Sebi orders DGR Farms & Leisures to refund investors' money

Regulator Sebi today asked DGR Farms & Leisures and its present as well as former directors to refund the money that the company had collected illegally from the public and also barred them from the markets for at least four years.
The Securities and Exchange Board of India (Sebi) noted that DGR Farms had issued redeemable preference shares to 191 investors and garnered Rs 1.25 crore between 2009-10 and 2013-14, the regulator said in an order dated November 20.
The company claimed to have made a refund of Rs 30.14 lakh to some of its investors and has provided a list of the investors and the bank account details to Sebi from which such repayments were made.

The shares were issued to over 50 people and accordingly the offer of RPS qualified to be a public issue and required compulsory listing of securities on a recognised stock exchange. However, the firm did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies (RoC) under the Companies Act, which it failed to do.
Accordingly, Sebi has ordered DGR and its present and former directors -- Rakesh Kumar Gupta, Umesh Soni, Nivedita Gupta, Umesh Gupta, Alok Kumar Singh, Jainendra Kumar Patel, Sanjay Kumar Gupta, Shankar Lal Gupta, Vijay Kumar Shukla and Jitendra Kumar Tripathi -- to refund the money collected by the company, during their respective period of directorship through the issuance of RPS along with an annual interest of 15 per cent.

After completion of refund, they have been directed to file a report of such completion with Sebi, within a period of three months, certified by two independent chartered accountants.

In case these entities fail to comply with the order, Sebi may recover such amounts in accordance with provisions of securities laws.
Further, Sebi has prohibited the company and its present and former directors from the securities markets till the refund and a further period of four years from the date of completion of the refund to investors.
Also, such directors have been restrained from associating themselves with any listed public company during the period under review.

In a separate order passed today, Sebi has imposed a penalty of Rs 30 lakh on Manish Thakkar, proprietor of KE Consulting Group, for not resolving investors' complaints as well as not providing the information sought by the regulator.
KEC or Manish's own submission says the entity had not resolved all the complaints as directed by Sebi through an order in February 2012.
With regard to non-compliance of Sebi's summons, the regulator said that KEC/Manish has come in the way of discharging its function towards the interest of the investors.