Order in the matter of M/s. PACKTECH INDUSTRIES LIMITED

Under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992

In respect of:

S.No. Names of the Noticee PAN/CIN

1. Packtech Industries Ltd. AACCS9244H / U25209PN1992PLC066034

2. Mr. Ashish Rasiklal Shah AAGPS7350F Mr. Ashutosh Rasiklal 3. AAJPS0662H Shah Mr. Sanjeev Madhav 4. ABFPK3252L Kokane (IN THE MATTER OF PACKTECH INDUSTRIES LIMITED)

(The above entities are collectively referred to as “Noticees’ and individually by their respective name or Noticee nos.)

1. In order to dispense a better, speedy and proper redressal of investors’ complaints against the listed companies, Securities and Exchange Board of India (hereinafter referred to as “SEBI”) in the year 2011, came up with an online portal/mechanism called the SEBI Complaints Redress System (hereinafter referred to as “SCORES”). This mechanism enabled prompt online transmission of the complaints to the respective listed companies for redressal. The listed

Order in the matter of Packtech Industries Ltd companies, after having received the complaints are required to take appropriate steps to resolve the complaints and upload their Action Taken Reports (hereinafter referred to as “ATR”) in SCORES for the benefit of the complainants. The companies can upload the ATR by logging in to SCORES by using their SCORES authentication (consisting of user ID and password), which can be obtained by the company after submitting the necessary details to SEBI. Similarly, investors can also upload their complaints and check the status thereof from time to time by logging into SCORES by using their ID and password which they receive after registration with SCORES. The online grievance redressal system facilitates speedy disposal and redressal of investors’ grievances by the listed companies under close monitoring by SEBI. 2. In this regard, SEBI has issued circulars dated viz. June 3, 2011, August 13, 2012 and April 17, 2013, informing the listed companies about SCORES mechanism and directing them to obtain SCORES authentication and further to take necessary steps so as to be able to resolve the complaints within the stipulated days in terms of the guidance issued to them from time to time.

Companies have also been directed to upload the ATR on SCORES in order to enable SEBI and investor to view the same. It has also been informed that failure to obtain SCORES authentication and update the ATR in SCORES will be treated as non-redressal of investor complaint and in case of failure to comply with the above instructions, SEBI would be constrained to initiate appropriate actions as per law against such erring companies/entities. 3. In the instant case, I note that apart from the above circulars which were required to be complied with by the companies, vide letter dated February 15, 2013 Packtech Industries Ltd. (hereinafter referred to as “the Noticee Company”) was informed about the SEBI circular No. CIR/OIAE/1/2012 dated August 13, 2012 whereby all companies including the Noticee Company whose securities were listed on stock exchanges were advised to obtain SCORES authentication by September 14, 2012 in terms of the aforesaid circular. Attention was also drawn that companies whose securities were listed on the stock exchange and against whom investors’ grievances were pending on SCORES were required to take appropriate necessary steps in terms of instruction stated in the letters/ circulars issued in this regard.

It was also advised to the Noticee Company intimating about the steps to be taken towards seeking SCORES authentication for resolution of the complaints through SCORES mechanism. 4. I note that despite the aforesaid circulars and letters, no information has been received from the Noticee Company and the investor complaint against the company have remained un-redressed. Therefore, a Show Cause Notice (hereinafter referred to as “SCN”) was issued to the Noticee Company dated March 28, 2013 asking it as to why directions including, restraining it from accessing the Securities Market should not be passed against it for their non-compliances as per the allegations made in the SCN. It is also observed that subsequently a SCN dated April 26, 2013 was issued to the three Directors of the Noticee Company, whereby again attention was drawn that the Noticee Company had not yet obtained SCORES authentication within the time specified in the aforesaid circular of 2012. It was further stated in the SCN dated April 26, 2013 that a public notice was also issued on January 13, 2013 whereby the Noticee Company was asked to obtain SCORES authentication within seven days from the date of the public notice cum advertisement failing which SEBI would be constrained to take appropriate enforcement action.

5. The aforesaid SCN however could not be delivered to the Noticee Company. Thereafter, vide public notice dated December 21, 2016, the Noticee Company was informed about the personal hearing scheduled on February 03, 2017 before the competent authority. Subsequently, the Noticees were informed about the personal hearing scheduled on February 13, 2019, which was re-scheduled to April 30, 2019 at the request of the Noticees. 6. On the scheduled date of hearing i.e. April 30, 2019, authorised representative appeared on behalf of the Noticees and made the following submissions. (a) The Noticee Company had already obtained the required registration in SCORES in terms of the relevant circular and has been redressing the grievances through the SCORES mechanism. (b) The log in id of SCORES was obtained and has been redressing the investor’s complaints from time to time. (c) The Noticees have already been penalised under the Adjudication proceedings for non-redressal of the investors complaint vide adjudicating order dated July 26, 2017 and as on date no complaints or ATR is pending at the end of the Noticee Company.

(d) The delay in redressing complaints pertain to the year 2012-2013 and the delay was on account of shift of the registered office of the Noticee Company entailing transfer and shift of huge quantum of records. (e) Production activities in the Noticee Company was stopped way back in the year 2001 and the Noticee Company was already de-listed by Bombay Stock Exchange (hereinafter referred to as “BSE”) on July 04, 2018. Copy of the notice dated July 02, 2018 was enclosed in support thereof. (f) The pending complaints were related to non-payment of dividend, whereas no dividend was declared by the Noticee Company. 7. During the course of hearing certain queries were raised and the Noticee Company was asked to provide documents in support of its claim of having redressed the pending complaints. I note that the Noticee Company has filed a short submission with supportive documents vide letter dated May 10, 2019. 8. Keeping in view the facts stated above, I proceed to deal with the matter, based on the materials available on record. I have considered the SCN, the annexures to the SCN submissions made by the Noticees and other material on record.

