Sebi cautions investors against illegal money pooling schemes

Cracking the whip on illegal money pooling schemes, Sebi today cautioned investors against unlisted companies issuing securities without complying with the market norms.
The capital market regulator in a statement said that it has already taken action against 221 such companies (as on December 15) for issuance of securities to public without complying with necessary laws.
According to the norms, any offer of securities made to 50 or more persons has to be construed as a 'Public Offer'.
The regulator has also taken action against entities/ individuals who have acted as debenture trustees for debt issuance of companies without being registered with Sebi.

Some unlisted companies are luring retail investors by issuing securities, including non-convertible and convertible debentures, non-convertible and convertible preference shares, equity shares in the garb of private placement without complying with requisite provisions of the law.
Before investing in securities, the regulator advised investors to see whether offering companies have filed offer document or application with stock exchanges for listing.