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WTM/PS/92/NRO/MAR/2015

SECURITIES AND EXCHANGE BOARD OF INDIA


CORAM: PRASHANT SARAN, WHOLE TIME MEMBER
ORDER
Under Sections 11 and 11B of Securities and Exchange Board of India Act, 1992
In the matter of Rhine and Raavi Credits and Holdings Limited
In respect of Rhine and Raavi Credits and Holdings Limited, Mr. Gurpreetesh Singh
Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini, Mr. Jivtesh Singh Maini, Mr.
Rakesh Gupta, Mr. Birendra Kaji and Mr. Surendra Kumar
Date of Hearing: January 16, 2015
Appearance: Mr. Alok Bajaj, Chartered Accountant
Mr. Amit Madhav, Chartered Accountant
For SEBI:

Mr. Narendra Rawat, Deputy General Manager,


Mr. Arvind Kumar, Assistant General Manager,
Mr. Pradeep Kumar, Assistant General Manager.
_________________________________________________________________________
1.

Securities and Exchange Board of India (hereinafter referred to as 'SEBI'), had pursuant
to a preliminary enquiry into non-compliances with the public issue norms stipulated
under the provisions of the Companies Act, 1956 including Sections 56, 60 and 73
thereof by the company, Rhine and Raavi Credits and Holdings Limited
(hereinafter referred to as 'the Company') in respect of its issue of the Secured Nonconvertible Debentures (hereinafter referred to as 'NCD'), issued an ex-parte interim
order dated October 01, 2013 (hereinafter referred to as 'the interim order') against the
Company and its promoters and directors including Mr. Gurpreetesh Singh Maini, Mr.
Tridivesh Singh Maini, Ms. Jyoti Maini, Mr. Jivtesh Singh Maini, Mr. Rakesh Gupta, Mr.
Birendra Kaji and Mr. Surendra Kumar (hereinafter collectively referred to as 'noticees'),
directing them not to collect any money from the investors. SEBI also restrained the
Company from (i) disposing off its properties/ assets without prior permission of SEBI
and (ii) diverting the funds raised from the public at large, kept in its bank account(s)
and/or kept in its custody. The interim order was issued against the Company and its
promoters/directors to ensure that they do not collect further funds and also to
safeguard the assets or property acquired through the funds mobilised from the
investors. The aforesaid directions came into force with immediate effect.

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2.

The interim order advised the noticees to treat the same as a show cause notice to
explain why appropriate action under the SEBI Act, 1992 (hereinafter referred to as
'SEBI Act') should not be taken/ issued against them for the alleged non-compliance
with the provisions of the Companies Act, 1956 including Sections 56, 60, 69, 73 etc
thereof. The interim order afforded opportunity to the noticees to file their reply in the
matter and also for a personal hearing, if they so desired.

3.

Before proceeding to deal with the replies of the noticees, it would be necessary to note
the important facts and observations/ alleged violations as made in the interim order.
a. SEBI received a letter dated December 20, 2012 from the Reserve Bank of India,
enclosing two complaints. A perusal of the complaints and the documents enclosed
revealed that the Company had issued NCDs of

2,264 each to investors, to be

redeemed with cumulative interest of 12.43% per annum on the maturity date. The
Company is registered with Reserve Bank of India as a non-deposit taking NonBanking Financial Company ('NBFC').
b. SEBI conducted an analysis of the allegations against the Company. Relevant
documents were sought from the Company and the Registrar of Companies ('RoC').
The Company submitted a certified copy of the Board Resolution dated September 04,
2012, Form 10 filed with the RoC, copy of the 'certificate of registration of mortgage,
etc. under Section 132 of the Companies Act, 1956', the list of allottees of debentures
and the balance sheets for the financial years 2010-2011 and 2011-2012. The ROC had
forwarded the Memorandum of Association ('MoA'), Articles of Association ('AoA'),
copies of Form- 23AC, Form - 2 and Form 20B filed by the Company.
c. From the list of the allottees of debentures submitted by the Company, it was revealed
that it had issued NCDs to 744 allottees and mobilised

6.27 crores. However, from

the minutes of the Board Resolution dated September 04, 2012, it was observed that the
Company had passed a resolution for issuing 1,60,356 NCDs at
calculation of the same shows that an amount of

2,264 each. A simple

36.30 crores has been raised by the

Company. From the same, it was observed that the Company had not disclosed the
details of all the allottees to whom the NCDs were issued. The details in Form 10
(particulars for registration of charges for debentures) filed by the Company with RoC
also confirms that about

36.30 crores have been mobilized through the issuance of

the NCDs to the investors. It was observed that the Company did not comply with the
laws applicable to the public issues, while raising money through the issuance of NCDs.
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d. The Company had also not submitted any material/ information indicating that the
offer of NCD to 744 or more allottees from which it raised

36.30 crores in September

2012 was intended to be a private placement meant only for a specific or selected group
of persons. In view of the same, the issuance of the NCDs by the Company was held to
be a public offer made to fifty or more persons within the meaning of the term 'offer'
made to the public under the first proviso to sub-section (3) of Section 67 of the
Companies Act, 1956.
e. The Company had not submitted copies of the prospectus, invitation letter or offer
document through which it sought subscription from the investors, despite such
information having been sought by SEBI repeatedly. The Company was mandated
under Section 73 of the Companies Act, 1956 to apply for permission for listing such
securities on stock exchanges. The Company failed to do so, in contravention of
Section 73 of the Companies Act, 1956. The Company was also alleged to have
contravened the applicable provisions of the Companies Act, 1956, including, Sections
56, 60, 69 thereof.
4.

Mr. Gurpreetesh Singh Maini vide his letters dated October 03, 2013 and October 15,
2013, replied on behalf of himself and three other noticees namely Mr. Tridivesh Singh
Maini, Ms. Jyoti Maini and Mr. Jivtesh Singh Maini and submitted as under:
a. The management and ownership of the Company had changed in the month of June
2012, by way of transferring the shares of the subject Company to the new management
including Mr. Rakesh Gupta and Mr. Birendra Kaji. The consequential changes in
respect of the registered office and directors were also reported to the RoC, Delhi by
filing the Form - 18 and Form - 32. The new directors of the Company were Mr.
Rakesh Gupta, Mr. Birendra Kaji and Mr. Surendra Kumar.
b. The Company subsequent to the change of ownership, was engaged in the activity of
soliciting money and raising funds from the general public through issue of debentures.
As per the Ministry of Corporate Affairs ('MCA') website, the Company had uploaded
the Form 10 with the MCA Portal on September 05, 2012, for affecting the creation of
charge on September 04, 2012 for getting the debentures issued. The entire process had
started only after the change in management.
c. The change in management of the Company was also intimated to the general public
through public notices in newspapers. Such changes were also duly reported to the
Reserve Bank of India, which includes suo-moto information regarding malafide act by
the new management of the Company.
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d. They had no control on the acts of the new owners and management and requested to
remove their names from any adverse order as may be passed against the new
management of the Company.
5.

When the interim order was forwarded to the Company, Mr. Birendra Kaji, Mr. Rakesh
Gupta and Mr. Surendra Kumar, they were returned undelivered. Attempts were made
to serve the interim order cum show cause notice by way of affixture at the Company's
registered office address on October 28, 2013. As the interim was not getting delivered
attempts were made to deliver the same by way of alternative methods and a public
notice was also issued in national dailies while advising such noticees to collect the
interim order within seven (7) days from the publication of the notice, failing which
SEBI shall proceed on the basis of material available on record. Inspite of the public
notice, the Company and three of its directors namely Birendra Kaji, Rakesh Gupta and
Surendra Kumar did not submit their replies to the interim order.

6.

Before proceeding further with the matter, an opportunity of personal hearing was
granted to the noticees on January 08, 2015. The hearing was later rescheduled to
January 16, 2015, due to certain administrative exigencies. On the date fixed, Mr. Alok
Bajaj and Mr. Amit Madhav, both Chartered Accountants appeared for the noticees
namely Mr. Gurpreetesh Singh Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and
Mr. Jivtesh Singh Maini and filed the written submissions dated January 16, 2015. The
Company and other noticees namely Mr. Rakesh Gupta, Mr. Birendra Kaji and Mr.
Surendra Kumar failed to turn up for the personal hearing inspite of due
communication vide the public notice dated December 19, 2014. In the interest of
natural justice, one more opportunity of personal hearing was granted to the Company
and noticees namely Rakesh Gupta, Birendra Kaji and Surendra Kumar on February 03,
2015. On this date again, none of these noticees turned up for the personal hearing.
Considering the fact that reasonable opportunities to the Company and its directors
namely Mr. Rakesh Gupta, Mr. Birendra Kaji and Mr. Surendra Kumar have already
been afforded for making their submissions in the matter, I note that the principles of
natural justice have duly been complied with. In view of the same, the matter is
proceeded ex-parte, against the Company, Rakesh Gupta, Birendra Kaji and Surendra
Kumar based on the material available on record.

7.

In the meantime a few investors of the Company had approached the Hon'ble Delhi
Court in Writ Petition (C) no. 1258/2015, with a prayer that inter alia to allow the
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petitioners - investors to participate in the proceedings before SEBI. Hon'ble Delhi


High Court vide its order dated February 09, 2015
"4. Having regard to the fact that there are other issues, which the petitioners have raised,
which perhaps, respondent no. 1, i.e., SEBI may not have taken into account, I deem it fit to
direct respondent no. 1/ SEBI to treat the present writ petition as a representation and look into
the issues raised therein. Respondent no. 1, shall while passing the order deal with the issues
contained therein. ... ...
... ...
5.1 Needless to say, respondent no. 1 will act with expedition and complete the proceedings,
though not later than eight weeks from today."
8.

I have considered the respective written submissions all dated January 16, 2015, of Mr.
Gurpreetesh Singh Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and Mr. Jivtesh
Singh Maini. The submissions in brief are as under:
They were no more the directors of the Company and requested to address the
matter to the persons who were the present directors of the Company and who were
also the directors of the Company when the alleged wrongdoings were committed.
They had neither any knowledge of the wrongdoings committed by the Company or
about the persons managing the Company.
Mr. Tridivesh Singh Maini and Ms. Jyoti Maini had ceased to be the directors of the
Company on May 25, 2012. Mr. Gurpreetesh Singh Maini and Mr. Jivtesh Singh
Maini ceased to be the directors of the Company since July 10, 2012.
Mr. Rakesh Gupta was appointed as director of the Company on January 05, 2012.
Mr. Birendra Kaji and Mr. Surendra Kumar were appointed as directors on May 05,
2012.
The address of the Company was changed in the record of RoC w.e.f. June 01, 2012.
A share purchase agreement dated June 08, 2012 was signed between the Company,
Mr. Gurpreetesh Singh Maini (representing the outgoing management), Mr. Rakesh
Gupta (representing the incoming management) and Mr. Santosh Gupta
(representing the incoming management).
They did not form the management of the Company, either presently or on the day
the alleged wrongdoings were committed by the Company.
The investors of the Company in the NCD scheme floated by the Company had also
recognised the new management represented through the new body of directors only
as they were the people who approached public at large for the same.

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The Debentures as were issued by the Company were duly signed by the two
directors namely Mr. Birendra Kaji and Mr. Surendra Kumar and one Secretary/
authorised signatory namely Mr. Anil Gupta.

9.

I have considered the submissions and documents submitted by the noticees namely
Mr. Gurpreetesh Singh Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and Mr.
Jivtesh Singh Maini, the material available on record including the interim order issued in
the matter. As can be noted from the above, no reply/ submission from the Company
and its directors namely Mr. Rakesh Gupta, Mr. Birendra Kaji and Mr. Surendra Kumar
with respect to the observations and allegations made against them in the interim order is
on record and the matter is being proceeded ex-parte.

10.

