Mumbai: Cracking the whip on illegal money pooling activity, Sebi on Wednesday restrained Kolkata-based Amazan Agro Products and its directors from raising funds and also barred them from capital markets, till further orders.
According to Sebi's findings, the firm allegedly raised funds from over 1,000 investors through issuance of 'Secured Non-convertible Redeemable Debentures (NCDs)'.
Such activities were prima facie in violation of various norms, Securities and Exchange Board of India (Sebi) said in an order.
The capital market regulator noted that as the issue was made to 50 or more persons, the company was under a legal obligation to get listed on a stock exchange, among others.
Consequently, Sebi noted that steps were required "to ensure only legitimate fund raising activities are carried on by Amazan Agro Products Ltd and no investors are defrauded".
Sebi ruled that Amazan Agro "shall not mobilise any fresh funds from investors through the offer of RPS 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 as well as its past and present directors 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 order asked them not to divert or dispose off any funds raised from public at large including assets brought from such money.
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.
Sebi began probe in the case after it received certain complaints in June 2013 alleging non-payment of their invested money in NCDs issued by Amazan Agro.
