Clamping down on illegal money pooling activities, SEBI has barred 20 former directors of 10 companies from the capital markets “till further directions”.
The Securities and Exchange Board of India (SEBI) ‘prima facie’ found that these past directors had illegally mobilised funds from the public through the issue of securities.
The money was raised through different tools such as redeemable preference shares (RPS), non-convertible redeemable debentures (NCDs), secured redeemable debentures (SRD), and preference shares.
Since the shares were issued to more than 50 people in each case, it qualified as a public issue and requires filing of prospectus.
As per the regulation, every director of a company is responsible for the issuance of the prospectus.
In separate orders, the markets regulator said these 20 former directors were engaged in fund mobilising activity from the public, in their capacity as a director of 10 companies, through the offer of securities and as a result of such activity and has violated the provisions of the Companies Act and the SEBI Act.
SEBI has barred Sunplant Forgings’s past director Ameet Singh, former director of Sunplant Constructions —Yoganand Prasad, Ameet Singh and Girija Shankar Kumar, Sun-Plant Business’ past directors —Girija Shankar Kumar and Awdhesh Kumar Singh.
Apart from these three companies, SEBI has restrained former directors of Mangalam Agro Products, Magnox Infraprojects, MBK Business Development (India), Falkon Industries India, Rising Agrotech, Ravi Kiran Realty India and Bharat Krishi Samridhi Industries.
The markets watchdog has restrained these past directors 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.”
Further, they have been 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 orders.”
Besides, SEBI has directed these former directors to provide a full inventory of all their assets and properties.
These companies and their directors are already facing the heat from SEBI.
