Sebi’s fresh warning to cos, directors against fraudulent NCD-NPS issues
The warning comes amid a continuing crackdown by Sebi against various unlisted companies that have lured retail investors by issuing securities such as non-convertible debentures/non-convertible preference shares in the garb of private placement. The regulator said that it already taken action against 112 such entities, since January 2013 for issuance of non convertible preference shares (NPS) or non convertible debentures (NCDs) to public without complying with the Sebi regulations.
Such securities were issued without complying with the prescribed Companies Act and Sebi norms. “Companies are cautioned not to issue securities to public without complying with provisions of law... failing which Sebi will be constraint to take stringent action against such companies and their directors. “Investors are also cautioned not to subscribe to such issues.”
“Investors are advised to see whether any such entity has filed offer document or filed application with Stock Exchange for listing,” Sebi said in a public notice. So far in 2015 itself, Sebi has passed orders against more than 50 companies in such cases. The companies against which action has been taken in the last few years include Polaris Agro Industries, Mangalam Agro Products Ltd, Mega Mould India Ltd, Alchemist Holdings Ltd and PAFL Industries Ltd.
As per the Companies Act, 1956 any offer of securities made to 50 or more persons has to be construed as a “Public Offer”. The new Companies Act also mentioned that “Private Placement” has to be made only to such persons whose names are recorded by the company prior to the
invitation to subscribe. It further says that in case of private placements, the company shall not release any public advertisements or utilise any mediato inform the public at large about such an offer.
NSE’s southern cash market volumes soar
The National Stock Exchange (NSE) on Thursday said its daily retail volumes surged 77 per cent to Rs 8,795 crore last fiscal, with a strong show from the southern region.
The retail volume was at Rs 4,962 crore in 2013-14. The daily average gross turnover in cash market in Kerala has increased to Rs 466 crore in 2014-15 as against 324 crore in the previous financial year, registering a growth in volumes by 44 per cent.
Clients have grown by 16 per cent in FY 14-15 compared to the previous financial year, NSE said in a statement here.