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Sebi bars Austral Coke from raising capital

September 02, 2009 03:34 IST
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The Securities and Exchange Board of India on Tuesday barred Austral Coke and Projects from raising any further capital on finding that the company was involved in a fraud amounting to Rs 1,047 crore.

Further, the market regulator has ordered an investigation into buying, selling or otherwise dealing in the securities of the company.

Sebi swung into action following a communication from the Income Tax Department on August 26, which pointed to serious irregularities in the company's books of accounts.

The tax department had carried out searches on Austral Coke's premises on June 23. The letter also said that bogus purchases had been claimed to have been made from 29 non-existent concerns, running into several hundred crores.

The non-existent concerns were floated by an Ajitkumar Jindal of Kolkata.

Between 2006-07 and 2008-09, Austral Coke, according to the letter, made bogus purchases and sales of worth Rs 1,047 crore. Jindal, the letter said, admitted having provided bogus bills for the purchase of raw material as well as plant and machinery to the company.

Austral Coke, which is engaged in the manufacture and sale of low ash metallurgical coke refractory in India, had raised Rs 142.3 crore through an initial public offering last year.

The Sebi order, released on Tuesday evening, said that part of the funds raised through the IPO were shown in the books as utilised towards purchase of capital goods, which were found to be bogus.

"A serious case has been made against the company for making fictitious entries in its accounts, procuring bogus bills," said the order said.

The order came ahead of Austral's board meeting, scheduled for Wednesday.

The company's board was to consider raising Rs 970 crore through private placement of shares with qualified institutional buyers.

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