9. I note that a listed company is under an obligation to timely redress all complaints of its shareholders & investors. I note from the record that the Noticee Company was required to redress the pending complaints and update the ATR in timely manner in terms of the relevant circulars issued by SEBI from time to time governing the subject of redressal of investor’s grievances. The Noticee Company has submitted its ATR and furnished explanation about the delay in redressing some of the pending complaints. It has been submitted that there was a change in the registered office of the Noticee Company and consequently there was movement of volumes of records of the Noticee Company to the new address. Further, it was also submitted that the Noticee Company’s production stopped in the year 2001 and there was no active work going on in the Noticee Company. It was stated that the pending complaints were related to non-payment of dividend whereas the Noticee Company had not declared any dividend. Further the complaint was of generic in nature without specifying the year for which dividend was pending for payment, especially when the Company has not declared any dividend, which also caused delay in redressing the complaints.

10. It may be noted that protection of investors’ interest is a key to secure a successful Securities Market, hence listed companies should adopt active and prompt approach towards resolving investors’ complaints. As regards the importance of taking SCORES authentication and resolution of investors complaints, I find it apt to refer and rely on the observation recorded by Hon’ble Securities Appellate Tribunal (hereinafter referred to as “SAT”) in M/s. Golden Proteins Ltd. v. SEBI (DOD: 11.09.2015 in Appeal No. 334 of 2015), wherein Hon’ble SAT has recorded “This Tribunal has consistently held that timely redressal of the investors' grievances by the companies is of utmost importance. Keeping this importance in mind, SEBI by circular dated August 2, 2011, SEBI introduced a system of processing investors' complaints in a centralized web based complaints redress system, which is commonly known as 'SCORES'. Under this system, a centralized database of all the complaints and their online movement to the concerned intermediaries is monitored. Similarly, online upload of action taken reports (ATR) by the concerned entities and its viewing by investors of the action on the complaints and their current status etc. all are displayed.

Violation of such an important regulatory measure cannot be taken lightly in the facts and circumstances of the present case.”

11. Further, the importance of compliance of circulars/directions issued by SEBI has been highlighted by Hon’ble SAT in Pashupati Cables Ltd. v. SEBI (DOD: 07.05.2018 in Appeal No.107 of 2018) by observing that “ Grievance of the appellant that the show-cause notice was not served on the appellant would not survive in the present case, because, it is admitted by the authorized representative of the appellant that SCORES authentication has not been obtained in spite of the circulars issued by SEBI from time to time. Once it is admitted that the appellant has violated SEBI Circulars, then directing issuance of a show-cause notice in that behalf would be futile and in such a case, the only question to be considered would be, whether the penalty imposed in the present case is justified or not.” 12. It may be emphasised here that in addition to the obligations under the provisions of Companies Act, the listed Company is also under an obligation to redress all investors’ complaints in compliance with the directions issued by SEBI from time to time in discharge of its regulatory functions. From the records and submission advanced on behalf of the Noticees, I find that though there was some delay on the part of the Noticees in obtaining the SCORES registrations and in obtaining log in id and password so as to expedite the redressing of complaints in terms of the circulars issued from time to time, however, the same was ultimately obtained and pending complaints have been redressed.

I also note that a part of delay in redressing the complaints was also on account of the fact that some of the pending complaints were related to non-payment of dividend and there is nothing on record to show that the Noticee Company whose production activities have stopped since the year 2001, had declared any dividend during the relevant period of time. In the absence of having not declared any dividend, it may not be right and proper to hold the Noticee Company accountable for non-redressal of such complaints. At the same time, it is expected from the Noticee Company to respond to the complaints by updating the ATR within a reasonable period of time and redress the grievance of investors in which the Noticee Company was not prompt enough in taking effective steps within the reasonable time. I have perused the record furnished by the Noticee Company and other material available on record, from which I find that as of now, no complaint is pending for further action on the part of the Noticee Company. 13. One thing that weighs in my mind that for the delay caused by the Noticee Company in redressing complaints in the SCORES, Adjudication Proceedings were also initiated and the Noticee Company has already been levied with monetary penalty for the delay, which has been duly paid by the Noticee Company.

It has also been brought to my notice that the Noticee Company has now been compulsorily delisted from the BSE under the SEBI (Delisting of Equity Shares) Regulations, 2009 (hereinafter referred to as “Delisting Regulations”) with effect from July 04,

2018. I further note that in terms of Regulation 24 of the Delisting Regulations, the Noticee Company, its Whole Time Directors, its Promoters and other companies which are promoted by any of them have been prohibited from accessing the Securities Market or from seeking listing for any equity shares for a period of ten years from the date of such delisting. 14. Under such circumstances and considering the facts that no investor’s complaint is pending for redressal, the Noticee Company has been levied with monetary penalty and the fact that it is no more listed on the any of the stock exchanges at present, and further taking into account the facts that its Whole Time Directors are already under prohibition in terms of the aforesaid Delisting Regulations, I deem it fit to dispose of the present proceedings without any further directions against the Noticees in the instant proceedings.

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DATE: SEPTEMBER 30, 2019 S. K. MOHANTY PLACE: MUMBAI WHOLE TIME MEMBER