In second major crackdown on entities luring investors fraudulently through SMSes, 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 March 13, 2013 to October 18, 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 Securities and Exchange Board of India (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.
While in the earlier case the investors were being lured for unauthorised investment products, the present case pertains to promoters of a listed company being involved as well with the spread of SMSes.
Besides, the Sebi probe found that the company and their promoters had violated norms related to preferential allotment of shares.
Pending detailed probe into the matter, Sebi in an interim order dated November 5 has barred SMS Techsoft, its three promoters, three independent directors, Rajesh Ranka along with 28 entities from dealing in the capital market.
Besides, the market regulator has restrained SMS Techsoft from raising additional capital through capital market, till further directions.
"The sequence of events and pattern of transactions in this case prima facie indicate that the company, its promoters/directors alongwith the Ranka Group, by falsely portraying the transactions as a genuine preferential allotment and by creating artificial volume the company, adopted