Regulator Sebi today banned Milan and Milan International Ltd from capital markets "till further directions" for violating public issue norms.
The direction follows Sebi probe into the fund-raising activity of Milan and Milan International Ltd (MMIL) and found that it had mobilised Rs 14.52 lakh by issuing preference shares to 260 people in 2010-11.
Since the shares were issued to over 50 people by the firm, the issuance qualified as a public issue that requires compulsory listing on a recognised stock exchange.
The company was also required to file a prospectus, among other things, which it failed to do.
"MMIL is prima facie engaged in fund mobilising activity from the public, through the offer of preference shares" and as a result of such activity has violated the provisions of the Companies Act, 1956, Sebi said in an interim order.
Accordingly, Sebi has barred the company, its directors and promoters from the securities market till further directions.
The company has been restrained from mobilising any fresh funds from investors through the issuance of securities to the public till further directions.
It has asked them not to dispose of any of the properties or alienate or encumber assets owned by the firm through preference shares without prior permission from the regulator.
The directions would take effect immediately and would be in force until further orders, Sebi said.
