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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO: SEBI/SRO/SBM/AO/3 of 2014)
_____________________________________________________________________
UNDER SECTION 15- I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
ACT, 1992 READ WITH RULE 5 OF SECURITIES AND EXCHANGE BOARD OF
INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES,1995
In respect of:
M/s Shreeyash Industries Limited
(Erstwhile name - Range Apparels Ltd)
No 1-11-252/A3, Jabbar Apartments
Begumpet
Hyderabad
_____________________________________________________________________
Background:
1. M/s Shreeysh Industries Limited is a company incorporated under the
Companies Act, 1956 having its registered office at No 1-11-252/A 3, Jabbar
Apartments, Begumpet, Hyderabad, Andhra Pradesh. The shares of the
company are listed on the Bombay Stock Exchange ( BSE ) and Madras Stock
Exchange ( MSE ). The company was earlier known as Range Apparels Ltd and
as per the information downloaded from the BSE website the address of the
company was mentioned as No 1-11-252/A 3, Jabbar Apartments, Begumpet,
Hyderabad, Andhra Pradesh. As per the records available the earlier address of
the company was No 5-8-272, 276 & 322, Ayesha Residency, Public Garden
Road, Nampally, Hyderabad - 500 001. BSE has also informed that M/s
Shreeyash Industries Ltd was suspended from 18
th
February 2002 to 8
th
March
2011 for penal reasons.

2. Securities and Exchange Board of India ( hereinafter referred to as SEBI ) had
issued Circular No CIR/OIAE/2/2011 dated June 3, 2011 regarding
commencement of the SEBI Complaints Redress System ( SCORES ) and
advising all companies whose securities are listed on various stock exchanges
to comply with the provisions of the said Circular. In this regard, SEBI again vide
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Circular no. CIR/OIAE/1/2012 dated August 13, 2012 advised all companies
whose securities were listed on stock exchanges to obtain SCORES
authentication by September 14, 2012 failing which it was informed that
appropriate enforcement action would be initiated against them.

3. It was observed by SEBI that M/s. Shreeyash Industries Limited (hereinafter
referred to as Noticee) had failed to obtain the SCORES authentication within
the timeline stipulated under the afore-mentioned circular dated August 13, 2012.
In this regard, SEBI issued as many as four letters to the Noticee advising it to
obtain the SCORES authentication and also to redress the investor grievances
pending against it. The details of letters sent by SEBI to the Noticee are
mentioned below :

a) Letter dated July 25, 2011 was sent to the Noticee by ordinary post advising it to
obtain the SCORES authentication and to redress the investor grievances
pending against it. The Noticee failed to respond to the said letter.

b) Another letter dated November 23, 2011 was sent to the Noticee by Registered
Post with acknowledgement due. However, the letter was not claimed by the
Noticee and the same was returned undelivered.

c) A Letter dated August 13, 2012 was again sent to the Noticee advising them to
furnish the SCORES authentication details and also to redress the 5 investor
grievances pending against it. The details of the five (5) pending investor
grievances were also sent along with the letter dated August 13, 2012 to the
Noticee with specific instructions issued to them to take such steps to redress the
grievances within 15 days from the date of receipt of the above said letter. The
said letter was sent to the address of the Noticee by Speed Post with
Acknowledgement due and the same was also acknowledged by them, which is
evidenced by the receipt of the acknowledgement due card.

d) Since there was no response from the Noticee to the earlier letters issued to
them by SEBI another letter dated September 8, 2012 was issued to the Noticee
advising them to submit the SCORES authentication details and also to redress
the five pending grievances against it. The said letter was sent to the address of
the Noticee by Speed Post with acknowledgement due and the same was also
delivered, as evidenced from the proof of delivery of the letter, which was
downloaded from the postal department website.
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4. In addition to the above steps taken by SEBI an advertisement dated October 21,
2012 was also issued by SEBI in the newspapers in respect of the companies
based in Andhra Pradesh, which included the name of the Noticee whose
securities were traded / listed on the Stock Exchanges. Specifically, the
advertisements were issued in the Deccan Chronicle and also in the Sakshi
dated 21.10.2012. Vide the advertisement, the companies based in Andhra
Pradesh, including the Noticee were advised to obtain the SCORES
authentication within 7 days of the advertisement date failing which it was
mentioned that SEBI would initiate appropriate enforcement proceedings against
the defaulting companies. However, it was noted by SEBI that the Noticee has
failed to obtain the SCORES authentication within the time frame, as advised.
Consequently, the five investor grievances were shown as pending to be
resolved against the Noticee in the SCORES. It was further observed that till the
date of initiation of the adjudication proceedings i.e. as on November 26, 2012,
the Noticee had not only taken any steps to obtain the SCORES authentication
as advised but also failed to redress the pending grievances against it in the
SCORES within the time specified.

