37 entities barred from capital market after SMS spurt probe
7 Nov 2013 6:11 AM IST
In second major crackdown on entities luring investors fraudulently through SMSes, the Securities and Exchange Board of India (Sebi) has barred 37 entities, including a listed company and its promoters and directors, from capital markets.
The market regulator had initiated an investigation after it noticed an outburst of short text messages (SMS) during February-March 2013, luring gullible investors to buy the scrip of SMS Techsoft (India) Ltd.
Sebi has also asked these entities to keep in an escrow account an amout totalling over Rs 6 crore ‘that they have earned as ill-gotten profit during the period 13 March, 2013 to 18 October, 2013 and any other amount that they have realised as sale proceeds of the shares allotted in the preferential allotment by the company’.
The preliminary probe by Sebi has found that the promoters and directors of SMS Techsoft were acting in concert with one Rajesh Ranka by issuing new equity shares of the company through preferential allotment to certain connected entities without receipt of full consideration. These entities had offloaded the shares through a fraudulent manner.
Sebi in August had passed an order in a separate case where action was taken against persons luring investors through SMSes with promise of daily returns of up to Rs 75,000 through mobile messages.
The market regulator had initiated an investigation after it noticed an outburst of short text messages (SMS) during February-March 2013, luring gullible investors to buy the scrip of SMS Techsoft (India) Ltd.
Sebi has also asked these entities to keep in an escrow account an amout totalling over Rs 6 crore ‘that they have earned as ill-gotten profit during the period 13 March, 2013 to 18 October, 2013 and any other amount that they have realised as sale proceeds of the shares allotted in the preferential allotment by the company’.
The preliminary probe by Sebi has found that the promoters and directors of SMS Techsoft were acting in concert with one Rajesh Ranka by issuing new equity shares of the company through preferential allotment to certain connected entities without receipt of full consideration. These entities had offloaded the shares through a fraudulent manner.
Sebi in August had passed an order in a separate case where action was taken against persons luring investors through SMSes with promise of daily returns of up to Rs 75,000 through mobile messages.
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