Sebi has banned Merlin Agri Projects India and its 13 directors from the securities market for at least four years and directed them to refund the money collected from investors without complying with the public issue norms.
The Kolkata-based firm had issued and allotted redeemable preference shares (RPS) to at least 56 investors during financial years 2011-12 and 2012-13 and raised Rs 50.78 lakh.
Since the shares were issued to over 50 people, the offer of RPS qualified to be a public issue and required compulsory listing of securities on a recognised stock exchange. However, Merlin did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies (RoC), which it failed to do.
According to a Sebi order dated July 18, the firm and its directors have to refund the money, which the company had collected from the investors, with an annual interest of 15 per cent.
Also, the directors have been restrained from associating themselves with any listed public company till the expiry of four years from the date of completion of refunds to investors.
The directors who will face the music include Pallab Das, Subrata Pal, Amiya Koley, Diptiman Sarkar, Raj Kumar Ghosh, Mir Amirul Ali, Sarat Bandapdhya, Apares Misra, Barindra Nath Koley, Bablu Kumar Routh, Argha Pan, Tapas Mandal and Madhu Sudan Sinha.
As per the order, three other directors -- Amarnath Sadhukham, Amit Kumar Pal and Pinku Majhi -- have also been banned from the securities market for four years.
With regard to Sadhukham, Pal and Majhi, the Securities and Exchange Board of India (Sebi) noted that since they were appointed as directors of Merlin after the period of issuance of RPS, they were not liable for refund of money.
As directors of the firm they were obligated to ensure the refund of money, which they failed to do and accordingly, the ban has been imposed on them, it said.
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