Sebi bans 2 firms, directors from securities market

Markets regulator Sebi today barred two firms -- Siyaram Development & Construction and Swasata Steel Industries -- as well as their directors from raising money from investors through issuance of securities in a matter relating to violation of public issue norms.
Securities and Exchange Board of India found that Swasata Steel alloted Non-Convertible Debentures (NCDs) to 795 people and mobilsed over Rs 12 crore, while Siyaram raked in at least Rs 6 lakh from by issuing secured redeemable debentures (SRDs) to at least 63 allottees.
The company, through such activities, violated various norms, Sebi said.
The regulator observed that allotment of debentures by the firms were a public issue, which under the rules require a compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among others, which they failed to do.

Accordingly, Sebi through two separate interim orders have restrained the companies and their respective directors from mobilising any fresh "funds from investors through the offer of NCDs/ SRDs 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".
Further, the firms and their directors have been barred from issuing any offer document or advertisement for soliciting money from the public for the issue of securities.

They have been restrained from accessing the securities markets, Sebi said.
The capital market watchdog also asked the entities not to dispose any of the properties or assets without prior permission from the regulator as well as not to divert the funds raised from the public.

This order "shall take effect immediately and continue to be in force till further directions".