Markets regulator Sebi today ordered SLB Invest (India) to refund investors money which it had raised illegally by issuing securities.
Besides, the Securities and Exchange Board of India (Sebi) has barred the firm and its directors from the capital markets for four years.
SLB Invest (India) garnered funds illegally through issuance of Redeemable Preference Shares (RPS).
As per Sebi, the company had raised Rs 5.22 crore by issuing RPS to 1,436 investors during 2009-10 and 2010-11.
Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among other things, which it failed to do.
In an order, the regulator has asked the company and its directors to refund the money along with an interest of 15 per cent per annum.
The firm and its 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 firm fails to comply with the order in three months, 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.
The directions would come into force with immediate effect.
