Ruchika M. Khanna
Tribune News Service
Chandigarh, August 6
The Alchemist Group, owned by Rajya Sabha MP KD Singh, is in news for the wrong reasons once again. Market regulator SEBI has banned Singh and his associates from participating in the market after they were found guilty of raising funds illegally.
Alchemist Capital is the second company of the Rs 10,000-crore Alchemist Group that has been barred by the SEBI from participating in the market. Two years ago, Alchemist Infra Realty had been barred by SEBI from raising money from investors.
It is learnt that in December last year the SEBI had initially barred Alchemist Capital from raising funds from investors and restrained the company, its present and past directors, including KD Singh, from the securities market.
The company, which was originally based out of Chandigarh, is alleged to have collected crores of rupees from investors by issuing redeemable preference shares. While barring the company from collecting money from investors last year, the SEBI had accused the company of violating various provisions of the Companies Act.
Since this issue was made to more than 50 people, under the rules laid by market regulator, it was akin to being a public issue of debt secutrities, making its listing on a stock exchange mandatory. According to the SEBI, Alchemist Capital issued over 16.52 crore RPS of Rs 10 each amounting to Rs 165.21 crore up to June 30, 2006. In its order now, the SEBI has asked the company to refund Rs 165 crore with 15% interest compounded half-yearly.
Though the phones in the listed head office of Alchemist Group in Chandigarh are no longer in use, former employees of the group, have told The Tribune that the group had interests in hospitality industry, healthcare, realty business, food processing and food retail and media in Punjab and the tricity. However, it has wound up its hospitality business here and the realty business has gone slow. Most of the top people in the management have shifted to Delhi.