9911796707
TMI Blog2017 (4) TMI 1500X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant company and some of its Directors have violated certain provisions of the Companies Act, 1956 and SEBI (Issue and Listing of Debt Securities) Regulations, 2008 ('ILDS Regulations' for short) and, inter alia, ordered to refund the money collected through the issue of Non-Convertible Debentures ('NCDs' for short) and restrained the appellant company and some of its Directors from dealing in securities market for a period of 4 years from the date of completion of refund to the investors. 2. The appellant, Neesa Technologies Limited is an IT company. It is an admitted fact that during the financial year 2013-14 they issued NCDs worth Rs. 10 crore and collected Rs. 5.96 crore from 341 persons. 3. We have heard the arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore" is a public issue and all public issues have to comply with the provisions of Section 56 of Companies Act and ILDS Regulations. Accordingly, in the instant matter the appellant have violated these provisions and their argument that they have issued the NCDs in multiple tranches and no tranche has exceeded 49 people has no meaning. Similarly, the appellant has also violated provisions relating to redemption reserve as provided under Section 117C of the Companies Act, 1956. The argument that the appellant had engaged IDBI Trustee as custodian for the issue absolves them from the charge of violation has no merit. In fact, the IDBI Trustee in its letter dated November 27, 2014 confirmed that though the appellant had taken their consent for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntend to get their securities listed on a recognized stock exchange in India." "SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and 11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who have issued shares or debentures to fifty or more, but not complied with the provisions of Section 73(1) by not listing its securities on a recognized stock exchange." The question relating to what constitutes a public issue is also clarified in the order of Sahara (supra) as follows: "... ... 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 issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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