Order in the matter of M/s. Jayant Vitamins Ltd. and its directors

WTM/RKA/OIAE/37/2012 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: RAJEEV KUMAR AGARWAL, WHOLE TIME MEMBER ORDER Directions under sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 in respect of Jayant Vitamins Limited and its directors Date of hearing : March 15, 2012 Appearances For the noticees : 1) Mr. Nahar S. Mahala, Advocate 2) Mr. Hiten P. Mange, Director, Jayant Vitamins Limited 3) Mr. Yogesh Mishra, Incharge-Redressal, Jayant Vitamins Limited For SEBI : 1) Mr. Santosh Shukla, Joint Legal Adviser 2) Ms. Rajani Agadi, Assistant General Manager 3) Mr. T. Vinay Rajneesh, Assistant Legal Adviser

1. Jayant Vitamins Limited (hereinafter referred to as "the Company") is a company incorporated under the Companies Act, 1956 having its registered office at Dosigaon Industrial Area, Ratlam, Madhya Pradesh, Pin Code - 451001. 2. SEBI was receiving investors' grievances against the Company and the same were periodically forwarded to the Company for redressal. As on September 24, 2008, a total of 173 complaints were pending unresolved by the Company. Therefore, SEBI vide letter dated September 25, 2008 enclosed a list of such investors' grievances and advised the Company to resolve the same and submit a status report within a period of 30 days. Though the said letter and a reminder letter dated November 21, 2008 were received by the Company, it failed to redress the investors' grievances. As no response was received from the Company, a public notice was also issued in the website of SEBI (www.sebi.gov.in) advising the Company to resolve the pending investors' grievances and to submit an Action taken Report ("ATR"). Despite such notices and the said public notice, the Company failed to resolve the investors' complaints or submitted the ATR. 3. In view of the same, SEBI issued a Show Cause Notice ("SCN") dated November 06, 2009, under sections 11(4) and 11B of the SEBI Act, to the Company advising it to show cause as to why it should not be restrained from accessing the securities market and prohibited from dealing in securities till all pending investors' grievances against the Company are resolved. Similar SCNs dated November 10, 2009 were also issued to the Company's directors, namely, Mr. Projesh Kumar Ray, Mr. Lalit Kumar Mishra and Mr.

Hiten Purshottam Mange (hereinafter the Company and its directors would be collectively referred to as "the noticees"). Mr. Projesh Kumar Ray vide letter dated November 30, 2009 inter alia stated that he is a non-executive director in the Company and not involved in the Company's day to day functioning and therefore would not be able to submit the ATR. He further submitted that he has forwarded the SEBI letter to the Company requesting it to comply with SEBI's requirements. 4. SEBI also issued a newspaper publication on June 13, 2010 in respect of this proceedings and the opportunity of personal hearing afforded to the noticees on August 05, 2010, in various newspapers having nation-wide and state-wide circulation. Pursuant to the newspaper notice, Mr. Projesh Kumar Ray vide letter dated July 13, 2010 reiterated his earlier submissions and informed that it would not be possible for him to make any effective representation in the hearing in the absence of required details as the statutory records are maintained by the Company at its registered office. I note that the noticees failed to appear in the said personal hearing.

5. I also note that SEBI had initiated adjudication proceedings against the Company for its failure to redress investors' complaints. The said proceeding culminated in the passing of an Order dated June 10, 2010 whereby the Adjudicating Officer imposed a penalty of Rs.15,00,000/- under section 15C of the SEBI Act and Rs.2,00,000/- under section 15A(a) of the SEBI Act, against the Company. On appeal, the Hon'ble Securities Appellate Tribunal (SAT), observed that the Company was before the Board for Industrial and Financial Reconstruction (BIFR) and not functioning for the last several years and that its assets were under the custody of the court receiver. The Hon'ble SAT also observed that the Adjudicating Officer did not have the benefit of examining court orders and the orders passed by the BIFR, as the Company did not appear in the adjudication proceedings. While setting aside the aforesaid adjudication order, the Hon'ble SAT directed the Company to appear before the Adjudicating Officer and place before him all the developments that have taken place in the matter. The Adjudicating Officer was directed to pass a fresh order thereafter on considering the totality of the circumstances.