It is noted that the Company is a non-deposit taking NBFC which has been granted a
certificate of registration dated October 5, 2001, by the RBI. In this regard, the interim
order has observed that:
"It is also noted that as per the first proviso to section 67 (3), the public offer and listing
requirements contained in the Companies Act, 1956, would become automatically applicable to
a company making the offer to fifty or more persons. However, the second proviso to sub-section
(3) of section 67 exempts NBFCs and PFIs from the applicability of the first proviso. Having
said that, I note that the second proviso to sub-section (3) of section 67 is not a blanket rule,
and does not exempt NBFCs and PFIs from the applicability of provisions pertaining to private
placements contained in sub-section (3) of section 67. The rule of automatic applicability of the
public offer requirements of the Companies Act would not be triggered for an NBFC or PFI
making an offer of shares or debentures in terms of section 67 of the Companies Act, to fifty or
more persons, if the concerned NBFC or PFI can show that the offer was a private placement in
terms of sub-section (3) of the section 67 of the Companies Act. In order to comply with subsection (3) of section 67, RRCHL is required show that it had an intention to offer the
debentures to only those persons who received the offer, or that the offer is a domestic concern of
RRCHL and the persons receiving the said offer." (emphasis supplied)
On the basis of the above observation, the interim order alleged that the Company has
made a public issue of NCDs, in terms of the first proviso to Section 67(3) of the
Companies Act, 1956 and that it did not comply with the provisions of Sections 56, 60
and 73 of the Companies Act, 1956 in respect of its issuance of NCDs. The Company
had made its brochure available on its website, which detailed its 'package option'
(investment options).

11.

In the absence of any reply or proof from the Company with regard to the allegations
made in the interim order that the issue of NCDs was done through a private placement
and that the number of allottees were less than 49, it has to be presumed that the issue
of NCDs of the Company is a public issue in terms of first proviso to Section 67(3) of
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the Companies Act, 1956. As the issue of NCDs was a deemed public issue, the
Company was required to comply with the legal provisions governing such public issue
including Section 60 of the Companies Act, 1956 (filing prospectus with Registrar and other
requirements) and state therein (i.e., in the prospectus) the matters stipulated under
Section 56 thereof. Further, the Company was also mandated to comply with Section 73
of the Companies Act, 1956, which mandates listing and dealing with such shares on a
stock exchange. As the Company failed to comply with the Sections 56, 60, 69 and 73
of the Companies Act, 1956, I find the Company guilty of having contravened the
above provisions in respect of its money mobilisation through the issue of NCDs.
12.

As per the Company, it had issued 27,692 NCDs on private placement to a limited
number of applicants i.e. 744 allottees. I have perused the Board Resolution dated
September 04, 2012 and note that the Company had resolved to issue 1,60,356 NCDs at
the face value of

2,264. A simple calculation of the amount works out as

36,30,45,984. Also in Form - 10 filed by the Company with RoC, it has been stated
that that the 'amount of present issue of series is

36,30,45,984'. It has also been said in

the same form that the amount secured by the charge is

36,30,45,984. Based on these

documents, the interim order has alleged that the Company has mobilised about

36.30

crores by issuing NCDs to more than 744 or more persons and the Company has failed
to provide the complete list of the allottees of NCDs. It is also observed from the
interim order that the Company has submitted its balance sheets only for the financial
years 2011 and 2012. The balance sheets for further years have not been submitted by
the Company. I note that these details are also not available on the 'MCA 21 portal'.
13.

I also note the following observations made in the

interim order regarding the

applicability of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008:
"A company making a public issue of debentures is required to comply with the applicable
stipulations including those pertaining to listing of the debt securities proposed to be issued,
disclosures in the offer document, filing of draft offer document, advertisements, price discovery
through book-building, minimum subscription, underwriting and redemption, in accordance with
the SEBI (Issue and Listing of Debt Securities) Regulations, 2008."
From the available records, it is noted that there is nothing to show that the Company
has complied with the provisions of SEBI (Issue and Listing of Debt Securities)
Regulations, 2008.
14.

