SECURITIES AND EXCHANGE BOARD OF INDIA
ORDER
UNDER SECTIONS 11(4)(b) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH REGULATION 65(e) OF THE SEBI (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 1999 IN THE MATTER OF M/S BOTANIST BIOTECH PROJECTS LTD.
1. M/s. Botanist Biotech Projects Ltd. (hereinafter referred to as “BBPL”), having its Head Office at Kaushallya More, Kharagpur – 721301, West Bengal, had filed information / details with Securities and Exchange Board of India (hereinafter referred to as SEBI) regarding its Collective Investment Schemes pursuant to SEBI Press Release dated November 26, 1997 and / or public notice dated December 18, 1997. Consequent to the notification of SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as the “said Regulations) dated October 15, 1999 in terms of Regulation 5 (1), any person who immediately prior to the commencement of the said Regulations was operating a Collective Investment Scheme(s), was required to make an application to SEBI for grant of registration within a period of two months from the date of notification. SEBI by way of public notice dated October 20, 1999 and also vide letter dated October 25, 1999 intimated BBPL about the notification of the said Regulations.
2. In terms of Regulation 73 of the said Regulations, an existing Collective Investment Scheme which has failed to make an application for registration with SEBI, shall wind up the existing scheme(s) and repay its investors in the manner specified therein. Further as per Regulation 74, an existing Collective Investment Scheme which is not desirous of obtaining provisional registration from SEBI, shall formulate a scheme of repayment and make such repayment to the existing investors in the manner specified in Regulation 73 of the said Regulations.
3. As SEBI did not receive application for registration from BBPL within the stipulated period of two months, SEBI vide its letters dated December 10,1999 and December 29, 1999, inter alia, advised BBPL that in case it was not desirous of obtaining registration from SEBI, it had to wind up its schemes and repay the investors in the manner specified in Regulation 73.
4. There were number of entities including BBPL who had violated the provisions of Section 12(1B) of the SEBI Act, 1992 and Regulation 5(1) read with Regulations 68(1), 68(2), 73 and 74 of the said Regulations, SEBI, therefore, issued a Public Notice dated March 31, 2000 in various news papers in this regard inviting attention of the concerned entities including BBPL about the statutory requirements.
5. As no compliance of the statutory requirement was reported even during the extended period, SEBI vide show cause notice dated May 12, 2000 directed BBPL to show cause as to why the actions mentioned therein be not initiated against it for the said violation/non compliance. However, BBPL neither replied to the show cause notice nor responded to the newspaper publication.
6. SEBI vide its letter dated July 31, 2000 enclosing therewith the format of “Winding up and repayment report” advised BBPL that it was required to file a detailed winding up and repayment report in the said format within 3½ months of the date of information memorandum to be sent to the investors in terms of Regulation 73.
7. There was however no communication from BBPL either to the show cause notice dated May 12, 2000 or to the letter dated July 31, 2000. In these circumstances, and in view of the fact that the BBPL failed to submit the Winding up and Repayment Report as specified in the said Regulations, the then Chairman of SEBI passed an order dated December 07, 2000 directing BBPL to refund the money collected under the scheme(s) with returns which were due to investors as per their terms of the offer, within a period of one month from the date of the said order. Vide the said order, BBPL was forewarned that in case of non compliance of the said order, various actions mentioned in the order would follow. The copy of the aforesaid order dated December 07, 2000 was forwarded by SEBI to BBPL through Regd. AD vide letter dated December 18, 2000.
8. BBPL vide its letter dated December 30, 2000 forwarded its purported “Winding Up and Repayment Report”, wherein BBPL submitted that it had intimated to all the investors to refund their money vide its letter dated June 12, 2000. It further submitted that only few i.e. 55 investors out of 1778 investors approached it and took their money back and for the remaining investors it would issue further intimation shortly.
9. Further, SEBI vide its letter dated May 17, 2002 advised BBPL to submit the latest status in respect of the total repayments made to the investors along with the necessary details of repayment, mode of repayment, etc., duly certified by its statutory auditors within 15 days from the date of receipt of the letter. BBPL vide its letter dated June 14, 2002 while reiterating its submissions made vide letter dated December 30, 2000 submitted that it has complied with all the provisions of Regulation 73 of the said Regulations and reiterated its reply dated December 30, 2000 to the Order dated December 07, 2000.
10. SEBI vide its letter dated July 08, 2002 forwarded through registered AD, advised BBPL to place the amounts payable to each of the investors in separate fixed deposits (FDs) for a period of 60 months, with any scheduled bank wherein repayments have not been made to them due to the non-availability of the current address. It was further advised to furnish copies of the said FDs along with an affidavit to SEBI, duly certified by BBPL’s Statutory Auditors, stating that FDRs would not be alienated or used in any manner whatsoever except to repay concerned investors as and when they approach BBPL. This said letter returned undelivered with remark ‘Long days door closed hence return to sender.
11. Another letter dated August 19, 2002, seeking the aforesaid details/ documents was also returned undelivered. SEBI vide its letter dated September 15, 2004 again asked for the aforesaid details. This letter also met with the same fate and returned undelivered with remark ‘Left without
address, Return to sender”.
12. In the light of the aforesaid fact, SEBI vide Show Cause Notice dated June 27, 2005 directed BBPL to show cause as to why directions under Section 11(4)(b) read with Section 11B of SEBI Act, 1992 and Regulation 65(e) of the said Regulations should not be passed against it and its promoters / directors / managers / persons in charge of the business of its schemes for non-compliance of the provisions of SEBI Act, 1992 and the said Regulations. It was also stated in the said show cause notice that if no reply was received from BBPL, it would be presumed that it had no explanation to offer and the matter would be proceeded ex parte as per law. However, it was returned undelivered bearing the remark ‘Addressee left without address’. Again a reminder letter dated October 07, 2005 was issued to BBPL, but it was also returned bearing the remark ‘Left without address’. Subsequently, the show cause notice was duly affixed on November 28, 2005 at the premises of the last known official address of BBPL. Despite this, BBPL failed to respond. Therefore, I am convinced that ample opportunity has been given to BBPL and it is a fit case to proceed further based on material available on record.
13. Upon local inquiry it came to the knowledge of SEBI that one of the directors of BBPL, Shri S. L. Dey is residing at Talbagicha Bazar, Kharagpur. A copy of the Show Cause Notice dated June 27, 2005 was hand delivered to him. Shri S. L. Dey vide a letter dated November 30, 2005 had replied that he had resigned as director of the BBPL in May 1999 and was unwell for last couple of years, therefore, it was not possible for him to say any thing in the matter relating to repayments to the investors.
14. I observe that as per letter dated January 16, 1998 of BBPL, it had collected a sum of Rs. 11.60 lacs from the investors under its scheme upto December 1997. I also observe that as per the Memorandum of Association of BBPL dated August 31, 1994, Shri S. L. Dey was one of the promoter- directors of BBPL and he was director of BBPL during the period of mobilization of funds from investors. Therefore, I am convinced that he is also liable for non compliance of provisions of the SEBI Act, 1992 and the said Regulations.
15. In view of the aforesaid facts and circumstances, I am satisfied that BBPL has failed to comply with the provisions of SEBI Act, 1992 and the said Regulations. I further note that it has failed to comply with the order of SEBI dated December 07, 2000 also, in spite of being given number of opportunities in this regard.
16. Therefore, in exercise of the powers conferred upon me under Section 19 read with Sections 11(4)(b) and 11B of the SEBI Act, 1992 read with Regulation 65 of the said Regulations, I hereby debar M/s Botanist Biotech Projects Ltd../ its promoters / directors / managers / persons in charge of the business of its schemes (as given in Annexure-A), from accessing the securities market and also prohibit them from buying, selling or dealing in securities for a period of 5 years from the date of this Order.
17. Any aggrieved person, whose name is mentioned in the enclosed Annexure A, but was not aware of the previous order and the warning issued vide the said Order and was not responsible for the conduct of the business of the company, may apply in writing, within 15 days, from the date of this Order, with all the supporting documents to SEBI.
18. This is without prejudice to the right of SEBI to initiate any other action, as it may deem fit, in the interest of investors.
| DATE :12-1-2006 |
MADHUKAR |
| PLACE : MUMBAI |
WHOLE TIME MEMBER |
| |
SECURITIES AND EXCHANGE BOARD OF INDIA |
Annexure – A
Name Address
1. Mr. Gordan Harold Johnson Jhapatapur, Kharagpur,
Dist : Midnapore,
West Bengal
2. Mr. Satyendra Lal Dey Sikharpari, PO: Bonpatna
Dist : Midnapore,
West Bengal
3. Mr Durgasankar Chakraborty Andul Purbapara
Post : Andul Mouri
Dist : Howrah
West Bengal
4. Mr Paresh Chandra Sarkar Talbagicha
Post : Talbagicha
Dist : Midnapore,
West Bengal
5. Mr Arbinda Tirkey Arambati
Post : Nimpura
Dist : Midnapore,
West Bengal
6. Shri. Paul Dennis Clarence S/O Late Paul Thomas
Pauls Villa, Brookland West
Pattathanam, P. O. Quilon,
Kerela – 691001.
7. Shri. Krishan Mohan Sahoo S/O Late Kashinath Sahoo
Villa, Sisua, P.O.Bentkar,
Dist. Cuttack, Orissa.
8. Shri. Avatar Singh S/o Late Wasakha Singh,
Behind Baghat Singh’s House,
Vill: Arambati, P.O. Nimpura
Kharagpur – 4
9. Shri. Korada Srinivas Rao S/o K. Narsinga Rao
B. R. Nagar, Purigate,
P.O. Hijli, Kharagpur -6