Orders in the matters of Roofers Capital Management Limited

1. Securities and Exchange Board of India (“SEBI”) received three complaintson November 13, 2013, alleging mobilization of funds by Roofers Capital Management Limited (“RCML”).

2.1 Thereafter, SEBI vide letter dated December 24, 2013, sought the following information from RCML, viz. – i. Copy of Audited Annual Accounts and Annual Returns of the company for the last 3 years;

ii. Name, addresses and occupation of all the Promoters/Directors and Key Managerial of the company; iii. Other information in respect of issue of shares/debentures 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. Date of opening and closing of the subscription list; c. Details regarding the number of application forms circulated inviting subscription; d. Details regarding the number of applications received; e. Details regarding the number of allottees and list of such allottees, etc.; f. Copies of the minutes of Board/Committee meeting in which the resolution has been passed for raising such additional capital and also for allotment; g. Copies of application forms, pamphlets, advertisements and other promotional material circulated for issuance of shares/debentures; h. Terms and conditions of the issue of shares/debentures; i. Details of application for listing, if any, filed with stock exchanges; j. Copy of Form 2 and Form 10 filed with ROC; k. Details of Debenture Trustee.

2.2 The abovementioned letter to RCML was deliveredbut no reply was received.

2.3 As no information was forthcoming, a reminder letter dated February 12, 2014, was sent to RCML. Further, vide letters dated February 12, 2014, SEBI also sought the abovementioned information from the Directors of RCML, viz. ShriSaurovemoy Ghosh, Shri Sukumar Bhattacharya and Shri Sudhir Chandra Bera.

2.4 The abovementioned letters were delivered to RCML’s Directors but no reply was received from them. However, the letter addressed to RCML was returned undelivered with the remark ‘Not claimed’.

2.5 It is noted that SEBI had earlier sought information from RCML vide letter dated April 19, 2013, while examining whether or not RCML was mobilizing funds through schemes launched by it. In its reply dated May 4, 2013, RCML submitted copies of the MOA,

AOA, Balance Sheet and Profit and Loss Account Statement for the Financial Years 2009–10, 2010–11 and 2011–12.

3.1 Having regard to the non–cooperation of RCML and its Directors in submitting requisite information to SEBI, vide an Order dated October 30, 2014 read with Order dated November 23, 2015, an Investigating Authority (“IA”) was appointed for investigating possible violations by RCML of the SEBI Act, 1992 (“SEBI Act”); Securities Contracts (Regulations) Act, 1956 (“SCRA”); the provisions specified in Section 55A of the Companies Act, 1956 or the Rules or Regulations made or directions issued by SEBI thereunder.

3.2 Summons dated January 9, 2015, were issued by the IA to RCML and all its Directors (past and present) for production of documents and to appear in person before her under Section 11C(3) & 11C(5) of the SEBI Act on January 21, 2015.

3.3 The status of compliance of summons is given as under:

i. RCML, Shri Khudiram Sounth, Shri Hirak Nath Sounth, Smt Jayanti Sounth, Shri Aniruddha Ghosal, Shri Saurovemoy Ghosh, Shri Sudhir Chandra Bera,Shri Sukumar Bhattacharya and Shri Subhash Ghorai – a. Summons (dated January 9, 2015) for production of documents and to appear before the IA on January 21, 2015, were issued to the aforementioned entities. The aforementioned entities sought adjournment vide letters dated January 20, 2015. b. Summons (dated January 22, 2015) for production of documents and to appear before the IA on February 6, 2015, were once again issued to the aforementioned entities. The aforementioned entities again sought adjournment vide letters dated February 5, 2015. c. Summons (dated February 13, 2015) for production of documents and to appear before the IA on February 24, 2015, were once again issued to the aforementioned entities. The aforementioned entities again sought adjournment vide letter dated February 27, 2015. d. In view of the deliberate non–cooperation from the aforementioned entities and in light of the fact that several extensions had earlier been granted as brought out above, no further extensions were granted by the IA.

ii. Shri Bhadreshwar Pal appeared in person before the IA. He submitted that Shri Hirak Nath Sounth had offered him employment with RCML. He further submitted that he was never part of any day–to–day activities of RCML.

iii. Sukumar Chatterjee appeared in person before the IA. He submitted that he had joined as a land development advisor in RCML on May 2, 2011. He was later informed by Shri Hirak Nath Sounth that he had been made a Director of RCML. After becoming aware of the said fact, he tendered his resignation. He further submitted that he was never part of any day–to–day activities of RCML. He also submitted a copy of Form 32 filed for his resignation.

iv. Shri Ajoy Sankar Sanyal appeared in person before the IA. He submitted that he was working in the capacity of a lawyer for the civil cases of RCML and due to his good relations with Shri Hirak Nath Sounth, he gave his consent to become an Additional Director of RCML. He further submitted that he was never part of any day–to–day activities of RCML. He also submitted a copy of Form 32 filed for his resignation.

v. Shri Anjan Bandyopadhyay–The summons issued to him was returned as undelivered with the remarks ‘Addressee moved’.

3.4 On completion of investigation, the IA submitted an Investigation Report.

4. Upon a consideration of the Investigation Report, it is observed that – i. RCML was incorporated on December 17, 2009, with the ROC, Kolkata with CIN as U74140WB2009PLC140331. Its Registered Office is at 103A, C.I.T. Road, 2nd Floor, Kolkata–700014, West Bengal, India.

ii. The Promoters of RCML are Shri Khudiram Sounth, Shri Hirak Nath Sounth, Smt Jayanti Sounth, Shri Rabindra Nath Sounth, Shri Tarak Nath Sounth, Shri Sujit Kumar Pal and Smt Kabita Rani Pal.

iii. The present Directors of RCML are Shri Subhash Ghorai, Shri Sukumar Bhattacharya and Shri Sudhir Chandra Bera.

iv. Shri Khudiram Sounth, Shri Hirak Nath Sounth, Smt Jayanti Sounth, Shri Bhadreshwar Pal, Shri Anjan Bandyopadhyay, Shri Aniruddha Ghosal, Shri Saurovemoy Ghosh, Shri Sukumar Chatterjee and Shri Ajoy Sankar Sanyal, who were earlier Directors in RCML, have since resigned.

v. From the Ministry of Corporate Affairs’ website i.e. MCA 21 Portal, it is noted that RCML issued Preference Shares (“Offer of Preference Shares”) to investors during the Financial Years 2009–10 and 2010–11, details of which are provided below –

Type of Security Year No. of persons to whom Total Amount Preference Shares were allotted ( ) Preference Shares 2009–10 188 1880 2010–11 11363 113630 Total 11551 115510 On a perusal of the Balance Sheet for the year ended March 31, 2010, the IA observed that one entry of 188 number of preference shares of 10 each amounting to 1,880 was appearing in the Balance Sheet. This did not match with the Balance Sheet for the year ended March 31, 2010 submitted earlier by RCML. Again, when the Balance Sheets for the year ended March 31, 2011 and March 31, 2012 were examined, the IA observed that no details with respect to preference shares were accounted for in said Balance Sheets. Hence, the IA observed that certain anomalies were present in the filings made by RCML with the ROC. Thereafter, the IA observed that RCML had filed Form 2 with the ROC. The IA observed that RCML had last filed its Annual Accounts/Annual Returns with the ROC for the Year ended March 31, 2012. The same was also brought to the notice of the ROC vide letter dated March 15, 2016.

5.1 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 RCML through the aforesaid,is in accordance with the provisions of the SEBI Act and the Companies Act, 1956.

5.2 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:

"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."

5.3 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. Construction of reference to offering shares or debentures to the public, etc. 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) Any reference in this Act or in the articles of a company to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be construed as including a reference to invitations to subscribe for them extended 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.

(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 Caseobserved 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 theOffer 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 2009–10 and 2010–11, RCML allotted Preference Sharesto approximately 11551 individuals/investors and mobilized an amount of at least 115510 (Table at paragraph 4(v) of page 5). The number of investors to whom allotments were made under the Offer of Preference Sharesduring the aforesaid Financial Yearsprima facie indicate that such Offer was a public issue of securities, as prescribed under the first proviso to Section 67(3) of the Companies Act, 1956.

b. However, it is noted that the number of allottees and amount raised under the Offer of Preference Sharesfor the abovementioned Financial Years, have only been taken from the documents available on the MCA21 Portal since certain anomalies have been observed in the information/details submitted by RCML (see paragraph 4(v) of page 5). Therefore, the actual number of allottees and amount mobilized by RCML may be more than the figure of 11551 individuals/investors and 115510.

c. It is observed that RCML is not stated to be a Non–banking financial company or public financial institution within the meaning of Section 4A of the Companies Act, 1956. In view of the aforesaid, I, therefore, find that RCML is not covered under the second proviso to Section 67(3) of the Companies Act, 1956.

d. In view of the above, the Offer of Preference Sharesby RCML, 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, 1956, Section 67 of that Act, so far as it relates to issue and transfer of securities, shall also be administered by SEBI.

