 2010, June 30, 2010, July 30, 2010, August, 30 2010, September 30, 2010 and October 30, 2010 show that AMF, in total, had issued and allotted 12,13,500 RPS to 222 persons, and collected Rs. 1,21,35,000, as shown in the Table No.1.

8.1 If so, whether the said issues are in violation of Section 60, Section 56(1) and 56(3), Sections 73(1) (2) (3), the Companies Act,1956?: The provisions alleged to have been violated and mentioned in Issue No.2 are applicable to the offer made to the public. Therefore the primary question that arises for consideration is whether the issue of preference shares covered in Issue No 1 is a ‘public issue’. At this juncture, reference may be made to sections 67(1) & (3) of the Companies Act, 1956:

"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)any reference in this Act or in the articles of a company to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be construed as including a reference to invitations to subscribe for them extended 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. (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).” 8.2 The following observations of the Hon'ble Supreme Court of India in Sahara India Real Estate Corporation Limited & ORs. Vs. SEBI (Civil Appeal no. 9813 and 9833 of 2011) (hereinafter referred to as the 'Sahara Case'), while examining the scope of Section 67 of the Companies Act, 1956, are worth consideration:- "84.

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. 85. 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, after 13.12.2000, any offer of securities by a public company to fifty persons or more will be treated as a public issue under the Companies Act, even if it is of domestic concern or it is proved that the shares or debentures are not available for subscription or purchase by persons other than those receiving the offer or invitation. (Emphasis supplied). 8.3 Section 67(3) provides for situations when an offer is not considered as offer to public. As per the said sub section, if the offer is one which is not 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 {(section 67(3)(a)}, or, if the offer is the domestic concern of the persons making and receiving the offer {(section 67(3)(b)}, the same are not considered as public offer. Under such circumstances, they are considered as private placement of shares and debentures. It is noted that as per the first proviso to Section 67(3) Companies Act, 1956, the public offer and listing requirements contained in that Act would become automatically applicable to a company making the offer to fifty or more persons.

8.4 In the instant case, since the offer of RPS has been made by AMF and allotment to 68 persons on March 31, 2010, the offer of RPS falls within the first proviso of section 67(3) of Companies Act,1956. As far as the allotments dated April 30, 2010, May 31, 2010, June 30, 2010, July 30, 2010, I find from the Extract of the minutes of EGM dated March 30, 2010, that 7,50,000 preference shares have been resolved to be issued, purportedly through private placement. I further find that an allotment to 95 persons have been made through different allotments dated April 30, 2010, May 31, 2010, June 30, 2010, July 30, 2010 pursuant to the EGM resolution dated March 30, 2010. In the same way, as far as the allotments dated August, 30 2010, September 30, 2010 and October 30, 2010, I find, from the Extract of the minutes of EGM dated August 28, 2010, that 1,00,000 preference shares have been resolved to be issued, purportedly through private placement. I further find that an allotment to 69 persons have been made through different allotments dated August, 30 2010, September 30, 2010 and October 30, 2010 pursuant to the EGM resolution dated August 28, 2010. 8.5 In view of the allotment to more than 49 persons, pursuant to the above said two different resolutions of EGM, I find that offer of RPS falls within the first proviso of section 67(3) of Companies Act, 1956, thereby such issues are deemed to be public issues and was mandated to comply with the 'public issue' norms as prescribed under the Companies Act, 1956. 8.6 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, containing 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'. As per the aforesaid Section 2(36), “prospectus” means any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate. 8.7 The allegation of noncompliance of the above provisions was not denied by the company or directors or the promoters. Neither the company nor the directors and promoters, produced any record to show that AMF has issued Prospectus containing the disclosures mentioned in section 56(1) of the Companies Act, 1956, or filed a Prospectus with ROC or issued application forms accompanying the abridged prospectus.

Therefore, I find that, AMF and its directors and promoters are responsible for the failure to issue prospectus in contravention of Sections 56(1), 56(3) and 60 of the Companies Act, 1956. 8.8 Further, by issuing RPS to more than 49 persons, AMF had to compulsorily list such securities in compliance with section 73 of the Companies Act, 1956. As per section 73(1) and (2) of the 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 within the stock exchange and if permission has not been applied for or not granted, the company is required to forthwith repay with interest all moneys received from the applicants. 8.9 The allegation of non-compliance of the above provisions was not denied by the company or directors or promoters. I find that no records have been submitted to indicate that it had made an application seeking listing permission from stock exchange nor did it refund the amounts consequent upon such failure. Thus, AMF has contravened the said provisions.

