Capital markets regulator Sebi has restrained Patna-based Sarada Pleasure and Adventure Ltd from raising funds through issuance of securities and barred the company as well as their directors from the stock market.
The Securities and Exchange Board of India (Sebi) found that the company had illegally mobilised funds through issuance of 'Redeemable Preference Shares'.
According to Sebi, Sarada 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 Sarada Pleasure and Adventure Ltd and no investors are defrauded," Sebi said in an order today.
Consequently, Sebi said that the company "shall not mobilize funds from investors through the offer of redeemable preference shares 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 firm and its past and present 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.
Sarada has also been asked to provide a full inventory of all its assets and properties.
Sebi had initiated a probe against Sarada after receiving several complaints against the company.
