Markets regulator Sebi today banned Pincon Group company LRN Finance and its 12 present and former directors from the securities market for raising money illegally from investors.
Among the present directors are Siddhartha Roy, Swapan Kumar Sircar and Raj Kumar Roy.
The former directors include Manoranjan Roy, Arup Thakur, Singh Jagbahadur Negi, Chandan Kumar Adhikary, Diwakar Singh, Goutam Ghosh, Hari Singh, , Sandeep Thakur and Subhajit Saha.
According to the data available with the BSE, Arup Thakur is the current Chief Financial Officer of Pincon Spirit.
Pincon Spirit figured among the firms against whom Sebi initiated action last year by ordering trading restrictions after receiving the list of 331 'suspected shell companies' from the government.
In an interim order, Sebi said the offer and allotment of secured redeemable non-convertible debentures (NCDs), from April 2012 to March 2015, to 4,256 persons amounting to Rs 40.60 crore by LRN "prima facie" qualifies to be construed as an offer made to the public in terms of the Companies Act.
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Since, the offer and allotment of NCDs was a public issue in accordance with the provisions of the Companies Act, the same had to be dealt on a recognised stock exchange. However, LRN prima facie did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies (RoC), which it failed to do.
The regulator said LRN and its 12 directors "shall not mobilize fresh funds from investors through the offer and allotment of any securities, to the public and/ or invite subscription, in any manner whatsoever, either directly or indirectly".
LRN and its directors "shall not access the securities market either directly or indirectly in any manner whatsoever", the Securities and Exchange Board of India (Sebi) said.
According to the order, the Directorate of Economic Offences (DEO), Kolkata, has initiated action against Pincon Group, including LRN, and has requested depositors, secured creditors and other affected persons to furnish the necessary documents with regard to their investment, for refund.
Considering the fact that the proceedings to refund the investors, including the debenture holders, have already been initiated by the DEO, the regulator said "it is felt that no meaningful purpose will be served if Sebi were to initiate separate refund proceedings against the noticees (LRN and its directors) at this juncture".
Accordingly, Sebi directed the entities to ensure refund to all the NCD holders through the process being carried out by DEO.
The regulator has also called upon the entities to show cause as to why they should not be banned from the securities market for a period of four years from the date of completion of refund to all the allottees of NCDs.
The entities have to file their replies within 21 days from the date of receipt of the interim order.
In the event of the respective entities failing to file replies or requesting for an opportunity of personal hearing within 90 days, the preliminary findings and directions will become final and absolute against them without any further orders, Sebi said.