Order in the matter of M/s. Steelco Gujarat Ltd. and its directors

1. Steelco Gujarat Limited (hereinafter referred to as the Company) is a company incorporated under the Companies Act, 1956 and having its registered office at Plot No. 2, G.I.D.C. Estate, Palej, Dist. Bharuch - 392220. The directors of the Company are Mr. Chandaria Vimal Ratilal, Mr. Lodha Mahendra G, Mr. Mehra Jatinder D., Mr. Sheth Shripal Chinubhai, Mr. Chandaria Rashmikant Devchand, Mr. Chandaria Ratilal Premchand, Mr. Singh Mahendra Pratap, Mr. Mohnot Narendra Mal Sardar Mal and Mr. Mamak Raghbirsingh Sundersingh and its company secretary, Mr. Mistry Hiren Jagdishbhai. The Securities and Exchange Board of India (hereinafter referred to as SEBI) received several complaints against the Company from investors. As on September 24, 2008, a total of one hundred and thirty one investor grievances were pending unresolved by the Company. The investor complaints received against the Company were forwarded to it for redressal. Periodical reminders were also sent to it for resolving such complaints.

2. Thereafter, SEBI), vide letter dated September 25, 2008 forwarded the list of such grievances to the Company for its redressal. The Company was further advised to resolve all the grievances within thirty days from the date of receipt of the said letter and to submit a status report. In the said letter, SEBI had also made references to Sections 15C and 24 of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as SEBI Act). The said letter which was sent to the Company by Registered Post was acknowledged by it. However, the Company had failed to file the status report with SEBI, as advised in the aforesaid letter. In view of the above, a reminder dated November 21, 2008 was sent to the Company advising it to resolve the complaints and submit the status report within seven days from the date of receipt of the said letter. It was also mentioned in the said order that in case of failure, SEBI would initiate such actions as deemed appropriate. A similar letter was also sent to Mr. N. M. Mohnot, Deputy Managing Director of company. Thereafter, the Company, vide letter November 28, 2008 had informed SEBI that it had resolved all the complaints and that there was no pending complaint against it.

As the said letter did not contain adequate information, SEBI, vide letter dated February 13, 2009 had advised the Company to submit the necessary enclosures with the Action Taken Report (hereinafter referred to as the ATR) within seven days. SEBI, in the said letter, had also provided the list of grievances which were not treated as closed/resolved due to the deficiencies in the ATR. The deficiencies observed by SEBI were also mentioned in the said letter. Subsequently, the Company had, vide letter dated February 20, 2009 reiterated its earlier submission, in response to SEBI letter dated February 13, 2009. In view of the prima facie failure of the Company to resolve the investor grievances and to file the ATR, as advised, 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 they should not be restrained from accessing the securities market and prohibited in dealing in securities till such time the pending investor grievances against it were resolved. Similar show cause notices were also sent by SEBI on November 10, 2009 to the directors of the Company namely, Mr. Chandaria Vimal Ratilal, Mr. Lodha Mahendra G, Mr. Mehra Jatinder D., Mr. Sheth Shripal Chinubhai, Mr. Chandaria Rashmikant Devchand, Mr. Chandaria Ratilal Premchand, Mr. Singh Mahendra Pratap, Mr.

Mohnot Narendra Mal Sardar Mal and Mr. Mamak Raghbirsingh Sundersingh and its company secretary, Mr. Mistry Hiren Jagdishbhai. In response to the said notice, the Company, vide letter dated December 4, 2009, while forwarding the ATR inter alia stated that it had replied to all the shareholders/investors. The Company had also sent ATR, duplicate issue register (dated March 11, and April 7, 2010) and the proof of dispatch (with registered post). Thereafter, vide letter dated April 8, 2010, the Company, forwarded the list of shareholder’s affidavit send as proof of dispatch, copy of duplicate share issue Register, list of complaints forwarded by SEBI. The Company had again filed ATR (as on April 29, 2010), vide letter dated April 29, 2010. The Company, in a separate letter dated April 29, 2010 requested SEBI that all the aforesaid replies made by it are to treated as a joint reply of Mr. Chandaria Rashmikant Devchand, Mr. Mistry Hiren Jagdishbhai, Mr. Singh Mahendra Pratap, Mr. Lodha Mahendra G and Mr. Mehra Jatinder D. Thereafter, SEBI, vide letter dated May 5, 2010 requested the Company to serve the show cause notices dated November 10, 2009 issued to Mr. Mamak Raghbirsingh Sundersingh, Mr. Sheth Shripal Chinubhai, Mr. Mohnot Narendra Mal Sardar Mal and Mr. Chandaria Vimal Ratilal.

Thereafter an opportunity of hearing was granted by SEBI to the Company and its directors and Company Secretary on August 5, 2010. Thereafter, the Company, vide letter dated June 21, 2010 forwarded the ATR as on the said date. The Company had also, vide letter dated June 21, 2010 enclosed ATRs in respect of the pending complaints. The Company had further requested, vide letter dated August 2, 2010 for an adjournment of the hearing scheduled on August 5, 2010 and accordingly, the hearing was adjourned to September 7, 2010. In the said hearing, Mr. Anish Kharidia, the company secretary, represented the Company and made submissions. Mr. N. M. Mohnot (Deputy Managing Director) and Mr. Manoj Srivastav (company secretary) were also present during the hearing. It was submitted before me that all the complaints forwarded by SEBI are resolved and that there is no pending complaint against the Company and referred to the ATRs submitted to SEBI by them. I also note that SEBI had initiated adjudication proceedings under Sections 15C and Section 15A(a) of the SEBI Act against the Company for its failure to redress the complaints.

The penalty of `5,00,000/- imposed by the adjudicating officer was also paid by the Company. As the Company has now resolved all the complaints forwarded by SEBI, I do not consider that the present case is a fit one to issue any directions. Accordingly, I dispose of the proceedings initiated against the Company, its directors and the company secretary, as ordered here in below.

3. 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 10, 2009 issued to Steelco Gujarat Limited and its directors namely, Mr. Chandaria Vimal Ratilal, Mr. Lodha Mahendra G, Mr. Mehra Jatinder D., Mr. Sheth Shripal Chinubhai, Mr. Chandaria Rashmikant Devchand, Mr. Chandaria Ratilal Premchand, Mr. Singh Mahendra Pratap, Mr. Mohnot Narendra Mal Sardar Mal and Mr. Mamak Raghbirsingh Sundersingh and Mr. Mistry Hiren Jagdishbhai (company secretary), without any directions for the reasons stated above.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: DECEMBER 15, 2010