APPOINTMENT OF ADJUDICATING OFFICER

5. The undersigned was appointed as the Adjudicating Officer under Section 15-I
of the Securities and Exchange Board of India Act ( hereinafter known as SEBI
Act ) read with Rule 3 of the SEBI ( Procedure for holding inquiry and imposing
penalties by Adjudicating Officer ) Rules, 1995 ( hereinafter referred to as
Adjudication Rules ) vide an Order dated 26
th
November, 2012, to inquire into
and adjudicate under the provisions of Sections 15 C and 15 HB of the SEBI Act,
the alleged violations committed by the Noticee of the above stated Circulars/
instructions of SEBI.

SHOW CAUSE NOTICE AND REPLY

6. A Show Cause Notice ref AO/SCN/SBM/EIL/ 20016 /2013 / 1 dated August 12,
2013 (hereinafter referred to as SCN) was issued to the Noticee in terms of the
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provisions of Rule 4 of the Adjudication Rules to show cause as to why an
inquiry be not held against it and penalty be not imposed u/s 15 HB and 15 C
of the SEBI Act, for the alleged violations committed by the Noticee of not
obtaining the SCORES authentication and consequently not redressing the
investor grievances . The copies of the documents relied upon in the SCN were
provided to the Noticee along with the SCN. The SCN was addressed to the
Noticee at their address located at No 5-8-272, 276 & 322, Ayesha Residency ,
Public Garden Road, Nampally, Hyderabad 500 001, Andhra Pradesh and the
SCN was sent to the afore mentioned address by Speed Post with
Acknowledgement Due. The SCN which was sent to the Noticee at the above
mentioned address returned undelivered with remarks Door Locked . I note that
the SCN was sent to the Noticee at the same address where the earlier letters
dated August 13, 2012 and September 8, 2012 were sent and also delivered to
the Noticee.

7. I am therefore of the view that sufficient opportunities have been provided to the
Noticee to take necessary steps to obtain the SCORES authentication and also
to redress the pending grievances against it. I note that some of the letters that
were sent by SEBI to the Noticees address in the past were also received by
them, which is evident from the proof of delivery of these letters. Also, I note that
SEBI issued an advertisement dated October 21, 2012 in both Deccan Herald
and Sakshi against those companies based in Andhra Pradesh whose
securities are traded on the Stock Exchanges but not obtained SCORES
authentication, advising the companies to obtain the SCORES authentication
within 7 days. I note that the name of the Noticee also appeared in the said
advertisement issued by SEBI. It is further observed that the Noticee finally took
steps to obtain the SCORES authentication only on 16
th
May 2013 i.e. almost 7
months after the advertisement was issued by SEBI, as aforesaid. Consequently,
due to the delay on the part of the Noticee to obtain the SCORES authentication,
the investor complaints were pending against it in the SCORES. Hence, I am
proceeding with the inquiry based on the documents and material available on
record.

8. The particulars of the entire allegations against the Noticee in so far as not
obtaining the SCORES authentication within the prescribed time frame and also
failing to resolve the long pending grievances received against it from the
complainants are not in dispute as no reply was received from the Noticee
(being a listed company ) towards the SCN. The fact cannot be ignored that
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being a listed company, the Noticee had failed to respond to the earlier letters
issued to them by SEBI advising them to take steps to obtain SCORES
authentication and subsequently even after SEBI had issued an advertisement in
this regard it took the Noticee further period of seven months from the
advertisement date to finally obtain the SCORES authentication.

