Sebi bars Aspen from raising funds via issuance of securities

Capital market regulator Sebi today restrained Aspen Projects India from mobilising funds from public through issuance of securities till further directions.
The watchdog found that the funds raised by Aspen through issuance of 'secured redeemable debentures' and preference shares from hundreds of investors amounted to public issues of securities and were therefore required to be listed on a recognised stock exchange as mandated under the norms.
It had also not filed a prospectus for the public offer as required.
Consequently, Sebi in a order today said Aspen "shall not mobilise any more funds from investors through the issuance of secured redeemable debentures or the issuance of preference shares or through the issuance of equity shares or any other securities, to the public and/or invite subscription... Till further directions".

Sebi has barred the firm and its seven directors from issuing any offer document or issue advertisement for soliciting money from the public for the issue of securities.
Aspen also has to provide Sebi with full inventory of all its assets and properties and the company and its directors cannot dispose of properties or assets acquired through issuance of securities as well as cannot divert the public funds.

Moreover, Sebi has barred -- Ram Sunder Bhattacharya and Mita Roy -- from continuing with their present assignment as debenture trustees for Aspen and also from taking up any new assignment or involvement in any new issue of debentures. The two were found to be acting as unregistered debenture trustees.

According to Sebi, as the firm had offered the securities to over 50 persons, it qualified as a public issue.
Aspen had made Rs 76 lakh from issuance of preference shares to 531 investors and Rs 14.90 crore from the issue of debentures to more than the prescribed limit of investors.
Since the issuance of secured redeemable debentures alongwith the issuance of preference shares were each made to fifty persons or more by APIL (Aspen Projects India), the same will attract the requirement of compulsory listing before a recognised stock exchange...", Sebi said.
"It therefore prima facie appears that APIL has violated the provisions... Of the Companies Act, 1956, since it has failed to ensure listing with a recognised stock exchange of the securities issued under the issuance of secured redeemable debentures alongwith the issuance of preference shares," it added.

Among others, Sebi said the company having made a public offer was required to register a prospectus with the ROC (Registrar of Companies), which it did not.
Sebi had also found that the company had accepted advance against purchase of products and land. In this regard, the regulator has asked the company to provide all necessary and relevant information in respect of the scheme within 15 days.