Sebi restricts Midas Touch from raising money via securities

Pulling up a company for illegally raising money through issuance of securities, Sebi today barred Midas Touch Assets and Securities, its promoters and directors from mobilising public funds, with immediate effect.
The Odisha-based company as well as its promoters and directors have also been prohibited from dealing in the capital markets, till further directions from the Securities and Exchange Board of India (Sebi).
A preliminary probe by Sebi found that Midas Touch Assets had raised funds to the tune of Rs 15.52 crore till March 30, 2011, through the issuance of 1.55 crore cumulative redeemable preference shares to over 3,000 investors.

Sebi has prima facie found that such fund mobilising activity by the firm was in violation of various rules.
The regulator observed that the company had issued shares 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 had failed to do.
In an interim order today, Sebi said it was "necessary" for it as the securities market regulator to intervene and issue suitable directions.

"Further, the interest of the investors also need to be protected to ensure that public funds are not diverted and misappropriated," Sebi said.

Consequently, the watchdog has directed the company and its promoters and directors not to mobilise funds from investors through issuance of equity shares or any other securities, till further orders.
They have also 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.
Midas Touch Assets has also been ordered to provide a full inventory of all its assets, securities and properties to the market watchdog.

Going by the details in the order, Sebi, among others, also observed from a media report that the CBI had conducted raids in the premises of the company for allegedly duping hundreds of investors of Rs 50 crore in Odisha.