Pratibhuti Vinihit Ltd. & Another vs SEBI & Others on 28 October 2026

O R D E R

Per: Justice P. S. Dinesh Kumar, Presiding Officer (Oral)

We have heard Mr. Sean Wassoodew, learned advocate for the appellant and Mr. Vishal Kanade, learned advocate for Respondent No.1-SEBI, Mr. Manish Chhangani, learned advocate for Respondent No.2-BSE and Mr. Prateek Pansare, learned advocate for Respondent No.3-Chrome Silicon Limited (‘Company’ for short).

2. This appeal is filed seeking several prayers mentioned in paragraph No. 43 of the memorandum of appeal. However, after conclusion of arguments, learned advocate for the appellants submitted that the appellants would be

satisfied if prayer clause (c) qua Respondent No. 1 is considered and granted. His submission is placed on record.

3. Brief facts of the case are, appellants approached several institutions such as BSE Limited, Hon’ble Bombay High Court and the SEBI1 with complaints against the Company. Learned advocate for the appellants has furnished a compilation containing a list of eight complaints which he had made to the SEBI against the Company.

4. Appellants’ main grievance is with regard to allotment of the preferential shares of the Company in 2018. The compilation contains alleged irregularities, Company’s reply and SEBI’s action. Appellants’ case before this Tribunal is that the SEBI has not taken necessary and appropriate action against the Company. The grievances are as follows:

Disqualification of Directors- Since 4 out of 5 directors of the Company were disqualified under Section 164(2)(a) of the Companies Act, 2013 to act as directors by the Registrar of Companies, the resolution passed in the Board Meeting held on June 01, 2018 and 36th Annual General Meeting (AGM) of the Company held on July 03, 2018 for the preferential issue of 1,20,00,000 convertible warrants at a price of Rs. 45/- was without proper quorum and non-est in law.

Learned Advocate for the appellants has not pressed this grievance.

Rights Issue Offer- Document filed with SEBI: The Complainant has inter- alia alleged that the Company in 2007 had filed the draft letter of offer with SEBI for its proposed rights issue wherein 3 persons viz: who have been identified as promoters in the draft letter of offer were shown as non- promoters in the preferential allotment of 1,20,00,000 convertible warrants. (see pg. 135). It was further stated that KSR Entrepreneurs Pvt. Ltd. has 1 Securities and Exchange Board of India

been allotted 5,00,000 shares by way of conversion of warrants in the company under the category of “Non-Promoter” that too in the teeth of the Order dated July 02, 2018 passed by the Hon’ble National Company Law Tribunal (“NCLT”).

It was contended by the learned Advocate for the appellants that three companies viz. (i) VBC Wood Distillation Private Limited (presently, Sillicon Mines Private Limited),

(ii) Frontline Enterprises Limited, and

(iii) Bhadrachalam Power Company Limited (presently, Bhadrachalam Power and Alloys Limited) were shown as Company's promoters in 2007 and subsequently they were shown as ‘non-promoters’. Without examining or investigating, SEBI in its reply has stated that no action was required. SEBI has taken a stand that since rights issue did not go through, no action was required. Having heard both the learned Advocate for the appellants and Mr. Kanade for SEBI, in our view, the grievance being that the said Companies were shown as related parties once and subsequently given up it is just and appropriate to direct the SEBI to have a second look in the matter.

Voting at AGM contrary to SEBI (Issue of Capital and Disclosure Requirements Regulations, 2009 (ICDR Regulations") SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations"): Complainant has alleged that as per the ICDR Regulations, and the LODR Regulations the promoters, directors and beneficiaries of the proposed allotment are prohibited from participating in the voting on the proposed special resolution at the AGM. It is further alleged that, as per scrutinizer's report, certain promoters and directors of the proposed allotment of warrants have participated in voting on the resolution at the AGM and have helped purported resolution to be passed as a special resolution. Thus, it is alleged that if the voting from promoters and directors is excluded, the special resolution would fail and the allotment under the said special resolution to all allottees is null and void ab initio.

This grievance is connected with appellants’ grievance No. 2. Therefore, SEBI shall have second look into the matter with regard to this grievance.

Grievance No. 4. Voting Pattern at various AGMs vis-à-vis a questionable pattern at A 36th AGM: The Complainant, on the basis of an analysis of historical data of 5 years' voting pattern of the Company from 2014-2018, has alleged that the voting at the 36th AGM in 2018 was manipulated / bogus voting, that too in clear violation of the ICDR Regulations and the LODR Regulations. It is further stated by the Complainant that for 4 years, there were zero number of proxies or no proxies from public. However, in 2018, there were abnormal number of 174 proxies. However, number of promoters remained the same at 15 with minor changes.

Learned Advocate for the appellant concedes that this

Allotment of shares against convertible warrants in violation of Hon'ble NCLT Order dated July 02, 2018: The Complainant has alleged that the conversion of 1,20,00,000 convertible warrants into equity shares by the Company much before the expiry of 18 months from the date of allotment of convertible warrants is in violation of the Hon'ble NCLT Order's dated July 02, 2018. [see pg 108] This order is not even disclosed to BSE.

Learned Advocate for the appellant concedes that this

Breach of the LODR Regulations: The Complainant has alleged that the issuance of preferential allotment of warrants which are convertible into shares would fall into the definition of related party transaction as contained in Regulation 2(1)(zc) of the LODR Regulations. It is further stated that, as per Regulation 23(4) of the LODR Regulations, related party is excluded from voting in respect of any material related party transaction. It is further alleged that the Company in its financial statements for 2017-18 has not disclosed details about the related parties and the scrutinizer’s report falsely states that promoters are not interested in the resolution.

This grievance is connected with appellants’ grievance No. 2 and 3 with regard to promoter and non-promoter issue. Therefore, SEBI shall have second look into the matter with regard to this grievance.

Grievance No. 7.

Proposed Merger of Orissa Power Consortium Limited: (“OPCL")": The Complainant has alleged that the proposed merger of OPCL with the Company would result in further dilution of the minority shareholders of the Company as 65% of shares of OPCL are held by the promoters of the Company.

Learned advocate for the appellant concedes that this

Breach of the ICDR Regulations: The Complainant has alleged that the Company has not disclosed the basis for arriving at the figure of Rs.45/- for the convertible warrants, including the amount of Rs.35/- as premium, and has not obtained valuation report from independent qualified valuer and made incomplete disclosures as required under Regulation 163(1) of the ICDR Regulations. It is further alleged that the proposed resolution is contrary to Regulation 169(1) of the ICDR Regulations which contemplates that consideration for preferential issue of specified securities is to be made only against cash. Further, the Company has failed to submit certificate to stock exchange as required under Regulation 169 of the ICDR Regulations to certify that the issuer is in compliance with Regulation 170(5) of the ICDR Regulation. Further, the Complainant has also alleged that no fresh/ subsequent special resolution was passed as required under Regulation 170(1) of the ICDR Regulations which states that if allotment of specified securities is not completed within 15 days from the date of the special resolution, fresh special resolution is required to be passed. Lastly, it is alleged that the Company is in breach of Regulation 169(1) of the ICDR Regulations which specify that the consideration of the specified securities is to be received from the respective allottees’ bank accounts and that a certificate of the statutory auditor is required to be submitted to the Stock Exchange to certify that the issuer is in compliance with Regulation 169(5) of the ICDR Regulations and relevant documents thereof are maintained by the issuer as on the date of certification.

This grievance pertains to breach of ICDR Regulations. It was submitted by the learned advocate for the appellant that the chart produced as Annexure ‘C’ in the compilation shows that there was a sudden spurt in the trading of Company’s shares in May 2018 when compared with the trading pattern between May, 2017 to April, 2018. It was submitted by Mr. Kanade that based on the available records, SEBI has analysed the trades and noted that the shares of the Company were frequently traded shares as per ICDR. We have perused Annexure C. The trading pattern of Company’s shares from May, 2017 to 2018 shows that there was a spurt in May, 2018. In our view, it would be just and appropriate for the SEBI to re-consider appellants’ grievance in this behalf.

5. Mr. Kanade submitted that as per his instructions the NCLT matter is listed on December 31, 2026.

6. Mr. Prateek Pansare, learned advocate for the Company submitted that he adopts the arguments of Mr. Vishal Kanade, learned advocate for SEBI.

7. In the result, the following:

ORDER

i. Appeal is disposed of with a direction to the SEBI to re-examine appellants’ grievances noted at Sr. Nos. 2, 3, 6 and 8.

ii. Appellants shall intimate to the SEBI the developments that take place in the NCLT from time to time.

iii. We make it clear that the SEBI shall examine the matter independently in accordance with law keeping in view all aspects including NCLT proceedings and its orders.

Justice P. S. Dinesh Kumar Presiding Officer

Ms. Meera Swarup Technical Member

Dr. Dheeraj Bhatnagar Technical Member 28.10.2026 PK PRERNA MANISH KHARE Digitally signed by PRERNA MANISH KHARE Date: 2026.10.30 12:05:53 +05'30'