Sebi bars Pune-based Shubham Karoti from raising public funds

Capital market regulator Sebi today barred Shubham Karoti Foods and its directors from mobilising money from investors and launching any new scheme.

The capital market regulator found that the company was collecting funds from common people in Silvassa through certain food schemes without due authorisation.

The Pune-based company is stated to be engaged in the business of food products including tea, groundnut, soya oil, mineral water, among others in Maharashtra.

"Protecting the interests of investors is the first and foremost mandate for Sebi and therefore steps have to be taken in the instant matter to ensure only legitimate investment activities are carried on by Shubham Karoti Foods and no investors are defrauded," the Securities and Exchange Board of India (Sebi) said in an order today.

Accordingly, Sebi has directed the company and its directors -- Somit Kishanchandra Saxena and Sudhir Nathuram Pawar "not to collect any more money from investors including under the existing schemes" and "not to launch any new schemes".

Besides, the entities have been asked not to dispose of any of the properties or alienate any of the assets of the schemes and not to divert any funds raised from public.

The company has to furnish all information regarding the schemes with details of the investors and also details of insurance policies and compensation given under the policies as part of the schemes, to Sebi.

The directions shall take effect immediately and shall be in force until further orders, Sebi said.

The regulator said that the company "is prima facie engaged in mobilising funds from the public, by floating or sponsoring or launching 'collective investment scheme...without obtaining a certificate of registration from Sebi".

Sebi had begun a probe in the matter after receiving a reference dated November 20, 2013 from the Reserve Bank of India in respect of the company.