SEBI drops adjudication proceedings against "dissolved" company

SEBI drops adjudication proceedings against "dissolved" company

Registrar of Companies, West Bengal, had stated that pursuant to Section 248(5) of the Companies Act, 2013, the Noticee Avlokan Dealcom Pvt Ltd had been struck off the register of companies, and stood "dissolved"

The Adjudication Proceedings initiated against the Noticee viz. Avlokan Dealcom Pvt Ltd vide Show Cause Notice (SCN) has been disposed of without going into the merits of the case.

Based on certain preliminary findings in regard to the preferential allotment of shares in the scrip of Radford Global Ltd. (RGL/Company), Securities and Exchange Board of India (SEBI) passed two separate interim orders dated 19 December 2014 and 9 November 2015 in the matter.

Thereafter, SEBI received a reference from Principal Directors of Income Tax, Kolkata, Delhi and Chandigarh as well as from the Financial Intelligence Unit. Based on these data, SEBI conducted an investigation in the trading in the scrip of RGL for the period of 27 February 2012 to 24 March 2014 (Investigation Period/IP) to ascertain whether there were any violations of the provisions of Securities and Exchange Board of India Act, 1992 (SEBI Act) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations) by certain entities.

On the basis of investigation conducted by SEBI for the transactions in the scrip of RGL, it was inter-alia alleged that, Avlokan Dealcom Pvt Ltd (Noticee) had violated the provisions of Section 12A(a), (b) and (c) of SEBI Act read with Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) & (e) of PFUTP Regulations.

It was noted from the MCA website that the status of the Noticee was being shown as "Strike Off". In this regard, a copy of the Company Master data of the Noticee from the MCA website was placed in the file. Since the status of the Noticee was showing as "Strike Off", it is imperative to see whether the Noticee was existing or not.

On perusal of Form No. STK-7, Notice of Striking Off and Dissolution, as available in the MCA website, the Adjudicating Officer (AO) noted that the Registrar of Companies, West Bengal, had stated that pursuant to Section 248(5) of the Companies Act, 2013, the Noticee had been struck off the register of companies, and stood "dissolved" since 9 June 2017.

It was noted from the records that the present adjudication proceedings were approved on 1 September 2017 and the AO was appointed on 4 September 2017, pursuant to which it was contemplated by SEBI to issue settlement notices to various entities in the matter. Subsequently, in March 2018, the matter was referred for adjudication proceedings.

It was noted that the Noticee was struck off the register of companies and dissolved on 9 June 2017 i.e. even prior to the initiation of the present adjudication proceedings, Since the Noticee had been "dissolved", it was concluded by the SEBI on 22 January 2021 that the adjudication proceedings initiated against the Noticee vide SCN could not be proceeded with.