Kolkata, 16 August
Continuing with its clampdown on illegal fund raising activities, the Securities and Exchange Board of India (Sebi) has ordered Kolkata Weir Industries Limited (KWIL) and its directors/promoters not to collect any more money from investors through issuance of securities in any manner whatsoever with immediate effect. Sebi said that the order shall remain in force until further notice.
This order shall also be treated as a show-cause notice to KWIL and its directors/promoters, who may show cause as to why appropriate actions under the SEBI Act should not be taken against them for non-compliance with the provisions of the Companies Act including Sections 56, 60 and 73.
KWIL and its directors/promoters shall, within 15 days from the date of receipt of this order, file their reply, if any, the Sebi said adding that this order is without prejudice to the right of Sebi to take any other action that may be initiated against KWIL and its directors/promoters ~ Mr Sahajahan Khan, Mr Samsul Alam Khan, Mr Ram Krishna Mondal, Mr Prabir Haldar, Mr Ratan Kumar, Mr Ajay Kumar Srivastab, Mr Selim Laskar, Mr Lukaman Ansari, Mr Chandan Chowdhury, Mr Sahajamal Khan and Mr Lakshmi Kanta Gayen ~ in accordance with law.
Sebi had been receiving complaints from investors that KWIL, an unlisted company, was mobilising funds illegally. When the company did not provide the detailed information to Sebi, the market regulator approached the Registrar of Companies and observed that while the ‘offer of redeemable preference shares’ was said to be made on a private placement basis "yet, through the same offer, KWIL had approached 1,05,809 investors and mobilised funds amounting to Rs 47.90 crore."
“KWIL is prima facie engaged in fund mobilising activity from the public, through the ‘offer of redeemable preference shares,’ which is a public issue made to 50 persons or more,” Sebi said in the order.
The market watchdog has also ordered the company not to dispose of any of the properties or alienate any of the assets owned/acquired by KWIL without prior permission from Sebi. The company has also been asked not to divert any funds raised from the public at large which are kept in bank account(s) and/or in the custody of KWIL.
Sebi said KWIL and its directors/promoters shall, within 15 days from the date of receipt of this order, file their reply, if any.
They may also indicate, in such reply, whether they wish to avail an opportunity of personal hearing in the matter.