5.4 I note that – i. From the abovementioned, it will follow that since theOffer of Preference Sharesis 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) Where a prospectus, whether issued generally or not, states that an application under sub-section (1) has been made for permission for the shares or debentures offered thereby to be dealt in one or more recognized stock exchanges, such prospectus shall state the name of the stock exchange or, as the case may be, each such stock exchange, and any allotment made on an application in pursuance of such prospectus shall, whenever made, be void, if the permission has not been granted by the stock exchange or each such stock exchange, as the case may be, before the expiry of ten weeks from the date of the closing of the subscription lists: Provided that where an appeal against the decision of any recognized stock exchange refusing permission for the shares or debentures to be dealt in on that stock exchange has been preferred under section 22 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), such allotment shall not be void until the dismissal of the appeal.

(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. … Section 73(2) says that every company and every director of the company who is an officer in default, shall 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. The scope of the above mentioned provisions came up for consideration before this Court in Raymond Synthetics Ltd. & Ors. Vs. Union of India (supra), wherein the Court held that in a case where the company has not applied for listing on a stock exchange, the consequences will flow from the company’s disobedience of the law, the liability to pay interest arises as from the date of receipt of the amounts, for the company ought not to have received any such amount in response to the prospectus. I am, therefore, of the view that since Saharas had violated the listing provisions and collected huge amounts from the public in disobedience of law, SEBI is justified in directing refund of the amount with interest."

iii. Having regard to the abovementioned observations of the Hon'ble Supreme Court of India, since theOffer of Preference Shares is prima facie a public issue in accordance with the provisions of the Companies Act, 1956, 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 and also compliance with the provisions of Sections 73(2) and 73(3) of that Act.

iv. In the facts of the instant case, it prima facie appears that RCML has violated the provisions of Section 73 of the Companies Act, 1956, in respect of theOffer of Preference Shares.

5.5 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 theOffer of Preference Shares was made to fifty persons or more, it has to be construed as a public offer. Having made a public issue, RCML was required to register a prospectus with the ROC under Section 60 of the Companies Act, 1956. I find that there is no evidence on record to indicate that RCML has registered a prospectus with the ROC. In view of the same, I find that RCML has prima facie not complied with the provisions of Section 60 of Companies Act, 1956.

5.6 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 RCML 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.

5.7 Upon a consideration of the aforementioned paragraphs, I am of the view that RCML is prima facie engaged in fund mobilising activity from the public, through theOffer of Preference Sharesand as 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).

6. I note that under the Offer of Preference Shares,RCML allotted Preference Shares to the public during the Financial Years 2009–10 and 2010–11. The past and present Directors and Promoters of RCML were/are Shri Khudiram Sounth, Shri Hirak Nath Sounth, Smt Jayanti Sounth, Shri Saurovemoy Ghosh, Shri Sukumar Bhattacharya, Shri Sudhir Chandra Bera, Shri Bhadreshwar Pal, Shri Anjan Bandyopadhyay, Shri Aniruddha Ghosal, Shri Sukumar Chatterjee, Shri Ajoy Sankar Sanyal, Shri Subhash Ghorai, Shri Rabindra Nath Sounth, Shri Tarak Nath Sounth, Shri Sujit Kumar Pal and Smt Kabita Rani Pal.It is alleged that the aforementioned Directors and Promoters are responsible under Section 73(2) of the Companies Act, 1956, read with Section 27(2) of the SEBI Act, for the prima facie contraventions committed by RCML through theOffer of Preference Shares.

7. 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 deems fit for fulfilling its legislative mandate. Further, as per the provisions of Section 55A of the Companies Act, 1956, 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 (as mentioned in paragraphs 5.1–5.7 above). It is pertinent to note that RCML and its Directors, viz. Shri Saurovemoy Ghosh, Shri Sukumar Bhattacharya, Shri Sudhir Chandra Bera, Shri Khudiram Sounth, Shri Hirak Nath Sounth, Smt Jayanti Sounth, Shri Aniruddha Ghosal, Shri Subhash Ghorai,have failed to co–operate with the Investigation conducted by SEBI and have not appeared before the IA in compliance with the summons issued against them under Sections 11C(3) and (5) of the SEBI Act [Paragraph 3.3(i) at page 4]. Further, Shri Anjan Bandyopadhyay, was not found to be existing at the registered addresses submitted by him in regulatory filings. Although Shri Bhadreshwar Pal, Shri Sukumar Chatterjee and Shri Ajoy Sankar Sanyal have submitted that they had resigned from RCML, it is observed from the material on record that they were Directors during the period when funds were mobilized by RCML. Steps therefore, have to be taken in the instant matter to ensure only legitimate fund raising activities are carried on by RCML and no investors are defrauded. In light of the facts in the instant matter, I find that there is no other alternative but to take recourse through an interim action against RCML and its Directors and Promoters, for preventing that company from further carrying on with its fund mobilising activity under theOffer of Preference Shares.

8. 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 read with Section 19 thereof and the Debt Securities Regulations, hereby issue the following directions – i. RCML (PAN: AAECR6116M), shall forthwith cease to mobilize funds from investors through the Offer of Preference Sharesor 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. RCML and itspast and present Directors and Promoters, viz. Shri Saurovemoy Ghosh (PAN: AIDPG1944N; DIN: 03580554), Shri Sukumar Bhattacharya (PAN: AHNPB5569M; DIN: 06538554), Shri Sudhir Chandra Bera (PAN: AXAPB8554D; DIN: 06500319), Shri Khudiram Sounth (PAN: AKEPS8245D; DIN: 01642426), Shri Hirak Nath Sounth (PAN: APKPS6248B; DIN: 01642164), Smt Jayanti Sounth (PAN: AZGPS4138J; DIN: 01642127), Shri Bhadreshwar Pal (PAN: ANZPP6080B; DIN: 01557670), Shri Anjan Bandyopadhyay (PAN: ADYPB3215H; DIN: 02599213), Shri Aniruddha Ghosal (PAN: AHEPG6300N; DIN: 03398215), Shri Sukumar Chatterjee (PAN: ACFPC4630F; DIN: 03576773), Shri Ajoy Sankar Sanyal (PAN: DUGPS0846K; DIN: 06548210), Shri Subhash Ghorai (PAN: BEQPG4679L; DIN: 06777536 ), Shri Tarak Nath Sounth (PAN: AZJPS2963G), Shri Rabindra Nath Sounth (PAN: BDLPS1922A), Shri Sujit Kumar Paul (PAN: BGBPP6436M) and Smt Kabita Rani Pal, 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. RCML and its abovementioned past and present Directors and Promoters, 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. RCMLshall provide a full inventory of all its assets and properties; v. RCML's abovementioned past and present Directors and Promoters, shall provide a full inventory of all their assets and properties; vi. RCML and its abovementioned present Directors and Promoters, shall not dispose of any of the properties or alienate or encumber any of the assets owned/acquired by that company, without prior permission from SEBI;

vii. RCML and its abovementioned present Directors and Promoters, 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 RCML; viii. RCML and its abovementioned past and present Directors and Promoters, shall co-operate with SEBI and shall furnish all information/documents sought vide letters dated December 24, 2013 and February 12, 2014.

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

10.1 Theprima facie observations contained in this Order are made on the basis of the material available on record i.e. information obtained from the MCA 21 Portal. In this context, RCML and its abovementioned Directors and Promoters, are advised to show cause as to why suitable directions/prohibitions under Sections 11(1), 11(4), 11A and 11B of the SEBI Act and Section 73(2) of the Companies Act, 1956, read with Section 27(2) of the SEBI Act, including the following, should not be taken/imposed against them:

i. Directing them jointly and severally to refund money collected through the Offer of Preference Sharesalongwith interest, if any, promised to investors therein; ii. Directing them not to issue 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, for an appropriate period; iii. Directing them to refrain from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period.

10.2 RCML and its abovementioned Directors and Promoters, may, within 21 days from the date of receipt of this Order, file their replies, 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.

11. This Order is without prejudice to the right of SEBI to take any other action that may be initiated against RCML and its abovementioned Directors and Promoters, in accordance with law.

Place: Mumbai S. RAMAN Date: July 7, 2016 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA