Market regulator Sebi today barred Prayag Infotech Hi—Rise, its promoters and directors from mobilising funds through issuance of securities to the public.
Securities and Exchange Board of India (Sebi) has begun a probe into the alleged Rs 341 crore raised by Prayag Infotech through issuance of preference shares from public without complying with regulatory norms, from 2007 to 2009.
On September 30, 2013, the market regulator through an interim order had barred the company, its promoters and directors -- Basudeb Bagchi, Avik Bagchi, Swapna Bagchi and Lakshami Kant -- from fund raising activities.
In its latest order, Sebi has confirmed the directions it had issued on the company and its directors last year.
"I do not find any plausible reason to vacate or modify the directions issued in the vide the interim order," Sebi whole time member Prashant Saran said in the latest order.
"...in the interest of investors and the securities market, the directions issued against the company and its promoters/directors vide the interim order needs to be continued, till the investigations in the matter is completed and a final view is taken with respect to the alleged violations in the matter," Saran added.
Accordingly, Prayag Infotech and its promoters/directors have been prohibited from mobilising funds through issue of redeemable preference shares, equity shares or any other securities, till further orders from the market regulator.
The entities have also been barred from issuing prospectus, offer document or advertisement soliciting money from public.
They have also been ordered not to dispose any of the properties of the company or alienate the asset acquired through the funds from public as well not to divert funds kept in bank accounts.
Sebi has directed the entities to furnish documents with it that may be required during the probe.
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.
As per Prayag Infotech' annual report for year ending March 2011, the company has mobilised Rs 341 crore.