Noticee No. 1, 2, & 3 vide common letter dated February 09, 2020 and July 15, 2020 submitted their reply / written submissions in the matter. Their submission in brief are as under:
8.1. Noticee No. 1, 2, 3 deny all the allegations levelled against them in the Show Cause Notice.
8.2. Noticee No. 1 founded RSGBL on July 2, 1990. In 1992, 1,00,000 shares of RSGBL were allotted to Xxxxx and 90,000 shares of RSGBL were allotted to Siwana.
8.3. As per the annual return filed on September 30, 1992 both Xxxxx and Siwana were part of the promoter group. As per the said annual return, Noticee No. 1 brothers namely Xxxx Xxxxxxxxxx X. Chowdhary, Xxxx Xxxxxxx X. Chowdhary and Xxxx Xxxxxxxxx X. Chowdhary and Noticee No. 1 were directors of RSGBL. Xxxx Xxxxxxxxxx X. Chowdhary and Xxxx Xxxxxxx X. Chowdhary resigned from directorship in RSGBL on July 15, 1993.
8.4. As on July 2, 1990, Noticee No. 1 sisters namely Xxxxxx Xxxxx and Xxxxxxxxxx Xxxxxx were married and did not have any connection with the business of RSGBL and were never involved in the management of the Company and were never employed with RSGBL. Out of love, affection and economic purposes, shares were issued by RSGBL to certain entities controlled by them.
8.5. On the basis numerous discussions amongst the family members, a family arrangement was put in place wherein (a) Xxxx Xxxxxxxxxx X. Chowdhary, Xxxx Xxxxxxxxx X. Chowdhary and Noticee No.1 along with their spouses and children and entities controlled by them (“Group A”) would solely run the business of RSGBL; and (b) Xxxx Xxxxxxx X. Chowdhary and the two sisters (i.e. Xxx. Xxxxxx Xxxxx and Mrs. Xxxxxxxxxx Xxxxxx) along with their immediate family and the entities controlled by them including Xxxxx and Siwana (“Group B”) would not in any manner be involved in running of RSGBL and were free to commence/carry out and run their business independent of Group A and the businesses of Group A (“Family Arrangement”). The Family Arrangement was arrived at to avoid any future conflict with them. In accordance with the terms of the Family Arrangement, it was agreed and confirmed by the entire family that neither Group B nor any member or entity forming a part of Group B will be treated as a promoter of RSGBL and no member or entity forming a part of Group B will form a part of the promoter group of RSGBL.
8.6. Post the Family Arrangement, none of the members or entities forming a part of Group B as mentioned above: (a) have ‘acted in concert’ with the promoters/promoter group...
Noticee No. 4 vide letter dated February 17, 2020, Noticee No. 5 to 9 vide common letter dated February 17, 2020 and Noticee No. 4 to 9 vide common letter / email dated July 15, 2020 submitted their reply / written submissions in the matter. Their submission in brief are as under:
9.1. Noticee No. 4 to 9 denied the allegation mentioned in the SCN.
9.2. Sayaridevi does not have any connection with RSGBL. Xxxxxxxxxx neither holds any shares in RSGBL nor had anything to do with the delisting process or in the book building process of delisting of shares of RSGBL. Xxxxxxxxxx was part of the family arrangement / separation and not part of the promoter group.
9.3. Xxxxxxxxxx transferred the fund of Rs. 31,25,000/- to her son Motit out of her love and affection for him to utilise the fund in usual course of his business. Xxxxx utilised the funds to acquire the shares of Vital. The said acquisition of Vital was not on the instruction of Xxxxxxxxx. The acquisition of Vital was an independent decision of Xxxxx and was carried out in the ordinary course of business for the purpose of carrying on the business of advisory and consultancy in finance and management.
Noticee No. 4 to 9 is neither “promoter group” nor “persons acting in concert”. There was no shared common objective of committing any fraud or deception or illegality by any of the Noticee No. 4 to 9 with any of the promoter of RSGBL. A finding of fraud, deception etc. cannot be based on suspicion and conjecture and must be proved beyond reasonable doubt
Noticee No. 10, 11 & 12 did submit any reply to the SCN.
Noticee No. 13 vide letter dated January 22, 2020 submitted his reply in the matter. His submission in brief are as under:
11.1. With regard to the allegation that Creelotex Engineers Private Limited (“CEPL”) had transferred Rs. 1,79,61,200/- to Xx. Xxxxxx Xxxxxxxx in relation to delisting of RSGBL, it is submitted that Noticee No. 13 was a shareholder of CEPL and held 44,903 shares in CEPL. As per Section 68 of the Companies Act, 2013, a board resolution dated March 6, 2017 was passed in the board meeting of CEPL in relation to the buy-back of equity shares of CEPL at a price of Rs. 400 per share. Noticee No. 13 tendered 44,903 equity shares held by him in the said buy-back. In consideration of shares tendered in the buy-back, CEPL paid him Rs. 1,79,61,200/. The documents in relation to the same are enclosed.
11.2. Out of the said funds, he lent Rs. 65.25 Lakh to Xx. Xxxxxxxx Xxxx and Rs. 100 Lakh to Mr. Xxxx Xxxxx as part of normal lending. Mr. Xxxx Xxxxx has duly paid interest on the loan availed and has deducted tax at source on the same. Copy of the account statement in relation to the same is enclosed. As per the account statement of Mr. Xxxx Xxxxx, no money has been used for purchase of shares of RSGBL. Therefore, the lending of funds received from CEPL has nothing to with the delisting of RSGBL or otherwise with the promoter of RSGBL.
Noticee No. 14 to 29 vide common email dated February 10, 2020 and vide common letter / email dated July 15, 2020 submitted their reply / written submissions in the matter. Their submission in brief are as under:
12.1. Noticee No. 14 to 29 denied all allegations mentioned against them in the SCN. 12.
Noticee No. 29 had purchased 5,000 shares of RSGBL out of the loans availed in normal course of business. Noticee No. 29 has used the amount of Rs.50 lakh for the purchase of shares of other listed company. Except for the transaction of 5,000 shares of RSGBL, there is no funds trail and no connection with dealing the scrip of RSGBL nor any relations with the promoters of RSGBL. The account statement and contract notes evidencing the entire trail of funds till the utilisation of the same are enclosed.
Noticee No. 19 had availed a loan from Metroglobal Limited and payment of Rs. 150 lakhs mentioned in the Show Cause Notice is towards repayment of the said loan. The amounts outstanding against the loans from Metroglobal Limited loan as on March 31, 2019 is Rs.425.10 Lakhs. The loan ledger from April 1, 2016 to March 31, 2019 enclosed
Noticee No. 30 vide email dated January 11, 2020 and July 07, 2020 submitted her reply / written submissions in the matter. Her submission in brief are as under:
13.1. The investments in the securities market are made after carrying out a study of the Companies listed on the Stock Exchange. The factors, which taken into consideration while investing are debt of the Company, book value of the Company, ratio analysis of the company in comparison to the price at which the said equity shares are being quoted on the stock exchange, fundamentals of the company, the future growth of the company and margins arises on account of buying and selling of the scrip.
13.2. RSGBL as a company showed excellent prospects and the returns which could get by making investments in RSGBL would be worth the amount of money that put in purchase of the shares of RSGBL. The investment in RSGBL are as part of ordinary course of investment and out of her own funds and have been investing in RSGBL prior to as well as during the course of inquiry by SEBI
13.3. All the investments in the share markets are made by her out of her own funds and have not borrowed any funds to make investment in share markets. Balance sheet for the FY 2016-17 and 2017-18 as well as the profits and loss accounts and copy of Income Tax Returns which give details of her investments in the securities market along with the value of the same are enclosed. The balance sheet for the FY 2016- 17 indicates that the value of investments in the share market is around 19 lakhs and current assets are around 27 lakhs and investment in mutual funds are approximately 19 lakhs.
13.4. The investments made in RSGBL are commensurate and proportionate to the total investments made in the securities market.
13.5. At the time of opening Noticee No. 30 trading and demat account, her father’s E- mail i.d. had been given. After marriage, merely out of convenience the transactions are being carried out in her maiden name and hence, even the e-mail i.d. of her father is being used.
13.6. She has no professional or business relations with Xx. Xxxxxxxxxx X.
Noticee No. 34 vide letter dated February 17, 2020 submitted that RSGBL is a body corporate distinct from its promoters and management and SCN has been issued to RSGBL as the delisting process relates to RSGBL and there is no other allegation against RSGBL in the SCN. Thus, the allegations contained in the SCN are denied and untrue.