AMF has not provided any records to show that the amount collected by AMF are kept in a separate bank account. Therefore, I find that AMF has also not complied with the provisions of section 73(3) as it has not kept the amounts received from investors in a separate bank account and failed to repay the same in accordance with section 73(2) as observed above. 8.10 I note that the jurisdiction of SEBI over various provisions of the Companies Act, 1956 including the above mentioned, in the case of public companies, whether listed or unlisted, when they issue and transfer securities, flows from the provisions of Section 55A of the Companies Act, 1956. 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" 8.11 In this regard, it is pertinent to note that by virtue of Section 55A of the Companies Act, SEBI has to administer Section 67 of that Act, so far as it relates to issue and transfer of securities, in the case of companies who intend to get their securities listed. 8.12 In view of the forgoing findings, I am of the view that AMF is engaged in fund mobilizing activity from the public, through the offer and issuance of RPS and has contravened the provisions of sections 56, 60 and 73 of the Companies Act, 1956. 9.1 If the findings on question No.2 are found in the affirmative, who are liable for the violation committed: Section 56(1) and 56(3) read with section 56(4) imposes the liability on the company, every director, and other persons responsible for the prospectus for the compliance of the said provisions.

The liability for non-compliance of Section 60 of the Companies Act, 1956 is on the company, and every person who is a party to the non-compliance of issuing the prospectus as per the said section. 9.2 As far as the liability for non-compliance of section 73 of Companies Act, 1956 is concerned, as stipulated in section 73(2) of the said Act, the company and every director of the company who is an officer in default shall, from the eighth day becomes 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. 9.3 SEBI, as per section 27(2) of the SEBI Act, has the powers to proceed against directors of such companies. In cases of financial fraud, the role of directors in prevention of the same is of utmost importance. They are required to take diligent measures in preventing the same. They are also required not to be neglectful in the affairs of the company which results in the violation of various laws such as deemed public issue in violation of law. In deemed public issue in violation of law, money is collected from innocent, ill-informed and gullible public, without the Company giving the statutory protection available to those investors under the law such as, full and necessary disclosures about the company, an exit opportunity by way of listing of the shares.

The purpose of refund in such cases as per law, is to protect the investors who have parted their money without having any opportunity of exit and without full disclosures about the Company which deprives their informed consent. 9.4 Reference may also be made to the ratio of the Hon’ble High court of Madras in Madhavan Nambiar vs Registrar Of Companies (2002 108 Comp Cas 1 Mad) which observed “In the matter of proceedings for negligence, default, breach of duty, misfeasance or breach of trust or violation of the statutory provisions of the Act and the rules, there is no difference or distinction between the whole-time or part time director or nominated or co-opted director and the liability for such acts or commission or omission is equal. So also the treatment for such violations as stipulated in the Companies Act, 1956”. 9.5 SEBI also has powers under section 11 and 11B of the SEBI Act to pass direction of refund along with interest. The Hon’ble Bombay High court in B.P.Plc (Formerly B.P.Amoco Plc) vs SEBI, (2002 (4) Bom CR 79), held that that SEBI has powers to award interest in exercise its power under section 11 and 11B of SEBI Act, as stated below:- “Applying the principles regarding award of interest as has been held by the Apex

Court in Secretary, Irrigation Department vs. G.C.Roy (supra) to the effect "a person deprived of the use of money to which he is legitimately entitled to has a right to be compensated for the deprivation, call it by any name. It may be called "interest, compensation or damages," the investors are entitled to be compensated by way of interest for delayed payment. Under these circumstances we find no substance that there is no power to award such an interest.” 9.6 In view of the provisions of law, AMF and its directors Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak are responsible for the noncompliance of the above provisions. From the available information as per the Form 32, the details of the appointment and resignation of all the directors are given in the Table below: Table 2 Sl Date of Date of Name of the Directors No. Appointment Resignation 1 Shri Ashok Kumar Behera 19/03/2010 Continuing 2 Shri Aswini Kumar Barik 11/10/2011 Continuing 3 Shri Satyabrata Sinha 04/02/2012 Continuing 4 Shri Umesh Ch Samantasinghar 04/02/2012 Continuing 5 Shri Suvash Chandra Behera 19/03/2010 04/02/2012 6 Shri Dipak Kumar Behera 19/03/2010 11/10/2011

9.7 Shri Ashok Kumar Behera, Shri Suvash Chandra Behera and Shri Dipak Kumar Behera were serving as directors while the impugned issues and allotments were made. They were signatories in both the EGM resolutions dated March 30, 2010 and EGM resolution dated August 28, 2010. Being the directors at the time of impugned issues, they are officers in default and co-extensively responsible for the refund along with interest. 9.8 Shri Ashok Kumar Behera as per the details of the MCA website is shown as continuing director. The fact that Shri Suvash Chandra Behera, Shri Dipak Kumar Behera resigned on February 04, 2012 and October 11, 2011 respectively, does not take away their liability for the violations committed. 9.9 The liability of the company to repay under section 73(2) of the Companies Act, 1956 is continuing and such liability continues till all the repayments are made. Therefore, the directors who join subsequent to the impugned public issuance are also officers in default in not making the refund, if the company does not repay the money collected, as mandated in section 73(2) of the Companies Act, 1956. Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar who joined after the impugned issues are also officers in default, in view of the continuing liability.

