A former office attendant has finally been freed from a joint liability of nearly Rs 37 lakh, plus 15 percent yearly interest, imposed by the market regulator SEBI (Securities and Exchange Board of India) for a violation committed by his former employer.
Taslim Arif Khan was among the 13 asked to return the money raised through the issue of non-convertible debentures (NCDs), when SEBI passed an order in June 2018. On April 9, 2025, SEBI passed an order disposing of the proceedings against him.
Khan, who was working as a daily wager in Baruipur, West Bengal, when SEBI passed the order against him, submitted that he had barely worked in the company for a year and that his main job was to serve water to visitors, along with doing odd jobs. He also said that he didn't even know he had been listed as a "non-executive director" of the company.
A compliance expert Moneycontrol spoke to, on condition of anonymity, said that this was fairly common practice. Companies would create digital signatures for peons and such like, get them to share the same, and use that to list them as directors without their knowledge.
The employees are told that the creation of their digital signature and signing of forms are part of the normal employee onboarding process. The signature is then used to enrol the employee as a director, and then his/her signature is used on anything that a director needs to sign off on, including raising funds or taking loans.
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In 2018, SEBI passed an order asking Greenbang Agro Limited (GAL), its directors, and promoters to refund Rs 36.97 lakh to investors. The regulator found that the money was raised through the issue of NCDs in FY12 and FY14, and that the issue had violated various provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2018, and the Companies Act, 1956.
Since the NCDs were allotted to more than 200 people, it fell under the definition of public offer and had to comply with certain requirements, such as seeking permission from stock exchanges for listing. But the company had violated these provisions, and hence the money had to be refunded to the investors, failing which the company and its directors would be jointly and severally liable to repay the amount with interest.
Since Khan was listed as a director of the company between March 6 and December 26, 2012, he also shared this liability.
But Khan appealed the SEBI order in the Securities Appellate Tribunal (SAT), and the tribunal remitted the matter to SEBI asking the regulator to examine Khan's role as a Director in the fund mobilisation scheme.
Why not a director
Khan submitted that he had worked for the company during the said period as a peon on a no-work-no pay basis, without a permanent role, and that he had never met the Chairman and Managing Director (CMD) of the company, had no financial stake in the company, had not attended any board meeting, had not signed any attendance register, and had not received any sitting fees as a director.
He also submitted that he had no knowledge of the mobilisation of funds since he was not engaged in the operations of the company, was fraudulently roped in as a non-executive director, and had no control over the activities of the firm. Further, he said that since he did not know that he had become the director of GAL, he could not have disputed the records available with the Ministry of Corporate Affairs.
In the April 9 order, when SEBI decided on Khan's role in the matter, the regulator also noted that another director of the company, Subhra Jyoti Sardar, had also appealed to SAT. The tribunal had quashed the order against Sardar stating that Sardar does not meet the definition of "officer who is in default," that there was no evidence that he was involved in the day-to-day management of the company or in the issue of NCDs. Also, there was a Managing Director who could be held accountable as the officer in default.
Going by the same logic, the regulator disposed of the proceedings against Khan.
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