Sebi has restrained Mega Mould India from raising funds from investors through issue of securities and has also barred the company and its directors from dealing in capital markets till its further directions.
The market regulator found that Mega Mould had garnered nearly Rs 716 crore from public through issuance of Secured Redeemable Non-Convertible Debentures (NCDs) and through such activity had "prima facie" violated various norms.
The market regulator Sebi observed that Mega Mould's NCDs 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.
In an order on July 23, the Securities and Exchange Board of India (Sebi) said that steps were required in the instant matter "to ensure only legitimate fund raising activities are carried on by Mega Mould and no investors are defrauded".
Accordingly, Sebi has asked Mega Mould to "not mobilise funds from investors through the issue 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".
Further, Mega Mould and its Directors -- Anukul Maiti, Kanika Maiti and Swapan Roy, are prohibited from issuing any offer document or advertisement for soliciting money from the public for the issue of securities.
"Mega Mould 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," the market regulator said in the order.
Sebi has also asked the entities not to dispose any of the properties or assets acquired by that company through the issue of NCDs, without prior permission from the regulator as well as not to divert the funds raised from public.
It has prohibited ICore E-Services and Mega Mould Debenture Trust from continuing to act as debenture trustees in respect of the issue of NCDs of Mega Mould and also from taking up any new assignment, till further orders.
While asking Mega Mould 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.
Sebi said that ICore E-Services and Mega Mould Debenture Trust had acted as debenture trustees to Mega Mould's issue despite being associates of the firm which was against rules.
