Sebi bars two companies in illicit money-pooling crackdown

To safeguard investors from schemes promising hefty returns through illicit fund-raising schemes, Sebi on Thursday barred two firms - Rahul Inn Hospitality and Eminence Infraproject -- from the capital markets. Rahul Inn Hospitality (RIHL) had illegally mobilised funds through Secured Redeemable Debentures while Eminence Infraprject (EIL) had issued Redeemable Preference Shares, Sebi said in two separate orders. RIHL and EIL, as also their past and present directors, have been 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.

EIL had offered 'Redeemable Preference Shares' to a total of 331 individuals/investors and mobilised funds amounting to Rs 39.33 lakh during 2010-2013. RIHL allotted 'Secured Redeemable Debentures' to a total of 147 individuals/investors and mobilised an amount of Rs 24.67 Lakh during 2011-2014. According to the regulator, the number of persons to whom the allotment was made, was above the limit of 49, in both the cases, and therefore they became public offers.

Since, the allotment was a public issue of securities, such securities should also have been listed on a recognised stock exchange, Sebi said, while adding that the companies have violated its public offer regulations as also the provisions of the Companies Act. Both the firms have also been directed not to dispose any of the properties or alienate or encumber any of the assets owned/acquired by them without prior permission from Sebi. The directors of the firms have also been prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities.