SEBI directs Shine India Infra Project not to mobilise fresh funds from investors
The company was engaged in fund mobilising activity from the public through offer of RPS without complying with the relevant provisions of the Companies Act. 1956 and provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008, says a SEBI Order on Shine India Infra Project
Market regulator SEBI (Securities Exchange Board of India) passed an interim order directing Shine India Infra Project Limited (SIIPL) and its directors not to mobilise fresh funds from investors. According to the SEBI Order, SIIPL and its Directors, viz. Sajahan Midya, Nasiruddin SK and Selim Mohammed SK are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities.
Also, SIIPL and its directors, are restrained from accessing the securities market for any purpose.
The SEBI Order has also asked for a strict accounting of the funds already collected and has directed the directors not to dispose of these funds.
The company was engaged in fund mobilising activity from the public through offer of Redeemable Preference Shares (RPS) without complying with the relevant provisions of the Companies Act 1956 and provisions of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
Hence, SEBI feels that here is no other alternative but to take recourse through an interim action against SIIPL and its directors, for preventing that company from further carrying on with its fund mobilising activity under the Offer of Redeemable Preference Shares.
The SEBI Order continues with a show-cause notice to the company and its directors as follows:
“The prima facie observations contained in the Order are made on the basis of the material available on record i.e. correspondences exchanged between SEBI and SIIPL, complaints received by SEBI and information obtained from the MCA 21 Portal. In this context, SIIPL and its Directors are required to show cause as to why suitable directions/prohibitions under Sections 11(1), 11(4), 11A and 11B of the SEBI Act read with Section 73(2) of the Companies Act, 1956, including the following, should not be taken/imposed against them:
i. Directing them jointly and severally to refund money collected through the Offer of Redeemable Preference Shares along with interest, if any, promised to investors therein;
ii. Directing them not to issue prospectus or any offer document or issue advertisement
for soliciting money from the public for the issue of securities for an appropriate period;
iii. Directing them to refrain from accessing the securities market and prohibiting them from buying, selling or otherwise dealing in securities for an appropriate period.”
The SEBI Order allows a personal hearing by saying, “SIIPL and its directors, may, within 21 days from the date of receipt of this Order, file their replies, to this Order and may also indicate whether they desire to avail themselves an opportunity of personal hearing.”
Finally, the SEBI Order concludes by saying, “This Order is without prejudice to the right of SEBI to take any other action that may be initiated against SIIPL and its directors, in accordance with law.”