To protect investors from illicit fund raising schemes, Sebi today restricted Mount Vision Industries Ltd from mobilising money through issuance of securities, barring the firm and its directors from accessing the capital markets.
The Madhya Pradesh-based company raised funds from about 70 investors from 2012-13 to 2013-14 through the issue of non-convertible debentures (NCDs).
The Securities and Exchange Board of India (Sebi) found that these activities by the firm were in prima facie violation of various capital market norms.
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The market regulator observed that as Mount Vision had issued NCDs to over 50 persons it would be identified as a "public issue of securities" and would, among others, require a compulsory listing on a recognised stock exchange.
Accordingly in an interim order today, Sebi said that steps were required to taken in the instant matter "to ensure only legitimate fund raising activities are carried on by Mount Vision Industries Ltd and no investors are defrauded".
The regulator has directed the firm not to mobilise funds from investors through issuance of equity shares or any other securities, till further orders.
The firms and its directors 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.
Mount Vision has also been asked to provide a full inventory of all its assets and properties as well as furnish complete and relevant information sought by the regulator relating to the matter.
Besides, Sebi has also prohibited Mount Vision Debenture Trust from continuing with its present assignment as debenture trustees in respect of the Offer of NCDs of Mount Vision and also from taking up any new assignment or involvement in any new issue of debentures.
As per the regulator, the debenture trustees had failed to meet the eligibility criteria specified under the norms.
Sebi had received a letter from The Registrar of Companies, Gwalior, that Mount Vision appeared to have issued debentures to more than 50 investors.
The regulator had also received complaints from investors alleging non-payment of their invested money in debentures issued by the company.
