Continuing its crackdown on illicit money-pooling schemes, capital markets regulator Sebi today barred Cell Industries and Shri Ram Real Estate & Business Solution from mobilising funds from public "with immediate effect".
In two separate interim orders, Sebi said it found that Cell Industries garnered money from several investors through issuance of securities and prima facie violated various norms, while Shri Ram Real Estate and Business Solution was running collective investment scheme (CIS) without obtaining regulatory approval from Sebi.
Cell Industries raised Rs 92 lakh from over 200 people through issuance of Redeemable Preference Shares in 2011-12 and it also garnered Rs 14.69 crore via Non Convertible Debentures during 2010-11 and 2012-13 and prima facie violated various norms.
Also Read
The Securities and Exchange Board of India observed that Cell Industries issued these shares to over 50 persons which under the rules made it a public issue of securities.
Hence, it would require a compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among others, which it failed to do.
Accordingly, Sebi directed Cell Industries not to mobilise funds from investors through issuance of equity shares or any other securities, till further orders.
The firms and its directors- have been prohibited from the capital markets as well as from issuing offer documents, advertisement for soliciting money from the public for the issue of securities, till further directions.
Further, the Sebi order has asked the company and its directors not to divert any funds raised from public at large.
The company has also been asked to provide a full inventory of all its assets and properties as well as furnish complete and relevant information sought by Sebi.
The company's debenture trustees have been prohibited from continuing with their assignment as debenture trustee in respect of Cell Industries case and restrained them from taking up any new assignment.
Sebi asked Shri Ram Real Estate and Business Solution and its directors "not to collect any fresh money from investors under its existing schemes" as well as "not to launch any new schemes or plans."
These directions will take effect immediately and be in force until further orders.
