Person foisted with unwanted directorship finally exonerated; co asked to refund Rs 33 cr to investors

The other board directors have been banned from the securities market for three years.

The company was found to have raised Rs 33.39 crore by issuing redeemable preference shares (RPS) to 32,454 investors between FY11 and FY14 in contravention of regulations. It had failed to issue prospectus containing disclosures and an accompanying application form, it did not file the prospectus with the Registrar of Companies, and failed to make an application for listing of offered securities.

The regulator asked the company, its Managing Directors Prince Rana and Anuresh to refund the money collected through the issue to the allottees with interest of 8 percent per annum from the date of receipt of money till the date of such refund.

They have also been restrained from accessing the securities market for three years or till the date of refund of money to the allottees, whichever is later. The managing directors have also been restrained from associating themselves from any public company and registered intermediary for three years or till the date when the refund has been completed, whichever is later.

The regulator had received complaints about the RPS issue in 2013.

The unwanted appointment

During the investigation, Pandey submitted that he had received a proposal to act as a consultant through Arunesh, the then MD of the company. The company had then taken his details such as his PAN card and photograph to generate the offer letter, and in 2011, Pandey was issued the letter which mentioned his designation as Technical Consultant for a project.

But without his knowledge, the former MD Arunesh allegedly got a director identification number (DIN) generated for Pandey and the same was communicated to Arunesh on his email. Pandey had never applied for a DIN and he pointed out that the consent letter submitted for it did not even carry his signature.

When Pandey became aware of it, he submitted a resignation letter to do away with the directorship. But he found later that the letter was not put to the Board of Directors and that the relevant forms were not submitted to the Registrar of Companies.

Also read: ICICI Bank under SEBI lens; watchdog examining complaints in ICICI Securities delisting case, says report

Then, he sent a reminder letter to the company and its senior management, and threatened to take legal action if his name was not removed from the Ministry of Corporate Affairs (MCA) portal. Then the company issued an acceptance letter, which mentioned that Pandey was only involved in geotechnical and drilling projects.