Order in the matter of Sumangal Industries Limited313/2017]

WTM/PS/13/CIS/ERO/JULY/2013 BEFORE THE SECURITIES AND EXCHAGNE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER IN THE MATTER OF SUMANGAL INDUSTIRES LIMITED Under Sections 11, 11B and 11(4) of the Securities and Exchange Board of India Act, 1992 read with Regulations 65 and 73 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999

Date of Hearing: June 27, 2013

Appearances:

For Noticee: Mr. Subrata Adhikary, Managing Director, Sumangal Industries Limited Mr. Sajal Bhattacharya, Director, Sumangal Industries Limited Mr. Venkateswaran, Employee, Sumangal Industries Limited

For SEBI: Ms. Anitha Anoop, Deputy Legal Adviser Mr. Pradeep Kumar, Assistant Legal Adviser and Mr. Prithwis Sarkar, Assistant Legal Adviser

1. Securities and Exchange Board of India (hereinafter referred to as 'SEBI') came across an advertisement issued by one Sumangal Industries Limited (hereinafter referred to as 'SIL') dated September 11, 2012, published in the newspaper 'Anandabazar Patrika' at Kolkata, whereby funds were solicited from the public under ‘potato purchase scheme(s)’. SEBI vide its letter dated October 11, 2012, advised SIL to furnish certain information/ documents including offer documents, applications forms, brochures of the schemes launched, sample of registration and allotment letter issued to the investors, Memorandum and Articles of Association, balance sheets, profit and loss accounts, details of present and past directors, statement of mobilization and deployment of funds under various schemes, etc., in order to ascertain whether it was carrying on the activities of a 'collective investment scheme' (hereinafter referred to as 'CIS') thus attracting the provisions of Sections 12(1B) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'the SEBI Act') and SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as 'CIS Regulations').

2. SIL vide its letter dated October 20, 2012 replied to the letter of SEBI and submitted that it is not engaged in the activities of mobilization of funds from public and is doing the trading business. It has a valid trade license and is dealing with agricultural and non-agricultural product inside and out of India. However, SIL failed to provide the details/ documents as asked for by SEBI.

3. Having prima facie found that SIL is engaged in the ‘fund mobilizing activity’ from public, by floating/ sponsoring/ launching CIS as defined under Section 11AA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the 'SEBI Act'), SEBI issued an ad interim ex-parte order dated April 10, 2012 (hereinafter referred to as the 'interim order') against SIL. The interim order directed SIL as under: "a. not to collect any money from investors or to launch any scheme; b. not to dispose of any of the properties or alienate the assets of the scheme; c. not to divert any fund raised from the public at large, whether kept in bank account(s) and/ or in the custody of the company."

SIL was advised to file its reply to the interim order, if any, within fifteen (15) days and also avail opportunity of personal hearing, if it so desire.

4. Subsequently, SEBI received a letter from SIL dated April 24, 2013, whereby SIL informed SEBI that it has approached Hon'ble High Court of Calcutta by filing a Writ Petition in the matter. SIL sought for an extension of time so as to reply to the interim order till the disposal of the writ petition. An opportunity of personal hearing also was sought for.

5. As there was no operation of stay on the proceedings initiated by SEBI, the proceedings were continued and SIL was afforded an opportunity of personal hearing on June 27, 2013, before me and the same was communicated to SIL vide SEBI letter dated May 31, 2013. The letter dated May 31, 2013, sent by SEBI also stated that the interim order shall be treated as a show cause notice by SIL and it is required to show cause as to why the schemes/ plans operated by SIL should not be held as a CIS in terms of Section 11AA of the SEBI Act read with the CIS Regulations and why directions for winding up of such schemes/ plans in terms of Regulation 73 of the CIS Regulations should not be taken/ issued against it.

6. On the date fixed for the personal hearing, Mr. Subrata Adhikary, Managing Director of SIL, Mr. Sajal Bhattacharya, Director of SIL and Mr. Venkateswaran, an employee of SIL appeared and made submissions. SIL also filed its written submissions dated June 27, 2013 along with the documents relied upon, which were duly taken on record. Further, during the course of hearing, SEBI asked SIL to submit the copies of 25-50 purchase orders which were stated as submitted by the customers. SIL sought three days’ time, which was duly granted. SIL vide its letter dated June 28, 2013, submitted the samples of 50 purchase order, samples of cold storage receipts and balance sheet for the year 2012-2013.

