Order in the matter of SEBA Real Estate Limited and its Directors

WTM/SR/GLO/64/09/2014 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI CORAM: S. RAMAN, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992, in the matter of SEBA Real Estate Limited and its Directors, viz. Shri Siddhartha Nag (DIN: 01560128; PAN: AEOPN7092K), Shri Kanak Ranjan Nath (DIN: 01042522; PAN: ADFPN9130J), Shri Sanjoy Nag (DIN: 01042623; PAN: AEOPN7091L), Shri Subhash Chandra Saha (DIN: 01042663; PAN: AYCPS4451M), Shri Satyendra Kumar Dey (DIN: 01042500; PAN: AJLPD1430D), Shri Mrinal Chandra Nandi (DIN: 01047315; PAN: ACZPN6252A), Shri Santanu Das (DIN: 01042699; PAN: AJJPD4880B), Shri Ashis Dhar (DIN: 01042604), Shri Sujit Kumar Roy (DIN: 01042580; PAN: AIYPR3451L) and Shri Shibendu Das (DIN: 01042551; PAN: AGDPD7440A).

1. Securities and Exchange Board of India ("SEBI") received a complaint on December 10, 2012, from an investor, wherein it was alleged that SEBA Real Estate Limited ("SREL") was mobilizing funds through issue of preference shares.

2.1 Thereafter, SEBI vide letter dated March 25, 2013, advised SREL to furnish the following information within 15 days from the date of receipt of the aforesaid letter, viz. – i. Copy of the Memorandum and Articles of Association of the company; ii. Copy of Audited Annual Accounts of the company for the last 3 years; iii. Copies of Annual Returns filed by the company for the last 3 years; iv. Copies of Compliance Certificate filed by the company for the last 3 years; v. Name, addresses and occupation of all the promoters/directors of the company; vi. Names and details of the Key Managerial Personnel of the company; vii. Other information in respect of every series of preference shares issued by the company, viz. – a. Copy of Prospectus/Red Herring Prospectus/Statement in lieu of Prospectus/Information Memorandum filed with Registrar of Companies ("ROC"); b. Confirmation of having made an Application for listing;

c. Copy of Form 2 filed with ROC; d. Date of opening and closing of the subscription list; e. Details regarding the number of application forms circulated inviting subscription; f. Details regarding the number of applications received; g. Details regarding the number of allottees and list of such allottees, etc.; h. Number of preference shares allotted and value of such allotment against each allottee's name. i. Details regarding subscription amount raised; j. Date of allotment of preference shares; k. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for allotment; l. Date of dispatch of preference share Certificates; m. Details of the total number of applicants for each of SREL's scheme besides the list of final allottee; n. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of preference shares; o. Terms and conditions of the issue of preference shares.

2.2 Since the abovementioned letter returned undelivered, SEBI, vide letter dated February 21, 2014, once again sought the information (sought vide its letter dated March 25, 2013) from SREL.

2.3 Thereafter, vide letters each dated March 12, 2014, SEBI once again sought the abovementioned information from the Managing Director/Directors of SREL. All but one of the aforesaid letters, were returned undelivered. In respect of the letter dated March 12, 2014, which was delivered to a Director of SREL i.e. Shri Kanak Ranjan Nath, no reply has been received by SEBI as on date, from that Director of SREL.

2.4 SEBI also issued letter dated March 12, 2014 (to the present Managing Director of SREL) and letters dated June 9, 2014 (to 3 present Directors of SREL). All but one of the aforesaid letters i.e. letter issued to SREL Director, Shri Kanak Ranjan Nath, were returned as undelivered. As no reply was furnished by Shri Kanak Ranjan Nath, a reminder was issued to him vide SEBI letter dated July 04, 2014.

