Order in the matter of Mafatlal Dyes & Chemicals Ltd.

WTM/RKA/OIAE/ 98/2014 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER Under section 11B of the Securities and Exchange Board of India Act, 1992 in the matter of Mafatlal Dyes & Chemicals Ltd. In respect of Mafatlal Dyes & Chemicals Ltd., Mr. Peter William Joseph Lionel Francis Cyril Vaz, Mr. Atulyabhai Yogindrabhai Mafatlal and Mr. Milind Sheshgiri Sohani. 1. Mafatlal Dyes & Chemicals Ltd. (hereinafter referred to as 'Mafatlal') is a company incorporated under the Companies Act, 1956 having its registered office at Mafatlal Dyes & Chemicals, 53-D, Cunha House, 1st Flr, Keshav Rao Khade Marg (west), Opp. Mahalaxmi Station (East) Mumbai 400 011. The shares of Mafatlal are listed on Bombay Stock Exchange Ltd. (BSE). It has been observed from the website of Ministry of Corporate Affairs that there are three directors of Mafatlal, namely, Mr. Peter William Joseph Lionel Francis Cyril Vaz, Mr. Atulyabhai Yogindrabhai Mafatlal and Mr. Milind Sheshgiri Sohani. 2. SEBI vide circular no. CIR/OIAE/1/2012 dated August 13, 2012 directed all companies whose securities are listed on stock exchanges to obtain SCORES authentication by September 14, 2012. However, certain companies including Mafatlal did not obtain SCORES authentication within the time period specified in the aforementioned circular. Therefore, a public notice was issued on January 13, 2013, advising inter alia, Mafatlal to obtain SCORES authentication within seven days from the date of the advertisement, failing which SEBI would be constrained to initiate appropriate enforcement actions. However, the company still failed to obtain SCORES authentication. It was also observed that two investor complaints were pending against Mafatlal. SEBI vide its letter dated February 15, 2013 once again advised Mafatlal to obtain SCORES authentication and to redress the investor complaints pending against it but the said letter returned undelivered. 3. Since Mafatlal did not obtain SCORES authentication and failed to redress the investor grievance, SEBI issued Show Cause Notices (SCNs) dated March 28, 2013 and April 26, 2013, to Mafatlal and its directors, respectively, calling upon them to show cause as to why suitable directions including the direction to restrain them from accessing the securities market for a specified period should not be issued under section 11B of the SEBI Act.

In the matter of Mafatlal Dyes & Chemicals

4. Replying to the SCN, Mr. Atulyabhai Mafatlal, vide his letter dated May 21, 2013 submitted that the Hon'ble High Court of Bombay, in Company Petition No. 900 of 2005 had ordered on July 19, 2010 for winding up of Mafatlal and the Official Liquidator, Bombay has been appointed Liquidator of the company.

5. I note that in the present matter, the winding up order had been passed on July 19, 2010 which is prior to the SCNs dated March 28, 2013 and April 26, 2013 issued in the present matter. I further note that section 446 of the Companies Act, 1956 mandates that “When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced … against the company except by leave of the (Tribunal) …”. 6. I am of the opinion that the present proceedings falls under the scope of the phrase “other legal proceedings” used in the section 446. Further I note that there is no material on record to suggest that leave of the Court has been taken before starting the present proceedings. 7. I, therefore, find that the present proceedings initiated against Mafatlal and its directors are infructuous and against the mandate of section 446 of the Companies Act, 1956. The matter is, accordingly, disposed of.

Date: 13th August, 2014 RAJEEV KUMAR AGARWAL Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA