Sebi bars Q&B Retail, its directors from the capital markets

Capital markets regulator Sebi today barred Q&B Retail Ltd (QBRL) and its nine directors for violating public issue norms.
According to the Securities and Exchange Board of India (Sebi), the company, earlier known as Basil Express Ltd raised more than Rs 10 crore from at least 7,545 investors by issuing Redeemable Preference Shares (RPS).
The regulator found that as the firm had issued shares to over 50 persons, the rules made it a public issue of securities requiring a compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among others, which it failed to do.

"QBRL is prima facie engaged in fund mobilizing activity from the public, through the offer of redeemable preference shares" and as a result has violated the provisions of the Companies Act, Sebi said in an interim order.
Accordingly, the regulator restrained QBRL and its directors -- Arvind Tiwari, Pashupati Nath Dixit, Rajesh Kumar Sharma, Ramendra Prasad Sharma, Kishan Pal Singh, Chhotelal Shukla, Vishwa Bandhu Vasishtha, Deena Nath Maurya and Mukesh Kumar Khare -- from the securities market.
It has also been asked to provide a full inventory of all its assets and properties as well as not to dispose of any of the properties or alienate or encumber any of the assets owned by the company through the issue of RPS, without prior permission from Sebi.

The public announcement will contain all material

information of such exit opportunity to its shareholders disclosing the name and address of the company, including exit price offered by the promoter with justification, and not contain any false or misleading statement.
The announcement will contain a declaration about the liability of the promoter to acquire shares of shareholders who have not offered their shares under the exit offer up to one year from the completion of offer at the same price determined by the valuer.
The exit offer will remain open for a minimum five working days during which the public shareholders will tender their shares. The promoter will open an escrow account in favour of independent valuer/designated stock exchange and deposit therein the total estimated amount of consideration on the basis of exit price and the number of outstanding public shareholders.

The escrow account will consist of either cash deposited with a scheduled commercial bank or a bank guarantee, or a combination of both. The amount in the escrow account will not be released to the promoter unless all the payments made in respect of shares tendered for the aforesaid period of one year. The promoter shall make payment of consideration in 15 working days from the date of completion of offer.
"The promoter shall certify to the satisfaction of designated stock exchange that appropriate procedure has been followed for providing exit to shareholders of such companies. Subsequently, the designated stock exchanges upon satisfaction shall remove the company from the dissemination board," Sebi said.

The exclusively listed companies that have 100 per cent promoter holding will be removed from the dissemination board on obtaining a compliance certification from any independent professional with regard to the holding of shares of these companies and submit to the designated stock exchanges.
The names of the companies providing exit opportunity to its shareholders and their promoters will be displayed in a separate section on the website of the designated stock exchange.