Sai Prasad Corporation was recently barred from raising capital by Sebi, a major setback for the company. This decision was made after a thorough investigation.
Sebi found that Sai Prasad Corporation had failed to comply with the necessary regulations, which is why they were barred from raising capital. This is a serious consequence for any company.
The company's failure to comply with regulations has significant implications for its future operations. It may struggle to attract investors and grow its business.
As a result of this decision, Sai Prasad Corporation will need to take steps to rectify the situation and regain the trust of investors and regulatory bodies.
Sebi Bars and Directors' Capital Market Exit over 4 Years
Sebi has ordered Sai Prasad Corporation Ltd to refund investors' money worth Rs615.47 crore.
The company and its directors, Balasaheb K Bhapkar, Shashank B Bhapkar, and Vandana B Bhapkar, have been barred from the capital market for four years.
Sebi found that the company was running a collective investment scheme (CIS) without obtaining its approval.
The CIS was allegedly being run in the name of its 'joint venture participation business for the development of land'.
SPCL mobilized Rs137.12 crore from investors during 2012-2013 and Rs478.35 crore in financial year 2013-14.
The directors and the company have been ordered to wind up the scheme and repay the amount collected along with promised returns.
Sebi directed the entities to refund the money within 3 months of the order and then submit a winding up and repayment report within 15 days.
They have also been barred from selling any assets of the company, except for the purpose of making refunds to its investors.
Holding and Implications
Sai Prasad Corporation has been ordered to refund investors ₹615.47 crore raised through collective investment schemes within three months.
The company's directors, Balasaheb K Bhapkar, Shashank B Bhapkar, and Vandana B Bhapkar, have been banned from accessing the capital markets for four years.
The directors have also been restrained from selling assets of SPC to repay investors, and must provide full details of their assets and properties, including information on bank accounts, demat accounts and holdings of shares.
If the directors do not comply with the directions, SEBI said police complaints and civil/ criminal cases would be filed against the company and its directors, and the Ministry of Corporate Affairs will be moved to initiate the process of winding up of the company.
Here are the directions issued by SEBI:
- SPCL and its directors are restrained from collecting money from investors or launching/carrying out any collective investment schemes.
- They are restrained from accessing the securities market and prohibited from buying, selling, or dealing in securities for four years.
- They must wind up existing schemes and refund investors with returns due within three months and submit a winding-up report to SEBI.
- They are prohibited from alienating or disposing of company assets except for making refunds to investors.
- They must provide a full inventory of assets, properties, bank accounts, and securities holdings.
Failure to comply with these directions will result in extended restraint from the securities market, references to law enforcement for criminal proceedings, winding up of the company by the Ministry of Corporate Affairs, and attachment and recovery proceedings under SEBI Act.
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