The Securities and Exchange Board of India (Sebi) found that the company had illegally mobilised funds through issuance of 'Redeemable Preference Shares'.
According to Sebi, Sarada issued the securities to over 50 persons which under the rules made it a public issue of securities and hence would require a compulsory listing on a recognised stock exchange, among others.
"Steps therefore, have to be taken in the instant matter to ensure only legitimate fund raising activities are carried on by Sarada Pleasure and Adventure Ltd and no investors are defrauded," Sebi said in an order today.
The firm and its past and present directors have also been prohibited from capital markets as well as from issuing offer documents, advertisement for soliciting money from the public for the issue of securities, till further directions.
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Further, the Sebi order has asked the company and its directors not to divert any funds raised from public at large.
Sebi had initiated a probe against Sarada after receiving several complaints against the company.