Sebi asks two companies to refund investors money

Cracking a whip on illegal money pooling schemes, markets regulator Sebi today asked two companies -- Multi Purpose Bios India and Prayas Projects India -- and their directors to refund money collected from the public.
According to the Securities and Exchange Board of India (Sebi), Multi Purpose Bios collected Rs 5.97 crore from more than 1,460 people through redeemable preference shares between financial year 2007-08 and 2011-12.
While, Prayas Projects raised Rs 86.32 lakh from 154 investors through issue of non-convertible debentures during 2011-12 and 2012-13.
The refund has to be made along "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," Sebi said in two similar worded orders.

According to the market regulator, the funds raised by the two Kolkata-based companies through the issues amounted to a public offer as it was made to more than 49 persons and as a result required mandatory listing on the stock exchanges.
The regulator has directed the companies and its directors to "jointly and severally, shall forthwith refund the money collected by the company through the issuance of redeemable preference shares".

Besides, the companies and its promoters and directors have been barred from the securities markets for four years and the ban will continue till the completion of refund to investors.

In case Multi Purpose Bios India and Prayas Projects India fail to comply with these directives, Sebi would make a reference to state government or local police to register a case against the company for fraud.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.
The regulator said that the order will come into force with immediate effect.
In a separate case, Sebi today asked Adorable Agrotech director Prashanta Ghosh to jointly and severally along with the company and others to refund the money collected by the firm through the issuance of redeemable preference shares.

Sebi had earlier discharged him from the proceedings against the company on noticing that he had resigned prior to the allotment of RPS.
However, the regulator noticed that the company had additionally allotted RPS during Ghosh's tenure as director to 169 persons and raised an amount of Rs 20.30 lakhs.