3. The material available on record i.e. information obtained from the Ministry of Corporate Affairs' website i.e. 'MCA 21 Portal' alongwith information forwarded by the ROC, Shillong, have been perused. On an examination of the same, it is observed that – i. SREL was incorporated on June 20, 2006, with CIN No. as U70101AS2006PLC008185. SREL's Registered Office is at House No. 5, Ward No. 56, Maidam Bakarapara, Basistha Chariali, Beltola, Guwahati, Assam–781029, India.

ii. The Directors in SREL are Shri Siddhartha Nag, Shri Kanak Ranjan Nath, Shri Sanjoy Nag and Shri Subhash Chandra Saha. Shri Satyendra Kumar Dey, Shri Mrinal Chandra Nandi, Shri Santanu Das, Shri Ashis Dhar, Shri Sujit Kumar Roy and Shri Shibendu Das, who were earlier Directors in SREL, have since resigned.

iii. SREL issued "Preference Shares" ("Offer of preference shares") in accordance with the following terms and conditions – a. "Since Preference shares are being issued on private placement basis, no prior approval/rating is required from Government/SEBI and other Statutory Authorities. b. Guaranteed dividend with Quarterly/Half yearly/Yearly withdrawal facility. (Preference Share Plan) c. Cumulative dividend with redemption (Cumulative Preference Share Plan) d. Share transfer facility at any time. e. Choice of six Different redemption options. f. Choice of investment in SEBA PREFERENCE SHARE and SEBA CUM PREFERENCE SHARE PLAN. g. Priority and discount for purchasing plots and flats from SEBA REAL ESTATE PROJECT. h. Double Nomination facility."

iv. The details of various plan launched by SREL in respect of the Offer of preference shares are as under – a. SEBA FLEXI CUM PREFERENCE SHARE PLAN:

REDEMPTION TERM TWO YEAR (2 YEARS) Amount paid up Month–wise Total Total Redemption per share/unit Subscription Subscription ( ) Dividend Value ( ) ( ) ( ) 10 100 2400 15% 2760 10 150 3600 15% 4140 10 200 4800 15% 5520 10 300 7200 15% 8280 10 500 12000 15% 13800 10 600 14400 15% 16560 10 1500 36000 15% 41400

REDEMPTION TERM THREE YEAR (3 YEARS) Amount paid up Month–wise Total Total Redemption per share/unit Subscription Subscription ( ) Dividend Value ( ) ( ) ( ) 10 100 3600 25% 4500 10 200 7200 25% 9000 10 300 10800 25% 13500 10 500 18000 25% 22500 10 600 21600 25% 27000 10 1500 54000 25% 67500 REDEMPTION TERM FIVE YEAR (5 YEARS) Amount paid Month–wise Total Total Redemption Value up per Subscription Subscription Dividend ( ) share/unit ( ) ( ) ( ) 10 100 6000 42% 8520 b. SEBA PREFERENCE SHARE PLAN Redemption Amount paid up Minimum Annual Dividend Term Per share/unit ( ) Subscription Dividend Withdrawal Option Two Years 10 10 Units 12% Quarterly/ Three Years 10 10 Units 12% Half Yearly/ Five Years 10 10 Units 12% Yearly Six Years 10 10 Units 12% Eight Years 10 10 Units 12% Ten Years 10 10 Units 12% c. SEBA CUM PREFERENCE SHARE PLAN Redemption Amount paid up Minimum Annual Redemption Value Term Per share / unit ( ) Subscription Dividend (on 10 Units) Two Years 10 10 Units 12% 124.00 Three Years 10 10 Units 15% 145.00 Five Years 10 10 Units 16% 180.00 v. SREL issued preference shares to a large number of investors during the Financial Years 2006–07, 2007–08, 2008–09, 2009–10 and 2010–11, details of which are provided below –

Year Type of Date of Allotment No. of No. of Total Amount Security Securities Allottees ( )

2006 – 07 31.03.2007 110805 849 1108050

2007 – 08 31.03.2008 1843707 8259 18437070 Preference 2008 – 09 Shares 31.03.2009 3571182 26704 35711820

2009 – 10 29.03.2010 1802000 3025 18020000

2010 – 11 31.03.2011 18019970 2461 180199700

Total 25347664 41298 253476640

4.1 In the context of the abovementioned details of the Offer of preference shares, the issue for determination in the instant matter is whether the mobilization of funds by SREL through the aforesaid, is in accordance with the provisions of the SEBI Act, 1992 ("SEBI Act"); the Companies Act, 1956 read with the Companies Act, 2013; the SEBI (Disclosure and Investor Protection) Guidelines, 2000 ("DIP Guidelines") read with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations").

4.2 I note that the jurisdiction of SEBI over various provisions of the Companies Act in the case of public companies, whether listed or unlisted, when they issue and transfer securities, flows from the provisions of Section 55A of the Companies Act. While examining the scope of Section 55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara India Real Estate Corporation Limited & Ors. vs. SEBI (Civil Appeal no. 9813 of 2011) (Judgment dated August 31, 2012) (hereinafter referred to as the "Sahara Case"), had observed that:

"We, therefore, hold that, so far as the provisions enumerated in the opening portion of Section 55A of the Companies Act, so far as they relate to issue and transfer of securities and non-payment of dividend is concerned, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India."

4.3 In this regard – i. Reference is also made to Sections 67(1) and 67(3) of the Companies Act, 1956, which are reproduced as under:

"67. (1) Any reference in this Act or in the articles of a company to offering shares or debentures to the public shall, subject to any provision to the contrary contained in this Act and subject also to the provisions of sub-sections (3) and (4), be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner. (2) ... (3) No offer or invitation shall be treated as made to the public by virtue of sub-section (1) or sub-section (2), as the case may be, if the offer or invitation can properly be regarded, in all the circumstances- (a) as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b) otherwise as being a domestic concern of the persons making and receiving the offer or invitation …

Provided that nothing contained in this sub-section shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more: Provided further that nothing contained in the first proviso shall apply to non-banking financial companies or public financial institutions specified in section 4A of the Companies Act, 1956 (1 of 1956).”

ii. While examining the scope of Section 67 of the Companies Act, 1956, the Hon'ble Supreme Court of India in the Sahara Case observed that:

"Section 67(1) deals with the offer of shares and debentures to the public and Section 67(2) deals with invitation to the public to subscribe for shares and debentures and how those expressions are to be understood, when reference is made to the Act or in the articles of a company. The emphasis in Section 67(1) and (2) is on the “section of the public”. Section 67(3) states that no offer or invitation shall be treated as made to the public, by virtue of subsections (1) and (2), that is to any section of the public, if the offer or invitation is not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation or otherwise as being a domestic concern of the persons making and receiving the offer or invitations. Section 67(3) is, therefore, an exception to Sections 67(1) and (2). If the circumstances mentioned in clauses (1) and (b) of Section 67(3) are satisfied, then the offer/invitation would not be treated as being made to the public. The first proviso to Section 67(3) was inserted by the Companies (Amendment) Act, 2000 w.e.f. 13.12.2000, which clearly indicates, nothing contained in Sub-section (3) of Section 67 shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more. … Resultantly, if an offer of securities is made to fifty or more persons, it would be deemed to be a public issue, even if it is of domestic concern or proved that the shares or debentures are not available for subscription or purchase by persons other than those received the offer or invitation. … I may, therefore, indicate, subject to what has been stated above, in India that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations framed thereunder, the Companies Act, pertaining to the public issue. …"

iii. In the instant matter, for ascertaining whether the Offer of preference shares is a public issue or an issue on private placement basis in accordance with Section 67 of the Companies Act, 1956, the number of subscribers is of utmost importance.

a. Under the Offer of preference shares, it is observed that during the Financial Years 2006–07, 2007–08, 2008–09, 2009–10 and 2010–11, SREL allotted preference shares to a total of 41298 individuals/investors and mobilized funds amounting to approximately 25.34 Crores. The number of allotments made under the Offer of preference shares alongwith the amount mobilized therein, when viewed in light of the refusal to submit complete and relevant information to SEBI, by SREL and its Directors, would prima facie indicate that the Offer of preference shares was a public issue of securities and prima facie indicate that the number of persons to whom such Offer was made, was above the limit of forty–nine persons as prescribed under Section 67(3) of the Companies Act, 1956.

b. SREL is not stated to be a non-banking financial company or a public financial institution within the meaning of Section 4A of the Companies Act, 1956 and therefore, is not covered under the second proviso to Section 67(3) of the Companies Act, 1956.

c. In view of the above, the Offer of preference shares by SREL, would prima facie qualify as a public issue under the first proviso to Section 67(3) of the Companies Act, 1956. In this regard, it is pertinent to note that by virtue of Section 55A of the Companies Act, Section 67 of that Act, so far as it relates to issue and transfer of securities, shall also be administered by SEBI.

