BEFORETHEADJUDICATINGOFFICER

SECURITIESANDEXCHANGEBOARDOFINDIA
[ADJUDICATIONORDERNO.AK/AO228/2014]
__________________________________________________________________________
UNDERSECTION15IOFSECURITIESANDEXCHANGEBOARDOFINDIAACT,1992READWITHRULE
5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING
OFFICER)RULES,1995.
Inrespectof

LateMr.AshokMittal(PAN:NotAvailable)

inthematterof

M/sRamaPaperMillsLimited
___________________________________________________________________________

FACTSOFTHECASE
1.

M/s Rama Paper Mills Limited (hereinafter referred to as the Company) vide letter dated
January 01, 2011 and March 09, 2011 requested SEBI for regularization of preferential
allotmentof20,83,333equitysharestothepromotersandtheirassociates.Thesharesofthe
companywerelistedontheBombayStockExchange(hereinafterreferredtoasBSE).

2.

From the documents enclosed with the aforesaid letters, it was observed that vide order
datedDecember30,2000,thecompanywasdeclaredsickbyBoardofIndustrial&Financial
Reconstruction (hereinafter referred to as BIFR). Further, it was observed from the
submissions made bythecompanyvide lettersdated January 01, 2011 andMarch09, 2011
thatduringtherehabilitationscheme,thecompanyhadenteredintoaOneTimeSettlement
(OTS) with its lenders. Accordingly, the promoters and their associates, which inter alia
included Mr. Ashok Mittal (hereinafter referred to as the Noticee), infused funds in the
company by way of preferential shares and unsecured loans and the company was revived
and accordingly deregistered as a sick company. The unsecured loan of the promoters and
theirassociateswasconvertedand20,83,333equitysharesoffacevalueofRs.10eachata
premiumofRs.26persharewereallottedtothemonMarch22,2007.

3.

The details of shareholding pattern of the company prior to and after the preferential
allotmentisasfollows:

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Category

Preissue
equityshares

PromoterGroup
TotalPromoterGroup
OtherShareholders
CorporateBodies
NRI
MutualFund
Public
TotalofOtherShareholders
Total

18,80,100
18,80,100

%oftotal
Postissue
%oftotal
paidup
equityshares paidupcapital
capital
24.80
39,63,433
41.01
24.80
39,63,433
41.01

26,54,416
44,082
4,200
29,98,602
57,01,300
75,81,400

35.01
0.58
0.06
39.55
75.20
100

26,54,416
44,082
4,200
29,98,602
57,01,300
96,64,733

27.46
0.46
0.04
31.02
58.98
100

4.

It was observed that on January 17, 2013, the company informed the following details
regardingchangeofshareholdingoftheentitiesbelongingtothepromotergroup:
S.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

5.

NameofthePromoterEntity
PramodAgarwal
PramodAgarwalHUF
ArunGoel
ArunGoelHUF
SunitaAgarwal
RachnaGoel
ApurveGoel
DeepiGoel
VandiniGoel
HarshalGoel
RamFinFortunePvt.Ltd.
AAAPaperMarketingPvtLtd
AnkurAgarwal
AshokMittal
SudhaAgarwal
AmolKumar
AmarMittal
KusumLata
ArvindKumarAgarwal
Total

Preissue
%oftotal
Postissue
%oftotal
equityshare paidup
equityshare paidup
2,42,050
3.19
2,97,605
3.08
1,26,125
1.66
1,53,903
1.59
13,550
0.18
1,80,217
1.86
3,80,825
5.02
4,08,603
4.23
69,750
0.92
1,11,417
1.15
79,250
1.05
1,90,361
1.97
2,01,450
2.66
3,12,561
3.23
82,500
1.09
1,51,944
1.57
21,000
0.28
48,788
0.5
450
0.01
83,783
0.87
4,41,850
5.83
11,08,517
11.47
1,75,000
2.31
8,69,444
9
600
0.01
600
0.01
25,100
0.33
25,100
0.26
3,000
0.04
3,000
0.03
7,500
0.1
7,500
0.08
8,650
0.11
8,650
0.09
100
0
100
0
1,350
0.02
1,350
0.01
18,80,100
24.80
39,63,433
41.01

ItwasobservedthattheaforesaidallottedshareswerenotlistedonBSE.Itwasalsoobserved
that the Promoters and its associates acted in concert with each other as a result of which

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theirshareholdinginthecompanywentfrom24.80%to41.01%pursuanttothepreferential
allotment.Itwasfurtherobservedfromthedocumentssubmittedwiththeaforesaidletters
thattheequityshares,whichintermsofSEBIDIPGuidelines,wererequiredtobeallottedby
March 20, 2007 were actually allotted on March 22, 2007, and hence, a Special Resolution
through Postal Ballot was passed on May 12, 2010 to ratify the issue and allotment of
20,83,333equitysharesoffacevalueofRs.10eachatapriceofRs.36pershare(inclusiveof
premiumofRs.26pershare),afterthesamewasnoticedbyBSEandcommunicatedvidetheir
emaildatedJuly16,2009.

6.

It was observed that the shareholding of the Promoters and its Associates in the company
increasedby16.21%,whichwasinexcessofthecreepingacquisitionof5%.Further,sincethe
saidinfusionoffundsbythePromotersanditsassociates,werenotthroughaschemeframed
under Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985, it thereby
attractedtheobligationtomakeanopenofferunderRegulation11(1)readwithRegulation
14 of the (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter
referred to as 'Takeover Regulations'). It was alleged that no open offer was made by the
Promotersanditsassociates,whichalsoincludedtheNoticee,forthepreferentialallotment
of20,83,333equityshares.Thus,bynotmakingpublicannouncementofanopenofferforthe
preferential allotment of 20,83,333 equity shares, it was observed that the Promoters and
Associates of the Company, which inter alia included the Noticee, allegedly violated
Regulation 11(1) read with Regulation 14 of the Takeover Regulations. The allegation if
established make the Promoters and its associates, which included the Noticee, liable for
monetary penalty under section 15 H(ii) of SEBI Act, 1992 for the alleged violation of the
TakeoverRegulations.

APPOINTMENTOFADJUDICATINGOFFICER
7.

TheundersignedwasappointedasAdjudicatingOfficervideorderdatedNovember11,2013
under section 15I and Section 19 of the SEBI Act read with Regulations 44 and 45 of
TakeoversRegulations.

SHOWCAUSENOTICEANDREPLY
8.

A common Show Cause Notice No. EAD6/AK/VS/1569/2014/018 dated January 15, 2014
(hereinafterreferredtoas'SCN')wasissuedtothePromotersandtheassociates,whichinter
aliaincludedtheNoticee,underrule4oftheRulestoshowcauseastowhyaninquiryshould

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not be held and penalty be not imposed under Section 15 H(ii) of SEBI Act, 1992 for the
allegedviolationspecifiedinthesaidSCN.InApril2014,thePromotersandtheassociatesof
theCompanyfiledanapplicationforsettlementproceeding.

9.

Duringthesettlementproceeding,theCompanySecretaryofthecompanyintimatedthatthe
Noticee againstwhomadjudicationproceedinghavebeeninitiatedhadpassedaway.Hence
vide email dated October 22, 2014, the Company Secretary was advised to submit attested
copy of death certificate of the Noticee in order to dispose the adjudication proceeding
againsthimonaccountofdeath.

10.

VideletterreceivedonNovember28, 2014, an attested copyof the deathcertificateof the

Noticeeviz.Mr.AshokMittalwasprovidedforperusalandrecords.

ORDER

11.

After taking into consideration all the facts and circumstances of the case, I find that the
matter in respect of the Noticee, Late Mr. Ashok Mittal initiated vide SCN Ref: No.
EAD6/AK/RSL/1569/2014/14 dated January 15, 2014 cannot be proceeded with as the
NoticeehaspassedawayonDecember13,2009and,thus,thematterbecomesinfructuous
andadjudicationproceedingcannotbeproceededwith.

12.

Intermsofrule6oftheRules,copiesofthisorderaresentattheNoticee'saddressandalso
totheSecuritiesandExchangeBoardofIndia.

Date:December19,2014
Place:Mumbai

AnitaKenkare
AdjudicatingOfficer

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