Sebi bars Alchemist Capital from mobilising public funds

In a fresh action against Alchemist group, Sebi today barred Alchemist Capital from raising funds from investors and restrained the company, its present and past directors, including K D Singh, from securities market.
Similar action has been taken earleir against a few other entities from the group, which is alleged to be linked to a senior leader of West Bengal's ruling party Trinamool Congress.
The Securities and Exchange Board of India (Sebi) found that Chandigarh-based Alchemist Capital had garnered crore of rupees from several thousand investors through issuance of redeemable preference shares (RPS) and had "prima facie" violated various norms.

Market regulator observed that Alchemist Capital's issue was made to more than 50 people which, under the rules, made it a public issue of debt securities requiring compulsory listing on a recognised stock exchange. It was also required to file a prospectus, which it failed to do.
According to Sebi, Alchemist Capital issued over 16.52 crore RPS of Rs 10 each amounting to Rs 165.21 crore upto June 30, 2006.
In an interim order, Sebi Whole Time Member S Raman said: "I am of the view that prima facie, Alchemist Capital is engaged in fund mobilising activity from the public, through the offer of RPS," and as a result of such activity has violated the provisions of the Companies Act.

Accordingly, Sebi directed Alchemist Capital not to "mobilise any fresh funds from investors through the offer of RPS or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions."

The regulator has barred the company and its present directors --Mansoor Ahmed , Hariharan Veeraraghavan, Harpreet Kaur, Sandeep Sethi, and Harjit Singh alongwith its former directors --Brij Mohan Mahajan, Sunil Kanti Kar, Virendra Singh, Kanwar Deep Singh, Ravinder Singh and R P Chhabra are prohibited from issuing any offer document for soliciting money from public.

The company and its directors have been restrained from accessing the securities market.
Sebi has also asked the entities not to dispose any of the properties or assets acquired by that company through the issue of redeemable preference shares, without prior permission from the regulator as well as not to divert the funds raised from public.
While asking Alchemist Capital to provide a full inventory of all its assets and properties, Sebi has also asked the company to within 21 days from the date of receipt of the order submit all relevant and necessary particulars sought by the watchdog.