Capital markets regulator Sebi today restrained Adamant Infrastructures Ltd from mobilising funds from the general public through the issuance of securities for failing to comply with its norms.
The Securities and Exchange Board of India also restricted the company's directors from the capital markets.
The regulator said as the company issued Non convertible Debentures (NCDs) to 50 or more persons, it was under a legal obligation to get listed on a stock exchange.
It was also mandatory for the firm, among other things, to bring out a prospectus with respect to the public issue. However, the firm failed to comply with the regulations.
"Adamant Infrastructures is prima facie engaged in fund mobilising activity from the public, through the Offer of NCDs," and as a result of such activity has violated the provisions of Companies Act, Sebi Whole Time Member S Raman said in an order.
As per Sebi, the company had issued NCDs worth Rs 25.28 lakh to 306 investors during financial year 2012-13.
Accordingly, Sebi asked the company not to "mobilise any fresh funds from investors through the Offer of NCDs 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 company and its directors - Indrajit Kumar Sharma Jitendra Kumar Sharma and Anand Mohan - have also 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.
Besides, Sebi has asked them not to divert or dispose of any funds raised from public at large including assets brought from such money.
Also, Sebi has prohibited debenture trustee, Adamant Debenture Trust (represented by its trustee Sushmita Sinha) from continuing with his present assignment in respect of the current NCDs issue and also from taking up any new assignment a similar capacity.
These directions will take effect "immediately and shall be in force until further orders".
