Order in the matter of M/s.Indu Nissan Oxo Chemical Industires Limited and its directors

1. Indu Nissan Oxo Chemical Industries Limited (hereinafter referred to as the company) is a company incorporated under the Companies Act, 1956, having its registered office at Bhajwa Chhani Road, Behind GSFC Complex, Vadodara, Gujarat-391310. The Securities and Exchange Board of India (hereinafter referred to as SEBI) received several complaints against the Company from the investors. As on September 24, 2008, a total of fifty six investor grievances were pending unresolved by the company. The investor complaints received against the company were forwarded to it for redressal and periodical reminders were also sent to the Company for resolving such pending complaints.

2. Thereafter, SEBI, vide letter dated September 25, 2008 advised the Company to resolve the fifty six pending investor grievances within thirty days from the date of receipt of the said letter and to submit a status report. In the said letter, SEBI also made a reference to Sections 15C and 24 of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the SEBI Act). The said letter was received and acknowledged by the Company. Since the Company failed to submit the action taken report as advised, SEBI sent reminders to the Company which were addressed to the Company Secretary and its Chairman and Managing Director, Mr. M.N. Bhuva, vide letters dated November 21, 2008 and December 19, 2008. Both the reminders sent to the Company as well as to the Chairman and Managing Director were acknowledged. Despite the same, the Company failed to redress the investor grievances or submitted any status report. Thereafter, a public notice was given on January 23, 2009 in the website of SEBI (www.sebi.gov.in) advising the Company to resolve the pending investor grievances and to submit the Action Taken Report.

Despite such steps, SEBI had not received any response from the Company or its directors. 3. In view of the above, a show cause notice dated November 6, 2009 was issued to the Company by SEBI under Section 11(4)(b) and 11B of the SEBI Act requiring it to show cause as to why it should not be restrained from accessing the securities market and prohibit it from dealing in securities till such time the pending investor grievances against it are resolved. Similar notices dated November 16, 2009 were also sent to directors of the Company, namely, Mr. Mallya T.B., Mr. Turakhia Prakash, Mr. Bhuva N. Mehool and Mr. Bhuva I. Narendra. The notice was served to the Company and its directors except in the case of Mr. Bhuvan I Narendra, where it was returned with a remark “expired”. However, no replies or action taken report was received from the Company or its directors (on whom the notices were served). An opportunity of hearing was also afforded to the Company and its directors on August 5, 2010. As no reply was received from the Company or its directors, a paper publication was also made by SEBI on June 13, 2010, in respect of the said show cause notices and notices for personal hearing, in various newspapers having nationwide and statewide circulation including ‘Hindustan Times’ (Mumbai, New Delhi & Kolkata Edition) ‘Sandesh’ (Rajkot Edition) and ‘Gujarat Samachar’ (Vadodara Edition).

In the meanwhile, the Company, vide letter dated July 6, 2010 submitted that on account of some mis-communication between the Company and its registrar, there was a failure on its the part to deliver the status report of the necessary action taken on the complaints. It was further submitted that the said fifty six complaints were already redressed before March 2009 and in support of that it had enclosed an action taken report. However, the said report was not in the format specified by SEBI. Subsequently, vide letter dated July 17, 2010, Mr. Bhuva Mehool, Chairman and Managing Director of the company submitted that Mr. Narendra I. Bhuva had expired on August 10, 2008 and enclosed a copy of the death certificate issued by the Municipal Corporation of Greater Mumbai. Thereafter, the Company, vide letter dated July 27, 2010, submitted the details of the action taken on some of the complaints and further requested to provide the addresses of some other complainants, which were provided to the Company. On the date of the hearing, the Company and its directors were represented by Mr. Deependra Shukla, practicing company secretary, who made submissions.

As regards the old shares which were lost, the Company was directed to issue an advertisement in the newspapers and also to write to the shareholders to apply for the same and for the said purpose, a further period of three months was granted. Pursuant to the same, the Company, vide letter dated November 23, 2010 submitted that it had published a notice in two newspapers requesting the shareholders to inform the Company regarding their non-receipt of share certificates to enable the Company to issue certificates to such members. However, the Company had not submitted the copy of the advertisement issued by it. Since the complaints were still pending, the Company was advised, vide SEBI letter dated March 16, 2011 to inform the current status of pending complaints along with the copy of the advertisement issued pursuant to the hearing held on August 5, 2010. The Company replied vide letter dated March 21, 2011 forwarding the copy of the advertisement and a copy of the same action taken report which was sent earlier on July 27, 2010. The Company maintained that all the complaints had been redressed.

However, there was no proof regarding the same to the satisfaction of SEBI. Therefore, SEBI, subsequently conducted a complaint validating exercise by issuing preprinted inland letters to the complainants requesting them to send a copy of the complaint, in case it still remains unresolved. SEBI had given two weeks time to the complainants in this regard. The said period had already lapsed and SEBI has not received any response from any of the complainants till date.

4. I have considered the show cause notice issued to the Company and its directors, various letters issued by SEBI for redressal of investor’s complaints to the Company and its directors, oral and written submissions made on behalf of the Company and other material available on record. There were fifty six investor complaints to be resolved by the Company, as stated in the letter dated September 25, 2008. The Company stated that it had redressed all pending investor grievances. The action taken report sent by the Company vide its reply dated March 21, 2011 was only a copy of its earlier action taken report dated July 27, 2010. In view of the above and since the Company had submitted that it had redressed the complaints, SEBI, thought fit to conduct a complaint validating exercise, where the complainants were requested to send copies of their complaints, if the same were unresolved. SEBI has not received any response from the complainants in this regard. Considering the submissions of the Company that they have resolved all the pending grievances, as of now, and also the fact that no response was received from the complainants in the complaint validating exercise undertaken by SEBI, I do not consider the present case a fit one to issue any directions as contemplated in the notices dated November 6, 2009 and November 16, 2009 issued to the Company and its directors, respectively. I further note from the death certificate dated August 20, 2008 issued by the Municipal Corporation of Greater Mumbai that Mr. Narendra I. Bhuva had expired on August 10, 2008, prior to the issuance of the SEBI letter dated September 25, 2008. Therefore, the notice issued to him should fail, even otherwise. Accordingly, I dispose of the proceedings initiated against the Company and its directors as ordered hereinbelow.

5. In view of the above, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(4)(b) and 11B thereof, hereby dispose of the proceedings initiated, vide show cause notices dated November 6, 2009 and November 16, 2009 issued to Indu Nissan Oxo Chemical Industries Limited and its directors namely, Mr. Mallya T.B., Mr. Turakhia Prakash, Mr. Bhuva N. Mehool and Mr. Bhuva I. Narendra without any directions for the reasons stated above.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA PLACE: MUMBAI DATE: JULY 8, 2011