7. The submissions made by SIL, in brief are as follows: a. It is not engaged in the activities of mobilization of funds from the public and is engaged in the trading business of agricultural and non agricultural products inside and outside India. For the said trading business, it has valid trade license, export license, etc. b. The customers directly purchase potatoes from it by issuing purchase order, and therefore the question for investment and pooling does not arise. Further, there is no property managed on behalf of investors as the potato is under the control of the customer and not SIL. The customers do own, manage, control and supervise the potatoes which are purchased by them. The customers instruct SIL to sell the potato by fixing the profit percentage. SIL was authorized to fix the sale price of the potatoes and the sale proceeds are given to the customers through the credit note. c. The cold store receipt i.e. Form no. 6, as per the West Bengal Cold Storage (Licensing and Regulation) Act, 1966 is in the name of SIL. As a matter of general practice the store receipts are purchased and sold without movement of the potatoes from the cold storage. SIL has also clarified that the word 'bond' in the newspaper advertisement means cold storage receipt only. d. It has been said that the trading business may be completed within 7 days to 15 months. However, the customer can sell the products or instruct to sell the products on any day. e. There is no question of guaranteed return. The guarantee referred in the newspaper advertisement was based on its past years of experience in the business. f. Section 2(i) of the SEBI Act, 1992 provides securities with the meaning assigned to it under Section 2(h) of the Securities Control (Regulations) Act, 1956. It does not issue any securities which fall in the ambit of Section 2(h) of the Securities Control (Regulations) Act, 1956.

g. SIL while referring to the CIS Regulations has stated that it does not fulfill the condition of CIS as the CIS Management Company is required to launch only close ended schemes and the duration of the schemes shall not be of less than three calendar years. SIL’s business had no close ended period and anyone could purchase and sell potatoes at any point of time. Further, the maximum duration between the purchase and sales of the potato was not more than 15 months.

8. I have considered the interim order, the oral and written submissions filed by SIL, the documents furnished by the SIL and the material available on record. The main allegation as against SIL is that the scheme operated by it are in the nature of CIS and that SIL is offering these schemes without obtaining registration from SEBI in contravention of the provisions of Section 12 (1B) of the SEBI Act, 1992 and Regulation 3 of the CIS Regulations read with Section 11AA of the SEBI Act, 1992. The issue that now arise for my consideration is: Whether the schemes operated by SIL are in the nature of CIS?

9. Whether the schemes operated by SIL are in the nature of CIS?

a. I have seen the documents provided by the customers of SIL to it. These are the purchase order, invoice, authorisation letter, credit note and transfer of credit note. Interestingly, the sample purchase order bearing no. 00320, inter alia contains the following statements: "We are please to place an order for supply of following products as per the quantity and rates given below: ... ... ... ... You are also requested to store the potatoes and others vegetables in any of the store all over in India"

The purchase order also contains the particulars such as the name and address of the applicants and SIL. SIL in its submissions has admitted that the purchase order executed between SIL and its customers gives SIL the authority to preserve the potatoes in the cold storage. The sample purchase order further provides for payment mode i.e., by cheque/ D.D., bank transfer (RTGS/ NEFT) and others. The terms of payment, as per the purchase order is either 100% payment or monthly instalments.

b. I have perused the copy of the invoice/ money receipt issued by SIL. It has been submitted by SIL that it sells the products to the customer as per purchase order and issues the invoice. The invoice contained the details of the customer, specification of the product, quantity, rates, amount, details of the payment, etc.

SIL has stated that the customers mostly give it the responsibility to preserve the potatoes at any cold storage and authorise it to sell the same in the open market or out of India. I have seen the copy of the sample authorisation letter and find that the same is addressed to SIL and contains the particulars of the customer. It also contained following statements/ clauses: "You are hereby authorised to store all Potato/ Vegetables purchased by me in any cold storage all over in India and thereafter you are also authorized to sale the products vide invoice no. ..... to the market or export and you are hereby given the discretionary power to fix the sale price of the product as per the options given below which is informed by you. Options ...."