I have perused Form-10 (particulars of registration of charges for debentures) filed by the
Company vide its letter dated March 19, 2013, with respect to the 'Creation of Charge',
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wherein it was mentioned that the Trustee of Debenture holders/ charge holders was
Mr. Birendra Kaji. As per this document, the date of creation of charge was on
September 04, 2012. The charge was for 'any issue in a series of debentures' and the
date of issue of series was on September 04, 2012. I note that person appointed as
'debenture trustee' of the Company does not meet the eligibility criteria specified under
Regulation 7 of the SEBI (Debenture Trustees) Regulations, 1993 and that the said
debenture trustee also appears to be not registered with SEBI as required under Section
12(1) of the SEBI Act.
By failing to file a Prospectus and stating that the Company has appointed a Debenture
Trustee, the Company has allegedly contravened the provisions of Section 117B of the
Companies Act, 1956. Further from the available records, it is noted that there is
nothing on record to show that debenture redemption reserve was created for the
redemption of such debentures. In view of the same, it appears that the Company has
also contravened Section 117C of the Companies Act, 1956. I note that the above
discussion is not part of the interim order and SEBI may initiate separate proceedings in
this regard.
15.

The Company vide its letter dated March 19, 2013, had also submitted that the
debentures issued by the Company are fully secured through a debenture trust deed
against the assets of the Company and a Debenture Holder's Trust has been formed for
the purpose of securing the rights of debenture holders. I have perused the copy of the
'Rhine and Raavi Debenture Trust Deed' forwarded by the RoC, Delhi, from the same,
I note the following:
"1.2.4 "debentures" means the 1,60,356 (ONE LAC SIXTY THOUSAND THREE
HUNDRED FIFTY SIX ONLY) of 2,264.17 each, optional convertible secured
debenture(s) of the following classes:1,60,356 Debentures or 36,30,73,152.00
Created by this deed (their aggregate value being 36,30,73,152.00 (THIRTY SIX
CRORE THIRTY LAC SEVENTY THREE THOUSAD ONE HUNDRED
FIFTY TWO ONLY) bearing an interest rate of 12.43% interest;"
It is noted that the said deed has been signed on behalf of the Company by Rakesh
Gupta in the capacity as Director and on behalf of 'Rhine and Raavi Debenture Trust
by Birendra Kaji in the capacity as Trustee.
I have also perused the 'Deed of Mortgage' said to be made on August 30, 2012, for the
property [i.e. 14 acres of land with plot no. 77 D to 01477D situated at Champaran
(West) Bihar]. It is noted that the same has been signed by Rakesh Gupta and Birendra
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Kaji on behalf of the Rhine and Raavi Debenture Trust/ mortgagee and none has
signed on behalf of the Company (mortgagor).
I note that Birendra Kaji being the director of the Company and an interested person,
should not have become the trustee of 'Rhine and Raavi Debenture Trust'. Further, the
'deed of mortgage' is also an incomplete document as no signature of the Company/
mortgagor are recorded on the document. The complete schedule of the property has
also not been provided in such document.
16.

I have perused the copy of the Debenture Certificates, on sample basis, issued by the
Company (received by SEBI from the copy of the winding up petition filed by the
investors of the Company as provided by the noticees namely Mr. Gurpreetesh Singh
Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and Mr. Jivtesh Singh Maini) and
note the following:
"Terms and Conditions
... ...
Conversion: The Debenture holders shall have the right to convert its outstanding Secured
Non Convertible Debentures into Equity Shares.
Redemption: Each Non Convertible Secured Debenture shall be promptly redeemed with
P.A. cumulative interest 12.43% on the maturity date.
Default: In the event of default by the Company to redeem/ convert the Secured Non
Convertible Debenture on the maturity Date, the Company shall be liable to pay penal interest,
compounded on a daily basis at a rate of 4% (four percent) per annum from the date of default
till the date of actual redemption. This remedy shall be in addition to all the other remedies
available to the Debenture holder."
From the above, it is noted that the Company has given the option of conversion of
NCD into Equity share in certain cases. Further, for luring the investors it has also
offered cumulative interest of 12.43% and penal interest (compounded on a daily basis
at a rate of 4% per annum from the date of default till the date of actual redemption).

17.

SEBI also received various investor complaints against the Company and its directors
making serious allegations against the Company and its directors namely Rakesh Gupta
and Birendra Kaji. From one group of investors' (consisting of 38 investors)
complaints, the following is noted:
a. One Real Bond Marketing and Real Bond Building and Land Developers Pvt. Limited
('Real Bond') had accepted deposits of fixed sum of money with registration charges
yielding assured return in fixed installments.
b. In August 2012, when the first installment became due, Real Bond offered fresh plan of
New Real Bond Working Plan and in lieu of the promise of assured tri-monthly
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payment, debentures in Rhine and Raavi Credits and Holdings Limited (the Company)
were offered. Having no other option, the investors had accepted such debentures.
c. Between July 2012 and January 2013, Rhine and Raavi Credits and Holdings Limited
had issued 3,977 secured debentures of

2,264 each to such 38 investors, redeemable

after different periods of time.


d. The persons in-charge of Real Bond and Rhine and Raavi Credits and Holdings Limited
were the same.
Other investor complaints are also of similar nature. I have seen the copies of the
'debenture certificates' enclosed with the investor complaints, which bears the
signatures of Mr. Birendra Kaji and Mr. Surendra Kumar Gupta in the capacity as
director and Mr. Anil Gupta as secretary/ authorised signatory. I note that a few of such
debenture certificates bears the date of July 2012 and August 2012.
18.

I note that these 38 investors had also approached the Hon'ble Delhi High Court by
filing of a Writ Petition. As noted earlier at para 7 above, the Hon'ble High Court, in
the said Writ Petition has directed SEBI to consider the present Writ Petition as a
representation and look into the issues raised therein.
I note that the Writ Petition has said that Real Bond had accepted money from the
investors and promised assured return in fixed instalments. It has been said that being
lured by the promise of high returns the investors had invested in the scheme of Real
Bond. It has also been said that there were close to 6,000 people with a total investment
of about 500 crores in the various schemes floated by Real Bond. In August 2012, when
the first instalment became due, instead of making payment, the investors were offered
a fresh plan i.e. New Real Bond Working Plan, wherein debentures of the Company
were offered in lieu of the assured tri-monthly payment. Being gullible the debentures
were accepted by these investors. The petition also said that in June 2014 Real Bond
started dilly dallying in making payment of assured returns and also avoided meeting the
investors.
In this regard, I note that SEBI had separately examined the role of Real Bond
Marketing and Real Bond Building and Land Developers Pvt. Limited. However, as the
activities were observed to be in the nature of 'Multi Level Marketing Schemes' (MLM),
the matters were forwarded to Chief Secretary of Delhi, Economic Offences Wing,
Ministry of Corporate Affairs and Reserve Bank of India, vide letters dated October 29,
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2013, with a request to look into the matter so that the interest of the investors is not
jeopardized.
As regards the contentions of the petitioners that debentures were issued in lieu of the
promised payments, I have already concluded above that the issue of debentures was a
public issue made without complying with the provisions of Companies Act, 1956 and
SEBI Regulations. The Company and its directors are liable to repay the money
collected against the debentures, in accordance with Section 73(2) of the Companies
Act, 1956. The rights of the debenture holders remain the same, whatever might have
been the method of acquisition.
The petition also states that the investors had made a representation dated August 21,
2014 to SEBI, requesting permission to participate in the proceedings for further reliefs
to secure the interest of investors. It has also been said that the investors have
documentary evidence which would be of help to SEBI.
As directed by the Hon'ble Delhi High Court, this order has dealt with the
representation of the investors. Accordingly, I find that the investors are not prejudiced
by not participating in the personal hearing. As regards the documentary evidence stated
to be helpful to SEBI, the investors may forward the same to SEBI, if not forwarded
earlier, which may be used for effective implementation of the directions issued in this
order.
19.

In view of the discussion above, appropriate action in accordance with law needs to be
initiated against the Company and the directors/ promoters in charge of the affairs of
the Company during the relevant period. The interim order has been issued to the
promoters and directors namely Mr. Gurpreetesh Singh Maini, Mr. Tridivesh Singh
Maini, Ms. Jyoti Maini, Mr. Jivtesh Singh Maini, Mr. Rakesh Gupta, Mr. Birendra Kaji
and Mr. Surendra Kumar. Of these, the noticees namely Mr. Rakesh Gupta, Mr.
Birendra Kaji and Mr. Surendra Kumar have not submitted their replies/ documents in
respect of the interim order. Those who have responded to the interim order have mainly
contended that they had resigned and ceased to be the directors of the Company before
the date of resolution for issuing NCDs dated September 04, 2012.

20.

I have considered the contentions of the noticees namely Mr. Gurpreetesh Singh Maini,
Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and Mr. Jivtesh Singh Maini that the
management and ownership of the Company had changed in the month of June 2012,
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by way of transferring the shares of the subject Company to the new management
including Rakesh Gupta and Birendra Kaji.
I have also seen the relevant Form 32 and other available records and in this regard the
following table provides the details regarding the period of their directorship, in the
Company:
S.No.

1
2
3
4
5
6
7

Name
Gurpreetesh Singh Maini
Tridivesh Singh Maini
Ms. Jyoti Maini
Jivtesh Singh Maini
Rakesh Gupta*
Birendra Kaji*
Surendra Kumar*

Date of Appointment
02/02/2006
02/02/2006
02/02/2006
02/09/2009
05/01/2012
05/05/2012
05/05/2012

Date of Cession
10/07/2012
25/05/2012
25/05/2012
10/07/2012
-

Appointed as Additional Director


From the above table, I note that the noticees namely Mr. Tridivesh Singh Maini and
Ms. Jyoti Maini had resigned from the Company on May 25, 2012. The noticees namely
Gurpreetesh Singh Maini and Mr. Jivtesh Singh Maini had resigned from the Company
on July 10, 2012.
At this stage, I note that certain debenture certificates as received along with the
investor complaints bears the date of July 2012 and August 2012. These dates are clearly
before the passing of the resolution for issuing 1,60,356 NCDs at

2,264 each on

September 04, 2012. Considering the same, giving a clean chit to Mr. Gurpreetesh Singh
Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and Mr. Jivtesh Singh Maini is
difficult, at this stage. It is necessary to examine the role played by them, if any and
whether they had knowledge about the issuance of NCDs by the Company.
21.

I note that the noticee Mr. Rakesh Gupta became the director of the Company on
January 05, 2012. Mr. Birendra Kaji and Mr. Surendra Kumar were appointed as
directors of the Company on May 05, 2012. These three directors still continue as the
directors of the Company. The resolution dated September 04, 2012, wherein the issue
of NCDs was approved, was attended by Birendra Kaji, Rakesh Gupta and Surendra
Kumar. The certified true copy of the resolution reads as under:
"RESOLVED FURTHER THAT the Debenture Certificates in the format approved
bearing the above said numbers be issued under the Common Seal fo the Company, to the
Debentures holder duly signed by Mr. Birendra Kaji and Mr. Rakesh Gupta, Directors of the
Company and countersigned by Mr. Surendra Kumar, Authorized Signatory of the Company.
RESOVED FURTHER THAT the above named persons are also severally authorized to
execute and deliver on behalf of the Company all deeds, declarations, undertakings and other
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writings and to do all such other acts, as may be required with regard to issue of the said
debentures"
In the absence of any denials/ submissions by the directors of the Company, namely,
Rakesh Gupta, Birendra Kaji and Surendra Kumar and the fact that they had resolved
to issue NCDs, which were found in contravention of the provisions of the Companies
Act, 1956, these three noticees being the 'officer in default' are found guilty of the
contraventions committed by the Company as detailed in the interim order and the
discussion above.
22.

The natural consequence of not adhering to the norms governing the issue of securities
to the public is to direct the Company and its promoters/directors to refund the monies
collected with interest to such investors. Further, in view of the violations committed by
the Company/its directors, to safeguard the interest of the investors who had
subscribed to such NCDs issued by the Company to safeguard their investments, and
also to ensure that the Company does not collect any further monies pursuant to its
offer of NCDs, it also becomes necessary for SEBI to issue appropriate directions
against the Company, its promoters and directors.

23.

In view of the foregoing, I, in exercise of the powers conferred upon me under section
19 of the Securities and Exchange Board of India Act, 1992 read with sections 11 and
11B thereof hereby issue the following directions :

a. The Company, Rhine and Raavi Credits and Holdings Limited [PAN:
AAACN4793N] and its directors including Mr. Rakesh Gupta [PAN:
ASVPG8313M; DIN: 03039404], Mr. Birendra Kaji [PAN: BSIPK9909F; DIN
05165145] and Mr. Surendra Kumar [PAN: CBFPK9464A; DIN: 05275114], jointly
and severally, shall forthwith refund the money collected by the Company through the
issuance of Secured Non-convertible Debentures (which have been found to be issued in
contravention of the public issue norms stipulated under the Companies Act, 1956), to the investors
including the money collected from investors, till date, pending allotment of NCD, 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 repayments to investors shall be effected only in cash through Bank Demand Draft
or Pay Order.

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c. The Company/ its present management is permitted to sell the assets of the Company
only for the sole purpose of making the refunds as directed above and deposit the
proceeds in an Escrow Account opened with a nationalised Bank.
d. The Company shall issue public notice, in all editions of two National Dailies (one
English and one Hindi) with wide circulation, detailing the modalities for refund,
including details on contact persons including names, addresses and contact details,
within fifteen days of this Order coming into effect.
e. After completing the aforesaid repayments, the Company shall file a certificate of such
completion with SEBI from 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. The Company is directed not to, directly or indirectly, access the capital market by
issuing prospectus, offer document or advertisement soliciting money from the public
and is 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, made to the satisfaction of SEBI, as directed above. The Company is
restrained from accessing the securities market for the purposes of raising funds with
immediate effect.
g. The present directors Mr. Rakesh Gupta, Mr. Birendra Kaji and Mr. Surendra
Kumar (the noticee who still continues as a director in the Company as per records) are restrained
from accessing the securities market and are further prohibited from buying, selling or
otherwise dealing in securities, directly or indirectly, with immediate effect. They are
also restrained from associating themselves with any listed public company and any
public company which intends to raise money from the public, with immediate effect.
This restraint shall continue to be in force for a further period of 4 years on completion
of the repayments, as directed above.
h. In case of failure of the Company/ its directors, to comply with the aforesaid directions,
SEBI shall take appropriate action against them and other persons/ officers who are in
default, including launching of prosecution proceedings, adjudication proceedings and
recovery proceedings, in accordance with law.
i. As regards Mr. Gurpreetesh Singh Maini [DIN: 00076936], Mr. Tridivesh Singh
Maini [DIN: 00077110], Ms. Jyoti Maini [DIN: 01187889] and Mr. Jivtesh Singh
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Maini [DIN: 00057017], Securities and Exchange Board of India should look into the
role of these in the issuance of 'Secured Non-convertible Debentures' during July 2012
and August 2012 and proceed appropriately. Till such examination is complete, Mr.
Gurpreetesh Singh Maini, Mr. Tridivesh Singh Maini, Ms. Jyoti Maini and Mr.
Jivtesh Singh Maini are prohibited from promoting any new company. They are also
restrained from mobilizing funds through the issue of equity shares or through any other
form of securities, to the public and/ or invite subscription, in any manner whatsoever,
either directly or indirectly till further directions.
j. The above directions shall come into force with immediate effect.
24.

In case of failure of the company, Rhine and Raavi Credits and Holdings Limited
and its directors including Mr. Rakesh Gupta, Mr. Birendra Kaji and Mr.
Surendra Kumar to comply with the aforesaid directions, SEBI-

a. shall recover such amounts in accordance with section 28A of the SEBI Act including
such other provisions contained in securities laws.
b. 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.
c. would make a reference to the State Government/ Local Police to register a civil/
criminal case against the Rhine and Raavi Credits and Holdings Limited, 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; and
d. would also make a reference to the Ministry of Corporate Affairs, to initiate the process
of winding up of the Rhine and Raavi Credits and Holdings Limited.
25.

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 the Company, its promoters, directors and other key persons.

26.

As mentioned above, SEBI may initiate separate proceedings against Mr. Birendra Kaji
for the contravention of SEBI (Debenture Trustees) Regulations, 1993 and Section
117B and 117C of the Companies Act, 1956.

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27.

Copy of this Order shall be forwarded to the recognised stock exchanges and
depositories for information and necessary action.

28.

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 : March 27, 2015


PLACE : Mumbai

PRASHANT SARAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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