Capital markets regulator Sebi has restrained West Bengal-based Megasys Medi Life Ltd from raising funds through issuance of securities besides barring the company as well as their directors from the stock market.
Securities and Exchange Board of India (Sebi) found that the company had violated various norms through issuance of 'Secured Redeemable Debentures' to 133 investors.
According to Sebi, Megasys Medi issued the securities to over 50 persons which under the rules made it a public issue of securities and hence would require a compulsory listing on a recognised stock exchange, among others.
"Steps therefore, have to be taken in the instant matter to ensure only legitimate fund raising activities are carried on by Megasys Medi Life Ltd and no investors are defrauded," Sebi said in an order dated January 28.
Consequently, the regulator has directed the company not to mobilise funds from investors through issuance of equity shares or any other securities, till further orders.
The firm and its eight directors, including past directors have also been prohibited from 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.
Megasys Medi 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 the regulator, relating to the matter.
Moreover, Sebi has also prohibited Dinesh Chandra Ghosh "from continuing with his assignment as debenture trustee in respect of the offer of Secured Redeemable Debentures of Megasys Medi and also from taking up any new assignment or involvement in any new issue of debentures, etc. In similar capacity, from date of this order till further directions."
Ghosh had allegedly acted as an unregistered Debenture Trustee, Sebi said.
Sebi had initiated a probe against Megasys Medi after it received a complaint against the company in 2013.
As per the regulator's order, the company had issued and allotted debentures to a total of 133 investors during 2010-11, 2011-12 and 2012-13, respectively.
It was also observed that through the offer of debentures, the firm had allegedly mobilised about Rs 52.79 lakh as on March 31, 2013.
