Sebi bars Life Care Infra Tech from raising public money

Continuing its stringent action against entities raising public money illegally, Sebi today barred Life Care Infra Tech Ltd from mobilising funds from investors through issuance of securities and also restricted the company and its directors from dealing in capital markets.
The Securities and Exchange Board of India (Sebi) found that Life Care Infra Tech had mobilised close to Rs 5 crore from more than 2,600 investors through redeemable preference shares (RPS)and "prima facie" violated various norms.
The regulator observed that the company allotted preference 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.

"...Life Care Infra Tech is prima facie engaged in fund mobilising activity from the public, through issue of RPS and a result of such activity has violated the provisions of the Companies Act," Sebi said in its interim order.
Accordingly, Sebi has asked Life Care Infra Tech not to "mobilise funds from investors through the issue of RPS or through the issue of equity shares or any other securities, to the public or invite subscription, in any manner whatsoever, either directly or indirectly, till further orders".
Further, the company and its directors --Yogendra Pratap Shahi, Ashok Kumar Singh, Bhardwaj Muni Tripathi, Ramashish Singh, Harendra Kumar Upadhyay and Satyendra Rai -- are prohibited from issuing any offer document for soliciting money from the public for the issue of securities.

"The company and its 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.
While asking the company to provide a full inventory of all its assets and properties, Sebi has also asked the company to submit all relevant and necessary particulars sought by the watchdog within 21 days from the date of receipt of the order.

During 2011-12, 2012-13, Life Care Infra Tech had allotted preference shares to atleast 2,603 investors and raised Rs 4.89 crore.
In late September, Sebi had barred Life Care Real Developers from mobilising funds from investors through issuance of securities.