A company promoted by Bharatiya Janata Party (BJP) leader and Maharashtra minister for cooperation Subhash Deshmukh and his family has come under the scanner of the securities market regulator for illegal issuance of shares to farmers in Solapur district.

In an interim order passed on 1 August, the Securities and Exchange Board of India’s (Sebi’s) whole-time member S. Raman asked Lokmangal Agro Industries Ltd, an unlisted company, to refund with interest ₹ 74.82 crore to 4,751 investors.

The company was given 21 days from receipt of the order to respond.

When contacted, Deshmukh, a Bharatiya Janata Party legislator from Solapur North, confirmed receiving the interim order and said that the company would reply within the stipulated time.

The market regulator’s order cites the Supreme Court ruling in the Sahara case wherein it had ruled that under Section 73 of the Companies Act, 1956, it is obligatory for every company that intends to offer shares or debentures to the public to apply on a recognized stock exchange for listing of its securities once it has invited subscription from over 49 investors.

Sebi’s scrutiny of Lokmangal Agro’s documents registered with the registrar of companies (RoC) revealed that the company had violated this section.

The capital markets regulator also held Lokmangal Agro guilty of violating Section 60 of the Act under which it is mandatory for a company to register a prospectus with the registrar of companies before making a public offer.

The regulator restrained Lokmangal Agro, its directors, and promoters from accessing the securities market and buying, selling, or dealing in securities directly or indirectly.

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