The said matter is under consideration by the Adjudicating Officer. 6. In the instant proceedings, the noticees were granted an opportunity of personal hearing on March 15, 2012 before me. As on the date of hearing, 182 complaints were pending against the Company. Mr. Nahar S. Mahala, Advocate represented the Company in the hearing and made submissions. Mr. Hiten Purshottam Mange, director of the Company was also present. The learned counsel stated that the Company is taking steps to resolve the pending investors' complaints and that it has taken steps along with the debenture trustees to resolve complaints pertaining to debenture holders. As regards the share transfer/registry and related work, it was submitted that the same was done in-house and that the Company is taking steps to appoint a Registrar and Share Transfer Agent. The learned counsel requested for copies of the complaints that were unresolved by the Company and requested further time for redressing the complaints. On a consideration of the matter, I had granted time till May 15, 2012 to the Company to resolve all pending investors' complaints and to submit the ATR.

The Company was also allowed to submit fortnightly status reports on the redressal of complaints. The noticees were informed that if complaints are not resolved within the time so granted, the directions contemplated in the SCNs would be issued. SEBI also sent letters to the noticees informing them about the directions given in the hearing. 7. With respect to the request for copies of complaints, SEBI vide letter dated March 28, 2012, informed the Company that out of the 184 complaints pending in the SEBI Complaints Redress System (SCORES), soft copies of 39 complaints were uploaded therein and advised the Company to obtain the necessary information/nature of grievances by directly contacting the complainants on their addresses/contact details available on SCORES. 8. The status of complaints' redressal by the Company was reviewed and was noticed that as on July 20, 2012, the number of pending complaints had come down to 146 complaints from 182. The Company was advised to upload the final ATR (along with all required documents) within 7 days in order to treat the pending complaints as redressed.

The Company was informed that failure to do so would result in SEBI taking action against it. As the Company was found to be in the process of redressing the complaints, its officials were called for a meeting on August 14, 2012 when they had requested for one more week to completely redress all the pending grievances and to upload ATR in the SCORES. 9. Thereafter, the Company vide letter dated August 22, 2012, informed that it had redressed all pending investors' complaints and had also uploaded the ATR for all 197 complaints in SCORES. It also submitted that it would take prompt action for redressal of investors' complaints received through SCORES. However, SEBI received a copy of the letter dated August 24, 2012, written by a complainant, Mr. Mahesh A. Patel wherein he had informed the Company that a complaint (SEBI ref. no. 00/0060509/01) with respect to non-payment of redemption amount/interest on debentures was not redressed by the Company. The Company, thereafter, redressed the said complaint by making a payment of Rs.27,754/- towards full and final payment of redemption of debentures and interest due thereon to the concerned debenture-holder.

SEBI also received confirmation from the complainant that the complaint has been settled/resolved in full and final satisfaction and nothing is pending further to be resolved by the Company. 10. I also note from the report generated from SCORES that as on September 12, 2012, there are no complaints pending against the Company. Since the Company had resolved all pending investors' complaints that were the cause for the issuance of the SCNs as well as other complaints as on September 12, 2012, I am of the view that the SCNs issued to the Company and its directors be disposed off without any directions. 11. I, therefore, hereby dispose of the show cause notice dated November 06, 2009 issued against the Company, Jayant Vitamins Limited and the show cause notices dated November 10, 2009 issued to its directors, Mr. Projesh Kumar Ray, Mr. Lalit Kumar Mishra and Mr. Hiten Purshottam Mange, accordingly.

Place : Mumbai RAJEEV KUMAR AGARWAL Date : September 18th, 2012 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA