SEBI to Auction Properties Worth Rs 15.47 Crore from Bishal Group on December 10
The Securities and Exchange Board of India (SEBI) has announced plans to auction seven properties belonging to the Bishal Group of Companies on December 10, aiming to recover funds that the company allegedly mobilized illegally from investors. With a reserve price set at approximately Rs 15.47 crore, the auction will feature various properties, including flats, land parcels, and buildings located in West Bengal, according to SEBI's public notice.
The Bishal Group, which includes Bishal Abasan India Ltd, Bishal Distillers Ltd, Bishal Agri-Bio Industries Ltd, and Bishal Horticulture and Animal Projects Ltd, is under scrutiny for raising funds by issuing Redeemable Preference Shares (RPS) to more than 49 investors without following the necessary public issuance guidelines. SEBI's regulations mandate that companies comply with public issue norms when soliciting funds from a larger audience, ensuring transparency and investor protection.
However, between 2006 and 2014, Bishal Group companies reportedly bypassed these regulations by privately issuing RPS to a large number of investors. For instance, Bishal Distillers raised Rs 4 crore, while Bishal Agri-Bio Industries and Bishal Horticulture and Animal Projects garnered Rs 3 crore and Rs 2.84 crore, respectively. Additionally, Bishal Abasan India raised Rs 2.75 crore through RPS during 2011-12, along with Rs 89 crore via non-convertible debentures issued between 2012 and 2014.
This auction reflects SEBI's commitment to investor protection and regulatory enforcement. SEBI plays a crucial role in safeguarding capital markets in India, and its actions in cases like that of the Bishal Group underscore the importance of compliance. By auctioning off properties of companies that violate market regulations, SEBI seeks not only to recover funds for impacted investors but also to send a clear message to other market participants about the importance of adhering to public issuance norms.
Scheduled to take place on December 10 from 11 am to 1 pm, SEBI has appointed Adroit Technical Services to assist in facilitating the auction process. SEBI has advised potential bidders to conduct independent due diligence regarding the titles, encumbrances, and any claims associated with the properties before submitting their bids, emphasizing the importance of thorough verification to avoid future complications.
The case also highlights the risks investors face when companies disregard regulatory frameworks. SEBI mandates that companies wishing to mobilize funds from the public should comply with public issue norms, which protect investors by providing critical information about the company’s financial health, ownership, and operations. This compliance enables informed investment decisions, crucial for market integrity. In this instance, SEBI’s findings suggest that Bishal Group misused the private placement route, effectively sidelining the regulatory requirements designed to protect investors from undue risk.
Investor vigilance remains essential, as SEBI frequently encourages the public to verify the credentials of firms before making investments. SEBI’s actions in auctioning properties demonstrate the regulator's proactive approach to recovering funds for affected investors, helping mitigate the impact of the Bishal Group’s alleged non-compliance. This property auction serves as a reminder to companies to adhere to regulatory requirements and reinforces SEBI’s ongoing commitment to protecting investors and maintaining market stability in India's capital markets.