9. The available records downloaded from the SCORES site reveal that there were
five complaints pending against the Noticee. However, out of the five complaints I
note that the complaints received from two complainants viz. Ms. Manju Chugh
and Mr. Hitesh Shah were entered in the SCORES twice and therefore,
effectively there were only three pending complaints against the Noticee and not
five as reported in the SCORES. I further note that in the case of a complaint
lodged by Ms. Manju Chugh, on May 18, 2011 as regards non-receipt of 1500
shares sent by her for transfer, these 1500 shares were transferred in the name
of Ms. Manju Chugh on June 15, 2012 and subsequently the R & T agent of the
Noticee viz. M/s Bigshare Services Pvt. Ltd. had dispatched the share certificates
to her by Regd. Post on June 28, 2012 i.e. the transfer of shares and dispatch of
the certificates took place almost a year after the complainant had lodged her
grievance. Thereafter, the Noticee had uploaded the ATR in the SCORES
informing the status of the complaint on July 5, 2013 after the SCORES
authentication was obtained by them on May 16, 2013. In terms of the Circular
dated June 03, 2011, all listed companies were inter alia required to view the
complaints pending against them, redress them and submit Action Taken
Reports (ATRs) electronically in SCORES. As the SCORES is an online
electronic system, respective listed companies were required to login to the
SCORES system electronically through a company specific user ID and
password, to be provided by SEBI, for the purposes of accessing the complaints
of the investors against them, as uploaded in the SCORES. In order to generate
the said user ID and password, listed companies were required to submit the
details for authentication to SEBI, in the format annexed to the above said
Circular. In the instant case, it is however, noted that the Noticee had delayed in
taking steps to obtain the SCORES authentication. In the case of another
complaint that was lodged against the Noticee by Mr. Hitesh Shah I note that the
complaint was received on May 22, 2011 and the same was shown as resolved
in the SCORES only on June 3, 2013 i.e. the Noticee took almost two years to
redress the grievance. In the absence of material on record due to lack of
response from the Noticee the amount of disproportionate gain or unfair
advantage made by the Noticee as a result of such default committed cannot be
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quantified. However, incidences of this nature wherein a listed company fails to
adhere to the instructions issued by SEBI in the matters relating to redress of
grievances of investors definitely compromise the securities market regulatory
framework, to the detriment of the investors at large.

10. I note that the Noticee has inordinately delayed in taking steps to obtain the
SCORES authentication although they were provided with ample opportunities
through various letters and advertisements issued by SEBI in this regard.
Further, there was also delay that has been observed on the part of the Noticee
to resolve the grievances received by it evident from the observations made in
the pre-paragraphs. The Noticee has not shown any tenacity to take such
proactive steps to immediately obtain the SCORES authentication despite
several instructions issued by SEBI. The same is amply clear from the manner in
which the Noticee took almost seven months to obtain the SCORES
authentication even after an advertisement was issued by SEBI in this regard.
Such casual display of attitude by listed companies towards regulatory
instructions and more particularly on matters relating to investor complaints
redress mechanism cannot be ignored and the violations against the Noticee
stands established.

Order

11. In view of the above, after considering the facts and circumstances of the case
and exercising the powers conferred upon me under the provisions of Section 15
I of the SEBI Act and Rule 5 of the Adjudication Rules, I impose a monetary
penalty of Rs 2,00,000/- (Rupees Two Lakh only) under the provisions of Section
15 C read with 15 HB of the SEBI Act on the Noticee. I am of the view that the
said penalty would be commensurate with the violations committed by the
Noticee.

12. The Noticee shall pay the said amount of penalty by way of Demand Draft in
favour of SEBI- Penalties Remittable to Government of India, payable at
Mumbai within 45 days of the receipt of this order. The said demand draft shall
be forwarded to the Deputy General Manager, Office of Investor Assistance and
Education, Securities and Exchange Board of India, Southern Regional Office,
Overseas Towers, 7th Floor, 756-L, Anna Salai, Chennai 600 002.

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13. In terms of Rule 6 of the Adjudication Rules, copy of this order is being sent to
the Noticee (M/s Shreeyash Industries Ltd.) and also to SEBI.


Place: Chennai Suresh B Menon
Date : September 30, 2014 Adjudicatiing Officer




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