Cracking the whip on illegal money pooling activity, Sebi today restrained Green India Infra Projects from raising funds while also barring them from capital markets, with immediate effect.
The Odisha-based firm along with its promoters and directors has also been barred from dealing in the capital markets, till further orders.
According to Sebi probe Green India Infra allegedly raised funds from hundreds of investors through issuance of 'Secured Optionally Convertible Debentures (SOCDs).
Such activities were prima facie in violation of various norms, Securities and Exchange Board of India (Sebi) said in an order today.
The market regulator noted that as the issue by companies was made to 50 or more persons, the company was under a legal obligation to get listed on a stock exchange, among others.
Sebi said that steps were required to prevent the company and its promoters and directors "from mobilising further funds through offer and allotment of SOCDs and to safeguard the funds so mobilised, and the assets or properties acquired through such public funds".
Accordingly, Sebi ruled that Green India Infra and its promoters and directors "are restrained from mobilising funds through the issue of SOCDs 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 company and its officials have also been prohibited from the 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 them not to divert or dispose any funds raised from public at large including assets brought from such money.
They would also have to provide a full inventory of all its assets and properties as well as furnish complete and relevant information sought by Sebi in the matter by May 12.
Sebi had received a complaint stating that the companies of the 'Green India' group have collected public funds through agents in the States of Odisha, Chhatisgarh and Gujarat.
The complainant had stated that in respect of the operations of these companies in Gujarat, when the money had matured, neither the agents nor the company returned the interest or the maturity amount.
