Mumbai: Pulling the plug on illegal mobilisation of funds by Sunplant Forgings, market regulator Sebi has barred the company and its directors from raising money by issuing securities.
Citing the Sahara case and the Supreme Court's order in this regard, the Securities and Exchange Board of India (Sebi) said that Sunplant Forgings Ltd (SFL)raised more than Rs 17 crore from 6,662 investors amounted to a public offer and not a private placement.
In its yesterday's order, Sebi said "...SFL is prima facie engaged in fund mobilising activity from the public, through the issue of RPS (Redeemable Preference Shares), which is a public issue made to 50 persons or more.
Sebi has been clamping down on entities that have illegally raised money from the public. In 2012, the Supreme Court asked Sahara India Real Estate Corp Ltd and Sahara Housing Investment Corp Ltd to refund through Sebi more than Rs 24,000 crore to over 3 crore bondholders, with interest.
The regulator has directed the company and its directors not to mobilize funds from investors through the issue of RPS or any other securities to the public.
Sebi also directed to provide a full inventory of all assets and properties of the company. The company has been barred from disposing of any of its properties without prior permission from Sebi. Besides, it cannot divert any funds raised from the public which are kept in bank account(s) and/or in the custody of SFL.
The directions would take effect immediately and would be in force until further orders.
The regulator received a communication from Corporate Affairs Ministry wherein it was stated that certain companies including SFL were collecting monies from the public through issue of debentures and redeemable preference shares allegedly allegedly in violation of the Companies Act.
Sebi noted that although the issue of redeemable preference shares is stated to have been made on a private placement basis, "yet, through the same offer, SFL circulated 11,904 application forms inviting subscription towards the issue of redeemable preference shares".
"Out of which it admittedly allotted redeemable preference shares to 6,662 investors and mobilised funds amounting to approximately Rs 17.51 crore," Sebi noted. Since the offer was made beyond the limit of 49 persons as prescribed under Companies Act, the offer qualified as a public issue.
The directors of the company against whom the order has been issued are Abhinandan Kumar Singh, Sumanta Sinha and Neeraj Pathak.
In a separate order, Sebi today imposed a penalty of Rs 1 lakh on Rakan Steels for not obtaining registration with market regulator's online complaint redressal system, SCORES.
Sebi said that the company obtained SCORES registration only after receiving show cause notice by the regulator and not within the time stipulated.
