During 2007-09, Prayag Infotech allegedly mobilised Rs341 crore through issuance of preference shares from a large number of people without complying with various provisions of law
Market regulator Securities and Exchange Board of India (SEBI) has barred Prayag Infotech Hi-Rise Ltd and its promoters and directors from raising funds through issuance of equity shares to the public.
The company has allegedly mobilised Rs341 crore through issuance of preference shares from a large number of people without complying with various provisions of law between 2007-09.
In an order, SEBI said Prayag Infotech, its promoters and directors -- Basudeb Bagchi, Abik Bagchi, Lakshami Kant -- "are prohibited from issuing any offer documents for soliciting money from the public for the issue of securities in any manner whatsoever either directly or indirectly till further orders".
Besides, these entities would not dispose any of the properties of the company or alienate the asset acquired through the funds from public by issuance of redeemable preference shares.
It cannot also divert any funds raised from public or kept in its bank account without prior permission of SEBI.
Further, SEBI has asked the company to produce proof of its claim that it has refunded Rs4.16 lakh to the public and also asked to cooperate with the regulator in the probe and furnish documents that are in their possession.
The market regulator had launched a preliminary probe into the matter after receiving information from registrar of companies in West Bengal alleging that Prayag had issued preference shares to more than 49 people which were in contravention to various SEBI laws.
SEBI said that as per the firm's annual report for year ending March 2011, the company has mobilised Rs341 crore.
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