Sebi slaps Rs 1 crore fine on Rose Valley
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Sebi has imposed Rs 1 crore penalty on Rose Valley Real Estates and Constructions for not providing details sought by the market regulator in a case charging the company of issuing debentures illegally.
The case is related to a probe by Securities and Exchange Board of India over allegations that Rose Valley had raised money by issuing debentures without complying with the norms.
Sebi had issued summons to the company seeking details that could have helped the regulator’s Investigating Authority (IA) probe the matter.
However, as the company failed to fully comply with the summons, Sebi in an order dated March 26, has imposed “a penalty of Rs 1 crore on Rose Valley Real Estates and Constructions Ltd”.
The regulator has noted that “not submitting complete details to the summons despite having the same appears to be a deliberate action/strategy on the part of the noticee (Rose Valley) to not cooperate with the regulatory mechanism”.
The Sebi probe followed a reference from Registrar of Companies (RoC), West Bengal that the firm had repetitively issued debentures in 2001–02, 2004–05, 2005–06 and 2007–08 to more than 49 persons in each of the fiscal years without filing offer documents.
The RoC had suggested that Rose Valley had raised total of Rs 12.82 crore by issuing secured debentures to the general public without complying with the norms related to Initial Public Offer (IPO) of securities.
In order to conduct a thorough probe in the matter, Sebi had issued summons on July 14, 2011 to Rose Valley asking it to submit information such as filing of prospectus, opening and closing dates of subscription, number of applications received, among others.
However, it was observed that even though the company had replied to summons, the details submitted were partial and incomplete.
Thereafter, another letter dated November 17, 2011 was issued by the regulator asking the firm to furnish complete information as sought by the summons in July, 2011.
Sebi alleged that this time too, the company failed to submit all the required information.
According to Sebi, any non-cooperation and default by an entity is an impediment to the functioning of the regulator’s investigation process and detrimental to the interest of the investors in the securities market.
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