Continuing its clamp down on illicit money pooling schemes, Sebi today barred Torsa Agro Projects from raising funds from investors through issuance of securities and also restricted the company and its directors from dealing in capital markets.
The Securities and Exchange Board of India (Sebi) found that Torsa Agro Projects Ltd (TAPL) had mobilised more than Rs 1.5 crore from close to 600 investors through preference shares as well as 'share application money' and "prima facie" violated various norms.
The regulator observed that TAPL allotted preference shares to over 50 persons which under the rules made it a public issue of securities. Hence, it 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.
"TAPL 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 an order.
Accordingly, Sebi has asked TAPL 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 -- Arup Kumar Dey, Arun Maji, Ashish Kumar Dey, Ranjit Chandra Pathak, Pran Gobind Debnath, Nielhousanuo Angami and Dipankar Medda-- are prohibited from issuing any offer document for soliciting money from the public for the issue of securities.
"TAPL 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 TAPL 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.
"TAPL issued and allotted preference shares to a total of 589 individuals/investors and mobilized an amount of approximately Rs 1.53 crores (Rs 0.29 crore mobilised under the offer of preference shares and Rs 1.24 crore as share application money) during the financial years 2008-09, 2009-10, 2010-11 and 2011-12," Sebi said.
