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2015 (2) TMI 1287 - Board - Companies LawIllelegal mobilizing funds from the public - carrying on the activities of a 'Collective Investment Scheme' - Whether HBN is operating a CIS without obtaining registration from SEBI? - Whether HBN has failed to repay to the investors as per the approved detailed procedure? - Held that:- Payments were made without the supervision of RTA, though this was a condition stipulated by SEBI for making repayments. Further, the statement that the Company had made cash payments is also a breach of such conditions. It has also been stated that HBN has deducted 25% of the amounts payable to the investors as a penalty. The Company cannot make any such deduction, as the liability to repay the investors has arisen out of its illegal manner of fund mobilization from them. Therefore, wherever such deductions were made, HBN shall make full payments to its investors with returns that were assured. The auditor has also observed that HBN did not provide full chain of repayments and also that it has used the stationery of group companies for making payments. These statements therefore create a doubt as to whether the claim of partial repayments made by the Company, is genuine. Noticee were the directors of HBN at the relevant period time and have resigned later-on. In view of the same, these five notices are also liable and responsible along with Mr. Harmender Singh Sran, Mr. Amandeep Singh Sran, Ms. Manjeet Kaur Sran and Ms. Jasbeer Kaur, for the violations committed by HBN in running CISs without obtaining registration from SEBI as required under law, during the period when they were the directors. Company had all the opportunity to sell its properties since July 12, 2013 (except for the period July 30, 2014 to December 09, 2014, when the restraint order of Hon'ble Delhi High Court was operative) and make repayments to its investors. Also note that there was no restraint on recalling the loans and advances so as to make the repayments. No hesitation in holding that HBN failed to comply with the directions of SEBI read with the Repayment Procedure forwarded to HBN on January 06, 2014. In exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 and Sections 11(1), 11B and 11(4) thereof and Regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999, hereby issue the following directions: a. HBN Dairies & Allied Limited [PAN: PAN: AAACH7852C] and its directors/ former directors namely Mr. Harmender Singh Sran [PAN: AIGPS2229B], Mr. Satnam Singh Randhava, Mr. Amandeep Singh Sran [PAN: AUVPS5370E], Mr. Gajraj Singh Chauhan [PAN: ADXPC6922H], Ms. Manjeet Kaur Sran [DIN: 00105878], Ms. Jasbeer Kaur [DIN: 00161623], Mr. Rakesh Kumar Tomar [DIN: 06824416], Mr. Sukhdev Singh Dhillon and Ms. Sukhjeet Kaur shall abstain from collecting any money from the investors or launch or carry out any Collective Investment Schemes including the scheme which have been identified as a Collective Investment Scheme in this Order. b. HBN Dairies & Allied Limited and its directors/ former directors namely Mr. Harmender Singh Sran, Mr. Satnam Singh Randhava, Mr. Amandeep Singh Sran, Mr. Gajraj Singh Chauhan, Ms. Manjeet Kaur Sran, Ms. Jasbeer Kaur, Mr. Rakesh Kumar Tomar, Mr. Sukhdev Singh Dhillon and Ms. Sukhjeet Kaur are restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of four (4) years. c. HBN Dairies & Allied Limited and its directors namely Mr. Harmender Singh Sran, Mr. Amandeep Singh Sran, Ms. Manjeet Kaur Sran and Ms. Jasbeer Kaur shall forthwith 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, on or before March 09, 2015 and thereafter within a period of fifteen days, submit a winding up and repayment report to SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds. d. The Company shall provide proof including trail of funds, bank statements to support its contention that it has refunded the monies to its investors. e. HBN Dairies & Allied Limited and its directors namely Mr. Harmender Singh Sran, Mr. Amandeep Singh Sran, Ms. Manjeet Kaur Sran and Ms. Jasbeer Kaur shall not alienate or dispose off or sell any of the assets of HBN Dairies & Allied Limited except for the purpose of making refunds to its investors as directed above. f. HBN Dairies & Allied Limited and its directors/ former directors namely Mr. Harmender Singh Sran, Mr. Satnam Singh Randhava, Mr. Amandeep Singh Sran, Mr. Gajraj Singh Chauhan, Ms. Manjeet Kaur Sran, Ms. Jasbeer Kaur, Mr. Rakesh Kumar Tomar, Mr. Sukhdev Singh Dhillon and Ms. Sukhjeet Kaur are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form. g. In the event of failure by HBN Dairies & Allied Limited and its directors namely Mr. Harmender Singh Sran, Mr. Amandeep Singh Sran, Ms. Manjeet Kaur Sran and Ms. Jasbeer Kaur to comply with the above directions on or before March 09, 2015, the following actions shall follow: - HBN Dairies & Allied Limited and its directors namely Mr. Harmender Singh Sran, Mr. Amandeep Singh Sran, Ms. Manjeet Kaur Sran and Ms. Jasbeer Kaur shall remain restrained from accessing the securities market and would further be prohibited from buying, selling or otherwise dealing in securities, even after the period of four (4) years of restraint imposed in Paragraph 20 (b) above, till all the Collective Investment Schemes of HBN Dairies & Allied Limited are wound up and all the monies mobilized through such schemes are refunded to its investors with returns which are due to them. - SEBI would make a reference to the State Government/ Local Police to register a civil/ criminal case against HBN Dairies & Allied Limited, its promoters, 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 - SEBI would make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the company, HBN Dairies & Allied Limited. - SEBI shall also initiate attachment and recovery proceedings under the SEBI Act and rules and regulations framed thereunder.
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