Sebi bars Nixcil Pharma from mobilising public money

Markets regulator Sebi today barred Nixcil Pharmaceuticals Specialities from raising funds from investors through issue of securities and prohibited the firm and its directors from dealing in capital markets till further directions.
The move follows as the Securities and Exchange Board of India (Sebi) received a complaint against Nixcil Pharma, alleging non-receipt of principal and interest amount invested in a monthly income scheme of the company.
Sebi found that the company had allotted redeemable cumulative preference shares (RCPS) worth over 127 crore to over 1.51 lakh people during 2005-06 to 2011-12.
The company through such activity had allegedly violated various norms, Sebi said.

The regulator observed that allotment of shares by Nixcil Pharma was 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 it failed to do so.
In an interim order Sebi said: "Nixcil Pharm is prima facie engaged in fund mobilising activity from the public, through the offer of RCPS," and as a result of such activity has violated the provisions of the Companies Act.

Accordingly, Sebi said: "Nixcil Pharma shall forthwith cease to mobilise any fresh funds from investors through the offer of RCPS or through issuance of any other securities, to the public/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions."

Further, the firm and its 20 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 regulator also asked the entities not to dispose any of the properties or assets acquired by that company without prior permission from the regulator as well as not to divert the funds raised from the public.
These directions "shall take effect immediately and shall be in force until further orders.