Description

SEBI order against Sarvoday Agro Power Limited for illegal public fundraising through NCDs without regulatory compliance.

Summary

SEBI has issued an order under sections 11(1), 11(4), 11A and 11B(1) of the SEBI Act, 1992 against Sarvoday Agro Power Limited (SAPL) and associated entities for illegal public fundraising. The company raised ₹4,67,57,500 from 3,622 investors through 4,67,575 Secured Non-Convertible Redeemable Debentures (NCDs) during 2010-2012 without complying with regulatory requirements.

Key Points

  • SAPL is an unlisted public company incorporated on July 2, 2007 (CIN: U45400WB2007PLC116883)
  • Company illegally raised funds from public through two series of NCDs between June 2010 to October 2012
  • Total amount raised: ₹4,67,57,500 from 3,622 allottees through 4,67,575 NCDs
  • Violations of Companies Act 1956, SEBI Act 1992, and SEBI (Issue and Listing of Debt Securities) Regulations 2008
  • 20 entities named as noticees including company directors and debenture trustees
  • Show Cause Notice issued on June 24, 2024

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action for existing violations.

Compliance Requirements

  • Companies must comply with SEBI regulations before making public issues of debt securities
  • Proper debenture trustee appointment and compliance with DT Regulations required
  • Public fundraising must follow prescribed disclosure and approval processes

Important Dates

  • Fundraising period: June 25, 2010 to March 31, 2012 and May 15, 2012 to October 31, 2012
  • MCA reference received: June 24, 2022
  • MCA inspection report: September 23, 2022
  • Show Cause Notice issued: June 24, 2024

Impact Assessment

This enforcement action demonstrates SEBI’s continued focus on curbing illegal fundraising activities. The case involves significant investor funds and highlights risks in unregulated debt securities offerings. The action reinforces the importance of regulatory compliance for public fundraising activities and serves as a deterrent for similar violations.

Impact Justification

Regulatory enforcement action against unlisted company for fundraising violations