Markets regulator Sebi today directed Regal Hitech Agro Projects Ltd (RHAPL) and its directors to repay the investors' money, which they had illegally raised from them.
Besides barring them 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.
According to the filing made to MCA 21 Portal, RHAPL had raised more than 42 lakh by issuing redeemable preference shares (RPS) to 265 people in 2012-13. The firm in its submission to Sebi said that it has collected over Rs 54 lakh from 329 investors.
However, the company claimed to have refunded around Rs 48 lakh to investors.
Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on the recognised stock exchange. It was also required to file a prospectus, among other things, which it failed to do.
In an order, Sebi has asked RHAPL and its directors -- Subhas Sur, Sougata Das, Sandip Kodaly and Pralayes Ghosh Mondal -- to refund the money collected by the firm through the issuance of redeemable preference shares ... With an interest of 15 per cent per annum, from the date when the repayments became due to the investors till the date of actual payment.
After completing the repayment, they will have to file a report of such completion with Sebi within three month certified by two independent chartered accountants.
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 they fail to comply with the order, Sebi will make a reference to state government or local police to register a case against them for fraud, cheating and misappropriation of public funds.
Earlier in December 2015, Sebi had barred the company and its directors from garnering fresh funds from the public through the issuance of securities till further directions.
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