Sebi bans Swasata Cement, 8 directors from markets

Regulator Sebi has banned Swasata Cement and its eight present and former directors from securities market for at least four years in a matter related to illegal fund raising from investors.
The present directors of the firm are Prasanta Chatterjee, Joydeb Biswas, Manas Kumar Dan, Jeba Parween and Renu Singh, while the former ones are Satya Ranjan Chaudhari, Swapna Chaudhuri and Chandrani Dan.
According to a Sebi order dated February 1, Swasata Cement Ltd (SCL) had issued and allotted secured redeemable non-convertible debentures (NCDs) to at least 11,013 investors during the financial years 2008-09 and 2009-10 and raised around Rs 6.63 crore.

Since the securities were issued to more than 50 people, the offer of NCDs qualified as a public issue and required their compulsory listing on a recognised stock exchange. However, SCL did not comply with the provision.
Among other requirements, the firm was required to register a prospectus with the Registrar of Companies (RoC) under the Companies Act, which it failed to do.
Apart from being banned from the securities market for at least four years, the eight directors have also been restrained from associating themselves with any listed public company for the same duration.

SCL and five of the eight directors have also been directed to refund the money collected by the company with an annual interest of 15 per cent to the investors.

Even though Prasanta Chatterjee, Joydeb Biswas, Manas Kumar Dan were appointed as directors only after the period of issuance of NCDs, Sebi said since the three are on the board they were obligated to ensure refund of investors' money.
Since the three failed to discharge the liability of ensuring refund, the Securities and Exchange Board of India (Sebi) has barred them from the securities market.