SEBI dismisses the Adjudication proceedings initiated against Paramount Printpackaging Ltd.
SEBI has disposed of the Show Cause Notice(SCN) in the matter of Paramount Printpackaging Ltd.,(Noticee/PPL) with respect to alleged violations committed by the Noticee under Section 23E of Securities Contracts (Regulation) Act, 1956 and Section 15HA of the SEBI Act,1992 by observing that the adjudication proceedings initiated against the Noticeecannot be proceeded with.
The dispute in this case relates to the of utilization of IPO(Initial Public Offer) proceeds as submitted by the company which were analysed and it was observed that the Company had allegedly devised fraudulent scheme or device to mis-utilize/divert the IPO proceeds.
It was further alleged that PPL provided wrong disclosures in Prospectus, as it never intended to utilize the IPO proceeds for the Objects stated in the prospectus and diverted the IPO proceeds to vendors including those whose names were not mentioned in the prospectus. The conduct on the part of PPL, allegedly caused publication of misleading information in the Prospectus thus influencing investors to purchase the shares of the company.
The disclosures on utilization of IPO proceeds, which have been provided by the company in the notes to the financial results for each of the quarters during June 2011 until December 2012 was not true and the same was misleading and contained information in a distorted manner, which may influence the decision of the investors.
Further, as required under clause 43A, the company has not furnished to the stock exchange on a quarterly basis, a statement indicating material deviations in the use of proceeds of public issue.
The Adjudicating Officer has put forth the finding that the Noticee is mentioned as 'Under Liquidation' on the website of Ministry of Company Affairs.The documents available on record show that the Hon'ble High Court of Bombay had passed an order of liquidation against the Noticee on January 25, 2018.
Hence, it has been opined by the Adjudicating Officer that it is mandatory and a pre-condition to obtain the leave of Hon'ble Court / Tribunal for commencing the instant proceedings against the Noticee, which is under liquidation in terms of order dated January 25, 2018 passed by Hon'ble High Court of Bombay. There is no material on record to suggest that leave of Hon'ble Court has been taken in the instant proceedings and so, the adjudication proceedings initiated against Noticee vide SCN dated April 26, 2018cannot be proceeded with
It has also been very significantly observed that the provisions of Section 279 of the Companies Act, 2013 are parimateria the provisions of Section 446 of the Companies Act, 1956 in so far as the commencement or continuation of any 'other legal proceedings', after appointment of official liquidator, are concerned.