Final Order in the matter of Siya-Ram Agro Industries Ltd

The Securities and Exchange Board of India (SEBI) issued a final order concerning Siya-Ram Agro Industries Ltd (SRAIL) and its directors, Mr. Aslam Sayeed and Mr. Amritendu Bhattacharyya. This action followed numerous investor complaints alleging that SRAIL failed to repay investments and promised returns on Non-Convertible Redeemable Debentures (NCDs). Despite being called upon to provide investors with options for surrendering securities and receiving refunds with interest, SRAIL did not comply with SEBI's communications. The company also failed to provide requested information, leading to the issuance of a show cause notice.

WTM/AB/EFD-1/DRA-IV/14/2020-21
SECURITIES AND EXCHANGE BOARD OF INDIA
FINAL ORDER

UNDER SECTIONS 11(1), 11(4), 11A AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH SECTION 73 OF COMPANIES ACT, 1956

In respect of:

Noticee No.	Name of the entity	PAN No.
1	Siya-Ram Agro Industries Ltd. CIN: U01117KA2006PLC040732	AMJPS7534C
2	Mr. Aslam Sayeed	AMJPS7534C
3	Mr. Amritendu Bhattacharyya	AJRPB1543M

(The aforesaid entities are hereinafter referred to by their respective names / Noticee numbers and collectively as “the Noticees”)

In the matter of Siya-Ram Agro Industries Ltd

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) received complaints from various investors inter- alia alleging that they had invested in Non-Convertible Redeemable Debentures (‘NCD’s’) issued by Siya-Ram Agro Industries Ltd. (hereinafter referred to as “SRAIL/ the Company”) and were unable to recover their investments and promised returns. The complainants also alleged that the Company had closed their branches and they are not able to recover their investments from Noticee no. 1. In light of the aforesaid complaints, information was sought inter alia from Noticee no. 1 and its directors. However, no information was forthcoming.

2. From the copies of debenture certificates annexed by the complainants, the following details are collated:

3. Since, the number of debenture holders who were issued securities by SRAIL were less than 200, hence, in terms of SEBI Circular no. CIR/CFD/DIL3/18/2015 dated December 31, 2015, SRAIL was called upon to provide option to the investors to surrender their securities and get refund of the subscription amount with interest. However, SRAIL failed to take heed of any of the communications from SEBI. Hence, a show cause notice bearing no. SEBI/HO/EFD1/DRA4/SPV/OW/P/2019 dated May 27, 2019 (hereinafter referred to as ‘SCN’) was issued to SRAIL and its directors, thereby calling upon them to show cause as to why appropriate directions, under Sections 11(1), 11(4), 11A and 11B of SEBI Act, 1992, should not be issued against them for the alleged violation of the provisions of Sections 56(1), 56(3), 60(1), 73(1), 73(2) and 73(3) read with 67 of the Companies Act, 1956, r/w. Section 465(2) of the Companies Act, 2013 and Clauses 2.1.1, 2.1.4, 2.1.5, 2.5, 2.8, 5.3.1, 5.6A, 6.0 to 6.33 and 10.0 to 10.9 of SEBI ((Disclosure and Investor Protection) Guidelines, 2000.

4. The brief findings of the examination done by SEBI as stated in the SCN is as follows:

a) Information available at MCA Website about SRAIL is as under:

Date of Incorporation: The Company is incorporated on October 13, 2006 and is having CIN: U01117KA2006PLC040732/PAN - AAKCS2215E. The company is an unlisted public company.

Registered office of the company is situated at: 21/36, 3rd Cross, 7th A Main, BTM 1st Stage, Bangalore - 560029.

Directors: The Directors of the Company are:
a) Aslam Sayeed (hereinafter referred to as “Noticee 2”) - (DIN 00873273/PAN: AMJPS7534C) appointed as director on 17/10/2006.
b) Amritendu Bhattacharyya (hereinafter referred to as “Noticee 3”) - (DIN 01742819/PAN AJRPB1543M) appointed as director on 13/10/2006.
c) Subrata Kumar Das (DIN 02161768/PAN ANYPD2233K) appointed as director on 03/06/2008.

Financials: SRAIL has only filed the Balance Sheet for the year ending March 2007. It is observed from the Balance Sheet of the company for the year ending March 2007 that the company has paid up capital of Rs.10,00,000/- and Share Application Money of around Rs. Rs. 55,00,000/-. The company has not shown any current liabilities. The company has fixed assets amounting to Rs.8.5 lakhs and cash at bank/hand- Rs.15.00 Lakhs.

b) It is observed from Board resolutions of Noticee no. 1, the filings made by Noticee no. 1 before ROC and the information available from the application-cum-offer letters issued by Noticee no. 1 that Noticee no. 1 had resolved in the meeting held on November 09, 2006 to borrow money by issue of NCDs of value not exceeding Rs. 20 Crore on terms and conditions of the draft offer letter placed before the Board. On 25-07-2007, Noticee no. 1 further resolved to raise through issue of secured redeemable NCDs of Rs.100/- each up to a limit of Rs. 20 Crore. Further, it resolved that the said debentures may be issued privately and confidentially at par.

c) Moreover, Noticee no. 1 had issued an application-cum-letter of offer for issue of Secured Redeemable Debentures of Rs. 100/- each, aggregating to Rs. 10.00 Crore with an option to retain over subscription up to another Rs.10.00 Crore including debentures of other series and the said application noted that the issue would open on 29-08-2007. Under the said offer, Noticee-1 issued two schemes, i.e. Scheme I: Multiplier Secured Redeemable Debenture; Scheme II: Regular Income Secured Redeemable Debenture. Noticee no.1 had issued various plans such as A, B, C, D, E and F for various terms having variable interest rates.

d) Noticee no.1 has also made claims in the application forms that they are proposing to list their securities in Mumbai, Bangalore and Kolkata Stock Exchanges. Furthermore, Noticee no.1 has also made claims about its forthcoming construction projects and solicited subscriptions for its debentures.

To know more in details find the attachment file