w w w . L a w y e r S e r v i c e s . i n



Radford Global Limited v/s Securities & Exchange Board of India, SEBI Bhavan


Company & Directors' Information:- INDIA SECURITIES LIMITED [Amalgamated] CIN = L99999TN1984PLC075902

Company & Directors' Information:- B N GLOBAL PRIVATE LIMITED [Active] CIN = U15400PB2014PTC038543

Company & Directors' Information:- RADFORD GLOBAL LIMITED [Active] CIN = L55101MH1994PLC235976

Company & Directors' Information:- GLOBAL SECURITIES LIMITED [Active] CIN = L67120GJ1994PLC021269

Company & Directors' Information:- K V GLOBAL PRIVATE LIMITED [Active] CIN = U24100DL2014PTC263567

Company & Directors' Information:- GLOBAL CORPORATION LIMITED [Active] CIN = L74999DL1992PLC048880

Company & Directors' Information:- K K SECURITIES LIMITED [Active] CIN = U74899DL1994PLC060238

Company & Directors' Information:- M K SECURITIES LIMITED [Active] CIN = L67120TG1994PLC018455

Company & Directors' Information:- T & I GLOBAL LTD. [Active] CIN = L29130WB1991PLC050797

Company & Directors' Information:- A TO Z SECURITIES LIMITED [Active] CIN = U74899DL1994PLC063412

Company & Directors' Information:- A TO Z SECURITIES LIMITED [Active] CIN = L74899DL1994PLC063412

Company & Directors' Information:- K G GLOBAL PRIVATE LIMITED [Active] CIN = U74999DL2000PTC104788

Company & Directors' Information:- I C P SECURITIES LIMITED [Under Process of Striking Off] CIN = U74899DL1994PLC060472

Company & Directors' Information:- P R B SECURITIES PVT LTD [Active] CIN = U67120WB1995PTC067948

Company & Directors' Information:- A. K. P. SECURITIES PVT. LTD. [Strike Off] CIN = U67120WB1995PTC068061

Company & Directors' Information:- A. V. GLOBAL CORPORATION PRIVATE LIMITED [Active] CIN = U63090DL2007PTC159315

Company & Directors' Information:- P F I L SECURITIES LIMITED [Active] CIN = U74899DL1995PLC068811

Company & Directors' Information:- S J SECURITIES LIMITED [Active] CIN = L65923GJ1995PLC025086

Company & Directors' Information:- GLOBAL SECURITIES LIMITED [Strike Off] CIN = U65929PN1994PTC016103

Company & Directors' Information:- R R SECURITIES LTD [Active] CIN = L67910GJ1993PLC020169

Company & Directors' Information:- K R SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059298

Company & Directors' Information:- B. N. SECURITIES LIMITED [Active] CIN = U67120WB1994PLC110809

Company & Directors' Information:- A AND W SECURITIES PRIVATE LIMITED [Active] CIN = U67120DL2005PTC137641

Company & Directors' Information:- H J SECURITIES PRIVATE LIMITED [Active] CIN = U67120MH1998PTC117076

Company & Directors' Information:- A N GLOBAL LIMITED [Active] CIN = U92110MH1985PLC035269

Company & Directors' Information:- D S GLOBAL PRIVATE LIMITED [Active] CIN = U74899DL1995PTC071516

Company & Directors' Information:- D H SECURITIES PRIVATE LIMITED [Active] CIN = U67120MH2000PTC123636

Company & Directors' Information:- V G SECURITIES LIMITED [Strike Off] CIN = U65993TG1995PLC020179

Company & Directors' Information:- N B S SECURITIES PRIVATE LTD [Active] CIN = U65921WB1996PTC079346

Company & Directors' Information:- G N H GLOBAL SECURITIES LIMITED [Active] CIN = U67120MH1997PLC111910

Company & Directors' Information:- B J SECURITIES PRIVATE LIMITED [Active] CIN = U67120WB2000PTC092061

Company & Directors' Information:- A B C GLOBAL PRIVATE LIMITED [Active] CIN = U51909PB2011PTC035103

Company & Directors' Information:- A N SECURITIES PRIVATE LIMITED [Active] CIN = U65999WB1997PTC084741

Company & Directors' Information:- B AND H SECURITIES PRIVATE LIMITED [Active] CIN = U74999MH1974PTC017380

Company & Directors' Information:- A G SECURITIES PRIVATE LIMITED [Strike Off] CIN = U65921DL1993PTC052453

Company & Directors' Information:- I A T GLOBAL COMPANY PRIVATE LIMITED [Active] CIN = U24116DL1997PTC084916

Company & Directors' Information:- M N SECURITIES PRIVATE LIMITED [Active] CIN = U67120DL1999PTC102464

Company & Directors' Information:- B P SECURITIES (INDIA) PRIVATE LIMITED [Active] CIN = U67120DL1996PTC077411

Company & Directors' Information:- I M SECURITIES PRIVATE LIMITED [Active] CIN = U67120DL1996PTC077356

Company & Directors' Information:- J D GLOBAL PRIVATE LIMITED [Active] CIN = U51909DL1997PTC091270

Company & Directors' Information:- K L G SECURITIES LIMITED [Active] CIN = U74899DL1993PLC052974

Company & Directors' Information:- K L B SECURITIES PVT LTD [Active] CIN = U67120GJ1995PTC024411

Company & Directors' Information:- V H SECURITIES LIMITED [Active] CIN = U74899DL1995PLC072918

Company & Directors' Information:- R K G SECURITIES LIMITED [Active] CIN = U74899DL1993PLC055457

Company & Directors' Information:- G S SECURITIES LTD [Active] CIN = U67120WB1995PLC073255

Company & Directors' Information:- R K SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC064716

Company & Directors' Information:- GLOBAL SECURITIES LTD. [Under Liquidation] CIN = L65993WB1993PLC059042

Company & Directors' Information:- B N G GLOBAL INDIA LIMITED [Active] CIN = U52590DL2011PLC225377

Company & Directors' Information:- N K COMPANY (GLOBAL) PRIVATE LIMITED [Active] CIN = U52390WB2010PTC153624

Company & Directors' Information:- K B K GLOBAL PRIVATE LIMITED [Active] CIN = U24296DL2016PTC290487

Company & Directors' Information:- S S G SECURITIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U67120KL1995PTC009473

Company & Directors' Information:- L N SECURITIES PVT LTD [Active] CIN = U65993WB1992PTC057302

Company & Directors' Information:- M D SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1975PTC007928

Company & Directors' Information:- M D K SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67110WB2000PTC092641

Company & Directors' Information:- A K D SECURITIES PRIVATE LIMITED [Active] CIN = U67120MH1997PTC112152

Company & Directors' Information:- E-2 SECURITIES PRIVATE LIMITED [Active] CIN = U65921DL1991PTC044031

Company & Directors' Information:- A R P SECURITIES LIMITED [Active] CIN = U67120MP1994PLC008872

Company & Directors' Information:- P K J SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1991PTC044706

Company & Directors' Information:- M & D GLOBAL PRIVATE LIMITED [Active] CIN = U31101UP1974PTC003937

Company & Directors' Information:- V AND U SECURITIES PRIVATE LIMITED [Active] CIN = U67120GJ1995PTC026131

Company & Directors' Information:- V R GLOBAL PRIVATE LIMITED [Active] CIN = U45200WB2007PTC120797

Company & Directors' Information:- S. D. L SECURITIES LIMITED [Active] CIN = U67120PB1995PLC016810

Company & Directors' Information:- M M GLOBAL PRIVATE LIMITED [Strike Off] CIN = U29120WB1986PTC041280

Company & Directors' Information:- J M SECURITIES PRIVATE LIMITED [Amalgamated] CIN = U67120MH1989PTC050648

Company & Directors' Information:- R V GLOBAL PRIVATE LIMITED [Active] CIN = U74990MH2009PTC195301

Company & Directors' Information:- M M SECURITIES LIMITED [Under Process of Striking Off] CIN = U74920BR1995PLC006716

Company & Directors' Information:- M M C GLOBAL INDIA PRIVATE LIMITED [Strike Off] CIN = U11200MH2010PTC206910

Company & Directors' Information:- S R GLOBAL PRIVATE LIMITED [Strike Off] CIN = U51109WB1997PTC084553

Company & Directors' Information:- R K D K SECURITIES LTD. [Amalgamated] CIN = L67120WB1994PLC063609

Company & Directors' Information:- H V GLOBAL PRIVATE LIMITED [Active] CIN = U18101DL2000PTC103960

Company & Directors' Information:- R P GLOBAL PRIVATE LIMITED [Strike Off] CIN = U74990MH2009PTC193409

Company & Directors' Information:- M S GLOBAL PRIVATE LIMITED [Active] CIN = U70100MH2008PTC213273

Company & Directors' Information:- S AND F SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120DL1993PTC054557

Company & Directors' Information:- R S V GLOBAL LIMITED [Strike Off] CIN = U51909DL1994PLC059032

Company & Directors' Information:- GLOBAL EXCHANGE COMPANY PRIVATE LIMITED [Active] CIN = U65929KL1995PTC009556

Company & Directors' Information:- R. J. SECURITIES PRIVATE LIMITED [Active] CIN = U67120WB2008PTC131387

Company & Directors' Information:- A R S SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC055638

Company & Directors' Information:- G V SECURITIES LIMITED [Strike Off] CIN = U67120PB1996PLC017506

Company & Directors' Information:- P G SECURITIES PRIVATE LIMITED [Active] CIN = U67120RJ1995PTC009985

Company & Directors' Information:- C & S SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120TN1994PTC028091

Company & Directors' Information:- K AND P SECURITIES LIMITED [Strike Off] CIN = U65910MH1995PLC092715

Company & Directors' Information:- A J M SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120KL1997PTC011202

Company & Directors' Information:- A & B SECURITIES PRIVATE LIMITED [Strike Off] CIN = U65993TN1995PTC032716

Company & Directors' Information:- P S R SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120DL1996PTC079088

Company & Directors' Information:- P N SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC070358

Company & Directors' Information:- N B GLOBAL (INDIA) PRIVATE LIMITED [Active] CIN = U15122UP2012PTC051614

Company & Directors' Information:- V R B SECURITIES INDIA PRIVATE LIMITED [Active] CIN = U67120KL2008PTC021718

Company & Directors' Information:- S K B SECURITIES LIMITED [Active] CIN = U65999WB1996PLC082316

Company & Directors' Information:- J AND J SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120KL1998PTC012015

Company & Directors' Information:- A M SECURITIES PRIVATE LIMITED [Active] CIN = U67120KL1997PTC011182

Company & Directors' Information:- P K SECURITIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC061444

Company & Directors' Information:- A B SECURITIES PVT LIMITED [Active] CIN = U67120AS1997PTC005177

Company & Directors' Information:- J J SECURITIES LIMITED [Strike Off] CIN = U65993TN1994PLC029598

Company & Directors' Information:- G J SECURITIES PRIVATE LIMITED [Active] CIN = U67120DL1998PTC094843

Company & Directors' Information:- P K T SECURITIES PRIVATE LIMITED [Active] CIN = U65921UP1995PTC017797

Company & Directors' Information:- N S V SECURITIES PRIVATE LIMITED [Strike Off] CIN = U74899DL2000PTC105022

Company & Directors' Information:- V 3 SECURITIES PRIVATE LIMITED [Active] CIN = U67120DL2005PTC142034

Company & Directors' Information:- J D V SECURITIES PRIVATE LIMITED [Active] CIN = U67190UP2014PTC067394

Company & Directors' Information:- B H SECURITIES PRIVATE LIMITED [Active] CIN = U67120DL2003PTC120184

Company & Directors' Information:- R N SECURITIES PRIVATE LIMITED [Active] CIN = U74900HR2012PTC046023

Company & Directors' Information:- F M SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120KL2009PTC024302

Company & Directors' Information:- N I SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120DL2000PTC105518

Company & Directors' Information:- S S V SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120DL2000PTC105232

Company & Directors' Information:- N R. SECURITIES LTD [Strike Off] CIN = U67120CH1995PLC015991

Company & Directors' Information:- G K R SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120TG2000PTC035435

Company & Directors' Information:- K H SECURITIES PRIVATE LIMITED [Active] CIN = U67120MH2001PTC134169

Company & Directors' Information:- T N S SECURITIES PRIVATE LIMITED [Active] CIN = U67120WB1992PTC055839

Company & Directors' Information:- Y K SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC074083

Company & Directors' Information:- J N SECURITIES PRIVATE LIMITED [Active] CIN = U67120TN1999PTC043842

Company & Directors' Information:- R C SECURITIES PRIVATE LIMITED [Strike Off] CIN = U74140OR2011PTC013240

Company & Directors' Information:- R L F SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC069597

Company & Directors' Information:- J M L SECURITIES LIMITED [Strike Off] CIN = U67110UP2000PLC025628

Company & Directors' Information:- A P SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC065651

Company & Directors' Information:- M G SECURITIES PRIVATE LIMITED [Active] CIN = U74899DL1994PTC058074

Company & Directors' Information:- C S SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120KL1998PTC012664

Company & Directors' Information:- M M SECURITIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC066511

Company & Directors' Information:- M N K SECURITIES PRIVATE LIMITED [Active] CIN = U67120MH2001PTC133711

Company & Directors' Information:- A M GLOBAL PRIVATE LIMITED [Active] CIN = U74999MH2015PTC261061

Company & Directors' Information:- L S A GLOBAL INDIA PRIVATE LIMITED [Under Process of Striking Off] CIN = U74900TG2015PTC098308

Company & Directors' Information:- R L GLOBAL INDIA PRIVATE LIMITED [Strike Off] CIN = U52300HP2014PTC000764

Company & Directors' Information:- N K J SECURITIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC070233

Company & Directors' Information:- N G SECURITIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC071199

Company & Directors' Information:- G R GLOBAL PRIVATE LIMITED [Active] CIN = U70102KA2013PTC069586

Company & Directors' Information:- H. E. GLOBAL PRIVATE LIMITED [Active] CIN = U72901GJ2016PTC092866

Company & Directors' Information:- P D K SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120RJ1995PTC010394

Company & Directors' Information:- S V SECURITIES PRIVATE LIMITED [Strike Off] CIN = U65993DL1993PTC051885

Company & Directors' Information:- G D L SECURITIES LIMITED [Strike Off] CIN = U74899DL1995PLC070979

Company & Directors' Information:- R D T SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120DL1994PTC057218

Company & Directors' Information:- M V SECURITIES PRIVATE LIMITED [Strike Off] CIN = U67120PB1996PTC018391

    Appeal No. 345 of 2019

    Decided On, 11 February 2020

    At, SEBI Securities amp Exchange Board of India Securities Appellate Tribunal

    By, THE HONOURABLE MR. JUSTICE TARUN AGARWALA
    By, PRESIDING OFFICER
    By, THE HONOURABLE DR. C.K.G. NAIR
    By, MEMBER & THE HONOURABLE MR. JUSTICE M.T. JOSHI
    By, JUDICIAL MEMBER

    For the Appellant: Jaikishan Lakhwani, Advocate i/b J. L. Legal Advisors. For the Respondent: Vishal Kanade, Kaushal Parsekar, Advocate i/b Legasis Partners.



Judgment Text


Dr. C.K.G. Nair, Member

1. Vide the order impugned in this appeal issued by the Adjudicating Officer (“AO” for convenience) of the Securities and Exchange Board of India (“SEBI” for convenience) on February 26, 2019 a total penalty of Rs.30 lakh has been imposed on the appellant. Out of this Rs.10 lakh has been imposed under Section 15A(a) of the SEBI Act, 1992 for violation of Sections 11(2)(i) and 11C(3) of the SEBI Act and Rs.20 lakh has been imposed under Section 23E of Securities Contracts (Regulation) Act, 1956 (“SCRA” for convenience) for violation of Section 21 of the SCRA read with Clause 43 of the Listing Agreement. Aggrieved by these directions this appeal has been filed.

2. The appellant Radford Global Limited (“RGL”) is a company listed on the Bombay Stock Exchange Limited (“BSE” for convenience). SEBI conducted an investigation covering the period from February 27, 2012 to March 24, 2014 relating to the company. During the investigation SEBI issued a summons to the appellant under Section 11(2)(i) and 11C(3) of SEBI Act, 1992 seeking production of certain information and documents. However the appellant failed to produce some of the material called for and not appeared before the AO. Hence an adjudication procedure under Section 15A(a) of SEBI Act was initiated against the appellant. Further it was also noticed during the investigation that the appellant made a preferential allotment on February 16, 2012 and the proceeds of the said issue were partly utilized for purposes other than what was disclosed in its objectives. Variations in this utilization had to be disclosed to the Stock Exchange on a quarterly basis, which was not done. Therefore, adjudication proceedings was also initiated under Section 23E of SCRA alleging violation of Section 21 of SCRA read with Clause 43 of the Listing Agreement.

3. Following appointment of an AO on November 16, 2017 a show cause notice dated December 27, 2017 was issued to the appellant for the alleged violations as stated in the aforesaid paragraph. In the show cause notice it was alleged that despite SEBI summons and reminders dated July 26, 2017, August 23 and 24, 2017 the company has failed to furnish complete information. Similarly, it was alleged that proceeds of the preferential allotment were found to be transferred to various entities in the form of loans and advances, advance against property etc. After giving time to file reply to the show cause notice, opportunity of hearing, inspection of documents etc. the impugned order has been passed on February 26, 2019.

4. It is the contention of the learned counsel for the appellant Shri Jaikishan Lakhwani, that whatever documents available with the appellant were provided to SEBI in response to the notice of summons as well as seeking information. Further it was contended that though the period of preferential allotment was during 2012 the AO had asked documents much prior to the same, even as old as 20 years, which were not available to the appellant particularly when the appellant had a completely new management in position. In any case, it was contended that the AO has gone beyond the scope of the investigation by seeking information and copies of the documents much prior to February 27, 2012, which was beyond the investigation period. Therefore, in short it is the contention of the appellant that all information sought in respect of 8 queries as in annexure to summons dated July 26, 2017 was provided and information relating to queries 9 and 10 could not be provided because those were not available with the appellant as these documents were relating to 1990’s. It was further contended that information sought subsequently were also obtained from the R&T Agent and given to the AO.

5. As regards the second charge of non-disclosure of variations in utilization of the funds/ proceeds from the preferential allotment it was submitted by the learned counsel for the appellant that funds were raised for acquisition of immovable property and for its development as per the objective of the preferential allotment. Since the entire amount of Rs.13.65 crore was not immediately needed for this purpose as acquisition of property and its development would take some time, in the interim surplus funds were given as loans to various entities. These loans were fully returned along with interest which also was utilized by the appellant for the stated purpose and as such there is no misutilization of the funds raised through the preferential allotment.

6. We have also heard the learned counsel for the respondent SEBI, Shri Vishal Kanade, who reiterated the findings in the impugned order and contended that investigation suffered on account of appellant’s non-cooperation.

7. The relevant questions to be considered are whether the appellant has violated provisions of Section 11C(3) of the SEBI Act by its non-compliance of summons issued by SEBI and whether Clause 43 of the Listing Agreement has been violated by not disclosing to the Stock Exchange the alleged variations between the projected utilization of funds and the actual utilization of funds raised through the preferential allotment. These Sections are produced for convenience below:-

“Relevant provisions of SEBI Act:

11C. (3) The Investigating Authority may require any intermediary or any person associated with securities market in any manner to furnish such information to, or produce such books, or registers, or other documents, or record before him or any person authorized by it in this behalf as it may consider necessary if the furnishing of such information or the production of such books, or registers, or other documents, or record is relevant or necessary for the purposes of its investigation.

Relevant provisions of Listing Agreement:

43 (1) The company agrees that it will furnish on a quarterly basis a statement to the BSE indicating the variations between projected utilisation of funds and/ or projected profitability statement made by it in its prospectus or letter of offer or object/s stated in the explanatory statement to the notice for the general meeting for considering preferential issue of securities and the actual utilisation of funds and/ or actual profitability.”

8. It is an admitted fact that part of the information sought vide the summons was not furnished by the appellant to SEBI. These details are at paragraph 16, page 22 to 25 of the impugned order. We are of the considered view that the stand taken by the appellant that the documents are old and therefore could not be produced cannot be supported as most of the documents not submitted relate to share allotment and related documents which are expected to be available to the appellant company. Moreover, the impugned order in paragraph 19 has clearly articulated how non-submission of certain information by the appellant has hampered the investigation into market manipulation by some entities such as Manisha Jayesh Shah and Artiben S. Kansara etc. At the same time, we note that investigation was relating to the period 2012-2014 and documents were sought in 2017 for periods much prior to 2012. Therefore, though the appellant may be charged with nonsubmission of full information the submission of the appellant that the management of the appellant was new etc. has to be given some weightage while imposing the penalty. Given this and the facts of the matter, we are of the view that the amount of penalty at the rate of Rs.10 lakh on this violation is on the higher side particularly when the appellant did provide part of the information readily available with them.

9. As regards non-reporting of the variations relating to the proceeds/ funds raised through preferential allotment it is an admitted fact that, during the interim, part of the funds were loaned out to various entities. Even if these funds have come back subsequently and in some cases with interest the matter needed to be disclosed to the Stock Exchange in terms of the requirements of Section 21 of SCRA and Clause 43 of the Listing Agreement which has not been done. Further, we note from paragraph 23 of the impugned order that the claim of the appellant that in all cases they received interest on the loans given to other parties is not correct as in four out of eight instances no interest has been received and in one instance in fact even the full amount of principal also was not received (in place of an advance against property of Rs.1.75 crore appellant has received o

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nly Rs.1.71 crore). In any case from the same paragraph we note that 41% of the allotment proceeds were invested in shares and another 45.31% was loaned out to seven entities out of which three did not pay any interest and in one instance of advance against the property instead of getting the property only part of the advance was returned. So the contention in the impugned order that the proceeds were not used according to the objective specified cannot be faulted and the same was not reported is an admitted fact. Given these facts imposition of penalty of Rs.20 lakh cannot be said to be arbitrary or harsh. 10. In the result, we reduce the penalty amount imposed under Section 15A(a) of SEBI Act from Rs.10 lakh to Rs.5 lakh and retain the penalty amount imposed under Section 23E of SCRA at Rs.20 lakh. 11. Appeal is partly allowed with no orders on costs. Appellant is directed to pay the penalty within four weeks from today.
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