In a fresh crackdown on illegal money pooling schemes, capital markets regulator Sebi today barred two firms -- Express Cultivation and R B Horticulture & Animal Project Ltd -- and their directors from raising funds from investors.
A probe by Securities and Exchange Board of India (Sebi) found that R B Horticulture & Animal had mobilised Rs 50 lakh by issuing Redeemable Preference Shares (RPS) to 1,668 investors during 2006-07 and 2007-08.
Besides, Express Cultivation had raked in Rs 1.02 crore by allotting RPS to 970 people between 2010-11 and 2012-13.
Since the shares were issued to over 50 people by each companies, the issuance qualified as a public issue which requires compulsory listing on a recognised stock exchange.
It was also required to file a prospectus, which they failed to do.
In similar-worded interim orders, Sebi said the firms will "not mobilise fresh funds from investors through the offer of RPS or through the issuance of equity shares or any other securities, to the public and or invite subscription, in any manner whatsoever, either directly or indirectly till further directions."
The companies and their present and former directors have been "prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions."
They have been directed to provide a full inventory of all their assets and properties. Besides, they have been restrained from disposing of any property of the firms without getting prior approval from Sebi.
The directions will take effect immediately and be in force until further orders.