9.10 Further, it appears that Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar have neither exercised necessary diligence after joining as a director nor made any attempts to report the wrongdoings of the Company to the appropriate authorities. The very inaction by these directors against the previous/existing management (for violating the public issue norms while making the offer and issuing the securities), even after the receipt of the interim order, leads one to conclude on a possible collusion by them with the Company and its management. As discussed earlier, the liability to refund is a continuous liability and would be discharged only when the repayments are done. These directors did not take any step to remedy the violations committed. Therefore, I hold that Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar liable for the same. 10.1 I find that Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak being the signatories to the Memorandum and Articles of Association dated March 16, 2010, are promoters of the Company.

However, Shri Saswat Sahoo vide letter signed on March 25, 2015 denied that he was a promoter of the Company. He stated vide the said letter that he was an employee of the company for monthly remuneration from February 2010 to February 2011. Thereafter, he had no relationship with the company. However, he has not substantiated his version by any documentary evidence. Therefore, I hold Shri Saswat Sahoo is also promoter of the Company.

10.2 In terms of Section 62 of the Companies Act, every person who is a director of the company at the time of the issue of the prospectus and every person who is a promoter of the company, are liable to pay compensation to every person who subscribes for any shares or debentures on the faith of the prospectus for any loss or damage he may have sustained by reason of any untrue statement included therein. Further, for the purpose of the said section, the expression “promoter” means a promoter who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company. It is clear that promoters are liable for mis-representation. 10.3 Shri Ashok Kumar Behera, Shri Suvash Chandra Behera and Shri Dipak Kumar Behera being the directors, in the capacity as promoters, Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak being the promoters by not issuing Prospectus containing the disclosures mentioned in section 56(1) of the Companies Act, 1956 are also liable to the shareholders. 10.4 I further note that AMF, its abovementioned Directors and Promoters have not furnished complete and relevant information as on the date of this order. Thereby they have not complied with the interim order. SEBI may take appropriate actions as per law for this non-compliance. 10.5 In view of the foregoing, the natural consequence of not adhering to the norms governing the issue of securities to the public and making repayments as directed under section 73(2) of the Companies Act, 1956, is to direct the AMF and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak to refund the monies collected, with interest to such investors. It would be appropriate to levy an interest @ 15% p.a. as provided for under the above section 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. In view of the violations committed by the Company and its directors and promoters, to safeguard the interest of the investors who had subscribed to such preference shares issued by the Company and to further ensure orderly development of securities market, it also becomes necessary for SEBI to issue appropriate directions against the Company and the other noticees. 11.1 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 hereby issue the following directions: a) The Company, namely, AM Fund Managers Limited and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, shall forthwith refund the money collected by the Company through the issuance of RPS, including the money collected from investors, till date, pending allotment, 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 and interest payments to investors shall be effected only through Bank Demand Draft or Pay Order. c) AM Fund Managers Limited and its present management is permitted to sell the assets of the Company only for the sole purpose of making the repayments including interest, as directed above and deposit the proceeds in an Escrow Account opened with a nationalized Bank. d) The Company, namely, AM Fund Managers Limited and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, shall issue public notice, in all editions of two

National Dailies (one English and one Hindi) and in one local daily (in Oriya) 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, AM Fund Managers Limited and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, shall file a report of such completion of repayment with SEBI, within a period of three months from the date of this order, certified by 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) AM Fund Managers Limited and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, are 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 AM Fund Managers Limited and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, to comply with the aforesaid directions, SEBI, on the expiry of the three months period from the date of this order,- i. shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws. ii. 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. iii. 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 iv. would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company. h) AM Fund Managers Limited and its Directors, Shri Ashok Kumar Behera, Shri Aswini Kumar Barik, Shri Satyabrata Sinha, Shri Umesh Ch Samantasinghar, Shri Suvash Chandra Behera, Shri Dipak Kumar Behera; its Promoters Shri Bibekananda Behera, Shri Saswat Sahoo, Shri Satrunjaya Sahoo and Shri Kailash Chandra Nayak, are directed not to, directly or indirectly, access the securities 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.

The above said directors are also restrained from 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 from the date of this Order till the expiry of 4 years from the date of completion of refunds to investors. i) The above directions shall come into force with immediate effect. 12.1 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 and other key persons. 12.2 Copy of this Order shall be forwarded to the recognised stock exchanges and depositories for information and necessary action. 12.3 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 Date : December 10, 2015 WHOLE TIME MEMBER Place: Mumbai SECURITIES AND EXCHANGE BOARD OF INDIA