Sebi orders Dreamland Industries to refund investor money

Markets regulator Sebi has ordered Dreamland Industries to refund investors' money, which it had raised by issuing non-convertible debentures (NCDs) without complying with the public issue norms.
Besides, barring the company and its directors for four years, they have been asked to refund the money along with an interest of 15 per cent per annum.
A Securities and Exchange Board of India (Sebi) probe found that Dreamland Industries had mobilised Rs 34 lakh in 2012-2013 and Rs 96.30 lakh in 2011-2012, from the public under its offer and issue of NCDs and in doing so it has failed to comply with the provisions of the Companies Act.

Under the norms, the firm was required to list its securities on the recognised bourse. It was also required to file a prospectus, among other things, which it failed to do.
In an order, Sebi directed the firm and its directors -- Ranjit Ghosh, Mrityunjoy Modak Bhowmik, Anuva Ghosh, Sukumar Ghosh and Haradhan Acharjee to jointly and refund the money collected by the firm through the issuance of NCDs 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."

After completing the repayments, the company will have to file a report in this regard with Sebi within three months.

The regulator restrained the company and its directors from buying, selling or otherwise dealing in the securities market "till the expiry of four years from the date of completion of refunds to investors."
Also, they have been asked to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.
Besides, Sebi said Dreamland Debenture Trust and Trustee, Kakali Mahanta, will not engaged as debenture trustees or in any capacity as an intermediary in securities market, without obtaining a certificate of registration to undertake that assignment. Further, they have been prohibited from the securities markets for four years.

The directions would come into force with immediate effect.
Non-compliance of the order would make Sebi register a case with the state government or police against them for fraud, cheating and misappropriation of public funds.
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In a separate order, Sebi has asked Prism Infracon to refund the money collected by the company through the issuance of NCDs without complying with the public issue norms.
Besides, the company and its directors have been asked to refund the money along with an interest of 15 per cent per annum.
They have also been barred from the securities markets for four years.

Sebi probe found that Prism Infracon had mobilised Rs 59.37 crore from more than 21,000 people via NCDs between 2009-10 and 2012-13 without complying with the provisions of the Companies Act.