Markets regulator SEBI has barred Trinity Tradelink Ltd, its senior officials and promoters from accessing securities market for three years for allotting equity shares in violation of public issue norms.

During a probe, SEBI found that Trinity Tradelink, which was an unlisted company, merged with a listed firm Omnitech Petroleum Ltd. The name of Omnitech was later changed to Trinity Tradelink Ltd. Prior to the amalgamation, the erstwhile Trinity had engaged in fund mobilising activity from public, through offer of equity shares.

It had allotted shares aggregating up to nearly ₹26 crore on 23 instances between December 2011 and March 2012 to a total of around 978 allottees. The allotment of equity shares by the erstwhile Trinity is deemed to be a public issue and the firm was mandated to comply with public issue norms prescribed under the Companies Act, 1956. However, it failed to do so, SEBI noted.

The erstwhile Trinity was never listed on the stock exchange, and amalgamated itself with a listed entity, Omnitech. By virtue of the same, the applicants in the deemed public issue of erstwhile Trinity became shareholders in Omnitech and these shares got listed on the stock exchange, SEBI said.

Provisions of the Companies Act “do not provide for such a mechanism, wherein the body corporate that has issued securities can merge itself with a listed entity and then list the allotted shares. The intent of the Noticees in entering into a scheme of arrangement was to circumvent the process envisaged under Section 73 and to avoid the disclosures required to be made when filing a prospectus and applying to the stock exchanges for listing permission,” it added.

It further noted that in view of the scheme of arrangement, the liability of the erstwhile Trinity stands transferred to Omnitech, which is presently known as Trinity Tradelink, along with every director of the erstwhile Trinity, who is an officer in default.

Accordingly, Sebi barred Trinity Tradelink Ltd, its senior officials -- Vikrant Kayan, Sukumar Das, Sharad Jhunjhunwala, Shaleni Kayan, and promoters -- Dunhil Healthcare, Devansh Kayan Beneficiary Trust and Tanvi Kayan Privilege Trust -- from the securities markets for three years.

Besides, Vikrant Kayan, Sukumar Das, Sharad Jhunjhunwala and Shaleni Kayan have also been restrained from associating themselves with any listed public company. As per the order, Sebi shall initiate adjudication proceedings against Trinity Tradelink Ltd, its officials -- Vikrant Kayan, Sukumar Das and Sharad Jhunjhunwala, who were directors at the time of public norms violation.

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