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WTM/PS/25/ERO/JULY/2015

BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA

CORAM: PRASHANT SARAN, WHOLE TIME MEMBER

ORDER

Under sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act,

1992, in the matter of Pinnacle Ventures India Limited (PAN: AAFCP8151K) and its

Directors, viz. Shri Rohit Agrawal (DIN: 03342857, PAN: ATUPA6061G), Shri Ram

Kumar (DIN: 03342871, PAN: BTNPK2863G), Shri Ashoke Ghosh (DIN: 06582965,

PAN: AYCPG3437B), Shri Kousik Sarker (DIN: 03352044, PAN: AYUPS9510K), Shri

Anjan Chatterjee (DIN: 03352045, PAN: AFVPC0501L), Shri Tapas Sarkar (DIN:

03467259, PAN: BAQPS7100A), Shri Sulalit Biswas (DIN: 03352064, PAN:

AESPB9580Q) and Shri Tridib Narayan Basu (DIN: 03352080, PAN: AGNPB7551J).

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1.1 Pinnacle Ventures India Limited ("PVIL"), having its Registered Office at 77A, Sarat

Bose Road Kolkata–700029, West Bengal, was incorporated on January 14, 2011, with

the ROC, Kolkata, West Bengal with CIN No. as U70109WB2011PLC157311.

1.2 Securities and Exchange Board of India ("SEBI") received a complaint dated November

21, 2013 (forwarded to SEBI by the Office of the Sub–Divisional Magistrate, Sadar,

West Tripura, Government of Tripura vide letter dated December 4, 2013), from an

investor alleging non–payment of maturity amount in respect of preference shares

issued by PVIL.

1.3 On enquiry by SEBI, it was observed that PVIL had issued Preference Shares to 9,305

persons during the period 2011-12 and 2012-13 ("hereafter referred to as Offer of

preference shares") and collected an amount of Rs. 3.85 crore.

2.1 As the above said Offer of preference shares was found prima facie in violation of

respective provisions of the SEBI Act, 1992 ("SEBI Act") and the Companies Act,

1956, SEBI passed an interim order dated August 22, 2014 (hereinafter referred to as

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"interim order") and issued directions mentioned therein against PVIL and its Directors,

viz. Shri Rohit Agrawal, Shri Ram Kumar, Shri Ashoke Ghosh, Shri Kousik Sarker,

Shri Anjan Chatterjee, Shri Tapas Sarkar, Shri Sulalit Biswas and Shri Tridib Narayan

Basu (hereinafter referred to as 'noticees')

2.2 Prima facie findings/allegations: In the said interim order the following prima facie

findings/allegation were recorded. PVIL made an offer of preference shares as shown

in the following table:-

Table

Year Type of

Security

Date of

Allotment

No. of

securities

No. of

persons

Allotted

Total

Amount (Rs.

in crores)

2011 – 12 Preference

Shares

11.06.2011 59,985 1,181 0.6

09.08.2011 52,494 1,362 0.52

07.01.2012 1,94,493 5,392 1.94

2012 – 13 30.06.2012 79,132 1,370 0.79

Total 3,86,104 9,305 3.85

2.3 The above offer of preference shares and pursuant allotment was a deemed public issue

of securities under the first proviso to Section 67(3) of the Companies Act, 1956.

Accordingly, the resultant requirement under Section 60, Section 56(1) and 56(3),

Sections 73(1) (2) (3) of the Companies Act, 1956 were not complied with by the

noticees.

2.4 In view of the prima facie findings on the violations, the following directions were

issued in the said interim order dated August 22, 2014 with immediate effect.

i. PVIL shall not mobilize funds from investors through the Preference Shares Issue or

through the issuance of equity shares or any other securities, to the public and/or

invite subscription, in any manner whatsoever, either directly or indirectly till further

directions;

ii. PVIL and its Directors, viz. Shri Rohit Agrawal, Shri Ram Kumar, Shri Ashoke

Ghosh, including its past Directors, Shri Kousik Sarker, Shri Anjan Chatterjee, Shri

Tapas Sarkar, Shri Sulalit Biswas and Shri Tridib Narayan Basu are prohibited from

issuing prospectus or any offer document or issue advertisement for soliciting money

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from the public for the issue of securities, in any manner whatsoever, either directly

or indirectly, till further orders;

iii. PVIL and the abovementioned past and present Directors, are restrained from

accessing the securities market and further prohibited from buying, selling or

otherwise dealing in the securities market, either directly or indirectly, till further

directions;

iv. PVIL shall provide a full inventory of all its assets and properties;

v. The abovementioned past and present Directors of PVIL shall provide a full

inventory of all their assets and properties;

vi. PVIL and its present Directors shall not dispose of any of the properties or alienate

or encumber any of the assets owned/acquired by that company through the

Preference Shares Issue, without prior permission from SEBI;

vii. PVIL and its present Directors shall not divert any funds raised from public at large

through the Preference Shares Issue, which are kept in bank account(s) and/or in the

custody of PVIL;

viii. PVIL and its present Directors shall, within 21 days from the date of receipt of this

Order, provide SEBI with all relevant and necessary information, as sought vide

SEBI letters dated May 2, 2014 and May 14, 2014.

3.1 Vide the said interim order PVIL and its abovementioned Directors were given the

opportunity to file their reply, within 21 days from the date of receipt of the said interim

Order. The interim order further stated the concerned persons may also indicate

whether they desire to avail themselves an opportunity of personal hearing on a date

and time to be fixed on a specific request made in that regard.

3.2 The copy of the said interim order was sent to the above mentioned entities by letter

dated August 25, 2014. The letters addressed to PVIL (at its registered office

addresses), Shri Rohit Agrawal, Shri Anjan Chatterjee, Shri Ram Kumar and Shri

Ashok Ghosh were returned as undelivered to SEBI with the remark 'Left without

address'. The letter sent to Mr. Koushik Sarkar was also returned undelivered.

However, Mr. Sulalit Biswas, Mr. Kausik Sarkar, Tridib Narayan Basu and Mr. Tapas

Sarkar have replied through their advocate vide letter dated September 10, 2014 stating

they have received the order passed by SEBI.

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4.1 Subsequently, vide notification dated April 14, 2015, published in newspaper Ananda

Bazar Patrika, PVIL and the directors were notified that they will be given the final

opportunity of being heard on April 22, 2015 at the time and the venue mentioned

therein.

4.2 Hearing and submissions: Neither PVIL nor the directors of PVIL availed the

opportunity of hearing held on April 22, 2015.

4.3 Mr. Sulalit Biswas and Mr. Kausik Sarkar, Tridib Narayan Basu and Mr. Tapas Sarkar

filed their separate replies dated September 10, 2014. Mr. Sulalit Biswas and Mr.

Kausik Sarkar, Tridib Narayan Basu filed their common reply through their advocate

dated April 17, 2015. Their submissions in brief are as follows:-

a) As on April 13, 2012, the authorized preference share capital of PVIL was Rs

9,90,00,000 represented by 9,90,000 preference shares at Rs.100 each. Money

was collected and receipts were issued to the investors.

b) The impugned issue of preference shares was not a public issue. Therefore, the

requirements of the public issue need not be complied with.

c) They had resigned as the directors with effect from March 23, 2013 and filed

Form 32 to that effect. They made a public notice of their resignation in Bengali

daily "Ei Samay" and English daily "The Times of India" on April 14, 2014. Mr.

Neelanjan Bhattcharjee, Mr. Sarvesh Agrahari, Mr. Sunny Mukherjee, Mr.

Biswajit Sarkar, Mr. PradyutMitra were appointed as additional directors on

March 20, 2013 and Ms. Chandra Banerjee, Mr. Rajib Bandyopadhyay, Mr.

