Regulator Sebi has barred Shreysth Production Industries Ltd (SPIL) and its seven former and present directors from the securities market for at least four years and directed them to refund the money collected illegally from the public.
Besides, the directors, who happen to be the firm's promoters, have also been restrained from associating themselves with any listed public company from the date of the order till the expiry of four years from the date of completion of refunds to investors.
The former directors are Rajoo Shah, Pramesh Das, Krishna Nand Pathak and Pramod Kumar Jaiswal, while those still on the board are Dipak Kumar Gupta, Ajay Gosai, Sankar Das, according to a Sebi order dated October 13.
In the order, the regulator noted that SPIL had issued and allotted redeemable preference shares (RPS) to 795 investors during 2009-10, 201011 and 201112 and raised Rs 62.64 lakh.
Since the shares were issued to more than 50 people, the offer of RPS qualified to be a public issue and required compulsory listing of the securities on a recognised stock exchange. However, SPIL did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies (RoC) under the Companies Act, which it failed to do.
The firm and the seven directors have to refund the money collected by the company including the application money collected from investors with an annual interest of 15 per cent, as per the ruling.
In an interim order passed in March 2016, Sebi had restrained SPIL and the seven directors from accessing the securities market and directed the firm not to mobilise fresh funds from the investors "till further directions".
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