4.4 I note that – i. From the abovementioned, it will follow that since the Offer of preference shares is a public issue of securities, such securities shall also have to be listed on a recognized stock exchange, as mandated under Section 73 of the Companies Act, 1956. In this regard, reference is made to Sections 73 of the Companies Act, 1956, of which sub- Sections (1), (2) and (3) are relevant for the instant case, which is reproduced as under:

"73. (1) Every company intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall, before such issue, make an application to one or more recognised stock exchanges for permission for the shares or debentures intending to be so offered to be dealt with in the stock exchange or each such stock exchange. (1A) … (2) Where the permission has not been applied under subsection (1) or such permission having been applied for, has not been granted as aforesaid, the company shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the company becomes liable to repay it, the company and every director of the company who is an officer in default shall, on and from the expiry of the eighth day, be jointly and severally liable to repay that money with interest at such rate, not less than four per cent and not more than fifteen per cent, as may be prescribed, having regard to the length of the period of delay in making the repayment of such money. (3) All moneys received as aforesaid shall be kept in a separate bank account maintained with a Scheduled Bank 1 [until the permission has been granted, or where an appeal has been preferred against the refusal to grant such. permission, until the disposal of the appeal, and the money standing in such separate account shall, where the permission has not been applied for as aforesaid or has not been granted, be repaid within the time and in the manner specified in sub-section (2)]; and if default is made in complying with this sub-section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees.”

ii. In the Sahara Case, the Hon'ble Supreme Court of India also examined Section 73 of the Companies Act, 1956, wherein it observed that – "Section 73(1) of the Act casts an obligation on every company intending to offer shares or debentures to the public to apply on a stock exchange for listing of its securities. Such companies have no option or choice but to list their securities on a recognized stock exchange, once they invite subscription from over forty nine investors from the public. If an unlisted company expresses its intention, by conduct or otherwise, to offer its securities to the public by the issue of a prospectus, the legal obligation to make an application on a recognized stock exchange for listing starts. Sub-section (1A) of Section 73 gives indication of what are the particulars to be stated in such a prospectus. The consequences of not applying for the permission under sub-section (1) of Section 73 or not granting of permission is clearly stipulated in sub-section (3) of Section 73. Obligation to refund the amount collected from the public with interest is also mandatory as per Section 73(2) of the Act. Listing is, therefore, a legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons."

iii. In the facts of the instant case, since the Offer of preference shares was made to fifty persons or more by SREL, the same will attract the requirement of compulsory listing before a recognized stock exchange in terms of Section 73(1) of the Companies Act, 1956. It therefore prima facie appears that SREL has violated the provisions of Section 73(1) of the Companies Act, 1956, since it has failed to ensure listing with a recognised stock exchange of the securities issued under the Offer of preference shares.

iv. As per Section 73(2) of the Companies Act, 1956, the obligation to refund the amount with interest that was collected from investors under the Offer of preference shares is mandatory on SREL. In this regard, there is no evidence on record to indicate whether or not SREL has paid interest to the investors where such preference shares are not allotted within 8 days under the Offer of preference shares, as per the aforesaid Section. In view of the same, I find that SREL has prima facie not complied with the provisions of Section 73(2) of the Companies Act, 1956.

v. Section 73(3) of Companies Act, 1956, says that all moneys received shall be kept in a separate bank account maintained with a Scheduled Bank and if default is made in complying with this sub-Section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees. In the instant case, there is no evidence on record to indicate whether or not funds received from the investors under the Offer of preference shares has been kept in separate bank account by SREL. In view of the same, I find that SREL has prima facie not complied with the provisions of Section 73(3) of Companies Act, 1956.

4.5 Under Section 2(36) read with Section 60 of the Companies Act, 1956, a company needs to register its prospectus with the ROC, before making a public offer or issuing the prospectus. As per the aforesaid Section 2(36), “prospectus” means any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate. As mentioned above, since the Offer of preference shares was made to fifty persons or more, it has to be construed as a public offer. Having made a public offer, SREL was required to register a prospectus with the ROC under Section 60 of the Companies Act, 1956. Based on the material available on record, I find that SREL has not complied with the provisions of Section 60 of Companies Act, 1956.

