Sebi has barred SEBA Real Estate Ltd from raising money from investors through issuance of securities and also restricted the company and its directors from dealing in capital markets till further orders.
The Securities and Exchange Board of India (Sebi) found that SREL had raised over Rs 25 crore from more than 41,000 investors through preference shares and "prima facie" violated various norms.
The capital market regulator observed that SREL allotted preference shares 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. It was also required to file a prospectus, among others, which it failed to do.
"SREL is prima facie engaged in fund mobilising activity from the public, through the offer of preference shares and as a result of such activity, has violated the provisions of Companies Act," Sebi said in its yesterday's order.
Accordingly, Sebi has asked SREL to "not mobilise funds from investors through the offer of preference 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 -- Siddhartha Nag, Kanak Ranjan Nath, Sanjoy Nag, Subhash Chandra Saha, including its past directors Satyendra Kumar Dey, Mrinal Chandra Nandi, Santanu Das, Ashis Dhar, Sujit Kumar Roy and Shibendu Das -- are prohibited from issuing any offer document for soliciting money from the public for the issue of securities.
"SREL 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.
The regulator has also asked the entities not to dispose any of the properties or assets acquired by that company through issue of preference shares, without prior permission from the regulator as well as not to divert the funds raised from public.
While asking SREL to provide a full inventory of all its assets and properties, Sebi has also asked the company to submit all relevant and necessary particulars sought by the watchdog within 21 days from the date of receipt of the order.
"During the financial years 2006-07 to 2010-11, SREL allotted preference shares to a total of 41,298 individuals/ investors and mobilized funds amounting to approximately Rs 25.34 crore," Sebi said.
