Sebi orders two cos to refund investors' money

Capital markets regulator Sebi has asked two companies -- Weird Industries Ltd (WIL) and Falkon Industries India Ltd (FIIL) -- as well as their directors to refund the money they had illegally raised from the investors.
Besides, the Securities and Exchange Board of India (Sebi) has barred the firms and their directors from the capital markets for four years.
A Sebi probe found that WIL had mobilised Rs 3.45 crore by issuing redeemable preference shares to 2,053 persons in 2008-09 and 2009-10.
Additionally, the company had mobilised Rs 14 crore through the issue of non convertible debentures in 2010 and 2011.

FIIL had collected Rs 48.58 lakh by issuing redeemable preference shares to 714 persons in 2009-2010.
Since the shares were issued by these firms to more than 50 people each, it qualified as a public issue that requires compulsory listing on the recognised stock exchange. They were also required to file a prospectus, among other things, which they failed to do.

It also ordered the two companies and their directors to refund the money raised through RPS or debentures along with an interest of 15 per cent per annum.
The firms and their directors have been restrained and prohibited from buying, selling or otherwise dealing in the securities markets for four years and the ban will continue till the completion of refunds to investors.

In case the companies fail to comply with these orders, Sebi would make a reference to state government or local police to register a case against them for fraud, cheating and misappropriation of public funds.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.