4.6 Under Section 56(1) of the Companies Act, 1956, every prospectus issued by or on behalf of a company, shall state the matters specified in Part I and set out the reports specified in Part II of Schedule II of that Act. Further, as per Section 56(3) of the Companies Act, 1956, no one shall issue any form of application for shares in or debentures of a company, unless the form is accompanied by abridged prospectus, contain disclosures as specified. Based on the material available on record, I find that SREL has not complied with the provisions of Section 56(1) and 56(3) of the Companies Act, 1956 and therefore, has prima facie violated the aforesaid provisions.

4.7 As per Section 465(1) of the Companies Act, 2013, the Companies Act, 1956, "shall stand repealed". However, Section 465(2)(i) of the Companies Act, 2013, provides that:

"(2)Notwithstanding the repeal under sub-section (1) of the repealed enactments,— (a) anything done or any action taken or purported to have been done or taken, including any rule, notification, inspection, order or notice made or issued or any appointment or declaration made or any operation undertaken or any direction given or any proceeding taken or any penalty, punishment, forfeiture or fine imposed under the repealed enactments shall, insofar as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act;"

4.8 I also note that SEBI framed the DIP Guidelines, in exercise of the powers conferred under the SEBI Act. In the words of the Hon'ble Supreme Court in the Sahara Case, "DIP Guidelines had statutory force since they were framed by SEBI in exercise of its powers conferred on it under Sections 11 and 11A of the SEBI Act. Powers have been conferred on SEBI to protect the interests of the investors in securities and regulate the issue of prospectus, offer documents or advertisement soliciting money through the issue of prospectus. Section 11 of the Act, it may be noted has been incorporated, evidently to protect the interests of investors whose securities are legally required to be listed. DIP Guidelines were implemented by SEBI with regard to the listed and unlisted companies, which made public offer, until it was replaced by ICDR 2009". In this regard, I observe prima facie that the Company has not complied with the provisions of the DIP Guidelines including the following clauses :

a. Clause 2.1.1. – (Filing of offer document) b. Clause 2.1.4 – (Application for listing) c. Clause 2.1.5 – (Issue of securities in dematerialized form), d. Clause 2.8 – (Means of finance), e. Clause 4.1 – (Promoters contribution in a public issue by unlisted companies), f. Clause 4.11 – (Lock-in of minimum specified promoters contribution in public issues), g. Clause 4.14 – (Lock-In of pre-issue share capital of an unlisted company) h. Clause 5.3.1 – (Memorandum of understanding), i. Clause 5.3.3 – (Due Diligence Certificate) j. Clause 5.3.5 – (Undertaking), k. Clause 5.3.6 – (List Of Promoters Group And Other Details), l. Clause 5.4 – (Appointment of intermediaries) m. Clause 5.6 – (Offer document to be made public) n. Clause 5.6A – (Pre-issue Advertisement) o. Clause 5.7 – (Despatch of issue material) p. Clause 5.8 – (No complaints certificate) q. Clause 5.9 – (Mandatory collection centres including Clause 5.9.1 (Minimum number of collection centres) r. Clause 5.10 – (Authorised Collection Agents) s. Clause 5.12.1 – (Appointment of compliance officer) t. Clause 5.13 – (Abridged prospectus) u. Clause 6.0 – (Contents of offer documents) v. Clause 8.3 – (Rule 19(2)(b) of SC(R) Rules, 1957) w. Clause 8.8.1 – (Opening & closing date of subscription of securities) x. Clause 9 – (Guidelines on advertisements by Issuer Company) y. Clause 10.1 – (Requirement of credit rating) z. Clause 10.5 – (Redemption)

4.9 As per Regulation 111(1) of the ICDR Regulations, the DIP Guidelines, "shall stand rescinded". However, Regulation 111(2) of the ICDR Regulations, provides that:

"(2)Notwithstanding the repeal under sub-section (1) of the repealed enactments,— (a) anything done or any action taken or purported to have been done or taken including observation made in respect of any draft offer document, any enquiry or investigation commenced or show cause notice issued in respect of the said Guidelines shall be deemed to have been done or taken under the corresponding provisions of these regulations; (b) any offer document, whether draft or otherwise, filed or application made to the Board under the said Guidelines and pending before it shall be deemed to have been filed or made under the corresponding provisions of these regulations."

4.10 In addition to the above, the following may also be noted – i. From the information available on the 'MCA 21 Portal', it is observed that SREL has not filed its Balance Sheet and Profit & Loss Account for the Financial Years 2011– 12 and 2012–13. In addition, it is observed that SREL has not filed its Annual Returns for the Financial Years 2011–12 and 2012–13.

4.11 Upon a consideration of the aforementioned paragraphs, I am of the view that SREL is prima facie engaged in fund mobilising activity from the public, through the Offer of preference shares and a result of the aforesaid activity has violated the aforementioned provisions of the Companies Act, 1956 (Section 56, Section 60 read with Section 2(36), Section 73) read with Section 465 of the Companies Act, 2013; the DIP Guidelines read with ICDR Regulations.

5. SEBI has a statutory duty to protect the interests of investors in securities and promote the development of, and to regulate, the securities market. Section 11 of the SEBI Act has empowered it to take such measures as it thinks fit for fulfilling its legislative mandate. Further, as per the provisions of Section 55A of the Companies Act, 1956 read with Section 465 of the Companies Act, 2013, administrative authority on the subjects relating to public issue of securities is exclusively with SEBI. For this purpose, SEBI can exercise its jurisdiction under Sections 11(1), 11A, 11B and 11(4) of the SEBI Act read with Section 55A of the Companies Act, 1956 and Section 465 of the Companies Act, 2013, over companies who issue preference shares to fifty persons or more, but do not comply with the applicable provisions of the aforesaid Companies Acts; the DIP Guidelines read with ICDR Regulations (as mentioned in paragraphs 4.1–4.11 above). Steps therefore, have to be taken in the instant matter to ensure only legitimate fund raising activities are carried on by SREL and no investors are defrauded. In light of the same, I find there is no other alternative but to take recourse through an interim action against SREL and its Directors, for preventing that company from further carrying on with its fund mobilising activity under the Offer of preference shares.

6. In view of the foregoing, I, in exercise of the powers conferred upon me under Sections 11, 11(4), 11A and 11B of the SEBI Act and Clause 17 of the DIP Guidelines read with Regulation 111 of the ICDR Regulations, hereby issue the following directions – i. SREL shall not mobilize funds from investors through the Offer of preference shares or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions; ii. SREL and its Directors, viz. Shri Siddhartha Nag (DIN: 01560128; PAN: AEOPN7092K), Shri Kanak Ranjan Nath (DIN: 01042522; PAN: ADFPN9130J), Shri Sanjoy Nag (DIN: 01042623; PAN: AEOPN7091L), Shri Subhash Chandra Saha (DIN: 01042663; PAN: AYCPS4451M) including its past Directors, viz. Shri Satyendra Kumar Dey (DIN: 01042500; PAN: AJLPD1430D), Shri Mrinal Chandra Nandi (DIN: 01047315; PAN: ACZPN6252A), Shri Santanu Das (DIN: 01042699; PAN: AJJPD4880B), Shri Ashis Dhar (DIN: 01042604), Shri Sujit Kumar Roy (DIN: 01042580; PAN: AIYPR3451L) and Shri Shibendu Das (DIN: 01042551; PAN: AGDPD7440A), are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further orders; iii. SREL and the abovementioned past and present Directors, are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions; iv. SREL shall provide a full inventory of all its assets and properties; v. The abovementioned past and present Directors of SREL shall provide a full inventory of all their assets and properties; vi. SREL and its present Directors shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company through the Offer of preference shares, without prior permission from SEBI;

vii. SREL and its present Directors shall not divert any funds raised from public at large through the Offer of preference shares, which are kept in bank account(s) and/or in the custody of SREL. viii. SREL and its present Directors shall, within 21 days from the date of receipt of this Order, provide SEBI with all relevant and necessary information, as sought vide SEBI letters dated March 25, 2013, February 21, 2014, March 12, 2014, June 9, 2014 and July 4, 2014.

7. The above directions shall take effect immediately and shall be in force until further orders.

8. The prima facie observations contained in this Order are made on the basis of the material available on record i.e. information obtained from the Ministry of Corporate Affairs' website i.e. 'MCA 21 Portal' alongwith information forwarded by the ROC, Shillong. In this context, SREL and its abovementioned past and present Directors may, within 21 days from the date of receipt of this Order, file their reply, if any, to this Order and may also indicate whether they desire to avail themselves an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.

9. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against SREL and its abovementioned past and present Directors in accordance with law.

Place: Mumbai S. RAMAN Date: September 10, 2014 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA