Mumbai, Dec. 12: Rose Valley Real Estates and Construction, one of the key entities sucked into the so-called chit fund scam investigations in Bengal over the past year, won a big reprieve when the Securities Appellate Tribunal (SAT) slashed a penalty imposed by market regulator Sebi back in March from Rs 1 crore to Rs 10 lakh.
In its order issued today, the SAT asked Rose Valley to pay the fine within two months.
The penalty stems from Sebi’s charge that Rose Valley has not been submitting documents relating to the secured redeemable non-convertible debentures it floated between 2001 and 2009 to raise Rs 9.97 crore. Rose Valley claims it has paid the entire sum to the debenture holders.
The SAT is the statutory body set up to hear and dispose of appeals against orders passed by the market regulator or by an adjudicating officer.
The case is related to a probe by the market regulator over charges that Rose Valley had raised money by issuing debentures between 2001 and 2008 to more than 49 persons in each of the fiscal years without filing the necessary documents either with the Registrar of Companies (RoC) or Sebi.
It had issued summons on July 14, 2011 requiring Rose Valley to submit certain information. According to the SAT, Rose Valley sent a reply on July 29, 2011 giving certain details such as certified copies of the memorandum and articles of association, audited balance sheets of 2008-2009 and 2009-2010 apart from names and addresses of various directors.
Rose Valley also stated that it had filed a statement in lieu of prospectus for the issue of the secured debentures with the RoC and regarding mobilisation of funds through such debentures and this was reflected in the audited balance sheets of 2009-2010. It had pointed out that since accounts of 2010-2011 were yet to be finalised, they could be provided after being audited and certified by the auditors.
Thereafter, while the company provided various documents to Sebi, the regulator on February 6 this year issued a notice to the company stating that it had not submitted any specific details regarding the issue of secured redeemable non-convertible debentures during 2001-2006 and also provided incomplete information for the debentures issued in 2007-2008.