Further, the authorization letter provided by SIL and signed by the customers contains eight (8) options of different profit ranges to choose from, which indicates that SIL has 'plans' for its transactions with its investors.

Another document, relied upon by SIL is the credit note. I have perused the sample of credit note and note that the same bears the details of the customer, invoice number, sale price and the date of payment. As per SIL, the sale proceeds of potatoes were given to the customers through the credit note. The credit note finds mention that the same is transferable to any person subject to certain conditions.

c. I have perused the copies of sample cold storage receipts submitted by SIL vide its letter dated June 28, 2013 and note that the same are issued in the name of SIL.

d. Having seen the sample documents submitted by SIL, I now refer to the submission made by SIL before the Hon'ble High Court of Calcutta vide W.P. 11492 (W)/ 2013 "25. The nature of the business of the petitioner is as follows- (i) When the potato farmer or their agents come to the cold storage of the petitioner then the petitioner company purchases the said potato.

(ii) For running of the business of the petitioner, the petitioner receives or takes money only by the way of a cheque or bank transfer from the investor, when the petitioner makes a bulk purchase are sold in the market....."

From the above pleadings made by SIL before the Hon'ble High Court, it becomes clear that SIL has floated a scheme wherein it purchased potatoes from the farmers and stored them in the cold storage.

e. Analysis of these documents reveals that: - SIL receives contribution/ investment from the customers with the application form/ purchase order and issues invoice against the investments made by the customers in its products. The sequence of events suggests that SIL has pooled the contribution/ investment received from the customers for the purchase of potatoes. - The contribution/ investment made by customers by selecting the options available are with a view of receiving profits from the sale of potatoes by SIL. - The customer at the time of placing order gives an authority to SIL for storing and selling the potatoes. With this, it can be said that the potatoes and the contribution/ investment are managed on behalf of the investors. - SIL stores the potatoes on behalf of its customers in cold storages anywhere in India and also takes the authorisation for the sale of potatoes on behalf of the customer in its own discretion. Therefore, the potatoes of the customers as mentioned in the purchase order cannot be identified. - Further, as submitted by the representatives of SIL, the cold storage receipts are issued in the name of SIL only, which means only SIL has the access to potatoes stored in the cold storages. The investor does not have day to day control over the potatoes as the same remained in the use of SIL.

f. The main allegation levelled against SIL is that it is operating CIS without obtaining registration from SEBI. I note that SIL in its reply has strenuously argued that its transactions do not fall within the ambit of a CIS as none of the conditions as laid down in Section 11AA(2) of the SEBI Act are attracted in its case.

g. Before proceeding further in the matter, it is necessary to note the background of CIS Regulations. Several entities were mobilizing huge money by issuing various instruments and offering very high rates of return inconsistent with the normal rate of returns and then misutilizing these funds, for the purposes not disclosed at the time of inviting the investments, thereby not only causing loss to the investors who lost their life savings to such unscrupulous entities, but also eroding the confidence of the general public. Considering the high element of risk associated with such schemes, the Government of India felt that it was necessary to set up an appropriate Regulatory framework to regulate such entities. Hence, in order to protect the interest of the investors and to ensure that only legitimate investment activities are carried on, vide press release dated November 18, 1997, the Government of India communicated its decision that schemes through which instruments such as agro bonds, plantation bonds, etc., are issued by the entities, would be treated as Schemes under the provisions of the SEBI Act and directed SEBI to formulate Regulations for the purpose of regulating these CISs.

It was against this background that Section 11AA of the SEBI Act and the CIS Regulations came to be framed. Thereafter, several press releases and newspaper advertisements/ notices were issued by SEBI from time to time in the leading newspapers bringing to the notice of the investors and the persons concerned, the various instructions issued by SEBI/ Central Government from time to time in respect of the functioning of the CIS. The press releases further stated that instruments such as agro bonds, plantation bonds should be treated as CIS coming under the SEBI Act. All the companies having such activities were required to file information with SEBI. Moreover, general public was also informed that no person can sponsor or cause to be sponsored any new CIS and thereafter raise further funds. Meanwhile, a committee was formed to examine and finalize the draft regulations for CIS to structure a comprehensive regulatory framework. Subsequently, the notification of SEBI (Collective Investment Schemes) Regulations 1999 was issued on October 15, 1999. As per the CIS Regulations, any person who has been operating a CIS at the time of commencement of the CIS Regulations was required to make an application to SEBI for the grant of registration under the provisions of the regulation, within a period of two months from the date of the notification.

No entity was allowed to run a CIS scheme without obtaining the Certificate of Registration from SEBI.

h. The definition for "collective investment scheme" was inserted in the SEBI Act, 1992, vide the Securities Laws (Amendment) Act, 1999 w.e.f. February 22, 2000. According to the definition, CIS means any scheme or arrangement which satisfies the conditions specified in Section 11 AA of the SEBI Act, which provides as under: "11AA(1) Any scheme or arrangement which satisfies the conditions referred to in sub section (2) shall be a collective investment scheme. (2) Any scheme or arrangement made or offered by any company under which, (i) the contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely for the purposes of the scheme or arrangement; (ii) the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable from such scheme or arrangement; (iii) the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors; (iv) the investors do not have day to day control over the management and operation of the scheme or arrangement." i. Therefore, let us examine how the nature of business of SIL would qualify as a CIS, and how the schemes floated by SIL satisfy all the four conditions prescribed under Section 11AA(2) of the SEBI Act.:

- The first condition, under Section 11AA(2), is that the contributions or payments made by the investors, by whatever name called, are pooled and utilised for the purposes of the scheme or arrangement. In the instant case, SIL collects the money from customers/ investors and sells the potatoes. The purchase order and the authorization letter are the primary documents taken by SIL for the sale of potatoes.

The purchase order contains the clause that the customer is requesting for storage of the potatoes and vegetables in any of the store all over in India. I note that a customer who is investing its money with SIL is mandatorily required to give authority for storing and selling the potatoes in favour of SIL. SIL pools the investment made by customers, with the aim/ object of carrying out the overall scheme/ arrangement. It is clear that the application form/ purchase order does not mention about the location of the potatoes which are being sold and there is no physical transfer as well at the time of collection of money from the customers. Thus, it becomes clear that SIL is pooling payments from its investors thus satisfying the first condition as stipulated in Section 11AA(2)(i) of the SEBI Act.

- The second condition, is that the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement. In this regard, I note that the contribution/ payments are made by customers to SIL by selecting the options available as detailed in the sample authorization letter about the profits. It is seen that the authorisation contains eight (8) options for profits. Under those options, the customer makes contribution/ payment with a view to receive the profits, income and returns on their initial investments that may accrue to them as applicable, thus attracting the second condition as stipulated in Section 11AA(2)(ii) of the SEBI Act.

- The third condition is that the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors. By the own admission of SIL, the customers give it the authority to store the potatoes in cold storages anywhere in India and sell in its own discretion. I note that the said authority is given to SIL by the customers vide authorization letter which is mandatorily required to be given along with the purchase order. One can say that an investor gets only an undivided interest in the stock of potatoes and the same cannot be identified. The customer does not manage his investments in the scheme rather his investments are managed and utilized by SIL. Thus, it is clear that the potatoes as mentioned in the purchase order are not managed by the customers at any stage of the scheme. The same therefore, satisfies the third condition as stipulated in Section 11AA(2)(iii) of the SEBI Act.

- The fourth and last condition is that investors do not have day to day control over the management and operation of the scheme or arrangement. As stated above, SIL obtains the authority from its customers to store the potatoes in the cold storage. Admittedly, the cold storage receipts are issued in the name of SIL only. As the contribution/ investment and the potatoes are managed by SIL on behalf of its customers, they do not have any role in their management. This makes it clear that the customer does not have day to day control over the potatoes as the same remained in the custody/ use of SIL which satisfies the fourth and last condition as stipulated in Section 11AA(2)(iv) of the SEBI Act.

j. Considering the above discussion, it can be said that the transactions between SIL and its customers are not trading business transactions simpliciter, rather they satisfy all the ingredients of a CIS as defined under Section 11AA of the SEBI Act. It is clear that the business run by the SIL is nothing but that of a CIS, as all the conditions of Section 11AA of the SEBI Act are satisfied by the scheme/ operations of SIL.

The Form 23AC filed by SIL to Registrar of Companies, West Bengal mentions Mr. Subrata Adhikary and Mr. Kaushik Roy, as the directors of SIL. The Enforcement Branch, West Bengal in its inquiry report forwarded to SEBI vide letter dated

September 25, 2012 has inter alia named Mr. Soumen Ghosh, Mr. Indusekhar Chakroborty and Ms. Madhumita Adhikary as directors of SIL. Further from the Memorandum of Association and Articles of Association, I note that Mr. Subrata Adhikary, Ms. Madumita Adhikary, Mr. Somnath Adhikary, Ms. Gopal Chandra Adhikary, Mr. Sarbani Adhikary, Mr. Astick Kumar Roy and Mr. Debika Adhikary are the signatories to the Memorandum and Articles of Association. I am of the view that the directors and promoters are responsible for the impugned activities of SIL.

k. I, therefore, have no hesitation in holding that SIL and its directors and promoters including Mr. Subrata Adhikary, Mr. Sajal Bhattacharya, Mr. Kaushik Roy, Mr. Indushekhar Chakraboty, Mr. Soumen Ghosh, Ms. Madumita Adhikary, Mr. Somnath Adhikary, Ms. Gopal Chandra Adhikary, Mr. Sarbani Adhikary, Mr. Astick Kumar Roy and Mr. Debika Adhikary are engaged in the fund mobilising activity from the public by floating/ sponsoring/ launching 'CIS'.

l. Section 12(1B) of the SEBI Act mandates that no person, shall sponsor or cause to be sponsored or carry on or caused to be carried on any CIS unless it obtains a certificate of registration from SEBI in accordance with the CIS Regulations. SIL has failed to do so. Regulation 3 of the CIS Regulations provides that no person other than a Collective Investment Management Company which has obtained a certificate under the said regulations shall carry on or sponsor or launch a 'collective investment scheme'. A person can launch or sponsor or cause to sponsor a collective investment scheme only if it is registered with SEBI as a Collective Investment Management Company. Therefore, the launching/ floating/ sponsoring / causing to sponsor any 'collective investment scheme' by any 'person' without obtaining the certificate of registration in terms of the provisions of the CIS Regulations is in contravention of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations.

m. I find it necessary to place my reliance on the judgement of Hon'ble Supreme Court, in the matter of PGF Limited Vs. Union of India & Ors.: "Therefore, the paramount object of the Parliament in enacting the SEBI Act itself and in particular the addition of Section 11AA was with a view to protect the gullible investors most of whom are poor and uneducated or retired personnel or those who belong to middle income group and who seek to invest their hard earned retirement benefits or savings in such schemes with a view to earn some sustained benefits or with the fond hope that such investment will get appreciated in course of time. Certain other Section of the people who are worstly affected are those who belong to the middle income group who again make such investments in order to earn some extra financial benefits and thereby improve their standard of living and on very many occasions to cater to the need of the educational career of their children. 38. Since it was noticed in the early 90s that there was mushroom growth of attractive schemes or arrangements, which persuaded the above vulnerable group getting attracted towards such schemes and arrangements, which weakness was encashed by the promoters of such schemes and arrangements who lure them to part with their savings by falling as a prey to the sweet coated words of such frauds, the Parliament thought it fit to introduce Section 11AA in the Act in order to ensure that any such scheme put to public notice is not intended to defraud such gullible investors and also to monitor the operation of such schemes and arrangements based on the regulations framed under Section 11AA of the Act…..

40. It will have to be stated with particular reference to the activity of the PGF Limited, namely, sale and development of agricultural land as a collective investment scheme, the implication of Section 11AA was not intended to affect the development of agricultural land or any other operation connected therewith or put any spokes in such sale-cum-development of such agricultural land. It has to be borne in mind that by seeking to cover any scheme or arrangement by way of collective investment scheme either in the field of agricultural or any other commercial activity, the purport is only to ensure that the scheme providing for investment in the form of rupee, anna or paise gets registered with the authority concerned and the provision would further seek to regulate such schemes in order to ensure that any such investment based on any promise under the scheme or arrangement is truly operated upon in a lawful manner and that by operating such scheme or arrangement the person who makes the investment is able to really reap the benefit and that he is not defrauded………… It is, therefore, apparent that all other schemes/arrangements operated by all others, namely, other than those who are governed by sub-section 3 of Section 11AA are to be controlled in order to ensure proper working of the scheme primarily in the interest of the investors. … 42. Therefore, in reality what sub-section (2) of Section 11AA intends to achieve is only to safeguard the interest of the investors whenever any scheme or arrangement is announced by such promoters by making a thorough study of such schemes and arrangements before registering such schemes with the SEBI and also later on monitor such schemes and arrangements in order to ensure proper statutory control over such promoters and whatever investment made by any individual is provided necessary protection for their investments in the event of such schemes or arrangements either being successfully operated upon or by any misfortune happen to be abandoned, where again there would be sufficient safeguards made for an assured refund of investments made, if not in full, at least a part of it. ……………In the light of our above conclusions on this ground it will have to be held that Section 11AA is a valid provision, not suffering from any infirmity, as it does not intrude into the specific activities of sale of agricultural land and its development. … " 10. As regards the argument of SIL that it does not transact in securities as defined under the Securities Contracts (Regulation) Act, 1956, I note that the definition of the term "securities" in section 2(h) of the Securities Contracts (Regulation) Act, 1956 was amended vide the Securities Laws (Amendment) Act, 1999, w.e.f. February 22, 2000 has been amended to include units or any other instrument issued by any collective investment scheme to the investors in such schemes.

It is an admitted position that the investors are allotted an unidentified portion of potatoes from the SIL's holding. These portions of potatoes represented by a 'invoice/ money receipt/ cash memo' issued to the customers can very well be considered as units of the large holding. The schemes of SIL have been found to be in the nature of CIS. Therefore, this contention is devoid of any merit.

11. In view of the foregoing, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 and Section 11, 11B and 11(4) read with the Regulations 65 and 73 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999, hereby issue the following directions: a. Sumangal Industries Limited shall not collect any money from investors or launch or carry out any Collective Investment Schemes including the scheme which has been identified as a Collective Investment Scheme in this Order. b. Sumangal Industries Limited and its promoters/ directors, including Mr. Subrata Adhikary, Mr. Sajal Bhattacharya, Mr. Kaushik Roy, Mr. Indushekhar Chakraboty, Mr. Soumen Ghosh, Ms. Madumita Adhikary, Mr. Somnath Adhikary, Ms. Gopal Chandra Adhikary, Mr. Sarbani Adhikary, Mr. Astick Kumar Roy and Mr. Debika Adhikary shall wind up the existing Collective Investment Schemes and refund the money collected by the said company under the schemes with returns which are due to its investors as per the terms of offer within a period of three months from the date of this Order and submit a winding up and repayment report to SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999, failing which the following actions shall follow : i. SEBI would initiate prosecution proceedings under section 24 and adjudication proceedings under Chapter VI of the Securities and Exchange Board of India Act, 1992 against Sumangal Industries Limited/ its promoters/ its directors/ managers/ persons in charge of the business of its scheme(s). ii. SEBI would make a reference to the State Government/Local Police to register a civil/ criminal case against Sumangal Industries Limited/ its promoters/ its directors and its managers/ persons in-charge of the business and its schemes for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and iii. SEBI would make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the company, Sumangal Industries Limited.

c. Sumangal Industries Limited is restrained from accessing the securities market and is prohibited from buying, selling or otherwise dealing in securities market till all the Collective Investment Schemes are wound up by it and all the monies mobilized through such schemes are refunded to its investors with returns which are due to them. d. In case, Sumangal Industries Limited fails to wind up its schemes and refund the money collected under the schemes to its investors, as directed above in this Order, its promoters/ directors including Mr. Subrata Adhikary, Mr. Sajal Bhattacharya, Mr. Kaushik Roy, Mr. Indushekhar Chakraboty, Mr. Soumen Ghosh, Ms. Madumita Adhikary, Mr. Somnath Adhikary, Ms. Gopal Chandra Adhikary, Mr. Sarbani Adhikary, Mr. Astick Kumar Roy and Mr. Debika Adhikary shall also be restrained from accessing the securities market and prohibited from buying, selling or otherwise dealing in the securities market till such time Sumangal Industries Limited complies with the directions issued above.

12. This order shall come into force with immediate effect.

PLACE : MUMBAI PRASHANT SARAN DATE : JULY 9, 2013 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA