Sebi slaps Rs 1-cr fine on Indus Weir Industries

Markets regulator Sebi today imposed a penalty of Rs 1 crore on Indus Weir Industries Ltd for illegal garnering of money from gullible investors.
The company had collected over Rs 33 crore from 32,454 investors who appear to belong to remote place in Bihar through three deposit schemes, including issuance of redeemable preference shares, in 2010-2014, Sebi said in an order.
These funds were mobilised without complying with the mandatory listing and other general conditions laid down in Companies Act, ICDR (Issue of Capital and Disclosure Requirements) and listing regulations.
Under the rules, issuance of shares to over 50 people qualifies to be a public issue and requires compulsory listing of such securities on a recognised exchange. Besides, the firm needs to register a prospectus with the Registrar of Companies (RoC) under the Companies Act.

"I am of the view that any attempt by any person or entity to raise funds illegally, without complying with regulatory requirements, especially from gullible investors from remote places where financial literacy is minimal, warrants strict action.
"Considering the facts and circumstance of the case and repeatedly raising funds illegally for four consecutive financial years 2010-11, 2011-12, 2012-13 and 2013-14, I consider it as fit case for imposition of maximum penalty provided under... Sebi Act," Sebi Adjudicating Officer B J Dilip said.
Accordingly, the Securities and Exchange Board of India (Sebi) has levied a fine of Rs 1 crore on the company.