Order in the matter of Movilex Irrigation Ltd.
- Order No.WTM/RKA/OIAE/110/2014
Ratio decidendi
The rule this decision rests on
Where a listed company has been declared sick by BIFR and its assets were sold by secured creditors under the SARFAESI Act, and the investor complaint against it has since been closed, there is no need to issue directions under section 11B of the SEBI Act, even though the company failed to obtain SCORES authentication and did not redress the grievance in time.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Under section 11B of the Securities and Exchange Board of India Act, 1992 in the matter of Movilex Irrigation Ltd.
In respect of Movilex Irrigation Ltd. and its directors, namely, Mr. Harshad Chandulal Shah Mr. Haresh Mohanlal Shah and Mr. Jaswant Lallubhai Shah 1. Movilex Irrigation Ltd. (hereinafter referred to as 'Movilex' or ‘the company’) is a company incorporated under the Companies Act, 1956 having its registered office at 1240, Champion House Bhawani Peth, Near Palkhi Chowk, Pune 411 042, Maharashtra. The shares of the company are listed on Bombay Stock Exchange Ltd. (BSE), Pune Stock Exchange (PSE) and Ahmedabad Stock Exchange Limited (ASE). It was observed from the website of Ministry of Corporate Affairs that there are three directors of the company, namely, Mr. Harshad Chandulal Shah Mr. Haresh Mohanlal Shah and Mr. Jaswant Lallubhai Shah (hereinafter collectively referred to as "directors"). 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 company including Movilex 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, the company to obtain SCORES authentication within seven days from the date of the advertisement, failing which SEBI would be constrained to initiate appropriate enforcement actions. It was observed that one investor grievance was pending against the company. 3. Since the company 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 the company 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 Movilex Irrigation Ltd
4. In reply to the SCNs the company vide its letter dated May 02, 2013 submitted that it has been declared sick company by BIFR vide case no : 397/2001 dated 16th October 2001. Besides the same, the assets of the company were acquired by the secured creditors and were auctioned by them in the year 2006 by exercising powers under SARFAESI Act 2002. SEBI has confirmed that the investor complaint in the present matter has been closed and same has been intimated to the complainant. 5. Considering the facts and circumstances of the case, I am of the view that there is no need to pass any direction under section 11B of the SEBI Act against Movilex Irrigation Ltd. and its directors, as contemplated in the SCN issued to them. The SCNs are accordingly disposed of.
Date: September, 22nd 2014 RAJEEV KUMAR AGARWAL Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
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