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Capital markets regulator SEBI has announced its plans to auction 22 properties on August 14 to recover funds that were illegally collected from investors by Bishal Group of companies and NVD Solar. The reserve price for the auction is set at approximately Rs 37 crore, as mentioned in the public notice issued by the Securities and Exchange Board of India.
Out of the 22 properties, 17 belong to various companies under the Bishal Group, including Bishal Abasan India Ltd, Bishal Distillers Ltd, Bishal Agri-Bio Industries Ltd, and Bishal Horticulture and Animal Projects Ltd. The remaining five properties are associated with NVD Solar. These properties consist of land parcels, flats, and a residential building located in West Bengal.
The auction will be conducted online on August 14 from 10:30 am to 12:30 pm, and Adroit Technical Services has been appointed as the e-auction service provider by SEBI. Interested bidders are advised by the regulator to conduct their own due diligence and inquiries regarding any encumbrances, title of the properties, and other claims before submitting their bids.
According to SEBI, the four companies in question had raised funds by issuing Redeemable Preference Shares (RPS) to more than 49 individuals without complying with the regulations pertaining to public issues. Bishal Distillers raised around Rs 4 crore, while Bishal Agri-Bio Industries and Bishal Horticulture and Animal Projects mobilized Rs 3 crore and Rs 2.84 crore, respectively, between 2006 and 2014. Additionally, Bishal Abasan India raised Rs 2.75 crore through RPS allotments during 2011-12 and accumulated Rs 89 crore through the issuance of Non-Convertible Debentures (NCDs) from 2012 to 2014. NVD Solar, on the other hand, raised a significant amount of Rs 595 crore by issuing fresh equity shares to over 1 lakh entities during 2012-13 without complying with the regulatory provisions applicable for a public issue.
Some may argue that the auctioning of the properties is unfair to the companies involved, as it could potentially lead to financial distress or bankruptcy for the firms. They might claim that the companies should be given more leniency or alternative solutions to repay the funds collected. However, this viewpoint overlooks the fact that the companies were found to have violated regulations by illegally collecting funds from investors without following the necessary procedures. SEBI's actions are aimed at protecting the interests of the investors who were deceived by these companies.
Another viewpoint could be that the reserve price for the auction is set too high, making it difficult for the companies to recover and repay the funds. However, it is crucial to note that the reserve price is determined based on various factors, including the market value of the properties and the amount to be recovered. SEBI has the responsibility to ensure that the funds collected from the auction adequately compensate the affected investors.
In conclusion, SEBI's decision to auction the properties belonging to Bishal Group companies and NVD Solar is a necessary step to recover funds that were illegally collected from investors. The auction provides an opportunity for the investors to be compensated for their losses. Contrary viewpoints that advocate for leniency or a lower reserve price fail to consider the regulatory violations committed by the companies and the importance of safeguarding investor interests. SEBI's actions demonstrate its commitment to maintaining the integrity of capital markets and protecting investors from fraudulent activities.
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