The company was engaged in fund mobilising activity through issue of equity shares to public without complying with the relevant provisions of the Companies Act, 1956, provisions of SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
SEBI passed an Order on 17 March 2015 to bar Astha Green Energy Ventures India Limited and its promoters/directors viz., Keshav Reddy Mereddy, Arjun Reddy Mereddy, Jayanth Reddy Mereddy, Kunduru Raghuveer, K Jayaveer, N Ram Bhupal Reddy and N Jayapal Reddy from mobilising funds through the issue of equity shares or through any other form of securities, to the public or invite subscription. The company and its promoters/directors are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities.
The company was engaged in fund mobilizing activity through issue of equity shares to public without complying with the relevant provisions of the Companies Act, 1956, provisions of SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
SEBI had received a reference from the Police Department, Government of Andhra Pradesh forwarding a complaint, against Astha Green Energy Ventures India Limited (earlier known as JKAR Energy Ventures Limited). The complaint alleged that Astha had issued equity shares in contravention to the relevant statutory requirements.
SEBI started an investigation and actually found that the company was indulging in public issue of equity without following proper procedure. The SEBI Order makes it clear that all mobilisation of funds from fifty or more investors should be classified as a public issue requiring the company to make an application to list its securities. “In view of the foregoing, it could be observed that the aforesaid issues of equity shares made by Astha were deemed public issues,” inferred the SEBI Order.
The restraining orders of the SEBI Order are justified as follows: “In view of the above alleged violations committed by Astha in raising money from the public through the issue of equity shares, it becomes necessary for SEBI, as the regulator for the securities market, to intervene and issue suitable directions including restraining the Company from carrying on activities in contravention of the law. Further, the interests of the investors also need to be protected to ensure that public funds are not diverted and misappropriated.”
Finally, the SEBI Order also has a point on money already collected by Astha. The Order says, “Astha Green Energy Ventures India Limited, its promoters and directors are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/ securities, if held in physical form.” SEBI has thus, started the process of refunding the money already collected by Astha to the investors.