Sebi restricts Adorable Agrotech from mobilising funds

Sebi today prohibited Kolkata-based Adorable Agrotech from mobilising funds through issuance of securities with immediate effect.
An initial probe by capital market regulator found that Adorable Agrotech Ltd (AAL) allegedly mobilised funds through issue of 'Redeemable Preference Shares'.
According to Securities and Exchange Board of India (Sebi), the company had violated various norms related to securities market through such fund raising activities.
The market regulator observed that the company had issued the securities 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.

Among others, the firm was also required to file a prospectus, which it failed to do.
In an interim order today, Sebi said that steps were required to be taken "to ensure that only legitimate fund raising activities are carried on by AAL and no investors are defrauded".

Consequently, the watchdog has directed the company not to mobilise funds from investors through issuance of equity shares or any other securities, till further orders.
The firm and its four directors including a past director have been prohibited from the capital markets as well as from issuing offer documents, advertisement for soliciting money from the public for the issue of securities, till further directions.

Further, the Sebi order has asked the company and its directors not to divert any funds raised from public at large.
AAL has also been asked to provide a full inventory of all its assets and properties as well as furnish complete and relevant details sought by Sebi relating to the matter.
The company and its directors are required to submit all relevant information with Sebi within 21 days from the date of receipt of the order.
Sebi had received a complaint on December 24, 2013 by some investors, against AAL alleging that company was mobilising funds from the public through issue of 'Redeemable Preference Shares'.