Sebi bars Rising Agrotech from fund raising via securities

Market regulator Sebi has barred Rising Agrotech from raising funds from investors through issuance of securities and also prohibited the company and its directors from dealing in capital markets till further directions.
The Securities and Exchange Board of India (Sebi) found that Rising Agrotech Ltd (RAL) had raised nearly Rs 1.35 crore from 996 investors through preference shares and "prima facie" violated various norms.
The regulator observed that Rising Agrotech's issue was allotted to over 50 persons which under the rules made it a public issue of securities and hence 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 so.

"RAL is prima facie engaged in fund mobilising activity from the public, through the offer of preference shares and as a result of such activity has violated the provisions of Companies Act," Sebi said in its yesterday's order.
Accordingly, Sebi has asked RAL to "not mobilise funds from investors through the offer of preference shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly, till further directions".
Further, the company and its directors -- Siddhartha Kayal, Sushovan Roy, and Bikash Bhandary, along with its past director, Dipan Kumar Sen -- are prohibited from issuing any offer document or advertisement for soliciting money from the public for the issue of securities.

"RAL 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 share, without prior permission from the regulator as well as not to divert the funds raised from public.
While asking Rising Agrotech 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.

"RAL allotted preference shares to 996 subscribers /investors and mobilised subscription money amounting to approximately Rs 135.20 lakh during the financial years 2011-12 and 2012-13," Sebi said.