Sebi asks United Cosmetics refund investors' money

Markets regulator Sebi today directed United Cosmetics Manufacturing and its directors to refund investors' money, which it had raised illegally by issuing securities, within three months.
Besides, the firm and its directors are also barred from the capital market for four years.
According to Sebi, the company had mobilised Rs 3.84 crore by issuing Redeemable Preference Shares (RPS) to more than 2,955 individuals during 2006-07, 2008-09, 2009-2010 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. It was also required to file a prospectus, among other things, which it failed to do.

In an order, the regulator said the company and its directors "shall within a period of three months from the date of this order, jointly and severally refund the money collected through the issue of redeemable preference shares to the allottees with interest at the rate of 15 per cent per annum from the date of receipt of money till the date of such refund".
The firm and its directors have been restrained and prohibited from buying, selling or otherwise dealing in the securities markets for four years and the ban will continue till the completion of refunds to investors.

The Securities and Exchange Board of India (Sebi), in an order in November 2015, had barred United Cosmetics Manufacturing and its directors from raising fresh funds from the public.