Kaushik Banerjee, Mr. Surojit Manna and Mr. Pradip Nag were appointed as

additional directors on March 23, 2013.

d) Repayment was made to investors in view of the redemption of maximum

number of preference shares issued at the period of their directorship.

e) Some of the creditors have filed winding up application against PVIL, before

the Hon'ble High Court at Calcutta being C.P. No.144 of 2014 which was

disposed of, by its order dated March 19, 2015 directing the company to be

wound with immediate effect and official liquidator has been appointed with a

direction to take possession forthwith of all the assets and properties of the

PVIL. Under section 446 of the Companies Act,1956, no proceedings should be

initiated, and/or to be continued without the leave of the court which passed the

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winding up order. Others did not make any representation.

4.4 Mr. Ashoke Ghosh vide his undated letter received by SEBI on May 6, 2015 submitted

that he is only an additional director and is not involved in day-to-day activities.

5.1 I have considered the allegations, and materials on record including complaint dated

November 21, 2013 and documents downloaded from MCA 21 Portal. On perusal of

the same the following issues arise for consideration. Each question is dealt with

separately under different headings.

1. Whether the company came out with the Offer of Preference Shares

2. If so, whether the said issues are in violation of Section 60, Section 56(1) and

56(3), Sections 73(1) (2) (3), the Companies Act,1956

3. If the findings on question No.2 are found in the affirmative, who are liable for

the violation committed.

6.1 Whether the company came out with the Offer of Preference Shares?: Mr. Sulalit

Biswas, Mr. Kausik Sarkar, Mr. Tapas Sarkar and Tridib Narayan Basu filed their

replies dated September 10, 2014 but did not dispute the said issuance of preference

shares. The company or other directors however, have not filed their replies disputing

the said issuance.

6.2 Instead the noticees, Shri Sulalit Biswas, Shri Tridib Narayan Basu and Shri Kousik

Sarker vide their written representation through their Advocate Mr. Shakti Kumar

Chatterjee, dated April 17, 2015 submitted that, as on April 13, 2012, the authorised

preference share capital of PVIL was Rs, 9,90,00,000 represented by 9,90,000

preference shares at Rs.100 each. The collection of money against money receipts was

also admitted by these noticees.

6.3 I have also perused the documents/ information obtained from the 'MCA 21 Portal' The

perusal of Form 2 filed in respect of allotment dated April 13, 2012, shows that the

company has as on that date was authorized to issue 9,90,000 preference shares at

Rs.100 each representing Rs. 9,90,00,000. On perusal of Form 2 filed for the allotments

dated June 11, 2011, August 9, 2011, January 7, 2012 and June 30, 2012, it is seen that

that the Company had issued preference shares for an amount of Rs. 0.6 crore, Rs. 0.52

crore, Rs.1.94 crore, Rs. 0.79 crore respectively.

7.1 If so, whether the said issues are in violation of Section 60, Section 56(1) and 56(3),

Sections 73(1) (2) (3), the Companies Act,1956: The provisions alleged to have been

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violated by the noticees and mentioned in this issue are applicable to the offer made to

the public. Therefore the primary question arises for consideration is whether the issue

of preference shares is public issue. At this juncture, reference may be made to section

67(1) & (3) of the Companies Act, 1956:

"67. (1) Any reference in this Act or in the articles of a company to offering

shares or debentures to the public shall, subject to any provision to the contrary

contained in this Act and subject also to the provisions of sub-sections (3) and

(4), be construed as including a reference to offering them to any section of the

public, whether selected as members or debenture holders of the company

concerned or as clients of the person issuing the prospectus or in any other

manner.

(2)any reference in this Act or in the articles of a company to invitations to the

public to subscribe for shares or debentures shall, subject as aforesaid, be

construed as including a reference to invitations to subscribe for them extended

to any section of the public, whether selected as members or debenture holders

of the company concerned or as clients of the person issuing the prospectus or

in any other manner.

(3) No offer or invitation shall be treated as made to the public by virtue of sub-

section (1) or sub- section (2), as the case may be, if the offer or invitation can

properly be regarded, in all the circumstances-

(a) as not being calculated to result, directly or indirectly, in the shares or

debentures becoming available for subscription or purchase by persons other

than those receiving the offer or invitation; or

(b) otherwise as being a domestic concern of the persons making and receiving

the offer or invitation …

Provided that nothing contained in this sub-section shall apply in a case where

the offer or invitation to subscribe for shares or debentures is made to fifty

persons or more:

Provided further that nothing contained in the first proviso shall apply to non-

banking financial companies or public financial institutions specified in section

4A of the Companies Act, 1956 (1 of 1956).”

7.2 The following observations of the Hon'ble Supreme Court of India in Sahara India

Real Estate Corporation Limited & ORs. vs. SEBI (Civil Appeal no. 9813 and 9833

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of 2011)(hereinafter referred to as the 'Sahara Case'), while examining the scope of

Section 67 of the Companies Act, 1956, are worth consideration:-

"84. Section 67(1) deals with the offer of shares and debentures to the public

and Section 67(2) deals with invitation to the public to subscribe for shares

and debentures and how those expressions are to be understood, when

reference is made to the Act or in the articles of a company. The emphasis in

Section 67(1) and (2) is on the ―section of the public‖. Section 67(3) states

that no offer or invitation shall be treated as made to the public, by virtue of

subsections (1) and (2), that is to any section of the public, if the offer or

invitation is not being calculated to result, directly or indirectly, in the shares

or debentures becoming available for subscription or purchase by persons

other than those receiving the offer or invitation or otherwise as being a

domestic concern of the persons making and receiving the offer or

invitations. Section 67(3) is, therefore, an exception to Sections 67(1) and

(2). If the circumstances mentioned in clauses (1) and (b) of Section 67(3) are

satisfied, then the offer/invitation would not be treated as being made to the

public.

85. The first proviso to Section 67(3) was inserted by the Companies

(Amendment) Act, 2000 w.e.f. 13.12.2000, which clearly indicates, nothing

contained in Sub-section (3) of Section 67 shall apply in a case where the offer

or invitation to subscribe for shares or debentures is made to fifty persons or

more. Resultantly, after 13.12.2000, any offer of securities by a public

company to fifty persons or more will be treated as a public issue under the

Companies Act, even if it is of domestic concern or it is proved that the shares

or debentures are not available for subscription or purchase by persons other

than those receiving the offer or invitation....."

7.3 Section 67(3) provides for situations when an offer is not considered as offer to

public. As per the said sub section, if the offer is one which is not calculated to

result, directly or indirectly, in the shares or debentures becoming available for

subscription or purchase by persons other than those receiving the offer or invitation

{(section 67(3)(a)}, or, if the offer is the domestic concern of the persons making

and receiving the offer {(section 67(3)(b)}, the same are not considered as public

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offer. Under such circumstances, they are considered as private placement of shares

and debentures. It is noted that as per the first proviso to Section 67(3) Companies

Act, 1956, the public offer and listing requirements contained in that Act would

become automatically applicable to a company making the offer to fifty or more

persons. However, the second proviso to Section 67(3) exempts NBFCs and Public

Financial Institutions from the applicability of the first proviso.

7.4 In the instant case, as shown in the table, since the offer of preference shares and

allotment was made by PVIL, to 1181 persons on June 11, 2011, 1362 person on

August 09, 2011, 5392 persons on January 07, 2012 in the financial year 2011-12

and the offer of preference shares and allotment was made to 1370 persons on June

30, 2012 in the financial year 2012-13, the offer of preference shares falls within

the first proviso of section 67(3) of Companies Act,1956 thereby such issues are

deemed to be public issues and was mandated to comply with the 'public issue'

norms as prescribed under the Companies Act, 1956.

7.5 In terms of section 56(1) of the Companies Act, 1956, every prospectus issued by

or on behalf of a company, shall state the matters specified in Part I and set out the

reports specified in Part II of Schedule II of that Act. Further, as per section 56(3)

of the Companies Act, 1956, no one shall issue any form of application for shares

in a company, unless the form is accompanied by abridged prospectus, containing

disclosures as specified. Section 2(36) of the Companies Act read with section 60

thereof, mandates a company to register its 'prospectus' with the Registrar of

companies before making a public offer/ issuing the 'prospectus'. As per the

aforesaid Section 2(36), “prospectus” means any document described or issued as

a prospectus and includes any notice, circular, advertisement or other document

inviting deposits from the public or inviting offers from the public for the

subscription or purchase of any shares in, or debentures of, a body corporate.

7.6 The allegation of non-compliance of the above provisions were not denied by the

company or directors other than the replying noticees. In view of the finding that

the issuance of preference shares as discussed above is deemed public issue, the

replying noticees' argument that the issue is private placement and therefore, the

said provisions do not apply, does not hold good. Neither the company nor the

directors produced any record to show that PVIL has issued Prospectus containing

the disclosures mentioned in section 56(1) of the Companies Act, 1956, or filed a

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Prospectus with ROC or issued application forms accompanying the abridged

prospectus. Therefore, I find that, PVIL and the persons responsible for the failure

to issue prospectus, has not complied with Section 56(1), 56(3) and 60 of the

Companies Act, 1956.

7.7 Further, by issuing the above discussed preference shares, PVIL had to

compulsorily list such securities in compliance with section 73 of the Companies

Act, 1956. As per section 73(1) and (2) of the Companies Act, 1956, a company is

required to make an application to one or more recognized stock exchanges for

permission for the shares or debentures to be offered to be dealt with in the stock

exchange and if permission has not been applied for or not granted, the company is

required to forthwith repay with interest all moneys received from the applicants.

7.8 Though Mr. Sulalit Biswas and Mr. Kausik Sarkar Mr. Tapas Sarkar, Tridib

Narayan Basu vide their separate replies dated September 10, 2014, submitted that

repayment was made to investors in view of the redemption of maximum number

of preference shares issued at the period of their directorship, neither did they give

any details of payment nor did they provide any proof towards repayment.

Therefore, the same cannot be accepted.

7.9 I further find that no records have been submitted to indicate that it has made an

application seeking listing permission from stock exchange nor refunded the

amounts on account of such failure. Thus, PVIL has contravened the said

provisions. The noticees have not provided any records to show that the amount

collected by FIIL are kept in a separate bank account. Therefore, I find that PVIL

has also not complied with the provisions of section 73(3) as it has not kept the

amounts received from investors in a separate bank account and failed to repay the

same in accordance with section 73(2) as observed above.

7.10 I note that the jurisdiction of SEBI over various provisions of the Companies Act,

1956 including the above mentioned, in the case of public companies, whether listed

or unlisted, when they issue and transfer securities, flows from the provisions of

Section 55A of the Companies Act, 1956. While examining the scope of Section

55A of the Companies Act, 1956, the Hon'ble Supreme Court of India in Sahara

Case, had observed that:

"We, therefore, hold that, so far as the provisions enumerated in the opening

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portion of Section 55A of the Companies Act, so far as they relate to issue and

transfer of securities and non-payment of dividend is concerned, SEBI has the

power to administer in the case of listed public companies and in the case of

those public companies which intend to get their securities listed on a

recognized stock exchange in India."

" SEBI can exercise its jurisdiction under Sections 11(1), 11(4), 11A(1)(b) and

11B of SEBI Act and Regulation 107 of ICDR 2009 over public companies who

have issued shares or debentures to fifty or more, but not complied with the

provisions of Section 73(1) by not listing its securities on a recognized stock

exchange"

7.11 In this regard, it is pertinent to note that by virtue of Section 55A of the Companies

Act, SEBI has to administer Section 67 of that Act, so far as it relates to issue and

transfer of securities, in the case of companies who intend to get their securities

listed.

7.12 In view of the forgoing findings, I am of the view that PVIL is engaged in fund

mobilizing activity from the public, through the offer and issuance of preference

shares and has contravened the provisions of sections 56, 60 and 73 of the

Companies Act, 1956.

8.1 If the findings on question No.2 are found in the affirmative, who are liable for the

violation committed?: Section 56(1) and 56(3) read with section 56(4) imposes the

liability for the compliance of the said provisions, on the company, every director,

and other persons responsible for the issuance of the prospectus, The liability for

non-compliance of Section 60 of the Companies Act, 1956 is on the company, and

every person who is a party to the non-compliance of issuing the prospectus as per

the said section.

8.2 As far as the liability for non-compliance of section 73 of Companies Act, 1956 is

concerned, as stipulated in section 73(2) of the said Act, the company and every

director of the company who is an officer in default shall, from the eighth day when

the company becomes liable to repay, be jointly and severally liable to repay that

money with interest at such rate, not less than four per cent and not more than fifteen

per cent if the money is not repaid forthwith.

8.3 Mr. Ashoke Ghosh vide his undated letter received by SEBI on May 6, 2015

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submitted that he is only an additional director and is not involved in day-to-day

activities.

8.4 Mr. Sulalit Biswas, Mr. Kausik Sarkar and Tridib Narayan Basu, Tapas Sarkar vide

their replies dated September 10, 2014 had submitted that they had resigned as the

directors with effect from March 23, 2013 and submitted that they had filed Form

32 to that effect. It was further submitted by them that they have made a public

notice of their resignation in Bengali daily "Ei Samay" and English daily "The Times

of India" on April 14, 2014. It was also submitted vide the said letter that Mr.

Neelanjan Bhattcharjee, Mr. Sarvesh Agrahari, Mr. Sunny Mukherjee, Mr. Biswajit

Sarkar, Mr. Pradyut Mitra were appointed as additional directors on March 20, 2013

and Ms. Chandra Banerjee, Mr. Rajib Bandyopadhyay, Mr. Kaushik Banerjee, Mr.

Surojit Manna and Mr. Pradip Nag were appointed as additional directors on March

23, 2013.

8.5 On perusal of the extract of "Register of directors, managing directors, manager and

secretary" sent to SEBI by Ministry of Corporate Affairs, I find that Shri Rohit

Agrawal has resigned as director on January 19, 2015 after joining the company on

March 20, 2013, Shri Ashoke Ghosh has resigned as director on February 28, 2015

after joining on July 23, 2013, Shri Kousik Sarker, Shri Anjan Chatterjee, Shri

Sulalit Biswas and Shri Tridib Narayan Basu have resigned as directors on March

23, 2013 after joining on January 14, 2011. Contrary to the contention of Shri Tapas

Sarkar, on perusal of the Form 32 and the extract of "Register of directors, managing

directors, manager and secretary" sent to SEBI by Ministry of Corporate Affairs, I

find that Shri Tapas Sarkar resigned as director on July 6, 2013 after joining on

March 07,2012.

8.6 From the above details, I find that Shri Kousik Sarker, Shri Anjan Chatterjee, Shri

Sulalit Biswas, and Shri Tridib Narayan Basu were directors at the time of the

impugned issues. Therefore, these directors are officers in default.

8.7 The liability of the company to repay under section 73(2) is continuing and such

liability continues till all the repayments are made. Therefore, the directors who

joined subsequent to the impugned public issuance are also officers in default in not

making the refund, if the company does not repay the money collected, as mandated

in section 73(2) of the Companies Act, 1956.

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8.8 I note that the directors Shri Rohit Agrawal, Shri Ram Kumar and Shri Ashoke

Ghosh and Tapas Sarkar had joined as directors subsequent to the impugned issues,

on March 20, 2013, July 5, 2013, July 23, 2013 and March 07, 2012 respectively

and the said directors who had joined as directors subsequently have not exercised

necessary diligence while taking charge of directorship in the Company. The very

inaction by these directors against the previous management (for violating the

public issue norms as stipulated under the Companies Act, 1956 while making the

offer and issuing the preference shares), even after passing of the interim order,

leads one to conclude on a possible collusion at their end with the Company and its

previous management. Further, these directors have also not taken any steps to

remedy the violations committed. Therefore, I hold that Shri Rohit Agrawal, Shri

Ram Kumar, Shri Ashoke Ghosh and Shri Tapas Sarkar are also 'officers in default'

and hence liable for the contraventions found against the Company and also for the

consequences of such violations.

8.9 In view of the above provisions of law, Shri Rohit Agrawal, Shri Ram Kumar, Shri

Ashoke Ghosh, Shri Kousik Sarker, Shri Anjan Chatterjee, Shri Tapas Sarkar, Shri

Sulalit Biswas and Shri Tridib Narayan Basu, being the directors are responsible

for the noncompliance of the above provisions.

