Sebi bans Aspen Industries, directors from capital markets

Sebi has banned Aspen Industries and its directors from the capital markets for mobilising money from public without complying with regulatory norms.
The company had garnered funds by allotting non- convertible debentures (NCDs) to more than 49 or 200 investors in 2013-14 and 2015-16 without complying with the provisions of debt securities regulation, Sebi said after analysing details of investor complaints and copy of debenture certificates.
The firm's board of directors, 2013, had authorised it to issue up to Rs 150 crore through NCDs. However, the exact quantum of fund mobilisation through issuance of NCDs could not be ascertained as the firm did not co-operate with the examination process, Sebi said.

Under the norms, these securities were required to compulsorily list on recognised stock exchanges. Among others, the firm was also required to file a prospectus, which it failed to do.
"AIL ( Aspen Industries Ltd) is prima facie engaged in fund mobilising activity from the public, through the issuance of NCDs without complying with ... Provisions of the Debt Securities Regulation," Sebi Whole Time Member G Mahalingam said in an order.
"...There is no other alternative but to take recourse through an interim action against AIL and its directors along with its debenture trustees for preventing them from carrying on further with the issuance of NCDs to the public," he added.

Accordingly, Sebi has restrained the firm and its directors -- Bhaskar Saha, Abhijit Dasgupta, Ujjal Kumar Roy and Debenture Trustee, Aspen Debenture Trust (acting through Raju Sarkar) -- from mobilising fresh funds through NCDs or through issuance of any other securities in any manner whatsoever, either directly or indirectly.

Also, they have been barred from dealing in the capital markets.
Aspen Debenture Trust and Raju Sarkar have been prohibited from continuing with their present assignment as debenture trustees in respect to AIL's issuance as well as from taking up any new assignment in a similar capacity.
The directions would take effect immediately and would continue into force until further order.