Order in the matter of M/s.Pankaj Agro Protinex Limited and its directors

1. Pankaj Agro Protinex Limited (hereinafter referred to as the company) is a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at Pankaj Premises, Morvi Road, Rajkot, Gujarat– 360003. 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 sixty one investor grievances were pending unresolved by the company. The investor complaints received were forwarded to the company for its redressal and periodical reminders were also sent to the company for resolving such pending complaints.

2. Thereafter, SEBI vide letter dated September 25, 2008 forwarded a list of such sixtyone grievances to the company for its redressal. The company was advised to resolve all the grievances and to submit a status report within thirty days from the date of receipt of the said letter. In the said letter, SEBI had also made a reference to Sections 15C and 24 of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act). Though, the said letter was delivered to the company, it had failed to file the status report with SEBI, as advised. Therefore, a reminder dated November 24, 2008 was sent to the Company Secretary advising the company to resolve the complaints and submit the status report within seven days of receipt of the aforesaid letter. It was also mentioned in the said letter that in case of failure, SEBI would initiate such actions against the company as deemed appropriate. The said letter was also acknowledged by the company. SEBI had also sent letters dated November 24,

2008 to Mr. Pravin Kumar K. Patel (Chairman and Managing Director of the company) advising the company to resolve the complaints and to submit a status report. Reminder letter dated December 22, 2008 was again sent to Mr. Pravin Kumar K. Patel advising to redress all the pending grievances within thirty days from the date of receipt of the said letter. Thereafter, another letter dated February 13, 2009 was sent to the company advising it to provide requisite information and submit the necessary enclosures with the Action Taken Report. Since no reply was received from the company as regards the redressal of complaints, SEBI issued a public notice dated March 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 letters and public notice, the company had not submitted the action taken report on the status of any redressal. 3. In view of the above, a notice dated November 6, 2009 was sent to the company by SEBI under Sections 11B and 11(4)(b) of the SEBI Act requiring it to show cause as to why it should not be restrained from accessing the securities market and prohibited in dealing in securities till such time the pending investor grievances against the company are resolved.

Similar notices dated November 10, 2009 were also sent to the directors of the company, namely, Mr. Vipul K. Dedakiya, Mr. Arun M. Kotari, Mr. Bharat R. Bhalodia, Mr. Kirti Keshavlal Patel, Ms. Devyami PravinKumar Patel and Mr. Pravin Keshavlal Patel. The said show cause notices were delivered on the company and its aforesaid directors and Chairman. Subsequently, company vide letter dated November 23, 2009, inter alia submitted that the complaints have been resolved by them and that the company has not received any complaint since last two years. It was also stated in the aforesaid letter that the company had already replied to the letter of SEBI dated November 24, 2008. Similar replies were filed by the directors of the company, namely, Mr. Vipul K. Dedakiya, Mr. Bharat R. Bhalodia, Pravin Keshavlal Patel and Mr. Kirti Keshavlal Patel, vide letters dated November 21, 2009. However, no reply was filed by Mr. Arun M. Kotari and Ms. Devyami Pravinkumar Patel. On perusal of the aforesaid letters, it was observed that the Action Taken Reports did not contain complete information on the action taken on the complaint, such as, copy of intimation to the investors, dispatch particulars and proof.

In view of the above, a letter dated January 21, 2010 was issued to the company and its directors advising them to submit the complete Action Taken Report to SEBI with necessary supporting documents, as per the prescribed format. Thereafter, vide letter dated June 2, 2010, an opportunity of hearing was granted to the company and its directors on August 5, 2010. A paper publication was also made by SEBI on June 13, 2010, in respect of the said show cause notices and the 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 meantime, a copy of the Annual Returns filed by the company was received from the Registrar of Companies (RoC), Gujarat. According to the Annual Report, Mr. Arun M. Kotari resigned from the company on September 29, 2007. Subsequently, the company, vide its letter dated July 12, 2010 filed its reply which inter alia stated that it had redressed all investor’s grievances and that it had not received any communication from any of the investors thereafter.

It was also stated that the majority of the complaints were related to non-receipt of Refund Orders in the public issue made by the company during 1992 and that the promoters, out of their own funds, again made payments towards refund of application moneys to various investors. A complete and detailed updated status of all 61 complaints was also enclosed with the letter. On the date of hearing, i.e., on August 5, 2010, Mr. Keyoor Bakshi, practicing Company Secretary appeared on behalf of the company and its directors and made submissions in the lines of its earlier reply dated July 12, 2010. During the course of hearing, the company was directed to submit the proof of dispatch of the instruments to the shareholders including the proof of the instruments. Subsequently, company, vide letter dated August 9, 2010, filed a statement containing the status of resolving sixty-one complaints showed as pending on the record of SEBI. It was also stated in the letter that the complaints pertained to the public issue made by the company during 1992, therefore, the proof of dispatch of Share certificates/refund orders sent during that time is not available as more than seventeen years have elapsed thereafter.

It was further submitted that the promoters, have made payments of the refund amount to the concerned investors out of their own resources. Although the company has stated that all the complaints have been redressed, there were 29 complaints pending from the initial list, as on January 28, 2011. Since the complaints were pending, the company was advised by SEBI, vide letter dated March 16, 2011 to inform the current status of the pending complaints. The company, replied vide letter dated March 21, 2011 forwarding the action taken report of all the sixty one complaints as per the initial list without any enclosures and therefore, the company was advised to provide the proper action taken report in respect of thirty complaints In reply, the company forwarded the action taken report in respect of such complaints. Thereafter, SEBI conducted a validation 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 has not received any response from 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.

The company stated that it had redressed all pending investor grievances. In this regard, I also note that in the complaint validating exercise undertaken by SEBI, 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 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 10, 2009 issued to the company and its directors, respectively. Notwithstanding the same, the show cause notice issued to Mr. Arun M.Kotari needs to be disposed of as it is found that he had resigned from the company prior to the issuance of the SEBI letter dated September 25, 2008. Accordingly, I dispose of the proceedings initiated against the Company and its directors as ordered herein below. 5. 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(4)(b) and 11B thereof, hereby dispose of the proceedings initiated vide show cause notices dated November 6, 2009 and November 10, 2009, against Pankaj Agro Protinex Limited and its directors namely, Mr. Vipul K. Dedakiya, Mr. Bharat R. Bhalodia, Mr. Pravin Keshavlal Patel, Mr. Kirti Keshavlal Patel, Ms. Devyami Pravinkumar Patel and Mr. Arun M Kothari, without any directions.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA PLACE: MUMBAI DATE: JUNE 3, 2011