8.10 As far as the persons who are stated to be new additional directors, SEBI shall

examine the same, and similar necessary action may be taken by SEBI in

accordance with law.

8.11 The noticees, Shri Sulalit Biswas, Shri Tridib Narayan Basu and Shri Kousik Sarker

through their Advocate, Mr. Shakti Kumar Chatterjee made a written representation

vide letter dated April 17, 2015 wherein it was submitted that some of the creditors

have filed winding up application against PVIL, before the Hon'ble High Court at

Calcutta being C.P. No.144 of 2014 which was disposed of, by its order dated

March 19, 2015 directing the company to be wound up with immediate effect and

official liquidator has been appointed with a direction to take possession forthwith

of all the assets and properties of the PVIL. It was further submitted that under

section 446 of the Companies Act, 1956, no proceedings should be initiated, and/or

to be continued without the leave of the court which passed the winding up order.

Accordingly, vide letter dated April 17, 2015, it was stated that SEBI cannot take

any further steps against PVIL or its directors without leave from the court.

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8.12 I note that the Company law court has ordered for the winding up of the

Company and also that an Official Liquidator has been appointed. However,

a separate order is required to be passed wherein both the company and the

directors are made liable for repayment under section 73(2) of the Companies

Act, 1956. In so far as the liability of the Company is concerned, this order

needs to be harmoniously read with the orders in C.P. No.144 of 2014 passed

by Hon’ble High Court at Calcutta in the instant matter.

9.1 In view of the foregoing, the natural consequence of not adhering to the norms

governing the issue of securities to the public and making repayments as directed

under section 73(2) of the Companies Act, 1956, is to direct the Company, its

directors Shri Rohit Agrawal, Shri Ram Kumar, Shri Ashoke Ghosh, Shri Kousik

Sarker, Shri Anjan Chatterjee, Shri Tapas Sarkar, Shri Sulalit Biswas and Shri

Tridib Narayan Basu, to refund the monies collected, with interest to such investors.

In view of the violations committed by the Company and its directors, to safeguard

the interest of the investors who had subscribed to such preference shares issued by

the Company and to further ensure orderly development of securities market, it also

becomes necessary for SEBI to issue appropriate directions against the Company

and the other noticees.

9.2 Therefore, I in exercise of the powers conferred under section 19 of the Securities

and Exchange Board of India Act, 1992 read with sections 11(1), 11(4), 11A and

11B thereof, hereby issue the following directions :

a. Pinnacle Ventures India Limited shall forthwith refund the money collected

by the Company through the issuance of preference shares, including the

money collected from investors, till date, pending allotment of securities, if

any, with an interest of 15% per annum compounded at half yearly intervals,

from the date when the repayments became due (in terms of Section 73(2) of

the Companies Act, 1956) to the investors till the date of actual payment.

b. The directors of the Company namely, Shri Rohit Agrawal, Shri Ram Kumar,

Shri Ashoke Ghosh, Shri Kousik Sarker, Shri Anjan Chatterjee, Shri Tapas

Sarkar, Shri Sulalit Biswas and Shri Tridib Narayan Basu, shall forthwith

refund the money collected by the Company through the issuance of

preference shares, including the money collected from investors, till date,

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pending allotment of securities, if any, with an interest of 15% per annum

compounded at half yearly intervals, from the date when the repayments

became due (in terms of Section 73(2) of the Companies Act, 1956) to the

investors till the date of actual payment.

c. The repayments and interest payments to investors shall be effected only

through Bank Demand Draft or Pay Order.

d. Pinnacle Ventures India Limited, Shri Rohit Agrawal, Shri Ram Kumar, Shri

Ashoke Ghosh, Shri Kousik Sarker, Shri Anjan Chatterjee, Shri Tapas Sarkar,

Shri Sulalit Biswas and Shri Tridib Narayan Basu, shall issue public notice,

in all editions of two National Dailies (one English and one Hindi) and in one

local daily (in Bengali) with wide circulation, detailing the modalities for

refund, including details of contact persons including names, addresses and

contact details, within fifteen days from the date of this Order.

e. After completing the aforesaid repayments, Pinnacle Ventures India Limited,

Shri Rohit Agrawal, Shri Ram Kumar, Shri Ashoke Ghosh, Shri Kousik

Sarker, Shri Anjan Chatterjee, Shri Tapas Sarkar, Shri Sulalit Biswas and Shri

Tridib Narayan Basu, shall file a report of such completion of repayment with

SEBI, within a period of three months from the date of this order, certified

by two independent peer reviewed Chartered Accountants who are in the panel

of any public authority or public institution. For the purpose of this Order, a

peer reviewed Chartered Accountant shall mean a Chartered Accountant, who

has been categorized so by the Institute of Chartered Accountants of India

("ICAI").

f. Shri Rohit Agrawal, Shri Ram Kumar, Shri Ashoke Ghosh, Shri Kousik

Sarker, Shri Anjan Chatterjee, Shri Tapas Sarkar, Shri Sulalit Biswas and Shri

Tridib Narayan Basu, are directed to provide a full inventory of all their assets

and properties and details of all their bank accounts, demat accounts and

holdings of shares/securities, if held in physical form.

g. In case of failure of Pinnacle Ventures India Limited, Shri Rohit Agrawal,

Shri Ram Kumar, Shri Ashoke Ghosh, Shri Kousik Sarker, Shri Anjan

Chatterjee, Shri Tapas Sarkar, Shri Sulalit Biswas and Shri Tridib Narayan

Basu, to comply with the aforesaid directions, SEBI, on the expiry of the three

Page 15 of 16

months period from the date of this order,-

i. shall recover such amounts in accordance with section 28A of the SEBI

Act including such other provisions contained in securities laws.

ii. may initiate appropriate action against the Company, its

promoters/directors and the persons/officers who are in default,

including adjudication proceedings against them, in accordance with

law.

iii. would make a reference to the State Government/ Local Police to

register a civil/ criminal case against the Company, its promoters,

directors and its managers/ persons in-charge of the business and its

schemes, for offences of fraud, cheating, criminal breach of trust and

misappropriation of public funds.

h. Pinnacle Ventures India Limited and its directors Shri Rohit Agrawal, Shri

Ram Kumar, Shri Ashoke Ghosh, Shri Kousik Sarker, Shri Anjan Chatterjee,

Shri Tapas Sarkar, Shri Sulalit Biswas and Shri Tridib Narayan Basu, are

directed not to, directly or indirectly, access the securities market, by issuing

prospectus, offer document or advertisement soliciting money from the public

and are further restrained and prohibited from buying, selling or otherwise

dealing in the securities market, directly or indirectly in whatsoever manner,

from the date of this Order, till the expiry of 4 years from the date of

completion of refunds to investors as directed above. However, the Pinnacle

Ventures India Limited and the above said directors may sell the

securities for the purpose of above refund. The above said directors are also

restrained from associating themselves with any listed public company and

any public company which intends to raise money from the public, or any

intermediary registered with SEBI from the date of this Order till the expiry

of 4 years from the date of completion of refunds to investors.

i. The above directions shall come into force with immediate effect.

10.1 This Order is without prejudice to any action, including adjudication and

prosecution proceedings that might be taken by SEBI in respect of the above

violations committed by Pinnacle Ventures India Limited, its promoters, directors

and other key persons.

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10.2 Copy of this order shall be forwarded to the Official Liquidator, at Calcutta, inter

alia, for the purpose of enabling him to take into account in the winding up

proceedings, the refund, if any, to be made by the directors to the preference

shareholders pursuant to this order.

10.3 Copy of this Order shall be forwarded to the recognized stock exchanges and

depositories for information and necessary action.

10.4 A copy of this Order shall also be forwarded to the Ministry of Corporate

Affairs/concerned Registrar of Companies, for their information and necessary

action with respect to the directions/restraint imposed above against the Company

and the individuals.

Date :July 24, 2015

Place: Mumbai

PRASHANT SARAN

WHOLE TIME MEMBER

SECURITIES AND EXCHANGE BOARD OF INDIA