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 SIMON TECH (INDIA) LIMITED.
1. M/s. Simon Tech (India) Ltd. (hereinafter referred to as “STIL”), having its Registered Office in front of Old Radio Station, Mission Road, Buxibazar, Cuttack – 753 001, Orissa, 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) of the said Regulations, 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 its letter dated October 25, 1999 intimated STIL 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, was required to wind up its 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, is required to 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 STIL within the stipulated period of two months, SEBI vide its letters dated December 10, 1999 and December 29, 1999, inter alia, advised STIL 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 STIL 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 STIL about the statutory requirements.
5. As no compliance of the statutory requirements was reported even during the extended period, SEBI vide show Cause Notice dated May 12, 2000 directed STIL to show cause as to why the actions mentioned therein be not initiated against it for the aforesaid violation / non-compliance.
6. STIL vide its letter dated May 22, 2000 replied to the said notice submitting inter alia that it had discontinued all its schemes of collective investments w.e.f April 1, 1998 and funds raised through various diversification programmes and through its sister concerns would be utilized for payments to investor in future.
7. SEBI vide its letter dated July 31, 2000, enclosing therewith the format of “Winding up and repayment report” advised STIL that in terms of Regulation 73, 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. As no compliance was reported, STIL was granted an opportunity of personal hearing before the then Chairman, SEBI on 18.12.2000 in the matter.
8. The date of personal hearing was communicated to STIL vide SEBI’s letter dated December 11, 2000. However, STIL neither appeared for the said hearing nor asked for any adjournment in the matter. In these circumstances, and in view of the fact that the STIL failed to submit the Winding up and Repayment Report as specified in the said Regulations, the then Chairman of SEBI, passed an order dated March 22, 2001 directing STIL to refund the money collected under the scheme(s) with returns which were due to investors as per the terms of the offer, within a period of one month from the date of the said order. Vide said order STIL 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 March 22, 2001 was forwarded to STIL through Regd AD vide letter dated March 30, 2001.
9. STIL vide its letter dated April 10, 2001 while acknowledging the receipt of the aforesaid order, expressed its difficulty in returning the entire balance amount to its investors within a month time and sought extension of time till the maturity of the amount in terms of the original scheme. Further, STIL forwarded so called “Winding Up and Repayment Report” dated April 27, 2001, which was neither in conformity with the Regulations nor in the format specified by SEBI. SEBI therefore, vide its letter dated May 17, 2002, forwarded through registered AD, advised STIL to submit the latest status of the total repayments made to the investos 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. The said letter addressed to the Registered Office of the STIL was however returned undelivered with remark ‘Left’.
10. Again, SEBI vide its letter dated July 8, 2002 forwarded through registered AD, advised STIL 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 their current address. It was further advised to furnish copies of the said FDs along with an affidavit to SEBI, duly certified by STIL’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 STIL. This letter also returned undelivered with remark ‘Left’.
11. Another letter dated August 19, 2002, seeking the aforesaid details 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 ‘Addressee Left’.
12. In the light of the aforesaid fact, SEBI vide show Cause Notice dated June 27, 2005 directed STIL 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 / its directors / its 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 STIL, 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 ‘Left’. Again a reminder letter dated October 07, 2005 was issued to STIL, but it was also returned bearing the remark ‘Left’. Subsequently, the show cause notice was duly affixed on November 27, 2005 at the premises of the last known official address of STIL. Despite this, STIL failed to respond. Therefore, I am convinced that ample opportunity has been given to STIL and it is a fit case to proceed further based on material available on record.
13. At this juncture, I note that vide order dated March 22, 2001, STIL was forewarned that in case of non compliance of directions mentioned therein, various actions mentioned in the said order would follow including that the company / its promoters / directors / managers / persons in charge of the business of its schemes would be debarred from operating in the capital market for a period of 5 years.
14. In view of the aforesaid facts and circumstance, I am constrained to take a view that STIL 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 March 22, 2001 also, in spite of being given number of opportunities in this regard.
15. Now, 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 Simon Tech (India) 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.
16. 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.
17. 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. Shri Simon Behera C/o Dr. (Ms.) Margaret Behera,
Hillpatna Street, Berhampur,
Dist. Ganjam, Orissa
2. Shri Sandeep Behera D/132, Koelnagar,
Rourkela – 769014, Orissa
3. Shri Kumar Sourav H.NO.18, 5th Main Road,
RMS Layout, RMV IInd Stage,
Sanjay Nagar, Near Bank Of India
Bangalore – 560 094
4. Ms. Sunita Behera C/o M/s. Simon Tech (India) Ltd.
In front of Old Radio Station,
Mission Road, Buxibazar,
Cuttack – 753 001, Orissa,
5. Mrs. Gitali Sikdar C/o M/s. Simon Tech (India) Ltd.
In front of Old Radio Station,
Mission Road, Buxibazar,
Cuttack – 753 001, Orissa,