Order in the matter of Ritman Infra Ltd.

IN RE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015.

IN RESPECT OF S. No. NAME PAN 1 Ritman Concrete Private Limited AADCR4006K 2 Ritman Commercial Private Limited AACCR7374M

1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”), in the interest of investors, vide its letter dated August 7, 2017 addressed to Stock Exchanges, took certain pre-emptive interim measures under section 11(1) of SEBI Act, 1992, in respect of listed companies identified as shell companies by Ministry of Corporate Affairs (hereinafter referred to as “MCA”) including Ritman Infra Ltd (hereinafter referred to as “RIL” / “Company”). SEBI placed trading restrictions on the promoters/directors so that they do not exit the company at the cost of innocent shareholders. In view of the said objective, SEBI vide the said letter dated August 7, 2017 also placed the scrip in the trade to trade category with limitation on the frequency of trades and imposed a limitation on the buyers by way of 200% deposit on the trade value, so as to alert them before trading in the scrip. The said measures were initiated by SEBI pending final determination after verification of credentials and fundamentals by the Stock Exchanges, including by way of audit and forensic audit, if necessary. The measures also envisaged, on final determination, delisting of companies from the Stock Exchange, if warranted. By virtue of these measures, trading in the scrip was not suspended but was allowed under strict monitoring so that investors could take informed investment decisions, till SEBI and Exchanges completed their detailed examination of such companies.

Order in the matter of Ritman Infra Ltd

2. Aggrieved by the aforesaid letter dated August 7, 2017 issued by SEBI, RIL filed an appeal No. 238 of 2017 before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as “SAT”). The Hon’ble SAT vide order dated September 11, 2017, allowed RIL to withdraw the appeal with liberty to file a representation to SEBI against the said letter dated August 7, 2017. Hon’ble SAT directed SEBI to dispose of the representation of RIL as expeditiously as possible and in any event within a period of four weeks from the date of receiving of the representation. Hon’ble SAT also held that passing of any order on the representation made by the appellant would not preclude SEBI from further investigating the matter and initiate appropriate proceedings if deemed fit

3. Thereafter, SEBI vide an interim order dated October 13, 2017 (hereinafter referred to as “interim order”), had modified, subject to para 25 (iv) of the interim order, the actions envisaged in SEBI’s letter dated August 07, 2017 and the consequential actions taken by Stock Exchanges, against RIL as under:

i. The trading in securities of RIL shall be reverted to the status as it stood prior to issuance of letter dated August 7, 2017 by SEBI. ii. Stock Exchange shall appoint an independent forensic auditor, inter alia, to further verify: a) Misrepresentation including of financials and/or business of RIL and consolidating subsidiaries, if any; b) Misuse of the funds/books of accounts of RIL and consolidating subsidiaries, if any. iii. The promoters and directors in RIL are permitted only to buy the securities of RIL. The shares held by the promoters and directors in RIL shall not be allowed to be transferred for sale by depositories. iv. The other actions envisaged in SEBI’s letter dated August 07, 2017 in para 1 (d) as may be applicable, and the consequential action taken by Stock Exchanges shall continue to have effect against RIL.

4. In compliance with the above directions, Metropolitan Stock Exchange of India Ltd. (“MSEI”) appointed a forensic auditor in the matter on January 10, 2018. However, the process of audit was put on hold as the proceedings in the matter upon receipt of reply of RIL were on going.

5. Subsequently, SEBI vide order dated April 25, 2018 (hereinafter referred to as “Confirmatory Order”) had confirmed the directions mentioned in the interim order dated October 13, 2017 against RIL, its promoters and directors.

6. Aggrieved by the above mentioned confirmatory order, RIL preferred an appeal before Hon’ble SAT. The said appeal was disposed of by Hon’ble SAT while making the following observations:

“2. Counsel for Respondent No. 1 states that forensic audit report would be submitted to SEBI within one week from today. Counsel for SEBI states that on perusal of the said forensic audit report, if deemed fit, SEBI would issue show cause notice within 8 weeks from the date of receiving the forensic audit report and dispose of the same as expeditiously as possible. Counsel for the respondents’ further state that in the meantime no other steps would be taken against the appellant. Above statements made by the counsel for respondents are accepted. 3. Accordingly, the appeal is disposed of with a direction that the show cause notice, if any, issued within the time stipulated herein, shall be disposed of as expeditiously as possible. No order as to costs.”

7. Pursuant thereto, forensic audit with a view to ascertain the possible violations of securities laws by RIL, its promoters or directors was completed and a report in that regard was submitted by MSEI to SEBI in July 2018.

8. Upon completion of forensic audit by MSEI in the matter, no evidence / supporting documents were found to substantiate the role of two promoters namely, Ritman Concrete Private Limited and Ritman Commercial Private Limited with respect to misuse / misrepresentation in financials of RIL. Hence, the violation of provisions of securities laws were not observed in respect of the said promoter entities. 9. Considering the fact that there are no adverse findings against the aforementioned promoter entities with respect to their role in misuse / misrepresentation in financials of RIL, I am of the view that the directions issued against them vide interim order dated October 13, 2017, which were confirmed vide order dated April 25, 2018, need not be continued.

10. Thus, I, in exercise of the power conferred upon me under sections 11, 11(4) and 11B read with section 19 of the Securities and Exchange Board of India Act, 1992 hereby revoke the directions issued against Ritman Concrete Private Limited and Ritman Commercial Private Limited vide interim order dated October 13, 2017, which were confirmed vide confirmatory order dated April 25, 2018.

11. The order shall come into force with immediate effect. It is clarified that the revocation of the directions by way of this order is only in respect of the two promoter entities namely, Ritman Concrete Private Limited and Ritman Commercial Private Limited in the matter of RIL. As regards the remaining entities in the matter of RIL, violations under securities laws have been observed and SEBI shall continue its proceedings against them in accordance with law. Hence, the directions issued vide interim order dated October 13, 2017 as confirmed vide order dated April 25, 2018 shall continue against remaining entities.

12. Copy of this Order shall be forwarded to the recognized Stock Exchanges and Depositories for information and necessary action. A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs and Serious Fraud Investigation Office for their information.

Sd/-

DATE: January 24, 2019 MADHABI PURI BUCH PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA