Besides barring the firm for four years, the Securities and Exchange Board of India (Sebi) has directed them to refund the money along with 15 per cent annual interest.
A Sebi probe found that Orchid had mobilised Rs 7.60 lakh by issuing Redeemable Preference Shares (RPS) to 124 persons in 2012-13 without complying with public issue norms.
Since the shares were issued to more than 50 people, the issuance qualified as a public issue that requires compulsory listing on the recognised stock exchange. It was also required to file a prospectus, among others, which it failed to do.
They have been directed to issue public notice in all editions of two national dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact persons within 15 days.
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After completing the refund, the firm will have to file a report about completion of repayment with Sebi, within three months.
Also, they have been "restrained and prohibited from buying, selling or otherwise dealing in the securities market, from the date of this order till the expiry of four years from the date of completion of refunds to investors".
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.