The company and its directors have also been barred from the capital markets for four years.
They have been ordered to refund the money along with 15 per cent annual interest.
The regulator found that the company had raised more than Rs 9 crore through secured redeemable debentures from 8,516 people between 2010-2012 without complying with public issue norms.
However, the firm claimed to have already returned nearly 50 per cent of the amount to the investors.
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MBK Business Development India and its promoter/directors shall refund the money collected through the issuance of secured redeemable debentures with an interest of 15 per cent per annum, Sebi said.
Also, the markets watchdog has restrained the company and its directors from the securities markets "till the expiry of four years from the date of completion of refunds to investors."
In case the company fails to comply with Sebi's order, the regulator would make a reference to state government/local police to register a civil/criminal case against the company and its directors for "offences of fraud, cheating, criminal breach of trust and misappropriation of public funds."
These directions would come into force with immediate effect.