Acting against the illegal mobilisation of funds, regulator Sebi barred the former director of Bishal Distillers from the securities market for four years.
The Securities and Exchange Board of India (Sebi), in a probe, found that the firm had mobilised Rs 4 crore by issuing redeemable preference shares (RPS) to 238 persons without complying with the public issue norms.
The funds were mobilised in 2011-12, and former director Prabir Chowdhury held the position from 2012 to 2013, the order passed by the regulator noted.
Sebi said "though the noticee was not the director of the company during the period when the fund mobilisation by the company ... took place, however, as the company had incurred the liability to refund the money collected by it which it failed to discharge, therefore, any person who is or becomes director of such company also becomes liable for ensuring refund by the company."
While restraining Chowdhary from accessing securities market, Sebi on Thursday said that he shall be banned "for a period of four years from the date of this order or till the expiry of four years from the date of completion of refunds to investors as directed in the order dated May 16, 2016, whichever is later."