Sebi bans Trinamool MP K D Singh from market

The Securities and Exchange Board of India (Sebi) has banned Trinamool Congress MP Kanwar Deep Singh and his associates from participating in the market for alleged illegal fund raising by an entity called Alchemist Capital. The regulator has asked the company and people associated with it including Singh to refund over Rs 165 crore raised from investors with 15 per cent interest compounded half yearly. Sebi has said if the proof of compliance with the directions of refund were not submitted in three months' time, it would initiate criminal action against promoters and directors.

Singh, who also owns Anant Media that runs Tehelka magazine and was a director of Alchemist between 2000 and 2004. Sebi held him responsible as he was part of one of the several times Alchemist raised money from public through issue of Redeemable Preference shares (RPS) without requisite approvals. Alchemist had raised about Rs 165 crore through several such RPS issues beginning 2003.

Singh, who is better known by his initials KD, and nine others associated with Alchemist "are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner, with immediate effect. They are also restrained from associating themselves with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with Sebi," the order dated August 3 said.

"The above directions shall come into force with immediate effect and shall continue to be in force from the date of this order till the expiry of four years from the date of completion of refunds to investors."

In his replies to Sebi, the Rajya Sabha member had said that he had resigned from Alchemist in 2004 itself. "The notice has submitted that he had acted on good faith and discharged his functions with utmost diligence,"he had said.

He further said he was following professional advice and cannot be made liable for the acts of the company if Sebi reaches a conclusion that the company has violated the Companies Act and Sebi Act.

In a recent response to Sebi, Singh had submitted, "As far as the allotment on 30.08.2003 was concerned, his mere presence in the Board of the Company was not sufficient to foist vicarious liability upon him for alleged violation. It is settled law that in the absence of specific allegation or specific role ascribed to a director, he cannot be liable for the alleged violations committed by a company."

A profile on Singh's website said that he was often seen as "Mamata Banerjee’s representative in Delhi." It added "KD Singh is inspired by her sense of simplicity and her untiring struggle for the upliftment of “Maa, Maati and Maanush”. It is this honesty and the same belief in ideals rooted in one’s own identity, own soil and roots and one’s own people that led him to join the Trinamool crusade. He was elected to the Rajya Sabha, The Upper House of the Parliament in India, in 2010. He is regarded as a most respected leader who has been made a head and party in-charge of 13 Northern and North Eastern states of India for All India Trinamool Congress." Early this year, Singh had told qz.com portal that he owned 70-80 per cent of shares in Anant Media.