Sebi asks GBC Enterprise, its directors to refund investors

Markets regulator Sebi today asked Kolkata-based GBC Enterprise (GEL) and its directors to refund the money to investors that it illegally raised by issuing redeemable preference shares (RPS).
Besides, the Securities and Exchange Board of India (Sebi) also banned the company and its five directors -- Krishnendu Das, Sugata Bal Das, Pramathes Dutta, Sujoy Nandi and Basab Dasgupta -- for four years from completion of the refund.
According to Sebi, the company raised about Rs 60.59 crore from 81,196 investors during 2012-13 and 2013-14.
Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on recognised stock exchanges, which the firm failed to do.

In an order today, Sebi asked GBC Enterprise and its directors to "refund the money collected by the company through issuance of RPS... With an interest of 15 per cent per annum compounded at half-yearly intervals, from the date when the repayments became due to the investors till the date of actual payment".
In addition, they "shall issue public notice, in all editions of two national dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact persons including names, addresses and contact details, within 15 days".
In case GBC Enterprise fails to comply, Sebi would make a reference to the state government or the local police to register a case against the company for fraud.

Besides, the Ministry of Corporate Affairs would be asked to initiate action against the company and its directors.