Cracking the whip on an illegal money pooling scheme, Sebi today barred ERIL Mutual Benefit India and its directors from raising funds through securities besides restraining them from stock markets with immediate effect.
According to Sebi's findings, the Jharkhand-based firm allegedly raised funds from over 500 investors through issue of equity shares.
Such activities were prima facie in violation of various norms, the Securities and Exchange Board of India (Sebi) said.
The capital market regulator noted that as the share issue by company was made to 50 or more persons, the company was obligated to list such securities on a stock exchange, among others.
Noting that the interest of the investors needs to be protected, Sebi in ruling today restrained ERIL Mutual Benefit and its promoters/directors -- Biplab Kumar Dey, Juthika Ghosh and Chandan Sinha Roy -- from mobilising funds through the issue of equity shares or through any other form of securities, till further directions.
They are "prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly, till further directions".
Besides banning them from securities market, Sebi has also asked the firm and its directors not to divert any funds raised from public kept in its bank accounts without prior permission of the regulator.
Sebi has directed the entities to furnish relevant documents sought by it and provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts, among others.
The regulator had received a reference on November 12, 2014 from Universal Human Rights Association, which had forwarded an undated complaint from an investor.
The complainant had stated that he had invested Rs 3.06 lakh with the company.
