The capital market regulator Sebi on Tuesday barred two Kolkata-based companies -- Bharatiya Real Estate Development and Swarnabhumi Developers -- from mobilising funds from issuance of securities till further orders.
In two separate orders, Securities and Exchange Board of India (Sebi) has also restricted the companies and their respective directors from dealing in the securities market. Both the companies had raised funds through issuance of preference shares to hundreds of investors.
According to Sebi, these activities were prima facie in violation of various norms. Bharatiya Real Estate had allegedly raised Rs 99 lakh from 294 investors during fiscal 2011-12 and 2012-13, while Swarnabhumi had mobilised an amount of Rs 46 lakh from 340 investors in the fiscal 2010-11 and 2011-12.
The capital market regulator noted that as the issue by companies was made to 50 or more persons, the companies were under a legal obligation to get listed on a stock exchange. Among others, it was also mandatory for the firms to bring out a prospectus with respect to the public issue.
Sebi in its interim orders noted that steps were required to be taken in the matter "to ensure that only legitimate fund raising activities are carried on" by the companies and that "no investors are defrauded".
Consequently, the regulator has directed the companies not to mobilise funds from investors through issuance of equity shares or any other securities, till further orders.
The firms as well as their directors have 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 any funds raised from public at large.
The companies 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. They are also required to submit all relevant information with Sebi within 21 days from the date of receipt of the order.
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