Sebi orders Orchid Cultivation to refund money to investors

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Press Trust of India New Delhi
Last Updated : Oct 15 2015 | 6:42 PM IST
Markets regulator Sebi today ordered Orchid Cultivation Projects and its directors to refund the money it had illegally raised from public investors.
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.
In an order, Sebi asked the company and its directors Sumanta Banerjee, Rajiv Kumar Singh, Subir Kumar Paul and Jyotirmoy Bhattacharjee to refund the money along with an interest of 15 per cent per annum.
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".
In case the firm fails to comply with these directives, Sebi would make a reference to state government or local police to register a case against Orchid and its directors for fraud, cheating and misappropriation of public funds.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.

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First Published: Oct 15 2015 | 6:42 PM IST

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