SEBI bans Shankalp Food and Beverages from markets

05 March, Mumbai

Market regulator, Securities and Exchange board of India (SEBI) has barred Shankalp Food and Beverages from capital markets for allegedly raising funds from investors without complying with the public issue norms.

The ban is imposed on the company and its directors till further directions from the regulator.

It was alleged that the firm was prima facie engaged in fund mobilising activity from the public through the offer of non-convertible debentures (NCDs) and as a result of the aforesaid activity has violated the aforementioned provisions of the Companies Act, 1956 (Section 56, Section 60 read with Section 2(36),Section 73) and the Debt Securities Regulations

A sum of Rs 50.11 crore was raised by the company from 106 investors.

The securities were issued by the firm to more than 49 persons, which qualified it as a public issue that requires compulsory listing on recognised stock exchanges.

It was also required to file a prospectus, among other things, which it failed to do.

The firm and its directors have been barred from issuing any offer document or advertisement for soliciting money from the public for the issue of securities.

They have been ”restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions ”

Further, the entities are directed not to dispose of any of the properties or assets acquired by that company without prior permission of the regulator as well as not to divert the funds raised from public.

The prima facie observations of the watchdog also stated that the debenture trustee of the company operated without registration from the regulator. SEBI has imposed several restrictions on Shankalp Secured Debenture Trust (represented by Amit Samanta and Jagadish Chandra Nag) till further directions. These directions ”shall take effect immediately and shall be in force until further orders”