Citing prima facie evidence that the fund raising activity by Kolkata based Suraksha Agrotech violated various norms, market regulator SEBI Monday barred the company from mobilising money through issuance of securities.
As per the orders from the Securities and Exchange Board of India (SEBI), the firm and its directors are also being "restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions".
"Protecting the interests of investors is the foremost mandate for SEBI," it said.
An initial probe by SEBI stated Suraksha Agrotech raised nearly Rs 11.46 crore through allotment of redeemable preference shares (RPS) to 13,612 investors during 2009-10, 2010-11 and 2011-12.
"In the instant matter, steps have to be taken to ensure that only legitimate fund raising activities are carried on by Suraksha Agrotech and no investors are defrauded.
In light of the same and also considering the failure on the part of Suraksha Agrotech to submit relevant information to SEBI, we find that there is no other alternative but to take recourse through an interim action against Suraksha Agrotech and its directors, for preventing it from further carrying on with its fund mobilising activity under the issue of RPS," SEBI said.
Further to the ruling, SEBI has also asked the company not to dispose any assets acquired through the issue of RPS as well as not to divert any funds raised from investors.
Also, the directors of the company are required to provide a full inventory of all its assets and properties and furnish all relevant information with SEBI within 21 days.
SEBI had received a reference on May 8, 2013 from the Bureau of Investigation, Assam alleging mobilisation of funds through the illegal issue of preference shares by Suraksha Agrotech.
