The Securities and Exchange Board of India (Sebi) found that the firm had raised Rs 1.35 crore by issuing redeemable preference shares to 2,355 investors during 2011-12 without complying with regulatory provisions applicable for a public issue.
The regulator observed that allotment of preference shares by the firm was a public issue (made to more than 50 people), which under the rules require a compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among others, which it failed to do.
"It can be reasonably inferred that money mobilisation on the part of MPIL is potentially placing investors at risk by not following the requirements of law applicable to a public issue... I find this to be a fit case to pass interim directions against MPIL and ... Directors and promoters," he added.
Also, they have been restrained from disposing of their assets as well as diverting any funds garnered from public through the allotment of preference shares.
These directions would remain in force until further orders, Sebi noted.
Besides, they have been directed to cooperate with Sebi and furnish all information sought in connection with the issuance of preference shares.
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