Clamping down on illicit money pooling schemes, regulator Sebi today barred Amrit Projects from raising funds from investors through issuance of securities and also barred the company and its directors from dealing in capital markets till further directions.
The Securities and Exchange Board of India (Sebi), found that Amrit Projects Ltd (APL) had garnered nearly Rs 40 crore from public through issuance of Redeemable Preference Shares (RPS) and through such activity had "prima facie" violated various norms.
The regulator observed that Amrit Projects' issue was made to over 50 persons which under the rules made it a public issue of debt securities and hence 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.
"APL is prima facie engaged in fund mobilising activity from the public, through the offer of RPS and as a result of such activity has violated" the provisions of Companies Act," Sebi said.
Accordingly, Sebi has asked APL to "not mobilise funds from investors through the issue 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".
Further, the company and its directors-- Kailash Chand Dujari, Sasanka Roy Sarkar, Barun Kumar De, Ranjan Kumar Chowdhury and Kali Kishore Bagchi-- are prohibited from issuing any offer document or advertisement for soliciting money from the public for the issue of securities.
"APL and its directors, are 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," Sebi said.
Sebi has also asked the entities not to dispose any of the properties or assets acquired by that company through the issue of RPS, without prior permission from the regulator as well as not to divert the funds raised from public.
While asking Amrit Projects to provide a full inventory of all its assets and properties, Sebi has also asked the company to within 21 days from the date of receipt of the order submit all relevant and necessary particulars sought by the watchdog.
During the financial year 2006-07, Amrit Projects had mobilised funds amounting to about Rs 7.43 crore by allotting RPS to 8,271 investors. Besides, the company had garnered funds under the offer of RPS amounting to Rs 32.97 crore between 2007-08 and 2010-11.
