Mumbai: Market regulator Sebi barred Madurai Rural Development Transformation India and its group firm from raising funds from investors through issuance of securities and also restricted the companies and its directors from dealing in capital markets.
The Securities and Exchange Board of India (Sebi) found that Madurai Rural Development Transformation (MRDT) and Madurai Rural Development Benefit Fund India (MRDF) had mobilised a collective amount of over Rs 5.32 crore from over 2,500 investors through issuance of equity shares and "prima facie" violated various norms.
The regulator observed that these companies allotted equity shares to over 50 persons which under the rules made it a public issue of securities.
Hence, it would require a compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among others, which it failed to do.
According to Sebi, MRDT and MRDF alloted shares to public but did not comply with provisions of the Companies Act.
"...MRDT and MRDF are mobilising money from the public and are issuing equities to such persons in order to make them members before deposit holders and rampantly soliciting fixed deposits or recurring deposits from such members," Sebi said in its order.
Consequently, MRDT and MRDF are "restrained from mobilising funds through issue of equity shares, debentures, preference shares, or through issuance of any kind of security to the public/invite subscription, in any manner whatsoever, either directly or indirectly, till further directions".
Further, companies and and their respective promoters and directors are prohibited from issuing any offer documents for soliciting money from public.
"Companies and their respective promoters and directors are restrained 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," Sebi said.
The regulator has also asked the entities not to dispose any of the properties or assets acquired by that company through issue of preference shares, without prior permission from the regulator as well as not to divert the funds raised from public.
Sebi said that MRDT has allotted equity shares to 1,464 persons and mobilised funds to the tune of Rs 4.99 crore, while MRDF has allotted equity shares to 1,104 persons and raised Rs 33.12 lakh.
Among the barred promoters included Mohammed Yusuff Suresh Batcha, Gopalarathinam Ramarathinam, Srinivasan Srikumar, Vaudevan Balaji, Kasivishwantahn Venkataraman, Nagasubramanian Rajalakshmi, Sudhakaran Lataji, Mumtaj Begam Baba, Sithikbasha, Mohamed Yusuf and Lilun Nihar Yousuff.
Comments
0 comment